Unlock investment in the SDGs: Fostering innovative financing and strengthening global debt sustainability

The 13th informal meeting of High-Level Political Forum 2021 explored policy recommendations to scale up public and private financing and unlock catalytic investments for the achievements of the SDGs.

The global debt sustainability challenges

The lack of fiscal space and the mounting risk of sovereign debt distress has become critical stumbling blocks for developing countries to achieve the 2030 Agenda. Under the brutal hit of the COVID-19 pandemic, countries experience unprecedented collapses of domestic revenue while weighing with urgent financial need to address the overlapping issues of health, climate, environment, recovery and inequalities. Unfortunately, while most developed countries have progressively moved on through advanced technological inputs and plentiful fiscal backups, the developing world continues its financial dilemma in balancing their mounting debt payments and addressing their severe developmental crisis, which not only upends their economic recovery, but could also generate new debt crisis. As of 2020, a significant record of sovereign credit rating downgrades and defaults was observed in many LDCs and MICs, causing large debt overhangs and chronically restrained economic recoveries for the subsequent years. Governments leave no choice but to continue borrowing and investing, thus lead to a vicious debt cycle with everlasting liquidity shortage and debt vulnerability, which also widens the global financial gap of recovery and SDG achievements. It is thereby essential for global actions to recognize the systematic issues of the current economic conjuncture and develop new financing instruments to pave an equal-paced COVID-19 recovery and SDG achievements for all.

Transformative measures to unlock public and private SDG investments

To foster innovative and transformative measures in strengthening global debt sustainability and creating fiscal space for SDGs investments, international debt architecture reform and sustainable debt management are imperative, which include supporting information, coordination, adaptation, and equity. Increasing debt information requires high transparency from governments, which could not only facilitate informed lending decisions from the creditors, but also increase governments’ accountability in financial transactions. Coordination-wise, effective partnerships between multilateral financial institutions, development partners, debtors and creditors are needed for more sustainable and effective reform. Moreover, when considering states’ eligibility for debt assistance, it is paramount to recognize countries’ vulnerabilities rather than solely their national income, which could lead to a more targeted and inclusive service for those who needed. As for equity, it is of utter urgency to ensure greater participation from LDCs and MICs in the international debt architecture to rebalance the global political decision-making dynamics. In addition, effective combinations of private-public investments are equally crucial for SDGs advancements. Innovative financial instruments including sustainability/green-linked bonds are excellent means to incentivize local and foreign private investments and help developing countries to close the SDG gaps. Other measures such as progressive taxation and digital market transformation can also effectively elicit domestic resources for further SDGs investments. 

On the one hand, the effectiveness of SDGs investments heavily lies on governments’ willingness to undertake policy reforms and transform the economy in a sustainable direction. On the other hand, it is a global responsibility to ensure all emerging markets and developing countries can be adequately financed under a sustainable international debt architecture for an equal opportunity to recover and achieve the SDGs.

References:

https://sustainabledevelopment.un.org/index.php?page=view&type=20000&nr=7194&menu=2993

https://www.brookings.edu/research/debt-distress-and-development-distress-twin-crises-of-2021/
https://unctad.org/debt-and-finance/home

Meeting Title: High-level Political Forum on Sustainable Development (HLPF 2021), 13th Informal meeting

Date/Location: Monday, July 12, 2021; 09:00-11:30; The meeting was held virtually

Speaker:

Mr. Sergiy Kyslytsya (Ukraine), Vice President of ECOSOC;

Mr. Homi Kharas, Senior Fellow and Deputy Director for the Global Economy and Development program, Brookings Institution;

Ms. Alicia Bárcena, Executive Secretary of ECLAC;

Ms. Joyce Chang, Managing Director and Chair, Global Research, JP Morgan;

Ms. Anna Gelpern, Professor at Georgetown University and a non-resident senior fellow at the Peter G. Peterson Institute for International Economics; etc.

Written by: WIT-UN Representative Iris Sit

Planet 50-50, Women’s Empowerment, and the SDGs

This meeting was about the importance of women’s economic empowerment and how they are directly tied with the SDGs. The first speaker, Ms. Susan Shabangu, explained that in order to address gender equality and improve the economy, the South African government is currently focusing on five critical areas: education, outcome and performance, labor markets, property and credits, and changes in poverty inequality. One example she gave of the discrimination that is still very present in South Africa was the marital laws. In South Africa, the banks require the husband’s signature for approval if a woman tries to request a loan. The minister also explained that the president of South Africa, who recently issued a directive to create more jobs for women, also translates this emphasis on the empowerment of women. She concluded with the remark that for gender equality to become a reality, it must be mainstream.

