Funding a better future for everyone: 5 things to know about the Business for Development Forum
There are so many conflicts, humanitarian disasters, extreme weather events and economic problems occurring in the world, that we are using a new word to describe the current situation: “polycrisis”.
The issue appears in 2022, a year that began with tentative hopes that the world economy would begin to recover from the severe disruption of the COVID-19 pandemic, but was soon dominated by Russia’s invasion of Ukraine.
Amid all these competing crises, many countries simply do not have the resources to invest in recovery, climate action, and sustainable development.
This is the challenging area in which the Financial Forum for Development 2023 (FfD) is taking place at the UN Headquarters, between 17 and 20 April, intended to push forward policies to address global development issues, from debt consumption, to under-development, and food insecurity.
Here are five things to know about this year’s FfD Conference.
1) Why is this year’s Conference so important?
Community members in Quelimane, Mozambique, restore mangrove forests to prevent flooding.
2023 is shaping up to be an important time for sustainable development. This year marks the midpoint between 2015, which saw the launch of the Agenda for Sustainable Development, and 2030, the deadline for the completion of the 17 Sustainable Development Goals (SDGs).
The United Nations plans to inject new momentum into achieving the Goals at a major SDG Summit in September. However, no progress will be made without significant funding
In February, UN Secretary-General António Guterres admitted that the SDGs are not on track, and launched an SDG Stimulus plan, which calls for rich countries to give an additional $500 billion each year to finance the SDGs. . “Investing in the SDGs is wise and possible,” he said. “It’s a win-win for the world, because the social and economic rates of return on sustainable development in developing countries are very high.”
The Stimulus Plan also calls for the global financial system to change, so that the debt burdens of developing countries are reduced, and access to financing is easier. Making this change a reality will be on the agenda of this year’s FfD Conference.
Women pick coffee beans in Addis Ababa, Ethiopia.
2) What are the main words?
According to the 2023 Fund for Sustainable Development Report, the number of people facing food insecurity has doubled, compared to epidemic levels (from 135 million in 2019 to 345 estimated in 2023). The war in Ukraine has led to higher food prices, up 50 percent in 2022 compared to 2019.
The productivity of least developed countries and many African countries is not improving as expected: The 2030 Agenda calls for doubling the value added from manufacturing in African countries by the end of the year ten. That means making and selling more products than selling raw materials to other countries.
In particular, inflation actually fell from about 10 percent of GDP in 2000 to nine percent in 2021.
Debt payments are also affecting poor countries: by 2022, 25 developing countries will have to devote more than a fifth of their total incomes to servicing external debt.
And gender inequality is a big drag on development: in 115 countries women cannot do business in the same way as men.
Ship workers unload cargo from a ship in Dar es Salaam, Tanzania.
3) What potential solutions will be discussed?
The Conference’s program will be based mainly on the findings of the 2023 Financing for Sustainable Development Report, released on April 5, which calls for stronger tax systems, more private and public investment for sustainable development, and the reform of the international financial system to get more resources to raise.
The report also argues that large investments are urgently needed to increase conversions in areas such as electricity supply, industry, agriculture, transportation, and buildings, to bring about a “new green industrial age”.
Manufacturing is often associated with dirt and waste, but history is an engine for progress. The “green manufacturing” proposed in the report includes supporting low-carbon industries, including renewable energy sources such as wind and solar, the digital economy, and the development of policies that lead to investment in sustainable activities, while reducing the negative environmental impact of companies.
There are positive signs that the message is starting to take hold: global spending on energy transition rose to a record high of $1.1 trillion in 2022, surpassing fossil fuel system investments for the first time ever, and the green economy has became the fifth largest. Industry sector by market value, $7.2 trillion in 2021.
A boy carries water in a refugee camp in Cox’s Bazar, Bangladesh.
4) What are the risks of inaction?
The gap between the rich and the poor is deepening, and, without a complete overhaul of the global economy, it is expected that 574 million people – nearly seven percent of the world’s population – will still live in extreme poverty by 2030 In this scenario, external financing needs for LDCs and least developed countries are expected to increase from $172 billion to $220 billion over the next four years.
Among the recommendations are warnings; If the proposed reforms are fragmented, inadequate, or fail to take into account the SDGs, sustainable development will be impossible, leaving the 2030 Agenda and climate goals unreachable.
An engineer works on a wind turbine blade in eastern Quebec, Canada.
5) What comes next?
No one is under any illusion that the task ahead is huge and experts agree that long-term sustainable development will be difficult in areas where humanitarian conflicts persist.
Ultimately, UN economists want the FfD process to lead to a deep reform of international institutions that better address the immediate needs of developing countries.
