Development Cooperation Forum High-level Symposium on Re-thinking Development Cooperation for the SDGs: Country-Level Perspectives and Lessons

The new mode of development cooperation, which the SDGs require, must embrace accountability of a broader set of actors using a wider range of instruments. Unlike the MDGs, which focused strictly on outcomes, the SDGs spell out a broad set of tools that can contribute to development success through the 2030 Agenda's means of implementation targets, and through the financing for development commitments made under the Addis Ababa Action Agenda. The more ambitious SDGs also imply financing needs that are at least one order of magnitude larger than those estimated for the MDGs, and imply moving beyond Official Development Assistance as the principal means for financing the agenda.

While the ambitions of the new Agendas are encouraging, the risks are clear. With a broader group of actors accountable for results, the danger is that no one will be held accountable. And as trillions of dollars, rather than billions, are now needed to achieve the desired results, the nature of the international enabling environment in which development cooperation takes place is of even greater importance.
Moving forward we must incorporate all the new actors and forms of cooperation into our strategies for development, and into our results frameworks. And we must learn from the experience of the MDGs, which showed that human development indicators cannot be improved in a sustainable manner without commensurate improvements in economic indicators.

Modes of development cooperation are already shifting from project-based approaches to a more systematic, integrated programmatic-based approach. Maintaining both vertical policy coherence between Ministries and sectors at the country-level and between the complex set of regional and international actors operating in many countries is becoming more important. Horizontal policy coherence between all actors at national, regional, and international levels is also more important than ever.

What is critically needed are whole-of-government approaches that promote policy coherence, involving partnerships that create space for exchange and experimentation based on the comparative strengths of each and every partner. Only through out-of-the-box thinking and willingness to try new approaches can we possibly hope to achieve the massive scale of action needed to achieve the SDGs.

UNCTAD - as the UN focal point for the integrated treatment of trade and related development issues - is poised to contribute to multi-sectoral, integrated, and coherent policy responses to Agenda 2030 embracing this wider set of actors and expanded scale of ambition.

Our engagements with three different partners - governments in the global South, the investment community, and other UN agencies - may be instructive in this context.

1) UNCTAD's partnership with governments in the global South

There is immense potential for South-South cooperation to drive development outcomes, particularly given the growing economic heft of some developing countries. Between 2000 and 2012, the South's share of global trade shot up from 35 to 51 percent. And developing countries now account for more than one-third of global FDI outflows - up from merely 13 percent in 2007. Expanded trade, investment, and developing financing among members of the global South could form the basis for more sustainable growth that doesn't depend on economic conditions in the North. 

Clearly, the full benefits of South-South cooperation remain untapped. Sound policies are required to coordinate development financing and boost trade flows. But what's missing is sound data to inform sound policymaking; the simple truth is that you cannot improve what you cannot measure. 

The lack of internationally comparable data is the Achilles heel of South-South cooperation, be it in the areas of trade, investment, and especially in the area of development financing, given the significant role that ODA will play in supplementing domestic resources. In the context of Agenda 2030, UNCTAD supports better research and analysis to support policymaking proposals in the global South.

Notably, UNCTAD is working closely with the Network of Southern Think Tanks to develop a sound methodology for measuring and analyzing South-South Cooperation, taking into account its specific and unique characteristics that make it a fundamentally different type of development cooperation than Official Development Assistance. It is our hope that by contributing to the growing evidence base on South-South Cooperation these efforts can make a concrete contribution to effective policies for mobilizing additional financial resources for developing countries from multiple sources, in line with SDG target 17.3.

2) UNCTAD's partnership with the investment community

In our World Investment Report 2014, UNCTAD estimated that we face an annual $2.5 trillion investment gap in developing countries in SDG-relevant sectors. In Africa alone, the required investment to finance the SDGs could amount to between $600 billion and $1.2 trillion per year. For infrastructure only, the continent requires $ 93 billion, but is only able to raise half of this. In these circumstances, the contributions of the private sector to Agenda 2030 will be indispensable.

