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2017

PART TWO

Moving from traditional resource transfer models to innovative financing solutions that shift the dynamics of where finance flows within a country is important for meeting the Sustainable Development Goals (SDGs). There is untapped potential for blended finance models to use international public finance, notably Official Development Assistance (ODA), to unlock additional resources and channel them to the families, local governments and Small- and Medium-sized Enterprises (SMEs) that are underserved and where resources are most scarce. This can be achieved by deploying ODA in the form of technical assistance as well as capital grants, concessional loans and guarantees in ways that de-risk and catalyse public and private, domestic and international, investments to support economic transformation at the local level and tackle entrenched inequities and exclusions.
Published 2017

UN pooled funds: A game-changer in financing Agenda 2030

By UN Multi-Partner Trust Fund Office
Achieving sustainable development results at the level of scale and ambition inherent in Agenda 2030 will require extensive mobilisation, joined-up systems and approaches, strong leadership and organisation. This is where UN multi-partner pooled funds offer a distinct advantage relative to project-based instruments and where the UN development system (UNDS) experience with such funds is key. The experience and performance of UN inter-agency and multi-partner pooled funds at the global, thematic and country levels have been widely documented and recognised. Since 2004, pooled financing instruments have been extensively applied and tested in advancing progress toward humanitarian, peace, development and climate goals in the UN, international financial institutions (IFIs), bilateral actors, private sector and beyond.
Published 2017

Financing for peace

By Stephan Massing
The world today faces increasing risks of fragility, conflict and violence that pose a serious challenge to economic development and stability, affecting developed and developing countries alike. Poverty is increasingly concentrated in fragile and conflict-affected countries with more than half of the global poor expected to live in just 35 countries by 2030.¹ Globally, trends such as climate change, demographic shifts, new technologies and transnational ideological movements are significantly shaping the fragility landscape at local, national and regional levels. Ongoing conflicts are at the origin of protracted crises situations and are intensifying the food insecurity of millions of people. They are also causing widespread displacement and other cross-border spill-overs. Today, a reported 65 million people are forcibly displaced, of which 21 million with refugee status. These risks and challenges have underscored the need for the global community to take collective action, help manage volatility and invest in building peaceful and resilient societies and states.
Published 2017

Is peacebuilding cost-effective?

By Institute for Economics and Peace
There is much that collectively we do not know about peacebuilding, what works and what does not, let alone the activities that broadly define it. At a time when the international community’s resources to international development and aid are under strain due to tightened national budgets and stress from humanitarian action, the need to understand and invest in building peace is more crucial than ever. While the world lost US$ 742 billion to violent conflict in 2015, it spent only a corresponding 2% of that on building and keeping peace.
The parallel ‘sustaining peace resolutions’ asked the United Nations Secretary-General to ‘provide options on increasing, restructuring and better prioritising funding dedicated to United Nations peacebuilding activities, including through assessed and voluntary contributions, with a view to ensuring sustainable financing’. An ad-hoc working group, established by the former Deputy Secretary-General in June 2016, consisting of experts from across the UN system, have since worked to develop these financing options across different tracks. One of these tracks includes exploring the existence and potential of innovative financing mechanisms and approaches for sustaining peace.
More than one billion people have lifted themselves out of poverty in the past 15 years, but climate and disaster risks threaten these achievements. Global economic losses from disasters are now reaching an average of more than US$ 300 billion a year. According to a recent World Bank report, when accounting for impacts on well-being, disasters actually cost the global economy 60% more than the economic losses usually reported (US$ 520 billion) and force some 26 million people into poverty every year. Furthermore countries face increasingly complex threats that often compound the negative impacts of disaster and climate shocks – from migration caused by fragility and conflict situations, to the risk of pandemics. For instance, it is estimated that 93% of people facing extreme poverty today are living in countries that are politically fragile or environmentally vulnerable and, in many cases, both. The United Nation’s (UN) humanitarian appeal for 2017 stands at a record US$ 22.2 billion to help almost 93 million people affected by conflicts and natural disasters.
Over the last couple of years there have been a few important milestones that have integrated prevention as part of a comprehensive response to violent extremism and terrorism. The United Nations Secretary-General’s 2016 Plan of Action to Prevent Violent Extremism is the most notable, along with a series of global and regional summits on preventing violent extremism (PVE). Also noteworthy is the recognition by the Organisation for Economic Co-operation and Development’s Development Assistance Committee (OECD-DAC) of PVE as eligible to be counted as Official Development Assistance (ODA). The relevance of peace and security more widely to the global development agenda had already been framed in the Sustainable Development Agenda, especially SDG 16.
The United Nations Secretary-General recently began his term with renewed focus on the role the United Nations needs to play in preventing conflict. He announced in an early speech that conflict prevention is the priority for the UN. The direction of the Secretary-General is both welcome and necessary. Hopefully the reformed UN that he envisions will be capable of working decisively in this area. A ‘systems’ approach will be needed to more effectively integrate the political, development and humanitarian sides of the UN.
International development cooperation has become much more complex over the last two decades. First of all, current practices provide recipients with more choice when it comes to providers. Namely, the Organisation for Economic Co-operation and Development (OECD) countries remain an important foreign aid provider, despite the changing pattern of cooperation, but South-South Cooperation (SSC) providers are now an additional pillar in the new development cooperation architecture, together with other actors such as philanthropic organisations and the private sector.
The Green Climate Fund (GCF) was launched in 2010 by a landmark decision of the Conference of Parties for the United Nations Framework Convention on Climate Change (CoP 16 in Cancun, Mexico). After intense, yet challenging negotiations in a ‘Transitional Committee’ appointed by the CoP, the GCF opened its door for business in 2014, located in Songdo, Korea. In its initial resource mobilisation drive at the end of 2014, the GCF collected US$ 10.3 billion from contributors, almost exclusively in grant quality. Initial disbursements of funds to developing countries were made in 2015. Total financial commitments from the GCF are at US$ 2.2 billion, as per April 2017. A breakdown is provided on the GCF website.
Published September 2017

