(Day 2) Special Events - 4th International Conference on Financing for Development FFD4 (Sevilla, Spain)
Conferences
Date: 1 July 2025
Language: English
Transcript: https://transcripts.un.org/en/asset/k10/k10437766p
Transcripts available through this tool are created by using automatic speech recognition and are not official records nor official documents of the United Nations. Official records and official documents are available on the Official Document System of the United Nations.

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Moderator [0:00]:

Well, hello, everyone. Thank you very much for being here on this special event. It's happening, of course, on the sidelines of the Fourth International Cooperation conference on funding for development. Of course, as you know, just as an anecdote, this is the first time this conference takes place in Europe, in Spain, and in the city of Seville, of course, recognized by UNESCO for its cultural heritage. Now, today for this session, we want to talk about the future of international aid, the future of cooperation at a time in which, of course, international relations are coming under immense stress. The Seville commitment puts that on paper, but we want to take that debate forward. So thank you very much. And I would just like to say some very quick words in Spanish. Buenos dias.

Good morning, ladies and gentlemen. Thank you for being here. We are in an event within this conference for Financing for Development organized by the United Nations and by the government of Spain. It's the first one taking place in Europe, Spain, and Seville. And today we'll be talking about the future of assistance, cooperation in a very complicated political moment. So again, thank you very much for being here.

I would like now to bring on stage the Prime Minister of the government of Spain, Pedro Sanchez.


Spain · Prime Minister · Pedro Sanchez [1:14]:

