Report Of The Inter Agency Task Force On Financing For Development 2023

The Financing for Sustainable Development Report (FSDR) assesses progress in implementing the commitments and actions in the Addis Ababa Action Agenda. Global sustainable development prospects continue to diverge. Two years ago, in the midst of the COVID-19 pandemic, the Inter-agency Task Force warned of a global divergence that could lead to a lost decade for development. By 2022, these risks had materialized--a great finance divide was translating into a development divide. Over the past 12 months, the war in Ukraine, sharp increases in food and energy prices and rapidly tightening financial conditions further exacerbated challenges for many countries, increasing hunger and poverty and reversing progress on the Sustainable Development Goals (SDGs). Despite some positive signs, the global macroeconomic outlook remains highly uncertain and particularly bleak for many of the poorest and most vulnerable countries faced with growing debt service burdens and tight fiscal constraints. Delaying investment in transformation is thus not an option. The multiple crises can shorten the time horizons for decisions--by policymakers, investors, businesses and individuals. Delaying investments would put the 2030 targets out of reach and exacerbate financing and macroeconomic challenges down the line. Sustainable and productive investments today can transform and diversify economies and enhance resilience to shocks, including inflationary supply-side shocks, tomorrow. As laid out in the 2022 Financing for Sustainable Development Report, such investments also enable countries to mobilize resources over time and better service debt. This is why the 2023 Task Force report focuses on sustainable transformations, including a roadmap for governments, along with changes in the way finance works.

The Financing for Sustainable Development Report (FSDR) assesses progress in implementing the commitments and actions in the Addis Ababa Action Agenda.

The Financing for Sustainable Development Report 2019 assesses the global economic context for development financing, highlighting growing global risks and challenges, and the need for collective action to create a more enabling international environment. This global context chapter is complemented by a thematic chapter focused on national financing frameworks for the SDGs - laying out actions that countries can take to finance their national strategies and plans and implement the Addis Agenda at the country level. The remainder of the report assesses progress in the seven action areas of the Addis Ababa Action Agenda.

The global economic recession and financial turmoil from Covid-19 are derailing implementation of the Addis Ababa Action Agenda and achievement of the Sustainable Development Goals (SDGs). Even before the pandemic, this report of the Inter-agency Task Force noted that there was backsliding in many areas. Due to the Covid-19 crisis, global financial markets have witnessed heavy losses and intense volatility. Particularly worrisome is the prospect of a new debt crisis. The report highlights both immediate and longer-term actions, including arresting the backslide, to respond to the global pandemic.

In 2023, the combined GDP of the LDCs was 10 per cent below the level it would have reached had the pre-pandemic (2010-2019) growth trend been sustained. As a result, at least an additional 15 million people in LDCs are now living in extreme poverty, with their governments severely constrained in their ability to sustain adequate investments in public services or invest in advancing development progress. The Report highlights the urgent need for concerted action to restore fiscal space in LDCs through the lasting resolution of the debt crisis, reform of the international financial architecture, and the mobilization of climate finance to enable needed investments towards low-carbon transition and green structural transformation. Without which, the SDGs and sustainable development cannot be realised. The Report advances several recommendations aimed at advancing the reform of global development finance, which in its current state, is deficient in terms of its quantity, quality, structure, cost and ease of accessibility. The Report also contains a detailed analysis of the possible role of central banks in shaping the financing of sustainable development and green structural transformation in LDCs. While the contribution of central banks to dealing with climate change has been discussed in developed countries, this is the first time this type of analysis is done in the context of the LDCs.