3rd International Conference on Financing for Development (Opening of the afternoon plenary session)

Excellencies,
Distinguished Colleagues,
Ladies and Gentlemen,

An extra $50 billion per year was the original price tag put on the Millennium Development Goals at Monterrey in 2002. It was an immense sum at the time.

Today, $2.5 trillion per year is the sum many have in mind, as we gather today here in Addis Ababa. This is the investment gap that UNCTAD estimates must be filled to achieve the Sustainable Development Goals.

But the challenge we face is not only about going from billions to trillions. Matching heightened ambition with equally ambitious actions requires increasing quantity of financing, and also improving its quality.

Today, I wish to address three ways that we can improve the quality of Financing for Development, if the SDGs are to be successful.

First, we must acknowledge the changes in the global economic landscape that took place during the MDG period.

Over the past 15 years, we saw progress on the Monterrey commitments. Debt relief was agreed for many developing countries. Development aid more than doubled.

Even today, we are regaining some momentum towards an open, transparent, non-discriminatory world trading system.

But the most impressive achievements of the MDG period could not have been imagined by our predecessors at Monterrey.

The world cut poverty in half well ahead of schedule, not because of aid or debt relief, but because of a shift in the geography of global growth.

Hundreds of millions of people moved out of poverty because a few developing countries harnessed the power of trade, investment, finance and technology to become new engines of growth for the world economy.

Their impact was felt across the world, even in countries most in need.

Many LDCs saw exports grow 20% annually, fuelled by a commodity price boom. Over 10 years, the stock of foreign direct investment tripled in LDCs and SIDS, and quadrupled in LLDCs.

But despite the miracle of the last fifteen years of growth in LDCs, there was little poverty reduction, few quality jobs created, virtually no structural transformation. At UNCTAD, we call this the "LDC paradox."

This is my second point: the SDGs offer a blueprint for overcoming the LDC paradox. And that is what makes them worth investing in.

Consider that the share of poor people in LDCs today is the same as in China in 1994 - 46% of the population below $1.25/ day.

China grew at nearly 10% per capita per year for 15 years, and yet still did not end extreme poverty.

To end poverty in the next 15 years in the LDCs therefore requires a bigger economic miracle than China. And this miracle must also not increase the carbon footprint!

Fortunately, the Sustainable Development Goals are aspirational. They raise the bar to provoke a qualitative shift in the development paradigm.

Just think about the change in mindset implied by the three pillars of sustainability.

15 years ago no one thought that reducing social inequality would be good for economic growth.

15 years ago no one could imagine that environmentally-friendly growth could be economically affordable, and that green technologies make sense even for the poorest countries.

And 15 years ago no one could imagine that environmental damage due to climate change could affect the poorest and most vulnerable societies most, threatening livelihoods and posing an existential threat for the small islands.

So our greater ambitions are a step in the right direction. And with high quality partnership, $2.5 trillion is not an insurmountable sum.

This leads me to my final point.

Our greater ambitions come at a time when external conditions are more uncertain than they have been in a generation.

This means the qualitative shift needed to implement the SDGs requires concerted actions at national, regional and global levels all at the same time.

Nationally, the past 15 years have taught that countries can transform their economies, and improve their competitiveness.

Countries can do this themselves, but they can also do this with the right help from the international community.

At national level, building productive capacity will be essential for the SDGs. Firms and entrepreneurs that engage in trading activity are key in this regard.

So is embracing the shift from trade in goods to trade in tasks, represented by the growing service sector.

Harnessing the trade/investment/know-how nexus can also improve the lives of citizens and push the national technological frontier forward.

Regionally, countries that cooperate more with their neighbors will achieve the economies of scale they need to become engines of growth themselves. This can be further bolstered by international support.

Regions can improve connectivity, and build infrastructure that connects people to markets, and that permits the diffusions of ideas and technology.

Regions can also do their part to break down barriers to trade, whether by reducing tariffs or non-tariff measures.

With concerted effort, it could be possible to have FDI stock in structurally weak economies quadruple again by 2030.

The role of regional development banks and other new financing mechanisms are indispensable in this process.

Globally, we must focus all our efforts to strengthen the enabling environment for the SDGs.

The world has still not recovered from the global crisis. Emerging financial markets are facing renewed turmoil.

2015 is likely to be the fifth straight year, when trade will expand more slowly than GDP.

Lost tax revenues on profits shifted away from developing countries by multinational companies leaves a $100 billion dollar hole in development budgets every year.

These are immense challenges that renewed multilateralism must remedy.

In spite of the momentous challenges we face, I am emboldened by the ambition of our collective resolve.

This year 2015 will be a bold decision point for all of us.

Excellencies,
Ladies and Gentlemen,

In conclusion, I want to extend to all of you an invitation, as the negotiations of this year come to conclusion. I welcome all of you to join with us at UNCTAD early next year, in the first major ministerial of the post-2015 era.

At UNCTAD XIV in Lima, Peru, in March 2016 we plan to shift gears from negotiations and decisions to implementation and action.

I look forward to your contribution to our shared efforts and to your continued engagement and support of UNCTAD.

Thank you.