The Prime Minister of Spain, Pedro Sanchez. Thank you very much. Good morning. Excellencies, ladies, gentlemen, delegates, friends, men and women, for me, it is an honor to welcome you to this space. At this time, we need to have clarity, boldness, and commitment more than ever before. And I'm here with you And I feel proud to represent a country firmly committed to multilateralism. For Spain, my country, international cooperation is not just another option in the so-called diplomacy toolkit, but rather it is the way to go. It is therefore an essential principle of our foreign policy and of our vision of the world, a fairer world which will only be possible if we build it together. Spain has been firmly committed for years to increasing development aid for years. In 2024 alone, we increased our official development assistance by 12%. That means that we surpassed 4 billion euros, and we allocated around 170 million euros to the United Nations. When we talk about development, therefore, multilateralism is not an abstract idea, but rather we are talking about more than 65 million lives saved by the Global Fund in the last 20 years. A third of them are boys and girls. who grew up to fulfill their dreams. They are the more than half a billion people who have been lifted out of extreme poverty. And we are talking also about more than $100 billion per year to support developing countries in the face of climate crisis. So these achievements are the result of a collective commitment that we must continue to reinforce today more than ever. It is true, the multilateral system is being questioned for budgetary reason, no doubt, but also because of its deficiencies and limitations that we need to cater for. That's why we have to live civil with a renewed multilateralism that needs to resist the onslaught of the current moment. Here, these days, we are launching proposals, initiatives, solutions in order to make the multilateral system more effective and to be better able to respond to the urgent challenges facing humanity. Because there's one thing clear, only through a stronger, more agile and efficient multilateral system will we be able to put an end to poverty, to tackle the climate emergency or to ensure justice and prosperity for all, for the whole of the planet. In this context, what can Spain do and what does Spain want to do? Well, we want to be part of the solution. We want to contribute humbly to that solution. That is why I would like to present to you today the Seville Plan. The government of Spain has designed this plan precisely to support the multilateral system in the context of high difficulty and uncertainty. This plan is born from the commitment which we acquired in this city of Seville. And there are three R's, the R's of Seville, refuge, reinforcement, and reform. So first, refuge. We're in a world where rights and development budgets are cut, reduced, and Spain wants to protect and preserve multilateralism. And if you allow me to word it this way, we want to be some sort of an institutional refuge for organizations in the system that see their resources dramatically diminished and are forced to reduce costs of all kinds and need voices to defend them. So Spain wants to be one of those voices. We are not going to abandon you. We are going to be on your side stronger than ever. And as I announced yesterday with the Secretary General of the United Nations, Mr. Antonio Guterres, we will open a United Nations house in Madrid, and we will make this house, our country, a multilateral hub in Spain. There are already some institutions, agencies, such as the Asian Development Bank, which will open an office in Spain. And we are making progress on agreements with different agencies of the United Nations, and we do see a high interest in moving to our country with units, and we welcome them and we thank them for trusting us, for trusting Spain. We will also host more international events like this one, which involve, of course, an enormous logistical and political effort for the organizing country, and we are going to bet on a greater presence of Spain and the Spanish people, wonderful civil servants and officials in international organizations, so Spain opens its doors Spain holds out their hand, and it does so when it is most needed. So, a second principle, together with refuge, would be reinforcement or strengthening. While some cut their contributions, Spain will do just the opposite. So today, I want to announce something which is very special. We are going to make the reality once and for all, the eternal promise of allocating 0.7% of our gross national income to official development assistance, and that by 2030. There will be gradual increases each year starting next year. We are going to work with our parliamentary partners to make it possible. And we will also reorient or redirect our contributions to those sectors most affected by the withdrawal of funds from other donors. Just to give you an idea, in the period from 2025 to 2027, the Spanish Agency for Development Aid is going to allocate 315 million euros to global health, which is one of the main policies that have been affected by the withdrawal of donors, of big donors. 500 million euros will be allocated also to climate change, and 725 million to human rights and human action. Because We know that the best investment in security and defense is the one that creates well-being, welfare, development, and opportunities. That is our vision of the world and the vision of our international relations with other nations. And we also want to look ahead and to plan ahead and see a horizon. And how are we going to do it? Well, first of all, we are going to announce our contributions on a multi-year basis. So that is very important in order to make agencies and the UN system more predictable and stable. Secondly, we will advance the disbursement of our contributions as much as possible in the budget period. And finally, we will significantly increase our contributions in order to meet the current expenses of the institutions so that they can better navigate these times of scarcity as a result of the withdrawal of funds by several important members. I insist on the fact that Spain will be with the multilateral system of international cooperations with its agencies, funds, programs when it is most needed. And our third R principle is reform. Spain defends the need for a change in the multilateral system. If we want it to last, we need to reform, and that doesn't mean to destroy, but rather to renew, to adapt. It is daring to imagine a new multilateral contract for the 21st century. Therefore, we stand for a more inclusive and representative global governance where all voices, including the global south and the youth, and science and civil society, all voices need to have a seat at the table. And promoting those reforms will be fundamental, and Spain wants to contribute to that. So we will coordinate a platform gathering leaders, institutions, and key stakeholders of the civil society, paving the way and pushing forward the action so that we can transform fundamentally multilateralism. Excellencies, friends, I will be concluding, and I want to remind all of us that this system, it is imperfect, but it's essential, and it was not a gift. It cost generations, wars, and agreements, and what is conquered with effort needs to be defended with commitment, also with enthusiasm, with hope, and with a necessary dose of audacity, of boldness. So in the face of the withdrawal of certain actors. Spain offers refuge in the face of the cuts. Spain offers strengthening of financing. And in the face of blockade, Spain offers reform. That is our roadmap. And I know that we will not walk alone. We will walk with you, with those who believe in peace, human rights, and cooperation, the rule of law, international law. We know that our countries are as great as their commitment to the rest of the humanity, because we are all in the same boat. If ever there was a time to renew and to strengthen our multilateral compact, that time is now. And if there was ever a place to do it, that place is here. And it is an immense honor to us in Spain and Seville. Thank you very much.


Moderator [11:23]:

Thank you so much. This I have to bring down because he is much taller. On this point and this note, I would like now to bring on stage Rebecca Greenspan. She is the Secretary General of the United Nations for Trade and Development and also the co-chair of this session. Thank you very much.


UNCTAD · Secretary-General, Co-Chair · Rebecca Greenspan [11:51]:

So, Excellencia, Pedro.

Excellencies, Pedro Sanchez, Prime Minister of Spain, Excellencies, distinguished delegates, heads of government and state, it is an honor for me to co-chair this session together with the Spanish Prime Minister. He has made Spain a synonym for solidarity, for commitment to development, fundamental values of justice and equity, and commitment to the fight against poverty. I want to deeply thank, wholeheartedly thank Spain for inviting us to this event in order to talk about global solidarity. Right now, what we thought to be indispensable is now just a mere option that could be easily abandoned.

