[AS PREPARED FOR DELIVERY]
Your Excellency, Mr. John Ashe, President of the General Assembly,
Your Excellency, Secretary-General Ban Ki-moon,
Your Excellency, Ambassador Masood Khan, Vice-President of ECOSOC,
Ladies and Gentlemen,
It is a great pleasure for me to address this Sixth High-Level Dialogue on Financing for Development, and to offer a few brief thoughts on the state of implementation of the Monterrey Consensus, and, more importantly, the way forward.
After years of neglect, the Monterrey Conference put development finance firmly back on the multilateral agenda. And yet, we are all aware of the slow progress that has been made since then. As mentioned by numerous speakers this morning, five years after the global crisis, financing for development is diminishing across the board. Public debts have been mounting. The Overseas Development Aid (ODA) declined to USD 126 billion by 2012, and is under further downward pressure. In the same year, developing countries saw the growth of their exports slow down to about 3.8 per cent, and an actual 4 per cent decline in Foreign Direct Investment (FDI) inflows, to USD 703 billion. Only remittances (standing USD 375billion in 2012) have seen a mild increase, but these flows still need to be channeled better into productive investments.
While the supply of development finance is diminishing, the needs are growing. In addition to the existing needs for the full achievement of the Millennium Development Goals (MDGs), we must consider the costs of the broader post-2015 Development Agenda, including the need to mitigate and adapt to climate change, which will require an unprecedented transformation of production and consumption patterns in the world economy. Achieving the Sustainable Development Goals (SDGs) - whatever their final form - will require significant investment in areas such as agriculture, infrastructure and other aspects of sustainable investment- well above current levels. For example:
In agriculture, the Food and Agricultural Organization (FAO) estimates that new investments of USD 83 billion are needed annually to meet projected demand for agricultural products in 2050 in 93 developing countries. Of this amount, Sub-Saharan Africa alone requires over USD10 billion per year.
In infrastructure, the McKinsey Global Institute estimates that some USD 57 trillion in total global infrastructure investment is required between now and 2030, much of it in the developing world. Africa's annual infrastructure needs are at least USD 93 billion a year.
And with regard to addressing climate change, the United Nations Department of Economic and Social Affairs (UNDESA) has estimated a staggering USD 1.9 trillion per year in additional financing needs.
Against this background, allow me to say a few words on how I see the way forward:
The first priority must, of course, be implementation and scaling up: Given the expansion in the financing needs we can no longer afford complacency. We must implement the commitments made.
But we should also look beyond Monterrey towards the post-2015 Development Agenda. We need to formulate a global strategic framework for investing in the Sustainable Development Goals. Such a framework should include three core elements: mobilizing the resources, channeling them into the priority sectors and maximizing their development impact on the ground.
With regard to the mobilization of financing, it is clear that public sources must be increased significantly, even as private sources need to be much more vigorously tapped and harnessed. And here, the news is not all bad: There is a large pool of potential capital available to be tapped. Allow me to mention just two such sources: first, the assets held by Sovereign Wealth Funds (SWF) today approach another USD 5.8 trillion and while most of these are portfolio investments in advanced economies, efforts are being made to channel a share to developing country projects; second, pension fund holdings in the Organization for Economic Cooperation and Development (OECD) countries alone have reached USD 20 trillion and while there are strict rules on how these can be used, as with SWFs, they are potentially a major source for development financing.
Harnessing and channeling these resources into sustainable investment projects in the developing world will require innovative policy thinking. As an example, UNCTAD has developed an Investment Policy Framework for Sustainable Development (IPFSD), which aims to mainstream sustainable development in national and international investment regimes.
The second issue I would like to highlight is prioritization: We must channel the resources mobilized strategically into priority sectors and target countries. Here, I would reiterate that while global attention is already turning to the post-2015 agenda, a lot of work remains to be done on meeting the MDGs. Targeted investments to support key sectors and projects, particularly in Least Developed Countries (LDCs), can achieve the final push. In prioritizing the allocation of development resources, we must also bear in mind that social achievements such as improved health-care and education will ultimately only be sustainable, if they are underpinned by solid economic growth. Indeed, inclusive economic growth was the most significant factor in the progress achieved on many MDGs. Thus, aid and investment targeted at economic sectors and building productive capacities should be scaled up.
A third issue is effective monitoring: The Monterrey conference was convened against the backdrop of the MDGs. And yet, the commitments made on MDG Goal 8, the partnership on development, are less ambitious than the Monterrey document. And even against this more limited standard, progress has been lacking. As the international community begins to think about the post 2015 development agenda, we need to embrace the Financing for Development Process as a roadmap for addressing the systemic and interrelated economic and financial issues, which will determine just how successful we are in making development a truly sustainable and inclusive process. Ideally, the SDG's should include a goal similar to MDG Goal 8, but based on the wider Financing for Development Process.
The fourth and final issue I would like to flag today is systemic reform. Of all the chapters in the Monterrey and Doha outcome documents, the one addressing systemic issues has seen the least progress in implementation. It is inconceivable that even after the largest financial crisis in 70 years, financial governance reforms at the global level have remained timid and ad hoc. Addressing the roots of the current crisis will require far deeper reforms of the global financial system. These include measures to better regulate speculative financial flows, improve exchange-rate management, and prevent the build-up of global imbalances. Most importantly, reform must ensure that global finance serves the real economy and supports productive activities.
Yet, any reform of the financial system can only be legitimate if developing countries are adequately represented in global financial institutions, and if their voices are heard. The United Nations, as the only institution with universal membership, can make an important contribution to the deliberations on global governance reform.
Ladies and Gentlemen,
As we meet here today, deliberations on a post-2015 development agenda are intensifying across the globe. But a new set of development goals will be meaningless without complimentary progress on financing. The implementation and scaling up of financing for development should therefore be an integral part of this debate, as it is a key catalyst for development progress post-2015.
Thank you very much.