A new UN report says financing challenges are at the heart of the world’s sustainable development crisis as staggering debt burdens and sky-high borrowing costs prevent developing countries from responding to the confluence of crises they face.
The 2024 Financing for Sustainable Development Report: Financing for Development at a Crossroads (FSDR 2024) says urgent steps are needed to mobilise financing at scale to close the development financing gap.
Meanwhile, rising geopolitical tensions, climate disasters and a global cost-of-living crisis have hit billions of people, battering progress on healthcare, education, and other development targets.
United Nations Deputy Secretary-General, Amina J. Mohammed said, “This report is yet another proof of how far we still need to go and how fast we need to act to achieve the 2030 Agenda for Sustainable Development.”
“We are truly at a crossroads and time is running out. Leaders must go beyond mere rhetoric and deliver on their promises. Without adequate financing, the 2030 targets cannot be met.”
With only six years remaining to achieve the SDGs, hard-won development gains are being reversed, particularly in the poorest countries.
If current trends continue, the UN estimates that about 600 million people will continue to live in extreme poverty in 2030 and beyond, and mostly, half of them are women.
UN Under-Secretary-General for Economic and Social Affairs, Li Junhua said, “We’re experiencing a sustainable development crisis, to which inequalities, inflation, debt, conflicts and climate disasters have all contributed.”
“Resources are needed to address this, and the money is there. Billions of dollars are lost annually from tax avoidance and evasion, and fossil fuel subsidies are in the trillions. Globally, there is no shortage of money; rather, a shortage of will and commitment.”
According to the report, debt burdens and rising borrowing costs are large contributors to the crisis. Estimates are that in the least developed countries debt service will be $40 billion annually between 2023 and 2025, 50 per cent above $26 billion in 2022.
Stronger and more frequent climate related disasters account for more than half of the debt upsurge in vulnerable countries.
The poorest countries now spend 12 per cent of their revenues on interest payments, four times above what they spent a decade ago. Roughly 40 per cent of the global population live in countries where governments spend more on interest payments than on education or health.
Meanwhile, Official Development Assistance from OECD countries and climate finance commitments are not being met. While ODA increased to an all-time high in 2022, reaching $211 billion, from $185.9 billion in 2021, the growth came from aid to refugees living in donor countries, and the total amount is inadequate for development.
“Without global cooperation, targeted financing, and, crucially, the political will, the world will not achieve the SDGs,” said Deputy Secretary-General Mohammed.
“The clock is ticking. Between now and next year’s FfD4 Conference, we have a once-in-80-year opportunity to comprehensively reform the financial architecture, and a last chance to correct course before 2030. History will not be kind to those with the power to act who fail to do so, while the clock winds down on the planet and its people.”
