September 2019: The Dag Hammarskjöld Foundation and the UN Multi-Partner Trust Fund Office have released a report to enhance understanding of the UN’s multilateral financial architecture and inform future debates on UN funding. The report titled, ‘Financing the UN Development System: Time for hard choices,’ features essays on ideas and initiatives related to financing the SDGs.

The publication examines how and by whom the UN is funded and where and on what the UN spends money. The UN remains the largest channel of multilateral assistance, with US$20.9 billion in contributions in 2017. Governments provided 74% of UNDS direct funding in 2017, with 12 UN Member States contributing 65% of the total contributions in 2017. The top ten contributors in 2010 were the US, Germany, the UK, Japan, China, Sweden, Norway, Canada, Italy and France.

The report also outlines the five channels of revenue in the UN: assessed contributions, voluntary core contributions, negotiated pledges, earmarked contributions and fees. More than half of all UN revenue is earmarked (57%), which the report identifies as part of a long-term trend from more flexible contributions towards more constrained, earmarked contributions. The report observes that the UN has a higher level of earmarked funding in comparison with other multilateral institutions.

In 2017, 32% of UN funding supported humanitarian assistance activities, a four-percentage point increase from 2016. Funding for development (39%) and peacekeeping (19%) remained stable. Funding for global norms, standards, policy and advocacy has decreased by four percentage points since 2016, to 10% in 2017.

Africa continues to be the region with the highest proportion of UN expenditures, receiving 35%. However, the report finds that the share of funding in Western Asia grew the most, from 17%in 2015 to 23% in 2017. Asia and the Pacific receive 13% of UN expenditures, followed by the Americas at 9% and Europe at 3%. Global and inter-regional expenditures compose the remaining 17%. The report finds that 48% of country-level expenditure in 2017 occurred in low-income countries. The group of 50 countries defined as crisis-affected countries received 76% of total country-level operational expenditures.

Authors reflect on the financing the 2030 Agenda in a series of essays. Fiona Bayat-Renoux, Executive Office of the UN Secretary-General, elaborates on the three strategies of the UN Secretary-General’s ‘Strategy for Financing the 2030 Agenda for Sustainable Development.’ These are:

• aligning global economic policies and financing systems with the 2030 Agenda;
• enhancing sustainable financing strategies and investments at regional and country levels; and
• seizing the potential of financial innovation, new technologies and digitalization to provide equitable access to finance.

Bayat-Renoux also highlights actions taken by the Secretary-General to advance the Strategy, including establishing a Task Force on Digital Financing of the SDGs and a CEO alliance of Global Investors for Sustainable Development (GISD).

Other essays explore, inter alia: financing challenges; the role of science and technology policy in shaping inequality; pooled funding; and earmarked funding. Essays on financing peacebuilding, humanitarian assistance and migration: propose a ten-point agenda for financing peacebuilding; share trends on official development assistance (ODA) and peacebuilding; describe how the peacebuilding fund invests in the SDGs; recommend ways to scale up support to address fragility, conflict and violence; illustrate how World Bank catastrophe bonds can provide innovative financing; address migration financing; and consider the humanitarian-development-peace nexus. Essays on multilateralism shares perspectives from Geneva, Switzerland, as well as the Global South, and reflect on how to attract millennial investors to multilateralism and SDG perspectives.

The report concludes by highlighting questions that emerged from the report’s analysis and findings, such as, “How can impactful drivers of change, including science, technology and innovation (STI), help reduce inequality and leapfrog transformation?” and “What financing approaches are most likely to reinforce these drivers?”

This is the fifth annual report on financing the UN development system produced by the Dag Hammarskjöld Foundation and the UN Multi-Partner Trust Fund Office. [Publication: Financing the UN Development System: Time for Hard Choices]