As discussions to develop a set of sustainable development goals (SDGs) build momentum, attention is starting to shift towards not only what the world should try to achieve, but also how to go about it. This in large part means starting to think about where the money for the proposed transformative action is going to come from.
Finance is one of the most frequently cited barriers to the implementation of sustainable development, and the need for significant mobilisation of resources to support countries in their efforts to promote sustainable development, including the achievement of SDGs, was acknowledged in the Rio+20 Outcome Document (para. 254).
This sentiment was reiterated at a high-level meeting convened at the end of last month by the UN Economic and Social Council (ECOSOC), the World Bank, the International Monetary Fund (IMF), The World Trade Organisation (WTO) and the UN Conference on Trade and Development (UNCTAD), where governments and other stakeholders exchanged views on financing sustainable development in the context of the outcomes of Rio+20, and ECOSOC President Néstor Osorio highlighted the need for an effective strategy for raising finance from a variety of sources in the follow-up to the conference.
In recognition of this need, Member States at Rio+20 agreed to establish an intergovernmental committee of experts to evaluate and propose options for effective financing for sustainable development.
The Permanent Representatives of Kazakhstan and Norway have been appointed to facilitate the process of establishing the Expert Committee on a Sustainable Development Financing Strategy, which will comprise of 30 experts nominated by regional groups (with equitable geographical representation), and will assess financing needs, consider the effectiveness, consistency and synergies of existing instruments and frameworks, and evaluate additional initiatives, before proposing options to facilitate the mobilisation of resources and their effective use in 2014.
The committee has a huge task ahead of it. Estimates of the additional investment needed to fund sustainable development in developing countries are as high as $1 trillion per year for the coming decades; and then there are the politics to consider, of course.
In order to be successful, the committee will need to utilise and build upon the commitments and expertise that have been developed through previous experience financing development and the environment, including the Monterrey Consensus, Doha Declaration, Busan Partnership, and efforts to raise finance for climate change. There will also be a need to respond to changes in the global financial system and the development aid landscape by innovating new solutions and mechanisms to leverage resources.
Financing for development has changed significantly since the establishment of the Millennium Development Goals (MDGs), which were underpinned by a model based largely on domestic resource mobilisation and official development assistance (ODA). For instance, there has been rapid growth in new forms of development finance, including South-South cooperation, philanthropy and climate finance.
It is therefore vital that the process of developing a sustainable development finance strategy is open and inclusive of a wide range of actors, including non-Development Assistance Committee donors, NGOs, philanthropic organisations, private sector, and other stakeholders, all of which will be instrumental to the mobilisation and delivery of funds.
The co-facilitators have now begun the process of recruiting experts to the panel. In March they invited the Chairs of the regional groups to nominate experts by 31st March 2013 and circulated anindicative list of possible expertise to be included in the panel – including ODA and aid efficiency, domestic resource mobilisation/tax, climate financing, asset management, and innovative financing – to aid the groups in their decision-making.
Despite a commitment in the Rio+20 Outcome Document to establish the process in “open and broad consultation with relevant international and regional financial institutions and other relevant stakeholders” (para. 255), stakeholders don’t appear to have been included in the process so far. This could be, however, partially due to the fact that the group, and the process, has not yet been fully constituted and designed. Furthermore, it is up to individual countries to select their own experts.
However, it is also worth noting that, although non-exhaustive, the contribution of NGOs and philanthropy in financing sustainable development is notably absent from the indicative list of experts.
Over the next few months it will be important to follow this process closely and ensure that stakeholders are not stonewalled, as has been seen in the climate finance talks. As with the negotiations to design a set of SDGs, ensuring the process to develop a strategy to finance sustainable development is inclusive, transparent and draws upon broad multi-stakeholder input and expertise will be vital if we are to successfully finance the future we want.