Reallocation of Finance Needed for Sustainable Development

By Joel Jaeger Reprint | | Print |

UNITED NATIONS, Jul 18 2014 (IPS) - Successful sustainable development financing will require a reallocation of investment and the creation of innovative partnerships, according to the Intergovernmental Committee of Experts on Sustainable Development Financing (ICESDF).

The committee conducted a briefing Friday on the progress of its new report.

The report seeks “to provide a sustainable development financing strategy for the United Nations development agenda beyond 2015,” according to Ambassador Pertti Majanen, co-chair of ICESDF.

“We found that needs are extremely large, and the challenge in meeting them is huge, but it is achievable,” he said. “Public and private savings, already at around 22 trillion US dollars a year, are sufficient to meet the needs.”

“Nonetheless, it is clear that the current allocation of investment will not deliver sustainable development. The challenge of policymakers is thus to facilitate investment of diverse public and private, domestic and international financing flows in sustainable development.”

Mansur Muhtar, the other co-chair of ICESDF, focused on the specific policies that need to be implemented for successful sustainable development financing, on both the national and international levels.

“National efforts need to be complemented by international public support and an enabling international environment,” he said.

Countries need to “formulate their own national financing strategies aimed at addressing sustainable development goals,” Muhtar said, “and look at this in a holistic and synergistic and interrelated manner.”

The committee wishes to promote the development of “efficient and transparent tax systems through the broadening of the tax base and improving tax administration as well as closing loopholes.”
National development banks could play an important role in domestic public financing, according to Muhtar.

ICESDF stressed that national governments must cooperate with and encourage private sector sustainable development financing.

Muhtar cautioned that blended financial instruments can shift risk from the private sector to the public sector, but remained confident that “innovative financial structures can overcome past impediments.”

On the international level, the committee “felt that there should be a focus on strengthening tax cooperation, facilitating greater exchange of innovation [and] encouraging country-by-country reporting,” Muhtar said. These measures are designed to stem illicit flows and increase financial transparency.

Sustainable development financing works best in a fair and open financial system, said ICESDF. The committee encouraged global and regional dialogue and the sharing of best practices in the structuring of sustainable development financing arrangements.

ICESDF will release its final report upon the conclusion of its next meeting from August 4 to August 8.