Meeting the challenge of financing for sustainable development
New DI fellow Gail Hurley's overview of what needs to be achieved to finance and deliver sustainable development and to leave no one behind.
I am delighted to join the Development Initiatives (DI) team as a Fellow and excited to contribute to the organisation’s vital work to reduce poverty, improve data and analysis on development, and boost high-quality investment and resources to meet the UN’s Sustainable Development Goals (SDGs). As a researcher, analyst and practitioner on development finance, including with the UN, governments and non-governmental organisations, I will support DI’s work on meeting the challenge of financing sustainable development.
I come to this role at a time when multilateralism is under strain in many countries and major shifts are underway in income and wealth around the world, leading (perhaps inevitably) to changing relationships and power dynamics among countries. In recent years, much attention has focused on the rapid economic advances of China, which has helped lift millions of people out of extreme income poverty, and sub-Saharan Africa, which is home to several of the world’s fastest growing economies, including Ethiopia, Rwanda and Ghana. Increasingly, both public and private investment in developing countries is being driven by other developing nations.
These shifts are accompanied by other major trends around the world, namely accelerated environmental degradation, the climate crisis, continued and rapid urbanisation, major demographic shifts (a youth ‘bulge’ in some countries versus ageing societies in others), and advances in new technologies and artificial intelligence. What do these dynamics mean for the work of international development organisations such as DI, and for our efforts to meet the SDGs? Emerging technologies and disruptive trends represent valuable opportunities to ‘do development differently’, such as implement renewable energy technologies, build ‘smart’ cities and revolutionise food production systems. But we also need to ensure they do not lead to worsening inequalities both within and between countries and bring about further rises in vulnerability to various economic, environmental and conflict-related shocks.
Responses to these major trends will also require the mobilisation of unprecedented resources and their targeted and effective use. But, while the world has never been wealthier, we know that finance does not necessarily flow to the countries or communities that need it most – and the SDGs as a whole remain chronically under-resourced. Capital continues to flow out of developing countries and raising tax revenues (from both citizens and corporations) remains a challenge.
Development aid has largely flatlined, with some traditional donors increasingly asking whether we should ‘do aid differently’ in middle-income countries and urging more political leadership on development and financing from the Global South. Worryingly, ‘donor fatigue’ has set in when it comes to financing for some protracted crisis countries, while more resources are being allocated to responding to sudden-onset crises, such as hurricanes, floods and disease outbreaks. Innovations in financial instruments and a gradual shift in values towards more responsible private investment practices (and consumer behaviour) are slowly reorienting more private capital towards sustainable activities. Yet the UN is clear that this is not happening at the scale (and speed) needed to finance the SDGs, and the extent to which these developments are helping to build a financial system that is more inclusive and reaches the furthest behind remains an open question.
This is why DI’s focus on the people and places that need financing the most is so important. As DI consistently shows, globally the poorest people continue to be left behind. On current trajectories, we will not eradicate extreme poverty everywhere by 2030. We also need more data on how resources – from all sources – are being spent and their impact on sustainable development. How can we most effectively target different forms of finance so that they drive poverty eradication and sustainable development? What is the role for development aid (and South–South cooperation) in a changing international context?
I’m excited to explore these questions (and more) with DI, an organisation that shares my passion for sustainable development for all. I look forward to supporting DI to build the evidence base that will help to shape international policy debates on how we ensure finance is ‘fit for purpose’ and can deliver on the central SDG promise to leave no one behind. With just over 10 years to deliver on the SDGs, there is no time to waste.
Photo: by Axel Fassio/Center for International Forestry Research (CIFOR). Woman carrying a solar panel near Yangambi, Democratic Republic of the Congo.
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