Excellencies, ladies and gentlemen, we meet at a crossroad. Our latest report on official development assistance presents a troubling picture. Aid is declining when it's needed most. For three consecutive years, official assistance to developing countries has declined. Last year alone, it fell by 2%. And there are some forecasts suggesting that in 2025, the decline could reach nearly 20%. And this is happening in a moment where in the world, 65% of developing countries experience a deterioration in their external debt sustainability. And at the same time, we see that aid in essential sectors, such as health, has dropped at a time when 3.4 billion people live in countries that spend more on servicing their debt than on health or education. And we wonder why there is no sense of urgency. And we answer, because Countries are continuing to pay because they prefer to pay and default on development than default on the debt. And also, there is no sense of urgency because the markets are not in crisis, but people are. People are in crisis. However, What we see also is that funding for emergency response is growing, which signals that underinvestment in resilience means that we need more funds to deal with the great consequences of underinvestment. So we forget so often, as I say a lot, that the short and the long term start at the same time. There is no long term that is only a consecutive succession of short-termism. So we have to say also that we should not limit the discussion on financing for development to aid. Aid is part of the mix and very important for low income and least developed countries, but most of the developing countries that are in this room will tell you that what they want is a level playing field that opens opportunities for all. They will tell you that sustaining development must be about tackling systemic issues that lock people and countries in poverty, inequality, lack of opportunity and suffering. That investment in global solidarity is about building a world in which no one is left behind because countries and citizens can build their own future because the rules are fair and all voices are heard. To do this, we need to think about development in an integrated way where trade, investment, finance, and technology reinforce each other as the Compromiso de Sevilla states. So, in this retrenchment and inward looking policies, Spain has been a champion of development and multilateralism. The Compromiso de Sevilla, together with now the Plan de Sevilla that the President just talked about, is really an open door to hope. While official development assistance for members of the Development Assistance Committee went down by 7.1% in 2024, as we heard from the President, Spain official development assistance grew by 12% in 2024, placing Spain as 12th among OECD countries. But Spain is also a leader of the new financing for development, of the turning point we are experiencing in this conference. So, excellencies, much has been achieved. Dialogue, negotiation, and an agreement when many thought it was not possible. A clear, actionable plan for change. So, thank you, Spain, not only for gracefully hosting us in Seville, but for pushing for ambition and helping us prove multilateralism can deliver. that cooperation matters and agreements can be reached. This is why also the Seville Platform of Action that was launched yesterday offers an invaluable opportunity to keep the momentum of Seville strong into 2030 and beyond and translate our commitment into action.

And, Prime Minister, again, the announcement of the Seville Plan today is a big push forward for the Seville commitment, but especially multilateralism is. We are living through very deficient times. We've got lots of deficits, but the trust deficit is the most worrying for us, and the hope deficit. But together, we are building up trust. and hope. Thank you very much.

In closing, in a world facing deep challenges, from climate shocks to conflict, from displacement to death, development cannot be an afterthought. It is central to the world's stability, security, and peace. When we invest in sustainable development, we do not only build schools, hospitals, jobs, and clean energy grids. We build trust, prosperity, resilience, and hope for a future that can include us all. And when we neglect these investments, the consequences reverberate across continents and generations. I am confident that the Seville Commitment sends a clear message that global solidarity matters and that it is a shared responsibility and that the smartest investment we can make is in our collective future. The choice is ours and the time to choose is now. I thank you. Muchas gracias.


Moderator [19:42]:

Thank you very much.

But thank you for that. Gracias, la Senora Greenspan.

Thank you, Mrs. Greenspan.

Before we move to a panel discussion, Mathias Cormann, who is the Secretary General of the OECD. Thank you so much, sir.


OECD · Secretary-General · Mathias Cormann [20:09]:

