UN-led processes over the past year have yielded strong recommendations across the financing spectrum.
The tide has begun to turning across the globe, as more governments take steps to align their recovery spending with the SDGs.
We also need the private sector to invest ambitiously in an SDG-aligned recovery.
By Navid Hanif
Since the onset of the pandemic, the UN has used its trusted, universally representative voice to catalyze action across the financing spectrum. It is time to turn the strong recommendations crafted through UN processes into targeted action.
The United Nations has made its voice heard on the pandemic response and recovery through three key channels: shaping the global conversation and setting priorities for global action; enabling and advancing evidence-based decision and policy making for a recovery aligned with the SDGs; and acting as consensus builder for global agreements to build forward better for the post-COVID world. Each of these has yielded important points of consensus about the way forward.
Aligning recovery packages and spending with the 2030 Agenda is condicio sine qua non.
As the world was racing to tackle the immediate fallout of the pandemic in early 2020, the UN began sending out a clear message: People first. Financing the health and humanitarian response, including through ACT-A and COVAX and expanding social services for those most impacted, has been and will continue to be a critical priority. The Secretary-General’s Policy Briefs call for actions that put people first, such as: to transform the care economy and informal sectors, to begin to address the pandemic’s disproportionate effects on women and girls; and establishing a universal platform to tackle debt sustainability challenges, which are diverting resources from health and humanitarian spending. The Secretary-General’s Special Initiative jointly convened with the Prime Ministers of Canada and Jamaica has proposed concrete and actionable recommendations for policy action towards this end, including on debt and liquidity, and a recovery aligned with the 2030 Agenda.
The UN’s analytical work has highlighted other areas for priority action in financing. The 2021 Financing for Sustainable Development Report has advanced evidence-based decision and policy making, exploring all levers to channel recovery financing towards the SDGs. The report finds that all major financing flows have been severely impacted, including FDI, which fell by 16% to developing countries. In this context, it identifies paradigm-shifting actions to address structural vulnerabilities that need more than a quick fix, particularly on debt, liquidity, and aligning economic activity with the SDGs. The full alignment of recovery packages and spending with the 2030 Agenda is identified in the report as condicio sine qua non.
The tide is visibly turning across the globe, as more governments take steps to align their recoveries with the SDGs. The private sector is also coming onboard, particularly through the leadership of the Global Investors for Sustainable Development (GISD) Alliance. GISD is advancing concrete and tangible actions on aligning investment and financial systems with the SDGs, and advocating for mandatory reporting standards, innovative financing tools, and the scaling of sustainable financing.
To unlock the needed investment to developing countries, the SDG Investment Fair has been acting as a trusted broker, bringing investment-ready project pipelines to investors to identify appropriate financing instruments. With an investment gap of USD 1 trillion annually in infrastructure in developing countries alone, moving the money and moving to scale is long overdue and a needed catalyst to kick-start sustainable growth.
The UN has also acted to shake up stalling progress in global agreements and enable the COVID-19 recovery. In their path-breaking outcome document of the 2021 Financing for Development Forum, the most ambitious since the Forum’s inception, UN Member States commit to align recovery programmes with the 2030 Agenda and the goals of the Paris Agreement on climate change.
Member States also pledge to: scale up concessional financing, particularly for the most vulnerable countries; strengthen the global dialogue on debt; and more effectively mobilize private investment, including through common frameworks and standards for SDG investment and disclosure. The outcome document also calls for expanding social protection, including to the informal sector.
To turn these calls into impact on people’s lives, the way forward is clear: governments must align their recovery spending with the 2030 Agenda and the Paris Agreement, including through expanded social services and protection for those most in need and increased concessional financing for vulnerable countries; the private sector must invest ambitiously in SDG-supportive projects; and the UN and stakeholders must provide evidence for good decision-making, evaluate impacts, and hold all of us to account. The future depends on how quickly and effectively we can advance inclusive solutions focused on people, planet and prosperity.
Guest author Navid Hanif is the Director of the Financing for Sustainable Development Office at the UN Department of Economic and Social Affairs (DESA).