The challenge of financing the Post-2015 Agenda

Luca Etter
Program Manager for Private Sector, Financing for Development and IFIs at Swiss Agency for Development and Cooperation

12 May 2014 - As governments are negotiating a new international development framework to succeed the Millennium Development Goals, an equally important debate has started around the question of how the new agenda will be financed. The process is still in its early stages; however, a few aspects are already clear.

First, this time is different

After the agreement about the Millennium Development Goals (MDGs) in 2000, governments signed on to the so-called Monterrey Consensus on financing for development in 2002, which outlined the main elements needed to finance the MDGs. While the Monterrey consensus included references to many sources of financing (including domestic resources, trade, external debt, and private finance) the main focus has been on the commitment of traditional “donor” countries to spend at least 0.7 percent of their Gross National Product (GNP) on Official Development Assistance (ODA). This commitment was reconfirmed in Doha in 2008 (and implemented by very few countries). For the new Post-2015 development framework, ODA will remain important, however, it will not be enough.

The Monterrey Consensus on Financing for Development  

Second, it’s complicated

If the international community truly agrees on a universal agenda encompassing the three dimensions of economic, social, and sustainable development - something Switzerland is arguing for – there is a need for a broad financing framework combining domestic and international sources; public and private finance; as well as a series of policy changes that will create the incentives needed to build sustainability considerations into mainstream financing and investment decisions.

Third, process matters

Governments have understood that the question of financing the new agenda is important and a number of intergovernmental processes are underway to start elaborating the new financial framework.

For one, governments have agreed to hold a third international conference on financing for development in either 2015 or 2016. Switzerland is actively supporting the preparatory process for this third conference by ensuring that it will reinforce the political discussions about the new Post-2015 Agenda.

For another, the international community has also nominated an Intergovernmental Committee of Experts on Sustainable Development Finance (ICESDF) tasked with providing a report to the Secretary General of the UN which outlines the blueprint of a new framework for sustainable development. Here, too, Switzerland is supporting the work of the committee, by actively providing inputs to the discussion and facilitating outreach activities between the ICESDF and important stakeholders.