World leaders to adopt financing framework for poor countries

14 Jul 2015
Financial Nigeria

Summary

World leaders are meeting this week to discuss and adopt the Addis Ababa Action Agenda.

Ban Ki-moon, United Nations Secretary-General

United Nations Secretary-General, Ban Ki-moon, told delegates at the Third International Conference on Financing for Development that the global community will make a new commitment to help the Least Developed Countries (LDCs) in the years to come. Speaking on Monday, July 13, in Addis Ababa, the Ethiopian capital, Ban Ki-moon said the commitment will be included in a financing framework document to be adopted at the end of the four-day conference.

World leaders are meeting in Addis Ababa this week (13-16 July) to discuss and adopt the Addis Ababa Action Agenda, which will provide a financing framework for the world's sustainable development agenda over the next 15 years. With the UN Millennium Development Goals (MDGs) to be replaced by Sustainable Development Goals (SDGs) in September this year, the Addis Ababa conference is key to securing international commitments to fund the new UN initiative. The First International Conference on Financing for Development was held in Mexico in 2002 to establish a financing framework to fund the achievement of the MDGs.

According to UN statistics, the flow of Foreign Direct Investment (FDI) – a key source of international private capital – as well as Official Development Assistance (ODA) is shifting away from Least Developed Countries. The financing framework to be adopted in Addis Ababa would entail pledges to increase ODA, the setting up of investment promotion regimes for LDCs and the operationalisation of a technology bank for LDCs by 2017.   

In a report of the Intergovernmental Committee of Experts on Sustainable Development Financing, global annual investment requirements in infrastructure -- water, agriculture, telecoms, power, transport, buildings, industrial and forestry sectors – are estimated at between 5-7 trillion dollars. While global savings -- at around 22 trillion dollars a year -- would be sufficient to meet these needs, the report states that resources are currently not adequately allocated.

Apart from the discussion on assistance to the LDCs, the UN Secretary-General said the Addis Ababa Action Agenda also includes five other concrete policy commitments: a new social compact for quality investment which calls for delivering social protection and essential public services for all, a new technology facilitation mechanism, global collaboration to stem illicit financial flows, maintaining gender equality, and protecting natural resources, biodiversity and the climate.

"These commitments can bring about real change. But the real test will lie in their implementation," Ban Ki-moon said.


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