Excellencies, ministers, distinguished guests, friends all, buenos dias, Sevilla. May I start by acknowledging Spain's great leadership of this fourth Financing for Development Conference. And also acknowledge the Secretary General of the OECD, the strong voice for ambitious, inclusive multilateralism that Spain presents across the OECD Council table. And Before starting my remarks, may I very warmly welcome the announcement, the very significant announcement that Prime Minister Sanchez has made here to us today, that Spain will increase its official development assistance to 0.7% of GNI by 2030. That really is a very significant and very welcome announcement, and we would encourage others to follow Prime Minister Sanchez's leadership in this regard, because This is a challenging time for development cooperation. At the OECD, we are committed to support policymakers through this period with the provision of relevant, robust, and reliable data, and by working with others in providing a trusted platform for inclusive dialogue and cooperation. In relation to official development assistance, our data reporting helps to ensure transparency and accountability. while our analysis and support for dialogue and cooperation helps ensure that those resources are used as effectively as possible. And last week, we reported that in 2025, our projections show that official development assistance provided by members of the Development Assistance Committee could fall by between 9 and 17% this year. and with a highly uncertain outlook. And this is where the Prime Minister's announcement here this morning is so significant. It takes the trend in the other direction. Least developed countries, sub-Saharan Africa, and public health across developing countries are the areas most likely to bear the brunt of the impact of any further reductions in official development assistance. And so we need to work together to cushion these impacts and to work to reverse that trend. The Global Partnership on Effective Development Cooperation, co-hosted by the OECD and the United Nations Development Programme, provides recommendations to ensure resources are channeled effectively and in a better coordinated way, and the OECD remains committed to advancing global solidarity through our unique evidence-based platforms for dialogue and support for practical action to build a better future. At this fourth International Conference on Financing for Development, our focus is clear. We need to build stronger, more coordinated international partnerships to deliver the 2030 agenda. And towards this, the OECD is supporting greater mobilization of private finance. Indeed, in 2023, official development finance mobilized only $70 billion US. This will need to grow. if we are to close the annual sustainable development financing gap, which we estimate, based on current trends, will reach $6.4 trillion U.S. by 2030. In partnership with the United Nations and Convergence, our new private investment mobilization action plan will help achieve the private finance objectives that are outlined in the Compromiso de Sevilla. More broadly, the OECD is working to address barriers to scaling up private investment. including a lack of data leading to higher perceived investment risk in developing countries, for example, through the data and analysis portal we are launching this year through our Africa virtual investment platform. regulatory barriers that hold back investment and innovative partnerships with our policy best practices on investment, competition, product market regulation and trade, and in tackling challenges and using official development assistance to catalyze other investments through our guidance on blended finance. Second, we are launching the Beyond GDP Alliance to help integrate more comprehensive development metrics into policy planning and monitoring. This partnership with Spain, the United Nations, and the Ibero-American General Secretariat will support cooperation on embedding multidimensional development metrics into national policies and international cooperation. As an implementation and knowledge partner, the OECD will provide analysis on how to use beyond GDP metrics, including by leveraging our well-being framework. This analytical work will support global dialogue on this emerging topic and help inform the considerations by members of the Development Assistance Committee on incorporating those broader measures of sustainable development when assessing eligibility for official development assistance. Third, the members of the OECD Development Assistance Committee are strengthening the graduation process to support the transition of developing countries following the end of their eligibility for official development assistance. Over the coming decade, 13 countries will graduate from official development assistance. This will be a remarkable achievement for each of these countries and for development cooperation. But without careful planning, graduation and the resulting loss of access to concessional financing could disrupt hard-earned development gains by creating financing gaps for essential services and putting pressure on debt sustainability. As part of the new graduation review process, development cooperation providers will support the design and implementation of country-led graduation strategies, including early notification and planning for graduation, continued technical and financial cooperation following graduation, in particular to boost domestic resource mobilization, and targeted support for economic diversification and scaling up of foreign direct investment. DAC members will also continue to reflect on how broader measures of sustainable development can help inform their development cooperation strategies and ODA eligibility. So in closing, at this time of a rapidly evolving multilateral development architecture, the OECD remains committed to supporting cooperation among development assistance providers, recipients, multilateral institutions, and the private sector. We are committed to remain a reliable and positive and constructive partner to make the best possible use of available financing at a time of significant budgetary pressures and to help unlock new partnerships and sources of investment for sustainable, inclusive growth and prosperity. Thank you very much for giving me the opportunity to say a few words.


Moderator [27:39]:

Well, thank you so much. And now we are going to continue with the panel discussion. And if you allow me just very briefly now, this roundtable will be, will start now and will be interpreted. part of this session. Mohamed Ould Gueswane, he is the President of Mauritania. Please, sir, join us on stage. Thank you very much. I would also like to bring on stage Bassirou Diomaye Faye. He is the President of Senegal. Please join us on stage. KP Sharma Oli, he's the Prime Minister of Nepal. Nadia Calvino, President of the European Investment Bank. Ilan Goldfren, he is the president of the Inter-American Development Bank. And last but not least, Mark Susman, CEO of the Gates Foundation. Well, thank you very much to all of you, and thank you so much for being here with us today. Yes, great. Wonderful. So the Seville Commitment, the declaration that was put forward in this conference, looks to find ways to continue international cooperation. But at the same time, we know the world is in a moment of very serious tensions. The United States, there isn't even a delegation present here. So I think the first question that I would like to put to the three of you, Excellencies, is, What do you believe is really the future of international cooperation? And, President, perhaps we can start with you.