Multilateral development banking for 21st century challenges: Addressing global public goods

By Scott Morris and Priscilla Atansah
In the discussions that took place in the United Nations Economic and Social Council (ECOSOC) dialogues on the reform of the United Nations Development System (UNDS) over the last two years, finance was identified as one of the key dimensions of the system that required serious reform. In the informality of the corridors it was frequently heard that reform of the financing system is a prerequisite for the achievement of broader reform. A core concept in this critique was that funding had to be better aligned with purpose and that in this sense finance follows function.
Published September 2017

Why the United Nations should embrace the concept of global public goods

By Dag Hammarskjöld Foundation
One of the transformational impacts that the acceleration of globalisation has had is that it has brought to the fore a class of development challenges that require collective action to have any chance of success. It is this characteristic, the need for a collective response, that means that the concept of global public goods (GPGs) has a key contribution to make to current debates about the future positioning of the United Nations Development System. This has been widely recognised outside the UN system.
Published 2017

Who will pay for safe, orderly and regular migration?

By Sarah Rosengaertner, Commissioned by UN Multi-Partner Trust Fund Office
Despite the large sums of money spent by states, businesses, migrants and their families annually on migration, the international community lacks a comprehensive delineation of the size and distribution of what could be dubbed ‘migration finance.’ Beyond disparate data points for specific flows, countries, regions or migration corridors, there is, as of yet, no definition of what constitutes such financing and no methodology for aggregating different migration-related financial flows to account for them as a discrete area of finance.
With the adoption of the Addis Ababa Action Agenda and the Sustainable Development Goals the international community has made fantastic strides toward the holy grail of development: the elimination of poverty. While derided by some as unfocused and overly ambitious, the 17 Goals and 169 targets demonstrate a willingness not only to think big, but to consider the multifaceted nature of development and its interlocking components. Indeed, even critics would be hard-pressed to decide which of the goals should be eliminated to narrow the agenda’s focus. Would it be Goal 11 – Make resilient cities? Or, perhaps, Goal 5 – Achieve equality for women and girls? Any attempt at deconstructing the SDGs would be pure folly.
One of the key shortcomings of the Millennium Development Goals (MDGs) was that governments were not required to openly, regularly and comprehensively report on the public financial resources they invested in pursuit of the goals. This includes how these funds were raised, how they were spent and what results were achieved. Without this information it has been very difficult to track MDG commitments, investments and outcomes — and to understand why specific goals were, or were not, achieved.
2016

