The SDG Stimulus: A Call for Global Action
With only 17% of the Sustainable Development Goals (SDGs) on track and an annual SDG investment gap in developing countries exceeding US$ 4 trillion, the world is facing a mounting sustainable development crisis. Deepening inequality, widening financial gaps, and unsustainable debt burdens are stalling progress on the SDGs, leaving vulnerable nations struggling to meet the 2030 Agenda. In response, the SDG Stimulus—proposed by UN Secretary-General António Guterres—aims to mobilize at least US$ 500 billion annually for sustainable development, but urgent international action is needed to scale these efforts.
Reforming Global Finance
In support of the SDG Stimulus, Prime Minister of Barbados Mia Amor Mottley announced that a new version of Bridgetown 3.0 would be part of discussions during the General Assembly High-Level Week. This initiative is aimed at applying “pressure on those who can help drive change.” Bridgetown 3.0, the third iteration of an agenda to fundamentally reform global finance, seeks to ensure predictable, long-term development funding and safeguard vulnerable economies from the growing impacts of climate change.
Prime Minister Mottley emphasized that Bridgetown 3.0 advocates for significantly increased funding for the SDGs and climate action, alongside changes to outdated financial terms and approaches. “We cannot continue to use short-term money to fuel development. That is why the SDGs are only 17% on track. If we continue doing the same thing in the same way, don’t expect different results.” She also urged G20 members to fulfill their commitments to rebuilding trust with those left behind, stressing the importance of giving developing countries representation in international financial institutions like the World Bank and IMF. “If you don’t know the road that I walk, you may make decisions that negatively impact me, perhaps innocently, but they will still impact me nonetheless.”
Prime Minister of Jamaica Andrew Holness shared how his country, through partnerships with the World Bank and IMF, combined with stringent budgetary austerity measures, was able to follow a sound fiscal path that built resilience and flexibility into its economy. This enabled Jamaica to withstand both the COVID-19 pandemic and natural disasters, such as Hurricane Beryl earlier this year. Now, to deliver on the promise of prosperity, he stated that economic growth and achieving the SDGs are essential. Mr Prime Minister Holness highlighted the need to leverage private sector resources through de-risking and incentivizing investments, while calling for greater agility and speed from key international financial institutions. “My advice, from my experience, is that good fiscal management should not be seen as a trade-off for achieving the SDGs.”
Leveraging Financial Resources for Sustainable Development
Heidy Rombouts, Vice-Minister of Development Cooperation and Humanitarian Affairs for Belgium, compared the challenge of managing restricted financial space to holding a handful of sand. “You may have a tendency to make a fist to hold onto the sand, but that’s when you lose it even faster than if you had the confidence to keep your hand open.” The International Development Association (IDA)—the World Bank’s initiative to assist low-income countries through grants and low interest loans—plays a critical role in supporting various development activities.
According to Anna Bjerde, Managing Director for Operations at the World Bank, the increased volume of financial resources for the many competing priorities in the developing world cannot be underestimated. The World Bank has boosted its financial capacity by approximately US$150 billion. Two pivotal aspects of IDA’s work are its role as the largest funder of climate adaptation and its ability to leverage funds. “It’s not a dollar in and a dollar out. It’s a dollar in and three or four dollars out,” said Ms Bjerde.
On the topic of doing things differently—a recurring theme of the summit—Rémy Rioux, CEO of the Agence Française de Développement and Chair of the Finance in Common Executive Board, remarked, “With this pact, the narrative is clear. No country should have to choose between poverty and the climate. But that wasn’t a given back in 2015.” He added, “We are now seeing the global financial architecture evolve to meet the scale of the challenges we face. The multilateral system is moving forward and innovating.”
Investing in Africa’s Potential
“I’m hopeful because I have to be hopeful,” said Mavis Owusu-Gyamfi, CEO and President of the African Center for Economic Transformation. She expressed optimism for her son, “who thinks all we do is talk in our business,” and for children around the world. However, she also voiced her concerns, noting, “We often say that 60% of solar resources and 70% of green minerals lie in Africa, and that we have a rapidly growing population. So what? We can’t eat that.”
Ms Owusu-Gyamfi stressed the lack of decent job opportunities for Africa’s youth but added that the situation need not remain bleak. “Africa doesn’t want to beg anymore. Africa is saying we want investment on our continent.”
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