Kathmandu, Nepal — The extensive plan of action adopted at the 4th International Conference on Financing for Development (FfD4), held recently in Sevilla, Spain (30 June – 3 July), triggers the question: Where will the money come from?
When I hear of mind-blogging figures of money needed to tackle the most daunting challenges humanity faces, I always ask myself how these resources will materialize.
Developing nations are saddled with debts whose serving is getting more and more onerous. Developed nations are entangled in a dangerous geopolitical downward spiral that is pushing them to invest enormous amounts in defense at the expense of global justice.
Meanwhile climate finance alone is going to be in the surround of trillions American dollars. In addition the recently World Bank published Global Economic Outlook provides another dismal forecast for the days to come.
“Global growth is slowing due to a substantial rise in trade barriers and the pervasive effects of an uncertain global policy environment. Growth is expected to weaken to 2.3 percent in 2025, with deceleration in most economies relative to last year. This would mark the slowest rate of global growth since 2008, aside from outright global recessions”.
This is the bedrock based on which the 4th International Conference on Financing for Development was recently held in Sevilla.
The final outcome of the Conference, the Sevilla Commitment is an extensive plan of actions with potentially groundbreaking measures that could truly support developing nations.
Yet as often happens with such documents, we should ask ourselves how this pledge will be upheld and implemented, especially the ones launched during the conference through the FFD4 Sevilla Platform for Action Initiatives.
The onus is going to be equally on both sides of the equation.
A Universal Peer Review to track the financial commitments of developed nations might be what is needed.
Will developed nations really be serious about raising their developed aid, mobilize the regional and international multilateral financial institutions that they control while being serious at finding ways to relieve developing nations of parts of their debts?
Even more crucially, with the stakes so high and the overall economic situation in such a distressful mode, will developed nations muster the courage to truly reform the international financial system?
On the other hand, will developed nations be committed and determined to root out corruption and malpractices in governance?
How will these nations be able to raise their taxation basis and undertake policy making actions transparently and inclusively?
The Sevilla Commitment does offer a broad framework to raise trillions of dollars to achieve the SDGs, including resources for climate and biodiversity actions.
This is an important aspect of the document that cannot go underestimated.
The document provides, at least in principle, a vision to do away, in matters of financing, with artificial and inefficient silos that the international aid system has created.
Paragraph 8 is key to this ambitious effort.
“National development efforts need to be supported by an enabling international economic environment and effective means of implementation that promote sustained, inclusive, and sustainable economic growth, and prevent external shocks from disproportionately affecting developing countries. We commit to align international support with national strategies, plans and frameworks, such as Integrated National Financing Frameworks (INFFs), and will respect each country’s policy space to pursue sustainable development while remaining consistent with relevant international rules and commitments”.
Annalisa Prizzon, an economist and Principal Research Fellow in the Development and Public Finance Programme at ODI, one of the most renowned development think tanks offered a clear insight.
“We should focus on “how much but also on how financing for development is delivered and reinvigorate the discussions on what makes cooperation for development effective”.
The International Commission of Experts on Financing for Development (FFD4) led by José Antonio Ocampo, a former Minister of Finance and Public Credit of Colombia that also included Prizzon, in its report released in February 2025, there is a proposal of creating a UN Global Economic Coordination Council.
The fact that the whole UN system is under immense pressure of restructuring itself in order to be more of value for money should not imply that it cannot still play an important role.
In a much different way, the UN should especially strengthen its convening and coordination powers among its members.
Yet I found it baffling that the whole text of the Sevilla Commitment does not contain any reference to the concept of “SDGs Stimulus” that have been championed for long by the UN Secretary General Antonio Guterres. Instead, it was less surprising that in Seville there was a lot of focus on the role of the private sector and blended capitals.
Now there is an overwhelming consensus that public financing cannot do the job alone and finding private resources, often by leveraging complex and abstruse financial mechanisms that only equity investors seem to comprehend, is seen as a must.
While it is certainly true that Multilateral Development Banks can be much more effective at increasing their landing capacities and also incentivizing the mobilization of private capitals, the biggest challenges faced by humanity cannot be tackled through shortcuts.
And centering the international finance for development on private capitals rather than public money in the forms of grants or concessional loans with minimal interests and a lot of flexibility on the receiving nations, developed countries are taking a very convenient route that helps them dodging their moral responsibilities.
At G7 held in Alberta, Canada, it was decided that American multinationals would be exempted from the global minimum taxation regime that was agreed in 2021.
While this decision might hit more the revenues of European governments where many American companies operate, it is a troubling signal. If big chunks of the international finance framework are outsourced and handed out to the private sector, then the international community is abdicating from its moral duties.
The same dynamics is also unfolding in matter of climate negotiations. In the recent held Bonn Climate Talks, officially the SB 62 held in the former capital of Western Germany (16 Jun – 26 Jun), even if financing was not a central topic on the official agenda, it was impossible avoid it.
Developed nations are pushing for a major role of private funding while also, quite correctly, demanding that nations like China and the Gulf Countries step up with new commitments.
In this context, developing nations must be more assertive with a “Show Me the Money” attitude when dealing with developed nations. The former might have some bargaining chips in the form of rare earth materials that the West is so desperately in need of.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
Forums like the G20, where developing and developed nations come together, offer a platform to push for changes. There are also now plenty of serious proposals to change the status quo.
On the top of the Sevilla Commitment, the same International Commission of Experts on Finance for Development has come up with a holistic array of proposals that, with political will, can make the difference.
The same can be said with the recently launched “The Jubilee Report: A Blueprint for Tackling the Debt and Development Crises and Creating the Financial Foundations for a Sustainable People-Centered Global Economy“, an initiative of the Vatican based Pontifical Academy of Social Sciences and Columbia University’s Initiative for Policy Dialogue.
Yet even if the flow of development finance from the private sector is tempered and controlled and a new governance system is created, we need some new forms of accountability.
What about a Universal Peer Review, UPR for development finance that could be devised while re-thinking the Post 2030 Development Agenda?
Borrowing from the UPR model in place in the Human Rights Council, such an accountability system could be the only hope to pressurize developed nations to hold to their promises.
As the international community will soon start discussing what will happen to the Agenda 2030 and the SDGs, we need some strongest mechanisms to hold nations answerable to their pledges.
While this is itself far from being a perfect mechanism (after all there are is no way of punishing or sanctioning the not complying governments), sometimes some shame is what is needed to give a jolt and ensure rich nations walk the talk.
Simone Galimberti writes about the SDGs, youth-centered policy-making and a stronger and better United Nations.
IPS UN Bureau