Secretary-General: New Dawn’ Rises for Financing Development Progress

This Forum reflects a fundamental fact.  Development is everyone’s business.  And the private sector is an essential partner in helping countries climb the development ladder and achieve the Sustainable Development Goals.

Businesses are not just engines of jobs and economic growth. They help propel the innovation, technology and investment that development demands.

We are here to boost support for initiatives that benefit people and planet.  We meet against the backdrop of an incredibly challenging global environment.  As we gather in Sevilla, trade barriers and macroeconomic risks are rising.  Major aid cuts are making a bad situation even worse.

Mistrust and geopolitical divisions are blocking effective global solutions.  

And the financing gap for the Sustainable Development Goals has ballooned to $4 trillion.

When the world came together for this conference 10 years ago in Addis Ababa, countries recognized that achieving the Goals was impossible without mobilizing private capital at scale.

One decade later, we continue to fall short.  Last year, investment in infrastructure in developing countries dropped by 35 per cent — including in key sectors like renewable energy, water and sanitation.

And foreign direct investment has declined two years in a row, with investment flows largely bypassing Least Developed Countries altogether. We need to create the conditions to change course.  And that begins here in Spain.

The Sevilla Commitment document includes important steps to get the engine of development revving again:  Through new domestic and global commitments that can channel public and private finance to the areas of greatest need […] By overhauling the world’s approach to debt to make borrowing work in service of sustainable development […] And by reforming the global financial architecture to reflect today’s realities and the urgent needs of developing countries.

The Sevilla Commitment also puts forward a number of specific actions to unlock private sector investment in sustainable development. This includes steps to strengthen the way we blend public and private capital together to maximize the use of public money in crowding-in private funds.  It includes new approaches to manage currency risk that prevent otherwise promising investment opportunities from securing the capital required.

And it includes a call to review financial regulations to ensure that risk weightings are well-designed, and help — not hinder — institutional investors from embracing projects in frontier markets.

These are significant steps, informed by lessons learned over the past 10 years.  When one looks at today’s world, the crises in the official development assistance (ODA), the crises in the global funds available, it is absolutely evident that we need to be able to multiply the resources available for investments.

And the main obligation, in my opinion, of public development banks, most national and international, should be today concentrated, not essentially, in their operations, and I understand the pressure of any bureaucracy to do their own things, but those public funds available in developing banks, should be more and more put to work to multiply resources through de-risking private finances and private investments.

Giving guaranties, stablishing coalitions in which they are the first risk takers and creating the conditions to massively increase the massive private finance and private investment in countries in which, without the necessary de-risking, it is practically impossible to see enough development.

This is a new mentality that we need to guaranty in the investment banks, the public investment banks, both national and international.

Throughout, we are counting on the leadership and vision of all of you to carry forward the spirit of collaboration and bold solutions.  By uniting public and private sector leaders, regulators and development banks, we can ensure that this conference is not an end, but rather a beginning.

The beginning of a new era of action and collaboration on some of the most urgent issues facing our world today.  And a new dawn for how we finance development progress around the world.

Thank you all for being part of this important effort. I hope that the joint participation of the public and private sectors can multiply the resources we have.

Knowing that much more investment is needed in today’s world, but that there are mechanisms that allow available public funds to mobilize much more private financing and investment than today.

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