Graphs provided by Development Initiatives give an overview of international financial flows to developing countries. A global snapshot is provided in Figure 1 below, with disaggregated graphs provided in the subsequent graphs (Figures 2-5), presenting the trends for Least Developed Countries (LDCs) vs. non-LDCs, and fragile vs. non-fragile countries respectively.While commercial long-term debt and Foreign Direct Investment (FDI) are dominant overall for the totality of ‘developing countries’, Official Development Assistance (ODA) remains a major source for the LDCs as well as fragile states as groups. Furthermore, the overall international financing flows are unevenly divided: LDCs – which housed about 15% of the developing countries’ population in 2016 and 7.6% of those living in poverty – received less than 10% of the total flows to all developing countries. Further, fragile developing countries accounted for less than 15% of the total inflows.

This paper discusses trends in cross-border financing of investments that impact the Sustainable Development Goals (SDG). We presage this discussion with one stark observation: choices on the level and quality of physical and human capital investment in the next decade will shape development trajectories for years to come. Once in place, these investments cannot be easily undone. The window for putting in place sustainable infrastructure is rapidly closing. More infrastructure will be built over the next 15 years than the entire stock of today’s infrastructure. If it is not low carbon, a climate-friendly development pathway is not feasible. Also, more people are moving to cities than ever before. If transport, land-use and public service delivery are not made more accessible, inequality cannot be addressed. Last, there is a demographic bulge in Africa. If these children are not kept healthy and skilled, they will be left behind.

I arrived in New York in early 2016 to take on my new responsibility as Canada’s Permanent Representative to the United Nations. During my introductory meeting with former Secretary-General Ban Ki-moon, I asked him for advice about which area I, as Canada’s new Ambassador, could focus on that would have the biggest impact. His answer surprised me.

Over the last 18 months a number of multilateral resource mobilisation efforts were completed. The consultations among the member countries that precede agreements on the replenishment of multilateral concessional funds and on capital increases for multilateral development banks represent important opportunities for members to set the strategic directions, policies and operational modalities for these institutions, and to ensure that they remain appropriately funded to deliver on their development mandates.

China has become a major source of development finance for the developing world. Its highest profile effort is the Belt and Road Initiative (BRI) – Xi Jinping’s vision of providing infrastructure and connectivity along the ancient Silk Road as well as along a so-called ‘maritime route’ that goes South from China, past Southeast Asia and South Asia, and on to Europe through the Suez Canal. But China’s effort goes well beyond this one project.

India’s development cooperation policy is the reflection of the broad principles followed by the Indian foreign policy of sovereign equality and a belief in friendly relations with all countries. In particular this means a new emphasis on the ‘Neighbourhood First’ approach by Prime Minister Modi’s administration, which in last four years has seen more of the lines of credit (LoC) (concessional financing) in the neighbourhood than ever before.

One of the derived wisdoms from the experience of implementing the Millennium Development Goals (MDG) suggests that the absence of an apriori understanding on the financing possibilities of the global agenda did affect its delivery. Thus, widespread satisfaction was expressed when the third Financing for Development (FfD) conference was held in Addis Ababa in July 2015, ie before the adoption of the Sustainable Development Goals (SDG). As the SDGs are rolled out at the country level over the next three years, it may be observed that the state of financing of the SDGs, particularly in the developing countries remains problematic—like clouds and wind without rain.

Civil society is committed to channelling individual voices and perspectives toward an improved present and better future through the Sustainable Development Goals (SDGs). Unlike the Millennium Development Goals (MDGs), civil society voices in the SDG agenda drove innovative and multi-sectoral approaches that are grounded in transparency and accountability of governments, thus living out the Busan principle that non-governmental organisations (NGOs) and civil society are ‘development actors in their own right’.

The evolving global landscape requires the international community to work together at all levels to leverage our unique and diverse advantages toward achieving sustainable development goals. South-South cooperation, whereby developing countries work together in the spirit of solidarity, mutual respect and collaboration, is a key modality for success.

When economists try to dig deep into what is perhaps the most fundamental question in economics (why do some countries develop and prosper, while others struggle and are even left behind?) the answer is always the same. It is not the accumulation of capital, which eventually hits decreasing returns. It is not even human capital, important though that is. The answer, short of staying clear from catastrophic events like war, is the accumulation of knowledge: ranging from institutional arrangements that foster economic growth and inclusion, to new methods of production.

It will take an estimated US$6 trillion annually from now until 2030 to meet the Sustainable Development Goals (SDGs).¹ Green bonds, and more generally, bonds that focus on investing for purpose are making an important contribution towards meeting the goals – not just by raising funding for investment towards the SDGs, but by changing the way issuers and investors behave. This is why we must look beyond green bonds towards building sustainable capital markets.

The UN Environment Inquiry into the Design of a Sustainable Financial System was launched in January 2014 with a mandate to advance options for improving the financial system’s effectiveness in mobilising capital towards a green and inclusive economy. In its early stages, there was some disbelief that it was possible to systematically insert sustainable development as a design criterion into the heartland of the US$ 300 trillion global financial system. A typical view came from one seasoned climate finance negotiator, who when hearing of the Inquiry’s ambition exclaimed, ‘surely you cannot touch the financial system: it’s sacred’.

