The OECD’s edition “Global Outlook on Financing for Sustainable Development 2019 – Time to Face the Challenge” was published in November 2018. This cross-sectoral approach required close collaboration of four directorates to produce this report led by the Development Co-operation Directorate.
The Sustainable Development Goals (SDGs) and 2030 Agenda have redefined global ambitions: creating a better world for all is a collective responsibility. Three years ago, the Addis Ababa Action Agenda (AAAA) called on a diverse array of actors – governments, businesses, foundations and individuals – to mobilise more financial resources, in a more co-ordinated manner, and in the pursuit of economic growth that enhances human well-being and preserves the environment, particularly in developing countries.
Yet three years after the AAAA was signed, the promised surge in finance available for those countries to achieve the SDGs has not materialised. External resources, in particular, are a cause for concern, with FDI dropping by 30% over 2016-17, and project finance decreasing by an alarming 30% in the first trimester of 2018 alone. Declining financing for sustainable development is not only a risk for developing countries: failure to achieve sustainable and peaceful prosperity globally will have consequences for all.
Therefore, this first edition of the Global Outlook on Financing for Sustainable Development calls for urgent and bold action to implement the AAAA and fulfil the promise of Agenda 2030 at home and abroad. Seeking to mobilise a greater quantity of financial resources for developing countries will not be enough; the quality, or sustainable development footprint, of all finance must be enhanced.
The Global Outlook identifies three areas for reform. First, on measurement: we need better indicators and tools to assess the volume of all financial flows, not just aid, but also their alignment with the SDGs. Second, policy reforms are needed to “shift the trillions”, i.e. create incentives for a greater share of the finance already available to be invested in sustainable development. Third, we need to improve the co-ordination of various actors in their operations, so as to better connect supply and demand for financing for sustainable development. In particular, country development strategies need to be better linked with available financing.
The ambitious change agenda set out in this inaugural edition of the Global Outlook aims to support the UN-led efforts to implement Agenda 2030 and the AAAA. The report puts the onus on OECD providers of development co-operation to use all available levers to support the visions and choices of partner countries for their sustainable development. It recommends concrete actions, identifies areas for further policy dialogue, and points to knowledge gaps which the next editions will aim to fill.