A year ago, the Inter-agency Task Force warned of the risk of a diverging world that could lead to a lost decade for sustainable development. Now, at the halfway mark to implementation of the 2030 Agenda, divergence is our reality. While many developed countries saw a rapid eco- nomic recovery from the pandemic shock in 2021, developing countries did not regain lost ground. In one in five developing countries, GDP per capita was projected to remain below 2019 levels by the end of 2023. This is even before accounting for the fallout from the war in Ukraine. The result is a severe setback to the Sustainable Development Goals (SDGs), with an additional 77 million people living in extreme poverty in 2021 and a dramatic increase in inequality.
This 2022 Financing for Sustainable Development Report of the Inter-agency Task Force lays out recommendations to enhance developing countries’ access to financing for their crisis response, and for productive investments in recovery, climate action and the SDGs. Three key messages emerge from the Task Force’s analysis and inform recommendations across the Addis Agenda action areas:
- First, financing gaps and rising debt risks must be urgently ad- dressed. This includes raising resources from all sources of finance, as well as ensuring that these resources are spent well. Given short-term constraints, an increase in long-term sustainable public finance is needed. The international community also needs to step up efforts to address sovereign debt challenges;
- Second, all financing flows must be aligned with sustainable development. Recent crises have once again highlighted the inter- linkages between the social, environmental and economic dimensions of development. They have underscored the need to address climate change and inequalities head on to preserve economic prospects. Growth can, in turn, help to finance environmental and social action. This implies, for example, adjusting fiscal policies, addressing green- washing, increasing climate finance and also rethinking incentives in the international financial system;
- Third, enhanced transparency and a more complete infor- mation ecosystem will strengthen the ability of countries to manage risks and use resources well and in line with sustain- able development. Better quality data is needed not only to enable monitoring and accountability, but also to support public and private sector planning and management, and financial integrity. Sovereign debt markets can also be more efficient with higher quality and more complete information.