In preparation for the fourth International Conference on Financing for Development (FfD4) in June 2025, the UN Department of Economic and Social Affairs (DESA), which serves as secretariat for the Conference, hosted a global policy dialogue on ‘Financing for the Future.’ The event provided an opportunity for academics to share their expertise, connect with peers, and identify key areas where further research is needed to drive meaningful action on FfD.

The event page notes that the Pact for the Future world leaders adopted at the Summit of the Future (SoF) in September highlights the need to reform outdated global institutions, including the international financial architecture (IFA), to “turbocharge implementation of the 2030 Agenda for Sustainable Development and address the challenges of today and tomorrow.”

DESA’s Financing for Sustainable Development Office (FSDO) organized the global policy dialogue on 2 December 2024 as part of the ‘Financing for Development Dialogues: From Evidence to Action’ programme of events. Taking place ahead of the FfD4 second preparatory meeting, convening from 3-6 December, the dialogue engaged members of the UN High-level Advisory Board (HLAB) on Economic and Social Affairs to explore the commitments made in the Pact for the Future and their linkages to FfD4 and the second World Summit for Social Development in 2025.

Shakuntala Santhiran moderated the event.

Setting the stage, Under-Secretary-General for Economic and Social Affairs Li Junhua, DESA, said the policy dialogue is one of the key steps in pursuing a shared commitment to shaping a more sustainable, equitable, and resilient future for everyone. Recognizing the need for global institutions, including the IFA, to evolve to meet the needs of the rapidly changing world, he underscored the importance of engaging key stakeholders in FfD4 preparations to ensure the latest research and insights help unlock SDG investment and finance.

On accelerating IFA reform, FSDO Director Shari Spiegel described the IFA as an ad hoc “non-system” that safeguards the stability and function of the global monetary and financial systems. She said the governance arrangements include institutions, rules, and markets that together seek to act as the global financial safety net. Spiegel underscored the need for IFA reform because the IFA does not help countries in crisis, money is not going where it is needed the most, and developing counties do not have a strong voice.

The Managing Director of the Economic Research Forum, Ibrahim Elbadawi, outlined steps needed to reform the IFA from the perspective of fairness. He called for providing a seat at the table to countries in the Global South, especially those most affected by poverty, climate change, inequality, and conflict. He said IFA reform needs to be delivered with speed and agility, at scale, and in solidarity with wealthy countries to ensure developing countries’ self-reliance, with support.

Mariana Mazzucato, Professor in the Economics of Innovation and Public Value at University College London (UCL), drew attention to the “SDG financing gap,” which is estimated at USD 7 trillion and is equal to the amount being spent by S&P 500 companies on buying back their stock. She also noted conservative estimates, according to which USD 500 billion a year is lost annually to tax evasion. Mazzucato said a huge amount of finance is being wasted, with the SDGs and nationally determined contributions (NDCs) remaining at the periphery. She stressed the need to change the framing away from SDG financing gaps, restructure finance to be goal-oriented and SDG-aligned, and move away form market fixing to market shaping.

Jayati Ghosh, Professor of Economics at the University of Massachusetts at Amherst, US, emphasized that getting the private sector involved doesn’t mean more incentives. She outlined the need to create a broader ecosystem where the private sector would find it in their own interest to align investments with the SDGs because of regulatory measures.

On expectations for FFD4, Spiegel mentioned debt and private and blended finance among the “concrete items that can be moved forward,” noting these are reflected in the co-facilitators’ elements paper. Acknowledging “some big issues that we’re not going to solve by June,” such as global governance, she hoped the discussions can move forward and continue to build momentum.

Elbadawi highlighted the importance of giving space to the recipient countries to prioritize how finance should be allocated.

Reiterating the need to rethink how we’ve structured finance, Mazzucato said the “privatize rewards, socialize risk” model needs to change.

Ghosh hoped FfD4 will serve as a forum and a platform that enables coalitions of willing countries to move forward in a progressive direction.

On taxation and tax reform to boost financing for the SDGs, the panelists acknowledged the importance of global tax cooperation in addressing tax avoidance and evasion, to tackle inequalities, and ensure a more equitable future for all.

Ghosh underscored that the current tax system is outdated and not fit-for-purpose. She said multinationals treat their subsidiaries as separate companies that have arm’s-length transactions with one another to shift profits to the lowest tax jurisdictions or tax havens. Ghosh suggested every country should be able to tax multinationals based on a formula, to get its share of the global profits. That single measure, she said, would generate an additional USD 300 billion in tax revenues. She also supported a wealth tax on the rich, including “semi-millionaires.”

Elbadawi stressed that collective action and support are needed to address illicit transfers associated with mineral exploration in Africa.

Noting that the African group felt they didn’t have a strong voice in the negotiations on taxation in the Organisation for Economic Co-operation and Development (OECD), Spiegel called attention to the recent decision by the Second Committee (Economic and Financial) of the UN General Assembly (UNGA) to establish an intergovernmental negotiating committee (INC) for the purpose of drafting the UN Framework Convention on International Tax Cooperation. She said the committee’s organizational session will be held in New York, US, from 3-6 February 2025, and stakeholders are invited to be part of the INC’s discussions as well. Elbadawi suggested the UN collaborate with other institutions, including OECD.

Ghosh characterized the UN as “the only legitimate forum to be in charge of global taxation.” She emphasized the role of cooperation in supporting governments as they collect revenue within the existing national tax rules and underscored the importance of inclusivity.

On ensuring international taxation does not hinder innovation, Elbadawi emphasized transparency.

Spiegel clarified that international agreements are about tax policy, while taxation is done by governments themselves. She said that, in order to design tax policy to encourage innovation, incentives need to be aligned with goals.

Ghosh said current tax systems discourage innovation.

On the role of the IFA in supporting the phase-out of fossil fuel subsidies, Ghosh said it is not the price of carbon that matters but profitability. She emphasized the need for genuine public investment to generate and deliver a real energy transition.

On how to stay optimistic in spite of the challenges, Spiegel said we need to show multilateralism can work. Elbadawi acknowledged youth engagement in DESA-led processes. Ghosh said optimism comes from the next generation.

DESA’s Assistant Secretary-General for Economic Development Navid Hanif offered closing remarks. He said the SDG “financing gap mantra” has to be debunked immediately as contrary to the foundational spirit of the 2030 Agenda. Hanif underscored that the only way to transform our behavior and ensure our existence on this planet is to align every financial decision with the SDGs and climate action. He listed debt, investment flows, IFA reform, and policy coherence across sectors among the areas requiring immediate attention at FfD4.

The policy dialogue was made possible by the UN Peace and Development Trust Fund. [SDG Knowledge Hub Sources]