Multilateralism: the only safe route for development finance
Lebanese ambassador who presides over UNCTAD's governing body defends multilateralism during UN development financing forum.
As leaders shun the rules-based international order, they undermine the conditions needed to finance sustainable development, Lebanon’s Ambassador Salim Baddoura said on 16 April at the United Nations headquarters in New York City.
Meeting the ambitious targets set by the 2030 Agenda for Sustainable Development – our common compass for a better world for all – means plugging a massive financing gap of at least $2.5 trillion a year for developing countries alone, according to UNCTAD estimates.
Mr. Baddoura, Lebanon’s permanent representative to the UN in Geneva and current president of UNCTAD’s governing body, said such a task is even tougher in a global landscape of weak growth, trade tensions and rising debt distress – and in a world where nations seem more set on protecting their own turf than fighting for the common good.
“Humanity is beset by systemic risks compounded by the erosion of multilateralism and the rise of extremist ideologies premised on forms of intolerant nationalism and exceptionalism,” he told the 2019 ECOSOC Forum on Financing for Development (FfD) follow-up, meeting from 15 to 18 April.
Unless the international community recommits to multilateralism, he said, the world won’t overcome the “chronic underfunding” of the 2030 Agenda’s 17 Sustainable Development Goals (SDGs) – the UN-endorsed blueprint for ending poverty and hunger, reducing inequalities and curtailing climate change.
Policy options for over-indebtedness
Speaking at a high-level meeting held with the International Monetary Fund, the World Bank and the World Trade Organization, Mr. Baddoura cited recent examples of multilateralism at its best in UNCTAD’s work related to financing sustainable development.
For example, he pointed to UNCTAD’s intergovernmental group of experts on financing for development, whose meeting in November 2018 brought together governments, international development agencies and civil society organizations in Geneva, Switzerland, to discuss policy options for tackling the rising debt vulnerabilities of many developing countries.
Debt sustainability is one of the central concerns of the Addis Ababa Action Agenda – the 2015 plan that outlined the means of paying for the SDGs.
Over the past decade, external debt has risen at an average annual rate of 8.5% for developing countries. By the end of 2017, the number of low-income developing countries that were over-indebted or at risk hit 31, compared to 13 in 2013.
“If these trends continue, many countries will face unsustainable debt burdens that could jeopardize development goals as governments spend more on debt service and less on infrastructure, health, and education,” Mr. Baddoura said in a written statement to the FfD forum.
The group explored several avenues for fair and effective debt resolution mechanisms and adopted policy recommendations that were provided as an input to the forum currently underway at UN headquarters.
A toolbox for development finance
Another example is the one-stop-shop for development finance – the Toolbox on Financing for the SDGs – that UNCTAD launched in Geneva during its 2018 World Investment Forum, in collaboration with the then president of the UN General Assembly, Miroslav Lajcák, now Slovakia’s foreign and European affairs minister.
“The toolbox is an online global resource platform for initiatives on sustainability financing,” Mr. Baddoura said in the statement.
The process brought together a range of other United Nations bodies, including the UN Development Programme and UN Environment. Others involved were the business grouping The Global Compact, the World Economic Forum, the International Chamber of Commerce, the insurance giant Aviva, and a host of other public and private sector organizations.
During this week’s FfD forum UNCTAD has also partnered with the Financing for Development Office of the Department of Economic and Social Affairs to organize the SDG Investment Fair, which provides a central platform for closing the Global Goals’ investment gap.
“I am also pleased to note that UNCTAD and DESA are joining hands with other UN entities in co-hosting the Secretary-General’s initiative of establishing a CEO Alliance on ‘Global Investors for Sustainable Development’ (GISD) as part of the implementation of his Strategy for Financing the 2030 Agenda for Sustainable Development,” Mr. Baddoura said in the statement.