Mauritania · President · Mohamed Ould Gueswane [29:38]:

Thank you very much for this cooperation problem that exists. We need to dynamize the architecture of international finance in order to make it more effective. We need to turn this into an instrument with approaches that can significantly contribute to seeking solutions or to the improvement of the situation. We advocate for exchanges and alliances that allow for the exchange between donors and recipients, and both should have decision capacities. We also need expertise and resources of diplomacy when engaging with traditional donors. And We also need to take a look into innovative financing solutions, which combine public finance and private investment to catalyze the resources in order to achieve the SDGs, and also to implement mechanisms that provide measurable results that have social impact. And as I said earlier, all of this analysis should provide measurable results. And from the point of view of transparency and trust, this is also very important. It was mentioned here a minute ago. We need to think into the implementation of interoperable systems that allow to follow up in real time, and also we need to avoid or rather to facilitate decision making in strategic issues. Another issue is the reinforcement of national systems. This can be done through encouraging donors to participate in planning system and through clear and transparent follow-up and accountability systems. In our opinion, it would be interesting to simplify procedures for our partner countries as well. And here we would need to think in a reform of multilateral organizations and to equip these emerging countries with a greater presence, such as the development banks or the UN. And we need to try and nationalize the different instruments to avoid fragmentation and to better manage international financing architecture. To conclude, let us think that the re-dynamization of cooperation requires a change, a paradigm shift, rather. We should go from a donor-recipient approach to a strategic partner approach. This would provide more agile instruments, more inclusive development, and renewed governance in all levels, national, international.


Moderator [34:02]:

President, I would like to present the same question to you. In a world that's becoming a sort of zero-sum game, what is the future of cooperation?


Senegal · President · Bassirou Diomaye Faye [34:26]:

I'd like to to congratulate the Spanish Government for the organization of this event. When we talk about financing and cooperation for development, there are problems that we have identified over the years in order to adapt the rules of financing. In this regard, it is important that rating agencies provide more favorable conditions in order to find more loans in a favorable conditions. Today, countries are limited between two options. either honor their debt, and this is difficult for an indebted country because this has an effect on the credibility. And these conditions should not limit themselves to that. This should also take into consideration strategic aspects such as education, health for children, and the creation of jobs and independence of women. So all of this should be reviewed. International cooperation today should put humans at the heart of everything. Everything that has to do with security, without which there wouldn't be any development, should be submitted to an arbitrage in order to preserve multilateralism. This would allow preserving world peace and world security. Well, international cooperation. fails to consider that that is the most important pillar, there won't be a peace that allows observing all these conditions. And that is why it is important to maintain a solidarity-based relationship with these countries.


Moderator [37:17]:

Now, talking about how to better work together, but the reality is the world outside, there's a number of wars that are going on. The world seems to be moving in a way that is much more aggressive. So how can we even talk about cooperation in this context?


Nepal · Prime Minister · KP Sharma Oli [38:16]:

Excellencies, distinguished delegates, good morning and namaste. I am honored to join this special event in which Investing in Global Solidarity, a new vision of development cooperation. Let me begin by extending my deepest appreciation to His Excellency, Mr. Pedro Sanchez, for convening this timely and important gathering. This event reaffirms the enduring value of development cooperation, especially in a time marked by resurgent nationalism, growing protectionism, and regional and global conflicts. Excellencies, development cooperation is not a gesture of charity. It is a place to leave no one behind in our shared pursuit of progress. This is about partnerships, partnerships that empower communities, strengthen institutions, build capacity, and that foster resilience. At its core, therefore, development cooperation is solidarity in action for lasting peace, for shared prosperity, for climate justice and for the foundation of a just, fair, and equitable world. Excellencies, over the years, development cooperation has delivered tangible results. It has helped reduce poverty. It has created jobs. It has supported education and health systems. Yet, despite its proven relevance, development assistance is declining, even as the wealth and income of many advanced economies continue to rise. And this decline comes when the need is greatest. Countries in special situations face rising pressure and widening gaps. They need enhanced and sustained global support to overcome mounting challenges and accelerate inclusive growth. We must also acknowledge a critical concern. The fragmentation of development aid is spread across too many small projects, too many parallel channels, and too many competing priorities, often dilutes its impact. Equally troubling is the shift from grants to loans, even for countries already burdened with unsustainable debt. Excellencies, the Saviya commitment, which we adopted yesterday, gives us a new hope. It is about turning principle into progress through global solidarity. We welcome its clear emphasis on the need to strengthen international development cooperation as a driver of sustainable development. This is the moment to translate our words into action. We must now deliver on both our commitments and our principles of effectiveness. We must find innovative ways to mobilize resources and make development cooperation truly meaningful for the lives of people on the ground. Today, developing countries face mounting financial stress, including rising debt. In this context, concessional finance is not optional, it is essential. His Excellency Prime Minister Sanchez, let me express my sincere appreciation to you for your initiative and announcement today in revitalizing the global conversation on development cooperation and for inspiring renewed ambition and united action. I also wish to extend my gratitude to our development partners for their continued cooperation. I trust this partnership will only grow stronger in the days to come. Thank you.


