May 27, 2015—Momentum is gathering for the Third International Conference on Financing for Development to be held in Addis Ababa from July 13-16. The conference will agree on a financing plan for the post-2015 agenda.
UN Secretary-General Ban Ki-moon recently laid out three key outcomes for the Addis conference in his remarks at last month’s Special High-Level Meeting of the Economic and Social Council with the World Bank, International Monetary Fund (IMF), World Trade Organization and the United Nations Conference on Trade and Development.
“First, a cohesive and holistic financing framework for sustainable development; second, concrete deliverables, particularly in crucial areas such as infrastructure, agriculture, social needs and support for small and medium-sized enterprises; and third, a strong follow-up process to ensure that no country is left behind,” said Ban.
This year at the Spring Meetings, the Development Committee (DC)—a ministerial-level forum of the World Bank Group and IMF for intergovernmental consensus-building on development issues—focused on the critical question of how to scale-up the financing needed to achieve the Sustainable Development Goals (SDGs).
The Committee brought together ministers of finance and development with the unprecedented participation of the UN Secretary-General, high-level UN officials, and heads of multilateral development banks (MDBs), to align their thinking and commitment around a new shared vision for development finance.
Ministers discussed a joint discussion note, From Billions to Trillions: Transforming Development Finance, co-authored by the MDBs, IMF and Bank Group, which sets the stage for a collective vision in which these institutions will play a role as key contributors, innovators, and intermediaries in financing the achievement of the proposed SDGs.
“Achieving the SDGs requires a transformational vision that builds on lessons from the MDGs [Millennium Development Goals] and combines all potential sources of financing including more effective and catalytic use of Official Development Assistance (ODA). We expect the WBG and the IMF to continue to work in partnership with governments, the UN, multilateral institutions, bilateral agencies, civil society and the private sector, as well as with the new development institutions, within their respective mandates,” the Development Committee noted in its communiqué.
“We need a paradigm shift on how development will be financed, and this includes a paradigm shift over the role of ODA, which will become better targeted and also demonstrate the ability to unlock other sources of non-ODA financing including from the public and private sectors,” said President Jim Yong Kim at the DC plenary. “We will need intelligent development solutions, and the core work of providing integrated development and financing solutions has got to be at the center of the paradigm shift.”
Success in achieving the goals will take more than money, however. It will require a “global change of mindsets, approaches, and accountabilities to reflect and transform the new reality of a developing world with highly varied country contexts,” said the World Bank Group, IMF and other multilateral development banks in a joint statement.
IMF Managing Director Christine Lagarde noted the cooperation between the IMF and the World Bank Group: “2015 is too much of a pivotal year to actually miss the opportunity of combining our expertise and lending.” Lagarde also stressed the need for a “global environment that is supportive, and that is where the advanced and the major emerging market economies have much to contribute in order to support the efforts undertaken at their national levels by each and every developing country.”
The Board of Governors welcomed the discussions on financing for development. They expressed a range of views on the sources of financing and agreed on the need to strengthen all potential sources of financing going forward.
With a little under two months to go until the Addis conference, the focus now shifts to discussions on how best to operationalize the new vision. At the same time, negotiations are continuing as government representatives prepare for the COP21 meetings in Paris in December 2015.