The International Conference on Financing for Development served as a platform for fostering dialogue and cooperation towards achieving a more sustainable and inclusive global financial system. The fourth round of the International Conference on Financing for Development (FfD) is scheduled to take place in 2025.
Before the fourth round, a preparatory committee meeting was held in Addis Ababa with a renewed focus on bridging gaps in SDG financing and delivering international financial architecture reform. Ministers and experts also discussed the Addis Ababa Action Agenda, which provides a starting point to discuss local finance in the context of sustainable development. The Addis Agenda presents a coherent framework for financing the 2030 Agenda, including the SDGs, by putting forward a comprehensive set of corresponding policy actions.
In 2015, world leaders gathered in Addis Ababa to agree on a framework for financing sustainable development, known as the Addis Ababa Action Agenda. The agenda was designed to support the implementation of the Sustainable Development Goals (SDGs) of 2030. However, according to Spiegel, progress has stalled due to global crises.
In an exclusive interview with The Ethiopian Herald Shari Spiegel, Director, Financing for Development Office, Department of Economic and Social Affairs at the UN, said that “the bad news is that we’re off track. We’re off track to implement the SDGs. Only 17% of the SDGs are on track to be implemented by 2030.” “There’s an enormous financing gap of 4 trillion dollars a year to achieve the SDGs in developing countries.”
The COVID-19 pandemic, climate crisis, and war in Ukraine have increased the costs of achieving the SDGs, making it even more challenging for countries to meet their goals. “The system is not working for development and for developing countries,” Spiegel emphasized.
The Addis Ababa Action Agenda aimed to address problems in the global financial architecture, including the International Monetary Fund (IMF) and the World Bank. However, the COVID-19 pandemic highlighted the gaps in the international architecture, leading to debt crises in many countries.
“Many countries in the world spend more on servicing debt than on health, education, and investment in long-term growth,” Spiegel said. “The system has not worked for the poorest countries. We need to support the most vulnerable and poorest countries so that they can develop and have the ability to develop.”
“There is real excitement in the room,” Spiegel said. “Countries from all over the world are coming together to think about how to find solutions and rebuild trust in the multilateral system.”
The conference is seen as a crucial step in updating the Addis Ababa Action Agenda to reflect the current global environment and to find ways to strengthen the international system to support developing countries, she added.
According to the press release, after the five-day first session of the Preparatory Committee (PrepCom) for the Fourth International Conference on Financing for Development (FfD4) concluded, dozens of finance and foreign ministers convened this week to demand sweeping action to overhaul the international financial architecture, empower developing countries in global institutions, and channel trillions of dollars towards sustainable development in Africa and other parts of the developing world.
Nine years after the historic Addis Ababa Action Agenda on financing for development, United Nations member states once again gathered in the Ethiopian capital to renew the push for sustainable development financing and the Sustainable Development Goals (SDGs).
“Faced with sky-high debt burdens and costs of capital, developing countries have limited prospects of financing the Sustainable Development Goals,” stated António Guterres, Secretary-General of the United Nations, in a video message to the conference. “The Fourth International Conference on Financing for Development provides a unique opportunity to tackle these challenges head-on.”
After a series of global shocks, including the COVID-19 pandemic, geopolitical conflicts, and economic instability, the SDG financing gap for developing countries has ballooned to 4 trillion dollars annually. These financing gaps and accompanying debt challenges have worsened poverty and inequality, putting the world off track to meet the 2015 international targets.
“This meeting provided the opportunity to take stock of the steps we must take to fill the financing gaps and meet the development needs of all people around the world,” said Mr. Li Junhua, the Under-Secretary-General of the UN Department of Economic and Social Affairs. “The ministers, experts, and other stakeholders that gathered here in Addis Ababa made clear that we cannot continue with business as usual and must dramatically reshape the international financial system.”
Proposals were unveiled for reforming the rules and governance of international taxation as well as for addressing countries facing debt crises, including through new international mechanisms to resolve sovereign debt defaults.
“The international financial architecture created nearly 80 years ago needs to be reformed to respond to the most pressing challenges of African countries in a more effective and inclusive manner,” said Mr. Claver Gatete, Executive Secretary of the UN Economic Commission for Africa.
Also, during the conclusion of the conference, Ethiopian Finance Minister Ahmed Shide said that in the last five days, we have been able to gather resources for the Fourth International Conference on Finance for Development by discussing various issues.
He emphasized that developing countries should have increased representation in international financial institutions and greater support for their development efforts. “It was raised in the conference that we should work with great concentration to increase our income,” Ahmed stated.
The conference, attended by ministers from various countries and representatives of UN member states, successfully concluded with a focus on addressing global challenges such as climate change, economic disparities, and the COVID-19 pandemic.
“By reforming international financial institutions and strengthening financial cooperation, especially with developing countries in Africa, with special attention and participation, an international financial system that suits their needs has been discussed,” he said.
However, the minister expressed concern that financial support decisions on climate change are not being fully implemented. “Commitment is needed to bring about an inclusive, sustainable, and resilient global economy,” he emphasized.
The conference was held in Addis Ababa to discuss the progress of the Addis Ababa Action Agenda and to find solutions to the challenges facing developing countries. Over 1,000 people from around 100 countries attended the conference, which aims to take stock of the progress made so far and put forward new ideas for moving forward.
This conference, which aimed to gather the agenda for the international financial conference to be held in Seville, Spain, in 2025, concluded with discussions on climate change, finance, gender equality, sustainable and stable financial systems, and fair financial distribution.
BY EYUEL KIFLU
THE ETHIOPIAN HERALD TUESDAY 30 JULY 2024