Moderator [43:47]:

Thank you so much. Thank you very much. And now a question for President Calvino. Obviously, in this session, we've heard yesterday and today, there's this idea of this commitment that has been put forward and civilian institutions like yours can play a role. But I wonder What role do you see yourself playing, but also two, this is a very complex, difficult geopolitical context, it would be wrong not to acknowledge that in this conference, so how do you work within those two parameters?


EIB · President · Nadia Calvino [44:17]:

Thank you. Thank you for the, for the, uh, very, very insightful interventions of the two presidents and the prime minister. And I'd like to, to offer five points that complement and, and respond also to the very, uh, very clear points that they have put on the table, very useful contributions, I think. First of all, to say that from the perspective of the European Union and the European Investment Bank being the financing arm of the European Union, it is a no-brainer.

What's correct is not enough. We need to do what's Smart.

It is the smart thing to do, because we cannot build strong societies, strong economies, and peace around the world without these strong partnerships, win-win partnerships. So my first strong message is one of commitment. From the European Union perspective, we are going to stay the course, and we are going to walk the talk, and the European Investment Bank is putting the money where our mouth is. This is my first and very strong message, building partnerships not only with the different countries and regions, also with other multilateral development institutions like our sister institution on the other side of the Atlantic, the Inter-American Development Bank, and also with the private sector, like the Gate Foundation, a very strong partner of the European Investment Bank in the area of health and climate. Second point I wanted to mention is about financial innovation. You're absolutely right, we need to work on climate resilience clauses, we need to look into lending with national currencies, we need to build also the national capital and banking sectors, we need to find innovative ways to cooperate. And here again, count on us. Third point, which has not been mentioned, and I would like to stress, is the mobilization of the private sector. We will be having an important meeting this afternoon with important private representatives, and we are going to be contributing from the European Investment Bank, together with the other multilateral institutions, in providing a public good for the world. That's the global emerging markets database. We're putting together all the information of the last 40 years of lending to emerging economies, and we are engaging with the rating agencies to address exactly what the president just said, that the risk data are really reflecting the risk of the countries. And I think that this work can really help shape these partnerships around the world going forward, public sector, private sector, working together to be accurate in assessing risk and therefore mobilizing private investment throughout the world. Fourth point, capacity building, I thought the statement by the OECD Secretary General was extremely interesting on graduation, how to do the transition, how to redefine what is emerging economies, developing aid, we need to rethink all of this in this brave new world which is in the making, and that brings me to my final point. which is the change of paradigm that both President and the Prime Minister have mentioned. We need to move from a logic of development assistance to a logic of partnerships, win-win partnerships. Let's work together. I am extremely inspired by this gathering in Sevilla. Let's work together to make sure that this new world order is based on the two principles that Secretary General Greenspan mentioned, trust and hope. You can count on the European Investment Bank to build on these two principles. Thank you.


Moderator [48:33]:

Thank you so much. So many interesting things there, perhaps for the next round of questions to continue in detail. But, sir, also a question for you. It's not the same type of institution in every way, but it is a similar institution to the extent that just like the European Investment Bank, you have a big role to play in how to channel some of these funding and also work as a sort of middleman at times. How do you see your role evolving if you believe, it's been mentioned now four times, that there is a change in paradigm?


IDB · President · Ilan Goldfajn [49:05]:

So thank you very much. It's a pleasure to be here.

Good afternoon or morning to you all. It's a pleasure to be here in Seville.

