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2021 DCF: Advancing risk-informed, climate-smart development cooperation
ECOSOC’s Development Cooperation Forum is working to advance development cooperation that is risk-informed and climate-smart. The aim is to ensure that countries and people with the least resources and weakest capacities can better manage and reduce risks and address vulnerabilities, toward achieving sustainable development.
In his latest blog post, FSDO Director, Mr. Navid Hanif writes how building back better after the COVID-19 pandemic will require adaptation of development cooperation in all its forms – ODA, South–South and triangular cooperation, private sector and philanthropic action – to ensure that development cooperation reduces risk, enables recovery and builds resilience.
As Secretariat of the DCF, UNDESA worked closely with the Government of Indonesia to prepare a DCF policy symposium on the topic of “advancing development cooperation to address climate, risk and resilience”. The pandemic has led to cancellation of the event. Yet, the substantive preparations and engagement have helped lay the ground for the next high-level meeting of the DCF, now set for New York on 6-7 May 2021.
The 2020 Report of the Secretary-General on trends and progress in international development cooperation will also provide a basis for further discussion on advancing risk-informed development cooperation, at the start of the Decade of Action for sustainable development.
Looking ahead: 2021 DCF
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2020 DCF Survey Study
The DCF Survey provides a snapshot of effective development cooperation and its enablers, from policies and results frameworks to multi-stakeholder dialogue platforms, data systems and monitoring and review. It highlights trends and makes recommendations on how best to enhance quality and impact of development cooperation, while identifying related needs for capacity support.
While the 2019/2020 DCF survey was rolled out before the COVID-19 pandemic in an already challenging global economic environment, the study followed up with a sample of countries to understand the early impact of the pandemic on development cooperation, which financial and non-financial resources were needed to overcome short-term challenges, and generate insights into how development cooperation could help address long-term recovery and resilience- building efforts.
The enablers of effective development cooperation – and the dynamics among them – can be put to work in the design and use of integrated national financing frameworks (INFFs). These frameworks help countries to mobilize and manage financial and non-financial resources to achieve their national sustainable development strategies. Participation in the DCF Survey exercise can also facilitate countries’ preparation and follow-up of Voluntary National Reviews of progress towards the SDGs (VNRs).
The 6th edition of the DCF Survey will be launched in July alongside the 2020 High-level Political Forum (HLPF).
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Financing for Sustainable Development and COVID-19 response and recovery
I) Policy Guidance and Analysis
The 2020 Financing for Sustainable Development Report (FSDR) noted the progress in action areas of the Addis Ababa Action Agenda, while identifying immediate and longer-term actions to respond to the COVID-19 crisis, among them: a globally coordinated stimulus package; preventing a debt crisis; stabilizing financial markets by continuing to inject liquidity; partnering with the private sector; building back better for sustainable development; and the potentials and challenges of digital technologies in recovery efforts. The 2020 FSDR is the fifth annual report of the Interagency Taskforce on Financing for Development, which engages the expertise, analysis and data of over 60 agencies and international institutions.
Socio-economic impacts of the pandemic and related policy guidance also feature in other newly released DESA publications, including the 2020 World Economic Situation and Prospects Report (WESP) as of mid-2020. The report underscores that stronger international development cooperation, including supporting efforts to contain the pandemic and extending economic and financial assistance to countries hardest hit by the crisis, will remain critical for accelerating recovery.
The new DESA policy brief series offers policy guidance and recommendations on a gamut of sustainable development issues and challenges related to the COVID-19 pandemic response and recovery. In addition to a policy brief on debt (see below) DESA has also produced policy briefs on financing issues including:
- How investors can move from greenwashing to SDG-enabling to help build back better after COVID-19, which highlights: i) the need to define Sustainable Development Investing (SDI) to counter the risk of greenwashing and set minimum thresholds for investment strategies and products to qualify as aligned with sustainable development; ii) the importance of enhancing corporate disclosure on social and environmental issues to enable SDG-aligned investments.
- The impact of COVID-19 on the financial sector which puts forward recommendations on how the international community can support countries most in need, in four areas: i) launching a large-scale, coordinated stimulus package that includes a significant increase in access to concessional financing; ii) strengthening the global financial safety net; iii) initiating a debt moratorium; and iv) in the medium-term, building a more sustainable future.
The Financing for Development Forum (23 April 2020) went virtual in 2020, supported by UNDESA and Secretariat partners, and with the 2020 FSDR as the main input. The consensus outcome of the 2020 FfD Forum emphasized the need for political commitment to tackle the economic and financing challenges that lie ahead. As noted by the ECOSOC President “For the first time in ECOSOCs history, the UN membership has come together by virtual means to negotiate a unified message. These efforts underscore our joint commitment to fight the COVID-19 pandemic, to restore sustainable growth, and to put the global economy on a more sustainable path.”
High-Level Event on Financing for Development in the Era of COVID-19 and Beyond (28 May 2020): Convened by the Prime Minister of Canada, H.E. Mr. Justin Trudeau, the Prime Minister of Jamaica, H.E. Mr. Andrew Holness, and UN Secretary-General António Guterres, this virtual event focused on the development emergency caused by the COVID-19 pandemic. Speakers included over 50 Heads of State and Government, as well as leaders of international financial institutions and other international organizations, civil society, and the private sector. Follow-up work with high-level engagement sustained over the next few months will aim to crystalize solutions for immediate and longer-term action.
Financing a sustainable recovery from COVID-19 (2 June 2020): This informal meeting of the Financing for Development Forum addressed concrete financing solutions in response to the pandemic in the framework of the Addis Agenda, with particular attention to the needs of countries in special situations. As countries are racing to address the pandemic, the meeting provided specific financing and policy options to support governments and institutions tackle the COVID-19 pandemic, including those offered by some of the largest UN COVID Relief Funds as well as international and regional organizations, including the International Monetary Fund, the World Bank and the African Development Bank. A compendium of funding mechanism, prepared by FSDO/DESA, was made available to participants.
Global Investors for Sustainable Development Alliance (GISD) (10 June 2020): In a meeting convened by United Nations Secretary-General António Guterres, leaders of prominent financial institutions and businesses pledged to scale-up sustainable investments globally, especially in countries most in need as a result of the COVID-19 pandemic. GISD issued a statement vowing greater action to confront the global economic crisis driven by the COVID-19 pandemic and keep the Sustainable Development Goals on track.
Looking ahead: MOI discussions at the High Level Political Forum
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Debt Sustainability
Concerns surrounding the already high levels of indebtedness in development countries have intensified, as countries navigate the health and economic emergencies imposed by the COVID-19 pandemic. While, in the short term, the Group of 20 announced a debt moratorium for all countries eligible for borrowing through the World Bank’s International Development Association (IDA), questions remain as to how countries with mounting debt will be able to support needed recovery efforts in the medium and long term.
The Secretary-General has put forth a three-step strategy aimed at preventing heavily indebted countries from suffering the worst impacts of the pandemic.
DESA has produced a complementary policy brief on COVID-19 and sovereign debt, distilling the key related findings from the 2020 FSDR and offering further analytical support to these discussions.
The High-Level Event on Financing for Development in the Era of COVID-19 and Beyond on 28 May extensively discussed how to address debt vulnerabilities of developing countries, with many calling for an expansion of the terms (e.g. including commercial debt) and eligibility (e.g. middle-income countries) for the debt service suspension initiative, and innovative instruments such as debt swaps, or state-contingent clauses to address debt sustainability and SDG achievement in the medium term. Two of the six working groups formed after the High-level event will address debt issues. The working groups will identify policy options, to be shared at a ministerial-level event at the High-level Political Forum in July.
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