26 April 2018: Participants at the third annual UN Economic and Social Council (ECOSOC) Forum on Financing for Development follow-up (FfD Forum) highlighted the importance of multilateralism to creating a global enabling environment for sustainable development. Representatives of governments, international financial institutions, the business sector and civil society also addressed issues related to, inter alia: using official development assistance (ODA) as catalyst for strengthening domestic resources mobilization and private sector engagement; the role of governments in de-risking private sector investments; and the risks posed by promoting incentives for the private sector through broad deregulatory agendas or tax incentives that are not well crafted.

The FfD Forum took place from 23-26 April 2018, in New York, US. The Forum was established by the Addis Ababa Action Agenda (AAAA) to support the follow-up and review of FfD outcomes and the means of implementation of the 2030 Agenda for Sustainable Development. The Forum’s conclusions and recommendations will feed into the 2018 session of the UN High-level Political Forum on Sustainable Development (HLPF).

During the Forum’s discussions, noting that the threat to free trade would have a spillover effect on the most vulnerable, Mohamed Asim, Minister of Foreign Affairs of Maldives, said the private sector would have to play an increasingly larger role to create transformative change and attract the amount of funding that is needed for SDG implementation. Oleksandr Danyliuk, Minister of Finance of Ukraine, advised countries to reform their institutions and financial systems before challenges appear forcing the respective changes, as crises make changes more challenging. He underscored the importance of sound and transparent regulations to attract investors.

Karin Finkelston, International Finance Corporation (IFC), the World Bank Group (WBG), noted that the capital increase for the Bank decided by its stakeholders on 21 April means that the WBG will be able to work better with private and public sectors to deliver the SDGs and eradicate poverty. Elissa Golberg, Ministry of Strategic Policy and Global Affairs of Canada, stressed that it is the role of governments to minimize risks for the private sector, through policies and legal frameworks.

Norbert Barthle, Federal Ministry for Economic Cooperation and Development, Germany, said one of the most important questions is how to help developing countries channel investment towards sectors that are sustainable and of importance to national development. Somchith Inthamith, Ministry of Industry and Commerce, Lao People’s Democratic Republic, underscored that countries need help to address their long‑term debt challenges. He explained that Lao People’s Democratic Republic is to graduate from least developed country (LDC) status for the first time in its history due to domestic policy reforms and bilateral and multilateral cooperation.

Pio Wennubst, Swiss Agency for Development and Cooperation (SDC), noted that we need more analysis of block chain and new technologies. He explained that packages of blended finance have not performed well enough so far to be scaled up as they are not well-assembled and the risk-management tools are not well integrated, being predominant only at the projects’ local levels. Mpho Parks Tau, President, United Cities and Local Governments (UCLG), emphasized the need to increase decentralization all over the world in order to enable local governments to deliver on the SDGs and ensure more effective spending and transparency.

Bambang P.S. Brodjonegoro, Minister of National Development Planning of Indonesia, said Indonesia is developing a one-stop service programme to ease the issuance of business permits. Teresa Ribeiro, Secretary of State, Foreign Affairs and Cooperation of Portugal, emphasized the importance of promoting innovation and modernizing public administration.

Liu Zhenmin, Under-Secretary-General for Economic and Social Affairs, underscored that the ability to tax, build and trade are at the core of development, thus effective mobilization and the use of domestic resources must go hand in hand with strengthened international tax cooperation. Rémy Rioux, CEO Agence Française de Développement (AFD), France, observed that development banks are becoming more concessional and international institutions are growing closer to development banks, with greater coherence developing between them.

Yaroslav Lissovolik, Eurasian Development Bank, said the biggest challenge is the lack of bankable projects and the lack of capacity to present projects that are possible to finance. Vitor Gaspar, International Monetary Fund (IMF), highlighted that a strong global response in the area of taxes is needed because the system available on the global scale is 100 years old. He noted that the progress on the automatic exchange of information on tax has been faster and better than anyone had anticipated.

Peter Bakvis, International Trade Union Confederation/Global Unions, said trade unions and civil society are concerned about the emphasis placed on creating incentives for the private sector through regulatory and policy changes on the national level, as often promoted by international institutions. He cautioned that that should not mean broad deregulatory agendas and revamping tax systems to allow for more tax incentives.

Mark Flanagan, IMF, expressed concern that countries’ debt levels are increasing and reaching “red flag” levels. He called on the countries that are at high or moderate risk to carefully look at their debt vulnerabilities, including the places where debt is mounting in the public sector.

Noting a trend emerging in recent years whereby a large portion of aid (up to 25%) is being driven by humanitarian crises, Jorge Moreira da Silva, Organisation for Economic Cooperation and Development (OECD), underscored the need to address aid in a more programmatic, long-term way, as well as a need to increase the volume of ODA.

Also during the FfD Forum, Amina Mohammed, UN Deputy Secretary-General, launched the Joint SDG Fund, which is a new pooled funding mechanism that aims to support Member States in their efforts to accelerate progress towards the SDGs. She said the Fund will facilitate SDG financing, with both public and private sector partners, through unblocking policy bottlenecks, de-risking investments, and connecting partners to SDG investments that need scale-up.

Neven Mimica, Commissioner, International Cooperation and Development, European Commission, said the European Commission supports the creation of the new Joint SDG Fund. [Meeting Summary 23 April][Meeting Summary 24 April][Meeting summary 25 April][Meeting Summary 26 April][FfD Forum Website][FfD Forum Programme]