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Country Reports

Bridging the Financing Gap of the Sustainable Development Goals

by Sebastian Borchmeyer
Estimates presented during last year's United Nations General Assembly revealed dramatic funding gaps in achieving Agenda 2030. It becomes clear that traditional sources of development finance are merely a drop in the ocean. Alternative approaches, such as innovative financial instruments, blended finance and impact investments, are promising but have not lived up to their potential. This news comes at a difficult time when the world experiences a dramatic slowdown of economic activity in light of the ongoing Covid-19 pandemic and the erosion of the multilateral rules-based order. Development practitioners are concerned that the coronavirus will 'infect' Agenda 2030 and that the Sustainable Development Goals (SDGs) will be among its many victims. With the United Nations Headquarters in New York on lockdown and all international conferences being cancelled, it will be challenging but critical to keep up the momentum of the Financing for Development process.

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At a speech on Financing for Development last year, UN Secretary-General Antonio Guterres gave a clear message to the world community: Given the massive needs in developing countries, particularly in the field of infrastructure, health and education, the Sustainable Development Goals (SDGs) will not be achieved by 2030, if funding is not scaled up dramatically. The current annual gap widened to US$2.6 trillion, which is 3.0% of global GDP or 7.4% of the combined GDP of all developing economies.1

Over the last years, it became clear that traditional forms of development assistance, in particular administering Official Development Assistance (ODA), will not be sufficient to mount this challenge and that different sources of resource mobilization need to be explored.

The timing for raising more funds for the SDGs was certainly not opportune even before the current health crisis unfolded at the end of 2019. Already a year ago, the IMF expressed concerns that “the world economy" was "at a delicate moment.”2 Trade restrictions and protectionism were rising, breaking up value chains around the world. Developing countries experienced increasing levels of debt and inequality, and an outflow of capital. Climate change endangered the livelihood of communities and put assets at risk. Finally, the perceived crisis in multilateralism weakened international institutions like the UN. Most of these issues might even multiply as life around the world now stalls and nations turn inwards in their responses to the SARS-CoV-2 outbreak.

The United Nations will need to cancel all international conferences in the first half of 2020, among them the Financing for Development Forum. It is unclear, if the Highlevel Political Forum on Sustainable Development in July can move forward; even the UN General Assembly in September is under jeopardy and will likely convene either in a scaled-down format or be scraped altogether. Despite this challenging situation, the international community cannot afford to drop the ball when it comes to moving Agenda 2030 forward.


You can find the complete report in the PDF.


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