PART TWO

The Sustainable Development Goals (SDGs) are a demonstration and endorsement of the power of a collaborative, open and inclusive approach to getting things done in development. This is true when looking at how the SDGs came to be, and it is just as true when it comes to achieving them. Agenda 2030 makes clear that the SDGs must become ‘everybody’s business’. While insisting on ‘national ownership’, it also calls for ‘multi-stakeholder partnerships’ and people and communities everywhere as key drivers of progress towards the goals and targets. The sprawling collection of United Nations agencies working in development - known generally as the UN Development System - has been given a recognised role in moving the agenda forward. This includes working with governments to help establish baselines for tracking progress and set early priority areas of action. It also involves working at national, regional and global levels to help convene actors, shape strategies and forge partnerships required for an ambitious, long haul towards 2030 across the wide range of issues covered by the 17 goals. The expertise, experience and convening power of the UN and its agencies will be critical to the success of the SDG journey. So will its ability to raise resources, both for its own work and for the agenda more broadly. And herein lies a major challenge - and an opportunity.
Simply put, the 2030 Agenda for Sustainable Development is an agenda for change. As many commentators have highlighted, the Sustainable Development Goals (SDGs) represent a significant departure from the previous Millennium Development Goals (MDGs); this is a much more transformative agenda, first and foremost because it’s universal but also because it is rights-based and tackles the root causes of inequalities and discrimination; brings together climate change and development in the same framework; and, importantly, focuses on ‘leaving no one behind’ and eliminating extreme poverty. What’s more, where the MDGs were vertical and siloed, the SDGs are more inter-linked and horizontal and require much more integrated approaches.
Climate change and development are closely interlinked. This emerges clearly from the global discussions that are shaping the world’s agenda for the next 15 years. The Sustainable Development Goals (SDGs) include a dedicated goal on climate change, and climate itself influences the goals on poverty, water, food security, energy, marine and terrestrial ecosystems, and responsible consumption, amongst others. The Addis Ababa Action Agenda states that finance needs to be climate-informed, and that addressing climate shocks and stresses is central to protecting development gains. In turn, the Paris Agreement, with its collective goal to strengthen the global response to climate change, explicitly situates climate efforts in the context of sustainable development.
Published June 2016

Humanitarian Pooled Financing

By Gwi-Yeop Son
The 2030 Agenda to achieve the Sustainable Development Goals (SDGs) includes a vision for global solidarity with people in fragile environments, a renewed commitment to resolve or prevent conflict, and recognition of the important role of migrants, internally displaced people, and refugees in achieving these goals.
Published 2016

UN Peacebuilding Financing

By Oscar Fernandez-Taranco
Official Development Assistance (ODA) to conflict-affected countries has increased over the last dozen years or so.Yet, these flows are volatile and concentrated in a few countries, leaving several ‘aid orphans’ with minimal external assistance.

The majority of this increase is a result of aid channelled through traditional development and humanitarian financing instruments. Alongside these, however, multilateral organisations have also developed specific instruments targeting causes of conflict and providing financing for specific peacebuilding activities.

Whilst financing for peacebuilding has increased, overall it remains low in comparison to total aid flows to conflict-affected states, especially within ‘aid orphans’. Furthermore, the growth of complexity in the absence of coordination mechanisms for peacebuilding financing has arguably contributed to gaps, particularly in areas balancing risk tolerance with long-term commitments
Published 2016

The Global Fund and Innovative Financing

By Patrik Silborn
The Global Fund was established in 2002, as a ‘war-chest’ to combat HIV/AIDS, tuberculosis and malaria. In 2002, only 300,000 people received life-saving treatment for HIV globally – by the end of 2015 that number exceeded 16 million people, and over 8 million of those are supported by the Global Fund. Our strategic investments, collaborations and strength of our partnerships, have enabled us to save 17 million lives, and we remain on track to save a projected cumulative 22 million lives by the end of 2016.
While uncertain in their exact timing and magnitude, natural disasters are becoming increasingly predictable using available technologies and data to monitor and estimate the level of potential risk. In 2014, the estimated cost of natural disasters was US$ 110 billion70, putting fiscal strain on governments and their partners and leaving vulnerable households in dire need. In order to maximise its value to the world’s most vulnerable populations, the international aid community must endeavour to utilise available technologies to create an effective and equitable international emergency aid system. This requires a shift from a reactive emergency aid business model to a proactive risk management investment model. It is on this premise that the African Risk Capacity (ARC) was created as an innovative financing solution to natural disaster response.
The International Development Association (IDA) is the part of the World Bank Group (WBG) that supports the world’s poorest countries. Overseen by 173 shareholder nations, IDA aims to reduce poverty by providing loans and grants for programmes that boost economic growth, reduce inequalities and improve people’s living conditions. In its 18th replenishment (IDA18), beginning in July 2018, IDA doubled its financing from US$ 7 billion to US$ 14 billion for low-income countries impacted by fragility, conflict and violence (FCV).