The second speaker was Ms. Phumzile Mlambo-Ngcuka. She said that the SDGs are all about the notion of leaving no one behind. Therefore, we need to start with those who are most likely to be left behind, and in most countries they are women. The most crucial thing that women are not able to participate in is finance, so, accordingly, the SDGs are about ensuring that business is done differently, and that we value people differently. She explained that the participation of women is crucial for the economy: there is currently over $28 trillion in the global economy that is being sacrificed because of the challenges that women are currently facing. She also discusses the issue of the wage gap between men and women. The global average is 24 percent, but in some countries it’s as high as 75 percent. After the two speakers, the floor was open for questions.

Meeting: Women’s economic empowerment and the link with the Sustainable Development Goals

Date/Location: Wednesday March 16, 2016, 15:00 –16:15; ECOSOC Chamber

Speakers: Ms. Susan Shabangu, Minister of Women in the Presidency of South Africa; Ms. Phumzile Mlambo-Ngcuka, Under-Secretary-General of the United Nations and the Executive Director of UN Women

Written By: WIT Representative Kangho (Paul) Jung

Edited By: WIT Representative Alex Margolick

Photo Credit: Gender Justice (Zambia)

ECOSOC’s 2015 Review and Beyond

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The Economic and Social Council convened on this day for a briefing on the international economy of 2015 and what to expect and strive for in 2016. Mr. Montiel opened the briefing with the introduction of World Economic Situations and Prospects (WESP) report, which was further discussed in detail in a presentation by Mr. Rashid. The presentation addressed the global and regional financial outcomes of 2015, and projected expected change in 2016 and beyond. Globally, there was a slowdown in growth, with expectations for economic growth in 2016 of about 2.9%. This presentation showed further concerns about the global economy due to economic volatilities and uncertainties that impeded global growth. Global oil prices were shown to have dropped by more than 70% since July 2014, and global commodity prices fell by more than 20% since then as well. The presentation featured regional GDP growths from 2015 and expected growths in 2016, and identified possible dangers to economic growths in each region. Mr. Rashid concluded with recommendations that urged policymakers to reduce economic uncertainties and create macro-prudential policies. He also warned that weak employment growth and high unemployment rates will post a significant challenge to poverty reduction and the realization of the 2030 Sustainable Development Goals.

His Excellency Oh Joon then presented the ECOSOC agenda for 2016, and each program was presented by Vice Presidents of ECOSOC. The most immediate programs to come are Youth Forum (February) and Partnership Forum (March).

Further comments were made by delegations from the European Union, United States, Mexico, Japan, Palau, Colombia.

Meeting: Economic and Social Council – 2016 Session Briefing

Date/Location: 20 Jan 2016; 10:00 – 13:00; Economic and Social Council Chamber

Speakers: His Excellency Oh Joon, President of ECOSOC; Lenni Montiel, Assistant Secretary General for Economic Development, DESA; Hamid Rashid, DESA, Development Policy and Analysis Division; Sven Jürgenson, Vice President, ECOSOC; Alejandro Palma, Vice President, ECOSOC; Frederick Shava, Vice President, ECOSOC; Jürg Lauber, Vice President, ECOSOC

Written by: WIT Representative Dongeun Kim

Edited by: WIT Representative Alex Margolick

Photo Credit: OCHA/Vincent Fung

Ideal Ways to Fund the Addis Ababa Agenda

    The Second Committee hosted a meeting on the Addis Ababa Action Agenda of the Third International Conference on Financing for Development. This agenda provides a foundation for implementing the 2030 SDGs, and it aims to foster universal economic prosperity.

    The meeting began with opening remarks from the co-chairs of the Second Committee. His Excellency Oh Joon discussed the policy aspects of the Action Agenda. He stated that taxation represents a stable and predictable source of finance, and that it is central to financing provision of public goods and services in developing countries. Finally, he explained that fiscal policy represents a social contract between the state and its citizens.

    His Excellency Andrej Logar highlighted the importance of domestic resource mobilization and international support. He also agreed with His Excellency Oh Joon on the belief that taxation is critical to financial sustainable development. He explains that there is evidence of high return in a tax collection system for developing countries, and gives the example of Kenya, which was able to increase its tax revenue from 52 million dollars in 2015 to 85 million for the following fiscal year.

