Financing for Sustainable Development Report 2024: United Nations

General Studies Paper-2 

Context: Recently, the United Nations (UN) has recently released the ‘Financing for Sustainable Development Report 2024’ highlighting the urgent need for increased investment in sustainable development to achieve the SDGs.

About Sustainable Development Goals (SDGs):

• These are a set of 17 goals established by the UN as a shared blueprint for peace and prosperity for people and the planet.
• These goals, adopted by all UN Member States in 2015, are an urgent call for action by all countries – developed and developing – in a global partnership.

The Journey of SDGs:

• More than 178 countries adopted Agenda 21, a comprehensive plan of action to build a global partnership for sustainable development at the Earth Summit in Rio de Janeiro, Brazil in 1992.
• It continued through the Millennium Summit in 2000, the World Summit on Sustainable Development in South Africa in 2002, and the United Nations Conference on Sustainable Development (Rio+20) in Rio de Janeiro, Brazil, in June 2012.
• These SDGs recognise that ending poverty and other deprivations must go hand-in-hand with strategies that improve health and education, reduce inequality, and spur economic growth – all while tackling climate change and working to preserve our oceans and forests.

Key Issues Highlighted in Report:

• Sustainable Development Crisis: The report identified that the world is facing a sustainable development crisis. It identified financing challenges as the heart of this crisis, which threatens the achievement of the SDGs and climate action.
  • Rising geopolitical tensions, climate disasters, and a global cost-of-living crisis have hit billions of people, battering progress on healthcare, education, and other development targets.
  • If current trends continue, the UN estimates that almost 600 million people will continue to live in extreme poverty in 2030 and beyond, more than half of them women.
• The Finance Divide: Developing countries are paying around twice as much on average in interest on their total sovereign debt stock as developed countries.
  • Staggering debt burdens and sky-high borrowing costs are preventing developing countries from responding to the confluence of crises they face.
  • Many of these countries lack access to affordable finance or are in debt distress.
• The Financing Gap: The report estimated that the development financing gap has grown to USD 4.2 trillion annually, up from USD 2.5 trillion before the COVID-19 pandemic.
  • It represents a more than 50% increase over the pre-pandemic estimates.
• Weak Enabling Environments: Average global growth has declined, while policy and regulatory frameworks still do not set appropriate incentives.
  • Public budgets and spending are not fully aligned with SDGs. Private investors are not incentivised to invest enough in SDGs and climate action.
• Closing Window: The window to rescue the SDGs and prevent a climate catastrophe is still open but closing rapidly.

Suggestions Made in Report:

• Urgent Actions Needed: This is the last chance to correct course if we want to achieve the SDGs by the 2030 deadline.
  • Only an urgent, large-scale and sustainable investment push can help us achieve our global goals.
• Four Actions:
  • Close financing gaps for SDG/climate investments (both public and private) at scale and with urgency;
  • Close policy and architecture gaps, and reform international institutions;
  • Close credibility gaps and trust deficits both international and domestically; and
  • Formulate and finance new development pathways.
• Reforms in existing systems: The report concludes that the international financial system, which was set up at the 1944 Bretton Woods Conference, is no longer fit for purpose.
  • It proposes a new coherent system that is better equipped to respond to crises, scales up investment in the SDGs especially through stronger multilateral development banks, and improves the global safety net for all countries.

Conclusion:

• The ‘Financing for Sustainable Development Report 2024’ serves as a stark reminder of the urgent need for increased investment in sustainable development.
• As the world stands at a crossroads, this report underscores the importance of closing financing gaps, reforming international institutions, and formulating and financing new development pathways.