In the 2017 edition of this report, we reflected on the UN’s role in engaging mainstream finance on sustainability issues, building on 25 years of the United Nations Environment Programme – Finance Initiative’s (UNEP-FI) work with more than 200 financial institutions globally. We underscored that the global finance sector has a distinct role to play in the achievement of the shared goals of the international community, as enshrined by the Paris Climate Accords, the Sustainable Development Goals (SDGs) and many other policy frameworks.

Over the past 18 months, we have seen an explosion of initiatives focused on driving more and better ‘blended finance’ – a game-changer in terms of funding the UN Sustainable Development Goals (SDGs).

At the turn of this century, Innovative Financing for Development (IFD) emerged as a financing discipline that played a substantial role in the attainment of specific Millennium Development Goal targets such as Immunisation, AIDS, TB and Malaria. Over the next 15 years the 2030 Agenda for Sustainable Development is expected to further leverage innovative financing to supplement existing public and private flows.

The Sustainable Development Goals (SDGs) are a universal call to action to achieve a comprehensive agenda for the future, including ending poverty, protecting the planet and ensuring that all people enjoy peace and prosperity. The high ambition set by the SDGs requires a strong implementation framework through financing, data, new technology and partnerships. While financing is needed for large and path-changing investments in sustainable development projects at the country level, smaller and catalytic initiatives that can create critical windows of opportunity for the achievement of the SDGs are also important. Such initiatives help with early investment in larger projects, help exchange knowledge across countries and organisations, nurture innovation and provide access to new data or new analysis. Often, such targeted and strategic initiatives are not always eligible other forms of traditional development finance.

In early April, the Dag Hammarskjöld Foundation brought together financing experts and leadership from five UN Country Teams (UNCTs) to brainstorm some of the best practices and innovations emerging from all UN Country Teams. The question raised was how these best practices might drive further innovation towards financing the United Nations’ 2030 Sustainable Development Goals (SDGs). In a broader context, the Dag Hammarskjöld Foundation has a committed programme focused on UN renewal; the idea that since the world at large has experienced significant change, the UN development system must embrace more dynamic approaches.

The Secretary-General’s June 2017 report about repositioning the UN development system (UNDS) to deliver on the 2030 Agenda calls for a comprehensive overhaul of the UNDS approach to financing. This includes making the United Nations Country Teams (UNCTs) better equipped to support governments and national partners unlock broader, non-traditional financing for development.

For decades, the challenge of bringing private investment to bear in fragile and low-income states has been a focus in development discourse. Despite a need for the jobs, services and revenues that the private sector can provide, the risks of investment have been prohibitive. New World Bank Group financing instruments offer the promise to mitigate risks and, alongside reforms, can help realise the potential of private investment in risky places.

Three years after the adoption of the Addis Ababa Action Agenda and the 2030 Agenda, there is a growing focus on how to ensure that development cooperation – especially Official Development Assistance (ODA) – accelerates economic growth and helps mobilise additional resources for sustainable development. New approaches are changing the development finance landscape and creating opportunities to scale up the contributions of all sources of financing towards the Sustainable Development Goals (SDGs), both public and private, domestic and international as called for in the Addis Agenda. As this happens, it is important that providers more fully engage with, tailor operations to, and harmonise their interventions in countries and sectors typically excluded from financing innovations.

The digitalisation of finance will transform the global financial system and its interface with the real economy. There is both opportunity and need to harness this disruptive dynamic in financing the 2030 Agenda and meeting the Paris agreement commitments on climate.

When talking about how to implement the Agenda 2030 for Sustainable Development and the Sustainable Development Goals (SDGs), a strong emphasis is often placed on private flows and partnerships – and rightly so. Not only are the financing needs massive, the Agenda is also about a transformation towards sustainable development that needs to take place worldwide, domestically and at the international level, in the public and in the private sphere. However, development cooperation - offical development assistance (ODA) and South-South cooperation (SSC) - has a crucial role to play.

For decades the United Nations Development System (UNDS) has existed and even thrived by mobilising and spending grant resources through projects. This is the traditional ‘funding’ approach and it has served the UNDS well; however, there are two significant shifts that suggest the UNDS needs to go beyond this funding model to a financing approach.

The former Secretary-General of the United Nations, Ban Ki-Moon, referred to the World Health Organization’s (WHO) financing reform as a model for other agencies1 . What are the key features of this model compared to other United Nations (UN) agencies that makes it a good example to follow? What have been the key achievements? What are its limitations or challenges, and what can we learn from it? While the reform process initiated in 2011, following the financial crisis, continues to be implemented some of these questions can be addressed and help promote a culture of learning and ensure lasting change for the organisation.

Over the past year we have witnessed multilateralism lose ground in the Western political landscape, particularly in the United States. US President Donald J. Trump’s nationalistic rhetoric indicates a narrow understanding of US priorities at the expense of an international agenda. The announced budget cuts to US foreign policy more broadly, and intended drastic reductions to contributions to the United Nations (UN) more specifically1 , sent a clear message: the US intends to turn priorities away from the UN; managing global governance is no longer a political priority. On top of this, the UK’s decision to leave the European Union might soon limit Britain’s ability to pay.