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Demanding Financial Innovation, Not Collapse


Recovering unmet targets can ease financing stress and support key priorities like health, education, and equality.

Trump’s decisions have worsened the funding crisis for health and development in low- and middle-income nations. However, development financing was already struggling, with debt-ridden Global South countries pressured to prioritize debt repayment over public programs. The June 2025 Financing for Development Conference could be pivotal, but whether it brings change or deepens the crisis remains uncertain. ()

“A call for breakthroughs not breakdowns” given out by CSO Partnership for Development Effectiveness (CPDE) best contextualises the situation and proposes key pathways forward. “Over the past years, it has become increasingly evident that the community of traditional donors is struggling to meet long standing commitments.

On top of these persistent challenges, we are currently witnessing unilateral decisions that are reshaping the development landscape, in ways that contradict the fundamental principles of development cooperation of democratic ownership, transparency and accountability, inclusive partnerships, and a focus on results.

As we head towards the Seville Financing For Development (FfD) Intergovernmental Conference, we must seize the opportunity to reset the discussion, and insist on the track that honours the foundational commitments of international cooperation.”

“Since the early 2000s, the UN’s Financing for Development (FfD) process has pledged to enhance both the quantity and quality of development cooperation. But today, we face multiple global crises, a derailing of the Sustainable Development Goals (SDGs), and a beleaguered aid system. It must then be the duty of the Seville FfD conference to rally governments and all development actors to heed the call of the times, and reboot development cooperation to effectively address these urgent challenges,” it adds.

FfD4 Zero Draft: Development Effectiveness and Existing Commitments

“Notably, the initial sections of the Zero Draft (paragraphs 6 to 9) also have plenty of language that can be traced back to the effectiveness conversation – a testament to the continuing relevance of the agenda. References to inclusiveness and effective governance, mentions of aligning with today’s realities and countries’ policy space (para 6), discussions on country-led financing strategies (para 7), and an explicit acknowledgment that countries bear primary responsibility for their strategies, are most welcome. In the same vein, the Draft emphasises effectiveness, efficiency, and transparency in resource mobilisation as well as commitment to developing effective, accountable and inclusive democratic institutions (para 8), and highlights the role of civil society (para 9). There is a section on development effectiveness (para 40) that underscores ongoing systemic challenges, such as fragmentation, smaller transactions, earmarking, and circumvention of government budgets,” reads the statement by CPDE. “While these are all appreciated, they simply reaffirm existing commitments on ODA and development effectiveness principles, without raising the ambition, correcting digressions, or establishing credible mechanisms to ensure compliance.”

To put forth a responsive and meaningful FfD Outcome Document, CPDE calls on governments to agree on scaling up and achieving the 0.7 GNI target as well as having mechanisms for enforcement to beat the inertia of this unfinished business. With the dilution of what can be classified as aid and the difference between what is committed and what is disbursed, there has been an alarming decline in the share of ODA that reaches developing countries that must be immediately addressed. The concessional nature of ODA must be preserved, and alignment with the SDGs must be a precondition. ODA is a unique and important resource even when compared to other forms of development cooperation, and its disbursement is determined by public policy that is flexible, traceable, and accountable.

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To make a significant impact the cumulative shortfall in Development Assistance Committee’s (DAC) commitment, estimated at USD 7.1 trillion, must be recognised as unmet ODA debt that can be delivered to countries of the Global South over time in full and unconditionally, says CPDE statement. “Recovering unmet targets from previous years as an additional mechanism for financing development initiatives can help ease financing stress and address top socio-economic priorities in developing countries, such as poverty eradication, health, education, gender equality, and social protection. In the context of recent developments, volatility and predictability challenges that affect actual flows to partner countries need urgent attention.”

The FfD Zero Draft cites broad consensus that the effectiveness agenda needs to be revitalised and its implementation better monitored. The emphasis on addressing fragmentation, elevating country leadership, improving alignment, and supporting policy coherence may indicate the direction of this revitalisation process. “While these are all important aspects of safeguarding aid quality, revitalisation should ensure that ODA and any other form of development cooperation and development partnership is effective, rights-based, accountable, and directed towards democratic country ownership, which includes locally-led development. A strict set of rules must be developed around how development cooperation and, in particular, ODA should be used, and fulfill its core mandate of eradicating poverty and addressing inequalities, with the development priorities set by the right-holders at the centre. Finally, this revitalisation should recognise and support the vital role of civil society in ensuring an effective aid architecture – one that is locally-led and focused on addressing poverty and inequalities,” says CPDE statement.

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“The upcoming Financing for Development conference can, and should, decide to establish a UN intergovernmental process towards agreeing on a legally binding convention on development cooperation that includes developing measurable, time-bound, and enforceable indicators for the fulfilment of these targets,” demands CPDE.

The CPDE statement ends with a strong reminder for FfD stakeholders to take immediate action: “We need a breakthrough in asserting the effectiveness agenda in development finance, or we face the breakdown of our shared aspirations around sustainable development.”

Reference:

  1. SDGs warrant breakthroughs not breakdowns in development financing – (https://www.citizen-news.org/2025/02/sdgs-warrant-breakthroughs-not.html)

Source-CNS

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