Several dimensions. I think we can be a bridge between regions. Latin America, Europe. I see that the challenges to multilateralism are bringing actually us closer together. And we can see it here in Sevilla. So we can be a bridge between regions that wants to be together. We can be a bridge between governments, MDBs and governments. Look at local solutions, capacitation. I think we can do that. And that's multilateral development banks have the capacity. We are not banks only, we are knowledge banks. Number three, we can be the bridge with the private sector. And we're going to be this afternoon, as Nadia mentioned, with the private sector offering financial innovation, offering capacity to mobilize so that we can get into together to the countries to finance. I think also that we can work together, the MDBs, the multilateral development banks, When you look at the Compromiso de Sevilla, there are two things that caught my attention. Number one is the compromise between being ambitious, but also being very concrete and very result oriented. And the second, the role of multilateral development bank in the Compromiso de Sevilla. So we have been working together as never before, working as a system. We have defined last year some deliverables. We call it viewpoint note, but those are flagship deliverables on how we can work together in mutual agreement, in procurement, how we can work together in attracting the private sector, how we can work together to reach local markets, local financing, and I can go on and on on things that we work together. But the important part is those are concrete, those are commitments that benefits the governments, benefits the people. So when you ask me what we can do, I think we are the bridge between governments, between regions, between the public and the private, and a bridge between ourselves. Thank you.


Moderator [51:55]:

Well, thank you so much. Mr. Sussmann, now a question for you. The president of the EIB, she said the European Union will stay the course. The head of the European Commission also repeated that yesterday. But globally, just the fact that the United States pulls out will pay significantly less. That means the public money to international cooperation statistically goes down. So I wonder what role can an institution like yours play and should it play a role? Some say it's not for an institution like that to replace a government.


Gates Foundation · CEO · Mark Susman [52:29]:

Yes, so first, thank you. Thank you to the government of Spain for our hosting. Thank you to President Sanchez for his leadership and for Spain in showing a pathway that does look different and goes in a different direction to what we heard Secretary-General Greenspan and Secretary-General Kormann talk about, which is what you described, that there is a long-term decline in traditional development assistance underway. Some of it is happening very abruptly, particularly some of the resources from the United States, but some of it is part of a broader, longer-term trend. I think one of the core messages from the Compromiso de Sevilla that we all need to get behind is the need to focus on what are going to be the highest impact areas of work. President Sanchez again cited health. Health is an area where, as you heard from President Calvino, we work very closely with the European Investment Bank, uh, we work, uh, closely with the President, uh, of Senegal and, uh, who has a very important primary healthcare initiative and, and digital healthcare delivery program that we help support, that what we need to do is, as, uh, what you just heard is… How do we do the concrete actions that go along with the broader compromise? And there, an institution like ours, which is a philanthropic institution, primarily a grant-giving agency, but a large grant-giving agency, our budget this year will be nearly $9 billion. And with the generosity of my chair, Bill Gates, we are committing $200 billion over the next 20 years into global development, and we will there to be dependable and predictable and reliable funders in that space. But even at that scale, we cannot possibly fill the gap that governments and the public sector need to do. And our primary strength really is in funding innovation, in taking risks that the public sector cannot take, that the private sector is not incentivized to take. These are new models of delivery in healthcare, in agriculture, in financial inclusion. And so for me, one of that core messages is absolutely we need to move full speed ahead, even at a time where some traditional global leaders are retrenching. We need to focus And you've heard a number of examples from the president sitting on the panel and my colleagues about on very concrete actions that are going to deliver results in the lives of human being. Ultimately, this financing for development has to be measured in its human impact. Is it changing lives and providing opportunities for the people on the ground? And I think the commitment you're hearing that even at this time of pullback, the need for reinforcing the multilateral approach, which absolutely we are very supportive of and have become large funders of a number of multilateral institutions, of focusing on what works, where we know we have some proven results and outcomes and models. And then looking ahead to the future, where there are new tools and new opportunities, particularly in digital public infrastructure and the use of AI and some other opportunities, where I think we need to have the kind of private sector financing, the blended finance partnerships that we've talked about. But again, the need is to make them very concrete and specific by sector, whether it's health or agriculture or infrastructure. And if we do that, we really can use the Compromiso de Sevilla and today's occasion as a transition point into a new era of development that actually can be even stronger than what we've seen in the past, even at a time of retrenchment.


Moderator [56:17]:

Well, thank you so much for that. And you made a, thanks. You talked about the stress that the multilateral world is under. Sometimes this seems like a form of intellectual concept, an intellectual debate, but I wonder a question for the three of you excellencies. If the multilateral world no longer existed, no longer worked, what kind of real life implications do you believe it would have on your nations? Is that something you think about?


