Financing for Development: moving from paper commitments to tangible progress

Last week, decision-makers and thought-leaders from civil society, business and multilateral institutions came together from around the world to nail down the actions that are needed on sustainable development financing. They met at the UN Financing for Development Forum in New York, which sought to build on the 2015 Addis Ababa Action Agenda, through which governments committed to put in place the necessary quality and quantity of finance for equitable and sustainable development. Yet, in the three years since the Addis Agenda, there has been little sign of change.

Save the Children was at last week’s forum to fight the corner for the poorest and most marginalised children. The Forum ended with the adoption of a report on progress and prospects by the Interagency Taskforce on Financing for Development and an agreed outcome document. Here are our reflections on the forum – and the urgent action we believe is needed.

The main take-away from a week full of discussions and statements is that progress is far too weak to meet the ambition of the Agenda 2030. Estimates of the total investments needed range from US$ 3.3. trillion to US$ 4.5 trillion in developing countries alone. While the outcome document reaffirms some of the previous agreements and puts a strong emphasis on tackling gender inequalities and accelerating action on disaggregating data, this is not enough. If current lacklustre levels of action and ambition continue, targets to ensure we provide quality education, access to universal health care, nutrition and protection for every last child by 2030 will be missed.

Save the Children urges decision-makers to move from paper to progress and deliver on 4 priorities on Financing for Development:

1 Ensure Leave No One Behind is front and centre for all development financing action

It was encouraging to hear strong references to the pledge in the Sustainable Development Goals to ‘Leave No One Behind’ during last week’s discussions, and to see a strong push for gender equality and a degree of data disaggregation in the outcome document. But actions need to go further. This means integrating a focus on the furthest-behind countries and groups within countries into all Financing for Development pillars; strengthening action on equitable taxation; focusing aid on the least developed countries and on conflict-affected and fragile states; and ensuring all financing, including private sector and blended finance, complies with effectiveness, human rights and environmental standards, and delivers maximum impact.

2 Step up action on public financing for the most deprived and marginalised people

Discussions at the forum were skewed towards the need for accelerated action on mobilising private finance, but lacked commitments to accelerate action on public financing. ‘Blending’ and ‘the catalytic role of aid’ were buzzwords. However, when limited aid money is used to mobilise private finance, first and foremost strong safeguards and monitoring processes should be put in place to ensure there is real financial and developmental additionality. The focus should be on strengthening domestic resources, in particular, tax – as governments committed to in the Addis Tax Initiative. Further emphasis should be placed on innovative ways of blending finance. For instance, the Global Financing Facilityif set up appropriately – can play a pivotal role for health and nutrition financing, and thus contribute to tackling the world’s biggest killer, pneumonia.

3 Translate words into action on quality financing and focus on long-term change

It was welcome to see commitments on development effectiveness principles, existing aid targets and tax capacity-building reiterated in the outcome document. Yet discussions fell short on committing to concrete steps to accelerate action, and on conveying a sense of urgency for tackling structural and systemic issues, such as tax avoidance and evasion. Governments now need to drive real progress, including at national and regional levels. For instance, the EU Anti-Money Laundering Directive is a welcome step to increasing transparency on the real owners of multinational companies.

4 Ensure development finance delivers the highest impact

Current Financing for Development recommendations are strongly focused on mobilising more finance, without looking enough at quality criteria and the impact resources have on the ground. When implementing action, decision-makers need to move away from a focus on measuring financial inputs and flows, to measuring financial impact, particularly on the poorest and most marginalised groups. Specific commitments on disaggregating data for age, disability and gender indicators are a welcome first step for measuring impact. However, we need to go further and faster, with deeper disaggregation, and more transparent and timely reporting.

We are at a critical juncture, and the actions needed to deliver on the ambition of the Addis Agenda are clear. It’s time to move from commitments on paper to actual progress.

 

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  • Simon Wright

    Disappointing to hear that the private finance dominated the discussion when public financing from domestic sources is the area which needs to grow for the SDGs and is fairer. A lot of what is celebrated as private finance is loans or investment of private money which is repaid (and more) by governments or by individuals buying services (i.e. it is public money going to private sector).