    After the introductory remarks followed keynote addresses by panelists. One notable speaker was Professor David Rosenbloom, who teaches at the NYU School of Law. He has worked in the field of taxation for 47 years, and specifically international taxation for 38 years. He explains that governments need money, and taxation far beats debt financing or devaluing currency in terms of efficiency. An income tax system has three goals: efficiency in interfering as little as possible of economic choice, fairness in that taxpayers have impressions that they are treated no less fairly than everyone else, and simplicity so that tax laws could be understood.

Meeting: Joint meeting on “Domestic Resource Mobilization: Where to go after Addis?”

Date/Location: Wednesday November 11, 2015, 10:00 – 13:00; Conference Room 2

Speakers: His Excellency Oh Joon (Republic of Korea), President of the Economic and Social Council; His Excellency Andrej Logar (Slovenia), Chair of the Second Committee; Mr. Alexander Trepelkov, Director, Financing for Development Office, Department of Economic and Social Affairs; Professor David Rosenbloom, James S. Eustice Visiting Professor of Practice and Taxation, and Director, International Tax Program, New York University; Ms. Victoria Perry, Assistant Director and Chief, Tax Policy Division, Fiscal Affairs Department, International Monetary Fund; Ms. Blanca Moreno-Dodson, Lead Economist for Tax Policy, Macro and Fiscal Management Global Practice, World Bank; Ms. Gail Hurley, Policy Specialist on Development Finance, Bureau for Policy and Programme Support, United Nations Development Programme; Mr. Tatu Ilunga, Senior Policy Advisor, Tax and Extractive Industries, Oxfam America; Mr. Eric Mensah, Assistant Commissioner, Ghana Revenue Authority, and Member, United Nations Committee of Experts on International Cooperation in Tax Matters (via telephone or video link)

Written By: WIT Representative Kangho (Paul) Jung

Edited By: WIT Representative Alex Margolick

Photo Credit: REUTERS/Stoyan Nenov

Balancing Debt and Sustainable Development

   Mr. Suescum presented a report on debt sustainability. “Rising interest rates and falling commodity price rates suggest an increased risk of sovereign debt problems in the future.” The international community agreed to handle these problems collectively with tighter financial regulations while promoting sustained economic growth and addressing the root causes of underdevelopment in less-developed countries. There was general agreement that the trading systems should focus on the Sustainable Development Goals’ realization.

   Mr. Valles spoke next, noting that SDGs are based around trade in many regards. World trade grew 3.2% last year, will grow 3.8% this year, and perhaps 4.8% next year. Most of the growth in 2014 came from Asia, Latin America, and the Caribbean. The 20 largest exporters represented 71% of world exports, indicating a trade inequality that requires policy attention. It is important to “mitigate the risks of trade adjustment mechanisms, especially for the poor.”

   Mr. Kim’s report discussed the effect of unilateral economic measures on developing countries. These sanctions have an adverse impact on developing countries, and that the number of sanctions has increased in recent years. This has had some severe consequences, affecting “human rights, public welfare”, and countries’ “long term growth prospects.”

   South Africa, on behalf of the Group of 77 and China, echoed by Jamaica, AOSIS, and the Group of Least Developed Countries, believes the international trade system should favor developing countries. It is important to eliminate all trade distorting measures.

   Ecuador and Zambia, speaking on behalf of the ECLAC and GLLDC, respectively, cited the need for countries to fulfill the pledges they made to send aid to the least developed countries as their stake in the international market has “hovered around 1%” for 40 years. The European Union, Canada, Australia, and New Zealand highlighted their commitment to combatting climate change.

Meeting: Second Committee, 19th Session

Date/Location: Monday, October 26, 2015; 15:00-18:00, Conference Room 2

Speakers: Alfredo Suescum, Vice-President of the Trade and Development Board; Guillermo Valles, Director of the International Trade in Goods, Services and Commodities Division, UNCTAD; Alexander Trepelkov, Director, Financing for Development Office, UN-DESA; Dusan Zivkovic, Debt and Development Finance Branch, Division on Globalization and Development Strategies of UNCTAD; Namsuk Kim, Development Policy and Analysis Division, Department of Economic and Social Affairs; H.E. Mr. Ramlan Bin Ibrahim, Malaysia; Mr. Thulani Nyembe, South Africa; H.E. Mr. Ahmed Sareer, Maldives; H.E. Dr. Mwaba Patricia Kasese-Bota, Zambia; H.E. Mr. Gerard Van Bohemen; Mr. Adebayo Babajide, European Union; Mr. Fred Sarufa, Papua New Guinea; H.E. Mr. Diego Morejón Pazmiño, Ecuador; H.E. Mr. Abulkalam Abdul Momen, Bangladesh; H.E. Mr. E. Courtenay Rattray, Jamaica; Ms. Caralyn Schwalger, New Zealand

