There is an urgent effort to deliver more for people and the planet. Multiple overlapping shocks have strained the ability of countries to address hunger, poverty, and inequality, build resilience, and invest in their futures. Debt vulnerabilities in low- and middle-income countries pose a significant obstacle to economic recovery and the ability to make crucial long-term investments.
Urgent efforts are being made to combat poverty and inequalities. An estimated 120 million people have been pushed into extreme poverty in the last three years, and achieving the United Nations Sustainable Development Goals by 2030 is still far from being accomplished. Placing people at the center of the strategy can increase human welfare globally.
A system is needed to address development needs better and vulnerabilities now heightened by climate risks. These risks could further weaken countries’ ability to eliminate poverty and achieve inclusive economic growth. Climate change is expected to result in more frequent and severe disasters, significantly impacting the world’s most vulnerable and impoverished populations. The challenges that arise cross borders and pose existential risks to societies and economies.
The system aims to deliver more for the planet. The transition to a “net-zero” world and the goals of the Paris climate agreement presents an opportunity for unlocking a new era of sustainable global economic growth. Ecological transitions that leave no one behind can be a powerful force for alleviating poverty and supporting inclusive and sustainable development. A long-term investment is necessary to ensure all countries can take advantage of this opportunity. Inspired by the historic Kunming-Montreal Global Biodiversity Framework, there is a need for new economic models that recognize the immense value of nature for humanity.
The convergence of objectives between poverty reduction and the protection of the planet is widely acknowledged. Focusing on just and inclusive transitions is crucial to ensure that the benefits of this opportunity are fully accessible to the poor and most vulnerable without them bearing a disproportionate cost. It is recognized that countries may need to pursue diverse transition paths in line with the Paris Agreement’s 1.5° Celsius limit, depending on their national circumstances. There can be no transition without solidarity, economic opportunities, or sustainable growth to finance it.
Leaders of diverse economies worldwide are determined to forge a new global consensus. The Paris Summit for a New Global Financing Pact on June 22-23 can be a significant political moment to regain development gains lost in recent years and to speed up progress towards the SDGs, including just transitions. It is crucial to have a clear strategy that ensures the fulfillment of development and climate commitments. Following the Addis Ababa Action Agenda, all sources of finance, including official development assistance, domestic resources, and private investment, should be leveraged.
Delivering on consensus should start with existing financial commitments. The climate-finance goals need to be achieved by 2023. The total global ambition of $100 billion of voluntary contributions for countries most in need should also be reached through a rechanneling of special drawing rights or equivalent budget contributions.
No country should have to wait years for debt relief. Greater and timely debt cooperation is needed for both low- and middle-income countries. The text begins with a rapid resolution of remedies for nations facing debt distress.
A top priority is to continue the ambitious reform of the system of multilateral development banks, building on the existing momentum. Development banks are being asked to take responsible steps to do much more with existing resources and to increase financing capacity and private capital mobilization based on clear targets and strategies regarding private finance contribution and domestic resource mobilization. Financial resources are essential, but the reform is about far more than money. A more effective operational model can be delivered by adopting a country-led approach. Development banks need to work together with public agencies, vertical funds, philanthropists, sovereign wealth funds, private finance, and civil society, where appropriate, to deliver the most significant impact.
The core of partnerships will involve technology, skills, sustainability, and public and private investment. The aim is to support voluntary technology transfer, a free flow of scientific and technological talents, and an inclusive, open, fair, and nondiscriminatory economy. An agenda of sustainable and inclusive investment in developing and emerging economies will be promoted based on local economic value added and local transformation – for example, fertilizer value chains. This comprehensive approach will require new metrics to update accountability instruments.
Public finance will remain essential to achieving goals. Starting by strengthening the instruments such as the International Development Association, the IMF’s Poverty Reduction and Growth Trust and Resilience and Sustainability Trust, the International Fund for Agricultural Development, the Green Climate Fund, and other concessional windows of banks, as well as the Global Shield against Climate Risks can be beneficial. They acknowledge that meeting development and climate goals will require new, innovative, and sustainable sources of finance, such as debt buy-backs, engagement from sectors that prosper thanks to globalization, and more trusted carbon- and biodiversity-credit markets. Indeed, the fight against hunger, poverty, and inequality; adaptation to climate change; and efforts to avert, minimize, and redress loss and damage are essential.
Increasing resilience through a comprehensive suite of financial instruments is a high priority. A stronger global safety net based on pre-arranged approaches is necessary to mitigate and adapt to the effects of climate change, particularly during disasters. This implies the need for climate and disaster-resilient deferral mechanisms, insurance nets, emergency-response financing, and a more sustainable model for humanitarian aid.
Achieving development goals, including climate mitigation, also depends on scaling up private capital flows. Enhanced mobilization of the private sector with its financial resources and innovative strength is required, as promoted by the G20 Compact with Africa. Improving the business environment, implementing common standards, adequate capacity building, and reducing perceived risks, such as in foreign-exchange and credit markets, are required. This may require public support, as well as the sharing of reliable data. Overall, the system needs to lower the cost of capital for sustainable development, including the green transition in developing and emerging economies.
The work towards solidarity and collective action aims to reduce the challenges faced by developing countries and fulfill the global agenda. There will be a continued effort to press for progress by leveraging other vital events such as the G20 Summits in India and Brazil, the SDG Summit, and the COPs, beginning with COP28 in the United Arab Emirates this year. In all upcoming international works and negotiations, efforts will be made to advance concrete actions that deliver on the promise of the SDGs for the prosperity of people and the planet. This organization provides a platform for diverse voices to share their perspectives on global issues.