At the same time, the expectations about the role of foreign investment have become more demanding. In the context of Agenda 2030, it is no longer enough that investment creates jobs or generates foreign exchange. Countries are looking for investment that protects the environment, promotes energy efficiency, and moves its firms up global value chains. So there are twin imperatives: one for greater investments, particularly in the countries and sectors that need it most, and another for higher demands for the sustainability of these investments.

This is not an easy task given the current state of the international enabling environment for investment. UNCTAD's latest data from our quarterly investment trends monitor suggest that the increase in global FDI-flows in 2015 was mainly in mergers and acquisitions with limited greenfield investment. This is worrisome because it potentially signals reductions in new productive investments in the near-term. Looking at Africa, FDI inflows even fell between 2014 and 2015 by 31 percent to an estimated US$38 billion, due largely to a decline of FDI in Sub-Saharan Africa. Central Africa and Southern Africa saw the largest declines in FDI, which can be partly explained by falling demand and prices for commodities, in what analysts have termed the end of the 'commodity super-cycle'.

In order to meet the expanded ambitions of the 2030 Agenda we need to ensure that these investment flows are more predictable, and more productive in nature. Part of this can be accomplished through improving the governance of investment internationally.

Given the vociferous debate surrounding ISDS in TTIP, we find ourselves at a moment of reflection and re-orientation in the design of international investment agreements. The question is not about whether to reform investment agreements, but about the what, the how, and the extent of such reform. UNCTAD is helping countries take a holistic look at their investment regime - including their investment policies, investment promotion, bilateral and regional investment treaties, and their collection of data on investment.

UNCTAD, with our World Investment Forum, is also at the center of the global dialogue about how to balance the rights of investors with the rights of states to regulate in the public interest. Getting this balance right is essential to harnessing the power of private sector partners for Agenda 2030 in countries where the needs are the greatest.

Further, public-private partnerships will be key to leveraging foreign capital and contributing to infrastructure build-up in industries such as electricity and transport that would accelerate progress towards the SDGs. Making sure that these partnerships successfully crowd in resources to meet the scaled up financing ambitions of Agenda 2030 will be critical.

3) UNCTAD's partnership with other UN agencies

Agenda 2030 will require UN country teams (UNCT) and non-resident agencies to work more closely together to deliver results on the ground through a stronger UN Development Group, particularly through exploring more efficient ways of pooling extra budgetary finance. The UNCTAD-led Inter-Agency Cluster on Trade and Productive Capacity is a promising example of how this closer collaboration could work going forward. Led by UNCTAD the Cluster comprises of 15 agencies including UNIDO, UNDP, ITC, FAO, WTO, UNEP, ILO, UNCITRAL, UNOPS, and the five UN Regional Commissions. 

Launched in 2008, the Inter-Agency Cluster has the ultimate aim of mainstreaming trade into national development strategies, which is increasingly important given the stronger emphasis in Agenda 2030 on the economic dimension of sustainable development, and on the means of implementation. To this end, UNCTAD is working with its partners to increase impact at the country level through support for export capacity, supply-side capacity, negotiating capacity, and research.

By adopting a multifaceted approach to everything from trade facilitation to legal frameworks to trade promotion to trade-related financial services, UNCTAD and its partners in the Inter-Agency Cluster can promote an integrated and coherent policy response to Agenda 2030. Working with 15 partner agencies in close collaboration with UN resident coordinators on a country-by-country basis, the Cluster consults across Ministries in Governments to identify specific country needs and to coordinate the most effective division of international expertise and resources to deliver customized cross-sectoral trade policy solutions.

For example, working through the UN Country Team in Rwanda, the Cluster has engaged with the Ministries of Labour and Youth, Environment, and Agriculture to develop a holistic set of interventions that aim to increase employment for young people and women in the green economy. This collaboration harnessed ILO expertise on the labor market side, UNEP on the environmental aspects, and UNCTAD on the enterprise and business facilitation side. This type of integrated delivery mechanism will become increasingly important in the years to come.

Not only does the Cluster facilitate inter-agency planning and coordination of non-resident agencies through the UNCT, it also helps efficiently match country-level needs with appropriate UN system expertise, avoiding duplication. A multi-donor trust fund is expected to be launched this year to further facilitate the matching between donor resources and country-level needs in collaboration with the 15 member agencies.