Written by: WIT Representative Alex Margolick

Discussion on the Eradication of Poverty


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The agenda of the Second committee was ‘the Eradication of Poverty and Other Development Issues.’ The meeting began with a discussion among representatives from a variety of countries and organizations about the implementation of the second United Nations decade for the eradication for poverty. Her Excellency, Ms. Anna Marie Menendez Perez, President of the Trade and Development Board (UNCTAD) and permanent representative of Spain to the United Nations, spoke on the reports of the trade and development board, which focused on tackling inequality through trade and development a post-2015 challenge.

The conclusion of the trade and development board was to decrease inequality among countries, stimulate higher rates of trade, and increase the productivity of least-developing countries. A recommendation from the trade and development board was to catalyze investments in Africa to ensure transformative growth in order to strengthen the managerial capacities of African policymakers and leaders.The board also looked at the evolution of trade and agriculture and its effect on poverty eradication, sustained development, and employment. Throughout the meeting there was a call for a global post-2015 development agenda by several delegates.

Representatives from countries in special situations including least developed countries and landlocked developing countries spoke on the challenges these countries within in special situations face. There was a consistent consensus among delegates for the recommitment of the Instantbul Programme of Action. The representative of Sudan said that the Instanbul Programme of Action’s goals can be met if economies work together in order to create job opportunities, improve health, education, and technology.

Meeting: Economic and Financial Committee (Second Committee), 19th Eradication of Poverty and other development issues
Date: October 23, 2014
Location: Conference Room 2, UNHQ, New York.
Speakers: His Excellency Mr. Sebastiano Cardi of Italy; Excellency, Ms. Anna Marie Menendez Perez, President of the Trade and Development Board (UNCTAD) and permanent representative of Spain to the United Nations; Individuals who spoke on behalf of groups in special situations included representatives of Myanmar (on behalf of the Association of South-East Asian Nations (ASEAN)), Malawi (on behalf of the African Group), Benin (on behalf of the Group of Least Developed Countries), European Union, Brazil, Malaysia, United States, Zimbabwe, Ethiopia, Bhutan, Myanmar, Bangladesh, China, New Zealand, Lao People’s Democratic Republic, Morocco, Russian Federation, Togo, Kazakhstan, Japan, Turkey and the Solomon Islands.
Written By WIT Representative: Eman Osagie

Edited by WIT Representative: Aslesha Dhillon

Funding Requirements for Third International Conference on Financing for Development

financeThis meeting focused on the financial organization for the third International Conference on Financing for Development, which will be held in Addis Ababa, Ethiopia from July 13 to July 16 of 2015. The goal of the Conference was to assess the progress made in the implementation of the Monterrey Consensus and the Doha Declaration. This meeting did not focus on all aspects of funding for the Conference, which the title may suggest. Instead, this meeting emphasized additional funding through voluntary contributions to the FfD trust fund. The Chair stated that this upcoming Conference is funded by voluntary contributions, both public and private.

The estimated budget calls for three outputs, or “clusters”. The first output is for inclusive engagement of country representatives, non-governmental organizations like Unicef, and institutional stakeholders in the Conference and in its preparatory process. The second cluster in the estimated budget is for compendium of policy papers. A set of policy papers will be used to inform individuals and business sectors on interactive hearings of sustainable development financing and goals. The last output for funding is for public outreach and communication.

Money raised for this cluster will go towards mobilizing promotional outreach through social media, posters, and public information materials. The Chair leading the discussion then emphasized his invitation of member states and other donors to donate voluntarily to the trust fund. Countries that have already made pledge contributions include Germany, Sweden, Switzerland, and Norway. Each trust fund in DESA is division specific, so funds cannot be taken out of different trust funds to support the upcoming Conference. The Chair concluded by stressing the importance of urgency to get donations in, later stating that organizations should not be shy to make a modest contribution.

