Published 9 June 2023 in News
On June 22 and 23, 2023, a Summit for a New Global Financing Pact will be held in Paris, organized by France. Many leaders from States, governments, international organizations, civil society and the private sector will be invited to discuss solutions for financing global development and the climate transition.
In order to decipher the stakes of this Summit, Focus 2030 aims to gather and highlight the point of view of organizations that are expert in their respective fields and is conducting a series of interviews with representatives of governments, international organizations, NGOs, think tanks, and others.
Discover our Special Edition about the Summit for a New Global Financing Pact and all the interviews with experts conducted ahead of the Summit.
Written interview received on May 26, 2023.
Focus 2030 : As the UN’s development agency, UNDP plays a critical role in helping countries achieve the Sustainable Development Goals (SDGs). A recent UN report, the SDG Stimulus to deliver Agenda 2030, warns that the multiple shocks the global economy is facing (Covid-19 pandemic, impacts from the war in Ukraine, high inflation, and weak economic growth, tightening monetary and financial conditions, unsustainable debt burdens, and the escalating climate emergency) are threatening to further reverse progress on the SDGs. How to ensure a renewed commitment of the international community in favor of the achievement of the SDGs ?
Achim Steiner: At the aggregate global level, the world is simply not moving fast enough on many of the Sustainable Development Goals (SDGs). A recent assessment of the roughly 140 SDG targets with data show that only about 12 percent are on track, while 30 percent show no progress or have even gone backward below the baseline set in 2015.
This comes in the wake of an era of polycrisis, including the ongoing socio-economic shockwaves of a pandemic and violent conflicts at their highest levels since 1945 including the war in Ukraine and its spillover effects. The cost of living has increased, with food prices skyrocketing, placing us at hunger levels we haven’t seen since 2005.
Furthermore, many developing countries are experiencing a mounting debt crisis, leading to strained economic and financial conditions. A recent analysis by the United Nations Development Programme (UNDP) highlighted that 52 low- and middle-income developing economies are currently either in debt distress or at high risk of debt distress. If this situation is not tackled, these countries will simply be unable to invest in critical areas such as poverty reduction, gender equality, and clean energy initiatives.
But it is precisely, in the midst of the current geopolitical turmoil and escalating crises, the importance of the SDGs cannot be overstated. These goals remain one of the few platforms on which all nations can concur to work together towards a more promising future. That’s why the upcoming SDG Summit in September 2023 is of added importance.
To address these pressing needs, the UN Secretary-General’s SDG Stimulus Plan provides a clear framework for action. The plan includes new measures to inject liquidity, reschedule and restructure debt, and leverage private finance. We urge the G20 to mobilise at least $500 billion available each year to developing countries. Let’s work together to overcome these challenges and ensure a prosperous future for all.
As the Secretary-General so aptly put it, if we do not act decisively and urgently, the 2030 Agenda and the 17 SDGs may only serve as a memorial to a world with limitless possibilities yet tragically unfulfilled. Let us commit ourselves to taking bold actions towards realizing the SDGs and averting this dire scenario before us.
Focus 2030 : What role do you think the Summit for a New Global Financing Pact, convened by France on June 22-23 in Paris, can play in this context, and under which conditions ?
Achim Steiner: We are on the cusp of the greatest shifts in the multilateral system — which remains the best way to forge a better world — since its establishment nearly 80 years ago. It involves evolving this tried-and-trusted system so that we can come together and realize a prosperous future that works for all peoples, the planet and future generations. In the here and now, that requires crafting a new, fit-for-purpose global financial architecture.
The summit can play a crucial role in bringing together leaders and experts from different countries and regions to discuss financial policies and strategies that promote global economic growth and stability. The summit aims to create a "New Global Financing Pact" that strengthens global financial governance to create a more sustainable, inclusive, and equitable world economy.
In many ways, it is a precursor to the G20 Summit and the SDG Summit in September, and the COP planned for November, with the purpose of highlighting critical issues such as the SDG Stimulus, the Bridgetown Agenda, and other global processes in an effort to reach consensus. These procedures offer a comprehensive plan for addressing the current global "poly-crisis."
Specifically, the Summit is expected to facilitate a strong partnership between the global North and South, with a focus on development and climate finance. The partnership aims to tackle various challenges that include concessional financing, enhancing private capital inflows, and mitigating vulnerability, all of which are crucial in overcoming existing obstacles.
Focus 2030 : Oxfam recently estimated that at least an additional USD 3.9 trillion a year are needed until 2030 to fill financing gaps in health, education, social protection and to tackle climate change in low- and middle-income countries. Among the possible solutions to the SDGs financing gap put forward as part of the Summit, such as an agreement on a new global tax, Special Drawing Rights (SDRs) rechanneling, debt relief, a multilateral development banks (MDBs) reform, or Just Energy Transition Partnerships (JETPs), which concrete deliverable or new approach would you say has the best chance for success ? What would a success of the Summit look like and what could be the next steps ?
Achim Steiner: Development finance is increasingly becoming a “big divider” between developed and developing countries, hindering progress towards the SDG and the targets of the Paris Climate Agreement.
With 120 developing countries grappling with either mitigating or muddling through an economic crisis in 2023 (65 countries with less than 2 percent growth ; 55 countries with 2 to 4 percent growth) and persistently high interest rates, the conditions to create jobs and attract private flows are an uphill task for both 2023 and 2024. This applies to development finance of all types, including ODA, concessional and near-concessional loans, guarantees, and all kinds of insurance.
The Summit in Paris must build upon the signals from the G20 meetings and recent G7 summit by aiming higher and pursuing greater ambition. There is no silver bullet, but there are several streams of finance that need to converge –many of which have been the flagged by the UN’s SDG Stimulus and the Bridgetown Initiative:
By prioritizing these solutions, we can forge an inclusive dialogue between developed and developing countries, enhancing our capacity to cooperate across borders, and attain our ultimate objectives in a just and equitable manner.