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The United Nations System Staff College’s Knowledge Centre for Sustainable Development is located in Bonn, in a beautiful castle on the Rhine surrounded by the Siebengebirge (“The Seven Mountains”). According to local legend, once upon a time a mountain blocked the Rhine’s path to the North Sea. The town on the other side of the mountain was deprived of water, and its inhabitants appealed to giants to remove the mountain and change the course of the river to enable them to access water. Seven giants got to work with enormous spades and soon cleared a path for the river to reach the sea. Pleased with their work, the giants dusted off the dirt and stones from their clothes, forming seven small mountains, the Siebengebirge, which still sit on the right bank of the Rhine.
This story has parallels for our discussions on financing sustainable development. Achieving a sustainable future will require leveraging the kind of financial flows that traditionally have not been harnessed for development financing, and redirecting them towards sustainable ends – much like changing the course of a river.
As we enter the Decade of Action and Delivery for Sustainable Development, many challenges remain in realizing the vision of sustainable development for all people and the planet that was envisioned in the 2030 Agenda. There is an increasing focus on the means of implementation of the Agenda, in particular, financing the Agenda. Traditional aid, commonly known as Official Development Assistance (ODA), is falling, despite pledges to boost development funding. In 2018, ODA totalled $149 Billion, 2.7 percent lower than in 2017. Even if this trend were reversed, the level of ODA is still inadequate to meet the needs of the 2030 Agenda, which is estimated to require several trillions dollars. The implementation of the Agenda will require catalysing broader financial flows to further the goal of sustainable development for all.
The 2030 Agenda and the Addis Ababa Action Agenda which addresses the means of implementation for the Agenda, recognize that the goal of sustainable development needs to be universal, and will require a whole-of-government and whole-of-society effort. Sustainable development will need to be driven and financed by governments, in partnership with development actors, the private sector and civil society, at international, national and local levels. National prioritization and budgeting that incorporates the SDGs, attracting private investment through the use of new technology and innovative financial instruments, addressing misaligned incentives and policies, enabling a better reflection of longer-term climate and other risks, and fostering international cooperation to manage illegal financial flows are only some of the ways to facilitate the redirection of financial flows.
This vision of a universal and integrated agenda, with its focus on nationally determined priorities and plans, requires a radical change in the way the UN system perceives its role in financing the Agenda – a shift from a disbursement-driven, programmatic approach to one that focuses on supporting national priorities and on using ODA to leverage global flows – public and private, domestic and international – and redirecting them to support the achievement of the 2030 Agenda.
On the shoulders of giants
So how does one go about the business of redirecting financial flows? Who are the giants that can change the course of the river, and what skills and tools will this effort require? These are the questions that face the UN today. The UN Secretary-General’s Roadmap for Financing the Agenda (2019-2021) lays out ‘key asks’ for the UN system in its role in supporting Member States to achieve the Agenda. He asks that the UN increase support to the Integrated National Financing Frameworks and improve progressive and gender-sensitive budgeting at the country level. He points to the need for a shared understanding of sustainable investing principles and the need for quality data. And he underscores the need to foster healthy financial environments in developing countries through partnerships.
In my opinion, two underlying themes emerge that might answer the questions of how to redirect the river, and who should do it. First, the question of how. Does the UN have the skills to do what needs to be done? I think it does. The Roadmap alludes to the long history of the UN in financing for development. Supporting the creation of gender-responsive and progressive budgets, building public and private sector partnerships, convening the development of sustainable investing principles at a global level, and harnessing technical and programmatic expertise to strengthen the efficacy of interventions, are all examples of current UN initiatives that can channel finance towards sustainable development. This is not to say that the UN has all the answers now, but perhaps that it does have ways to start addressing the financing challenge. However, there is no doubt that the UN needs to do more, and do so more consistently and effectively, in order to drive the desired levels of financing.
The second theme pertains to the question of whose role relates to finance within the UN system, and goes to the heart of the changing ways of working required of the UN. Unlike the conventional aid-funded model, where the responsibility for funding was limited to a few specific roles, financing needs to be part of everyone’s job description, much like Partnerships. Effective financing will require a new UN Sustainable Development Cooperation Framework that is based on a context-specific financial mapping. Results frameworks will need to consider ways in which to best leverage UN funds to catalyse and amplify other sources of finance. Financing needs to be a lens through which we look at the implementation of all our programmes in the UN, not a sporadic intervention.
The resources to address the challenge of Sustainable Development exist today. Gross World Product is $80 trillion. Banks manage $140 trillion in assets, and capital markets account for more than $100 trillion. The challenge is to redirect a greater proportion of these flows towards sustainable ends, and in support of the kind of transformative economic growth that is environmentally sound, that addresses inequality, and that fosters peaceful and inclusive societies. We will need to rise to this challenge jointly and in partnership if we are to succeed in changing the course of the river.
The UNSSC is exploring the themes of Funding and Financing for the UN system in a new course, Financing the SDGs: Mobilising Finance for Sustainable Development, to be held in Bangkok from 29 October to 1 November 2019. More details can be found at https://www.unssc.org/courses/financing-sdgs-mobilizing-finance-sustainable-development/.