Meeting Topic: Briefing for Member States on “The funding requirements for third International Conference on Financing for Development” (organized by the Financing for Development Office of the Department of Economic and Social Affairs (DESA))
Date: 22 October 2014
Location: Conference Room E, UN HQ, New York.
Written by WIT Representative: Paige Stokols
Edited by WIT Representative: Aslesha Dhillon

Acceleration Sustainable Energy Deployment through Support for Energy Innovation

On the first day of the Sustainable Energy for All Forum, the second session focused on catalysing investment through innovative business models.

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Mr. Zindler, a representative of the Bloomberg team, started by introducing his field, which focuses on new energy technologies and investment in clean energy. Mr Zindler highlighted the current challenges for policymakers, especially in developing countries. Firstly, it is difficult to find the appropriate level of support for renewables, given the uncertainty over costs. Allocating support costs equitably, integrating renewables into the grid and preparing for cost parity are equally difficult. Therefore, he would like to come up with ideas about promoting innovation for policies and financials, efficiently in the near future.

Mr. Sarkar followed by highlighting the current challenges in terms of energy efficiency implementation in the developing world since different countries use different financial instruments. Therefore, he introduced three implementation models to tackle the challenges and financing gap categorized under the Energy Efficiency Fund (EE Fund), namely the public model, private model and public private partnerships (PPPs). He emphasized that PPPs has a possibility of bringing in new sources of financing for funding public infrastructure and service needs. Some countries like Romania, Bulgaria, Korea and India are already implementing the EE Fund. This fund would be able to support energy efficiency, renewable energy and promote economic development and energy security.

Mr. Roders, who moderated the meeting, concluded the session with an example – introducing the innovative programming for climate change, which is a performance-based financing for projects and sectors. One of the advantages of this programming is that it catalyses the engagement of the private sector, including PPS, risk-mitigation and structured financing tools, global certification, standards programs and SME Small Grant Program.

 

Meeting Title: Accelerating Sustainable Energy Deployment through Support for Innovation
Speakers: David Rodgers, Senior Climate Change Specialist, Climate and Chemicals, GEF; Ethan Zindler, Head of Policy Analysis, Bloomberg New Energy Finance ; Ashok Sarkar, Senior Energy Specialist, World Bank
Location: UN Headquarters, Trusteeship Council
Date: 4 June 2014
Written By WIT representative: Samantha Kong
Edited by WIT representative: Sophia Griffiths-Mark 

 

Financing the Sustainable Development Agenda

Ecology_Society_Economy_diagram_Environment_backgroundCo-Chairs, H.E. the Ambassador of Kenya and H.E. the Ambassador of Hungary, gave a brief summary of the progress from the fourth session of the Intergovernmental Committee of Experts on Sustainable Development Financing, and the way forward leading up to mid-august when the proposal will be given to the attention of the secretary general. The committee’s major concern is quantifying needs across all three areas of Sustainable development especially the social and environmental elements. Quantifying the financial need of socio-climates amounts to an immense task however H.E. the Ambassador of Kenya was confident the committee would be able to reach a consensus on an effective financial document and policy implementation in the near future.

Co-Chair H.E. the Ambassador of Hungary expressed his belief that previous funding towards sustainable development neglected the private sector and for the most effective policies the international system should combine public and private assets. The private sector now has a much stronger role in the international trading system especially in states that have show substantive economic improvement such as China, India and Brazil. H.E. emphasized the role of private trade as a means of providing employment opportunities, new industries and income tax to developing and developed states.

H.E. Ambassador of Kenya reflected on the effective dialogues shared in Latin America and Africa. These ESCA organized outreach efforts provide platforms for discussion between states, stakeholders and regional experts. The meetings are an effort to reach out for feedback and to facilitate regional input for a holistic financial network in support of sustainable development. These outreach programs will next meet for discussion on finances from the Asian and Pacific region.

The Co-Chairs anticipate that the committee’s dynamic work will amount to concrete actionable policies for the long term funding of sustainable development incorporating state leaders, private funders and civil societies.

 

Meeting Title:Intergovernmental Committee of Experts on Sustainable Development Financing (Fourth Session) – Open briefing on the progress of the Committee’s work by the co-chairs
Speakers: Co-Chairs; H.E. Ambassador of Kenya and H.E. Ambassador of Hungary, as well as questions from H.E. Ambassador of Singapore, Norbert Kloppenburg, Canada, Switzerland and Djibouti
Location: United Nations HQ, New York
Date: 16 May 2014
Written by WIT representative: Sophia Griffiths-Mark