On 20th September 2023 the UN held a High-Level Dialogue (HLD) on Financing and Development under the theme Financing the SDGs for a world where no one is left behind. This was held as part of the 78th UN General Assembly (UNGA), and was attended by UN Member States, international financial institutions, creditors, global financial and taxation bodies, and members of civil society. The Sustainable Development Goals (SDGs) were agreed in 2015 and aim to achieve sustainable improvements to development and poverty reduction worldwide by 2030. However, progress in delivering the goals has been limited, and so it was important for UN Member States to use this year’s UNGA as a mid-way point to refocus efforts and help them achieve their SDG targets in time. A key part of this discussion is about how the SDGs are financed, and the need to increase investment in sustainable development.
Challenges to Achieving the SDGs
In the HLD, the current challenges in meeting SDG targets were highlighted. Currently, only 15% of the SDG targets are on track and roughly one-third of the targets have stalled or regressed. Progress on fundamental priorities, poverty and hunger targets, have regressed for the first time in decades. 3.3 billion people live in countries that spend more on debt servicing than on education, health, and social protection. Climate change, COVID, cost of living crises, and protracted geopolitical tensions have further hindered progress towards the 2030 Agenda.
While these issues have impeded delivery of the SDGs, there are other systemic issues that further complicate progress towards realising the 2030 agenda for sustainable development. One significant issue discussed was the unjust and archaic nature of the global financial architecture. The current system was established when many countries in the Global South were under colonial rule and not independent nations. High borrowing rates, unfair loan conditions, and ‘one size fits all’ credit ratings make it difficult for developing countries to effectively access and participate in the global financial architecture in the same manner as their Global North counterparts.
Additionally, climate change is a global challenge whose impacts are borne the hardest by developing countries, and Small Island Developing States (SIDS) in particular noted that they are bearing an unequal burden as they sit at the intersection of the impacts of climate change and inequitable development financing. They are the most affected by climate events, which requires them to borrow money more frequently to repair damage caused by climate events. Even though they lack financial resilience, they are required to borrow at commercial rates. African nations have borrowing rates that are eight times higher than those of countries in the Global North.
In the face of growing humanitarian and development needs and an increasingly urgent climate emergency, accessing increased resources for development and green transition should be a priority for all nations to address these global challenges.
Domestic resource mobilisation through taxation was a major topic of discussions during the HLD, as this was seen as key to helping developing countries finance delivery of the SDG. However, developing Member States noted the global tax infrastructure replicates similar inequalities as the global financial architecture. Least developed countries (LDCs) and middle-income Member States noted that attempts to build effective domestic tax systems are obstructed by obsolete international tax structures that allow multinational companies to avoid paying their share of taxes, and also allows corporations and the ultra-rich to hide their wealth in order to avoid taxation. Representatives of Member States made calls to create a fairer and more equitable global taxation infrastructure that will allow LDCs and middle-income countries to fully mobilise domestic resources towards achieving the SDGs. Other calls to create more equitable tax and financial infrastructure included for donor countries to honour their ODA commitments, creating long term, low-cost debt relief options for Pacific Small Island Developing States (PSIDS), and reparations for countries negatively impacted by the horrors of the Transatlantic slave trade.
Member States had the opportunity to share innovative solutions they have implemented to increase financing towards their SDG targets. These solutions are mainly targeted at increasing support from the private sector. Tanzania created an SDG investment map to help funds, financiers, and corporations identify investment opportunities and business models that advance the SDGs. Ethiopia highlighted that they established various funds, including a diaspora trust fund, to help bring in public and private funds to Ethiopia.
Shabaka and the SDGs
Shabaka’s SDG priorities are:
- SDG 10 – Reduce inequality within and among countries
- SDG 11 – Make cities and human settlements inclusive, safe, resilient, and sustainable
- SDG 17 – Strengthen the means of implementation and revitalize the global partnership for sustainable development
Development financing is a critical part of working towards the 2030 agenda because SDG targets cannot be met without sufficient resources. The SDG framework and 2015 Addis Action Agenda agreement on financing the SDGs set out the need for governments, civil society, and the private sector to increase investment in development, and recognise diaspora and migrants as development and humanitarian partners. Indeed, according to the World Bank, diaspora and migrant remittances exceeded $647 bn in 2022 , outstripping bilateral aid flows and, in some regions, Foreign Direct Investment (FDI). However, diaspora and migrants are more than just ‘beneficiaries’ and ‘cash machines’ and contribute to the social, cultural, and environmental development of their countries of origin.
We support the calls from Members States to create a more equitable and just financing and taxation infrastructure to support development and humanitarian response so developing countries can have resources needed to achieve the SDGs. We also support the calls for Global North countries to fulfil their ODA commitments, which will further help countries in the Global South achieve their SDG targets.
To be truly inclusive, conversations on financing for development solutions must also include migrant and diaspora populations who are already contributing to the development of their countries of origin in various ways.