Fixing the Foundations: Reforming Global Finance for Sustainable Development

Why does the United Nations have so many conferences? Simply put, that's where member countries come together to try and forge solutions on the most pressing issues facing the world, from #climate, to #foodsecurity, to #oceans.

The upcoming Fourth International Conference on Financing for Development (#FfD4)  in Seville, Spain (June 30 to July 3, 2025) aims to tackle one of the most intractable, foundational problems for development, that of financing. We've seen a lot of attention-grabbing headlines about cuts by rich countries to their “aid” budgets, but relatively fewer about what it would take for developing countries to fix their own problems. Simply put, poorer countries simply don't have access to the scale of financing required for #SustainableDevelopment - ending poverty, hunger, addressing climate change, and promoting peace.

Let's put this in context. Conservative estimates how much financing is needed to achieve the #SustainableDevelopmentGoals range from $3.3 to $4.3 trillion, with a whopping annual funding gap of USD 2.5 trillion for developing countries. But aid, or #OverseasDevelopmentAssistance (ODA), amounted to just USD 223.3 billion in 2023. So while aid is critical and catalytic - especially for the poorest countries and most vulnerable populations - sustainable solutions must include a mix of financing, including improving domestic tax revenues, aligning global investments with development objectives, exploring innovative financing models and yes, ensuring ODA commitments are met so that it can act as a crucial catalyst for attracting other forms of investment.

FfD4 aims to address the key underpinning issues in order to create a more just and equitable global economy and financial system, including:

• Tackling unsustainable debt: Many developing countries have to spend 20–30% of their GDP on loan repayments ("debt servicing"), crowding out their ability to invest in health, education, and climate resilience. Low-income countries have to pay as much as four times more to borrow than wealthy nations, because, for example, they are perceived as higher risk borrowers and lower credit ratings, have limited access to international capital markets, and are more vulnerable to currency fluctuations. 

“It’s like a billionaire getting a mortgage at 3% while a minimum-wage worker is charged 15% for a payday loan.”

• Promoting fairer taxation – through ways to ensure everyone pays their fair share of taxes (including the wealthiest) to generate more domestic resources for development.
• Highlighting finance to address the #climatecrisis, making it more accessible, equitable and accountable.
• Giving voice to developing countries in global financial decision-making, ensuring that financing aligns with their specific needs and priorities.

Member States of the United Nations have been vocal in their insistence on such reforms, including in the #PactfortheFuture (2024), which calls for a UN Framework Convention on Debt, a rebalanced voice for developing countries in global financial institutions, a new approach to sovereign risk that rewards investment in sustainable development, and a global tax architecture to curb illicit flows and fund global public goods

📚 Key references that elaborate on these issues:

• The UN’s “Decoding the Future” series and its Financing Policy Briefs  highlights how crushing debt and limited fiscal space are stalling progress on the SDGs 
• The OECD’s 2025 Global Outlook calls for a shift toward resilience, equity, and sustainability in global finance
• The IMF’s 2025 WEO warns of deepening divergence between rich and poor economies
• Next week, SDSN and Jeffrey Sachs will release a major proposal for a new global deal to unlock long-term, affordable capital for development

🔑 FfD4 is our moment to act. To build a financial system that reflects today’s realities—not the geopolitics of 1945. A system that empowers all countries to invest in health, education, climate resilience, and opportunity.

#FfD4 #PactForTheFuture #GlobalFinance #SDGs #SDSN #UnitedNations #DevelopmentFinance #Sevilla2025

UN Sustainable Development Group Sustainable Development Solutions Network Navid Hanif United Nations Joint SDG Fund