Mauritania · President · Mohamed Ould Gueswane [57:17]:

Well, in our opinion, we need to acknowledge that there is some multilateralism which is in crisis. However, we need to continue working on this axis on what we can do in order to strengthen cooperation in at this moment of a crisis affecting multilateralism. We think there are different leverages that can be activated in this sense. First, we should promote multilateral partnerships. through the support for reforms of the international system, such as the United Nations, the World Trade Organization, the Food and Agriculture Organization, the multilateral organizations, so that member states cooperate on common goals. It will also be necessary to see how we could promote partnerships between countries, between countries and NGOs, and countries and the private sector in order to tackle world challenges such as climate change, poverty, all the problems on which we need to try to carry out collective action. And secondly, we also think that we should develop innovative financing mechanisms in order to attract more public funding for sustainable development. Partners providing public funding, we could also promote the attractiveness of countries, developing countries, through guarantees or certain insurances in order to reduce risks. And third, we should also adopt a global approach, which should be a proactive one, in order to tackle crises, in order to adapt public policies to unforeseen obstacles and new realities. Summing up, we are convinced.

that by implementing these strategies or similar strategies, trying to work on all those pillars, we will be able to reestablish, to restore trust and confidence between the different stakeholders for which development aid is important, and that also attests to our commitment to multilateralism. in this context, in the world, which is quite difficult. We need to recognize that. So it's not just about saving a system, but rather to renew a solidarity-based compact at the world stage in a more equitable way as well. I'd.


Moderator [1:00:49]:

Like to ask you a very similar question. The president just said the multilateral world is in a moment of difficulty. There's no point denying that. But we need to try to save still the system. Why? It's a very simple question, but why?


Senegal · President · Bassirou Diomaye Faye [1:01:13]:

Well, in order not to go back to the past episodes that motivated the creation of the multilateral system. Nowadays, we've got a multilateral system that tried to work against the tragedies that have happened for decades and that made it necessary to develop international law. And why do we need to save this multilateral system in order to avoid past horrors? and most especially in order not to forget that past. Nowadays, we see that every time there's a new conflict, the League of Nations that became the United Nations later are being replaced by private initiatives in order to tackle a conflict. For example, the Middle East, a country considers that they are threatened and they preventively attack another country. If all countries could do that just based on their own personal evaluation of threats, if they could attack another country, that wouldn't work. whereas peace is the best situation for development and for human condition. And multilateralism, an inclusive multilateralism, is there for that. The United Nations is a forum for deliberation. But it is true that certain countries have a veto in the United Nations. Five countries or one country can impose their views. Nowadays, based on their own interests, certain countries can impose their interests on what should actually benefit everyone. So cooperation nowadays needs to be reinvented. However, Unfortunately, every time multilateralism withdraws from the scene, we get back to the wars, to the traumas that we've lived through in the past. There are generations now that did not know war. We need to avoid these new generations know a new war. So we need to prevent unilateral action so that our world preserves peace and security, because this is all very interrelated. So it's multilateralism that counts in that respect, right? Thank you very much.


Moderator [1:04:19]:

Question to you and also the idea of the end of multilateralism. It's an abstract concept. But do you worry about the real life implications It could happen in a country like yours. Is that something you're thinking about?


Nepal · Prime Minister · KP Sharma Oli [1:04:37]:

Thank you very much. Thank you. Thank you very much. Today's world is facing violence, troubles, poverty, hunger, climate issues, crises, different things. And We have to finalize first to think about multilateralism, whether these issues, these problems which the people are facing in the earth, in the planet, are common issues or not. And if we have to address these common issues, then there must be multilateralism. Multilateralism works for all. and anti-multilateralism works for some, few, and not for all. So multilateralism must be, as we discussed yesterday and today, and we drew conclusions. important conclusions. Now we have to materialize and practice these conclusions to adapt and accept multilateralism and make multilateralism effective. So in my opinion, multilateralism is a theory to work and a practice to work for all, for the children, for the backward countries, for the needful people, for backward communities, for the youths, for the women, and for all nations. And no one should be left behind, can be addressed only through the principle of and practice of multilateralism.


Moderator [1:06:53]:

Do you worry that we're moving into a world where the big, just because they're big, can do whatever they want? Where the big countries, because they're big, just because they're big, can do whatever they want, and smaller countries are not going to have any rule of law? It's the force of strength. Is that something you're worried about?


Nepal · Prime Minister · KP Sharma Oli [1:07:14]:

Yeah. I'm not-- I don't want to talk about the size and population of the countries, but the level of their development. whether and how they talk, that is because of their ideologies, their actions, their opinions are created by their development level, not because of the size of the country. So I'm not talking about the big countries, but the developed countries must give attention on these questions. And themselves, they must join and accept the multilateralism in all aspects.


Moderator [1:07:52]:

Well, thank you for that. Thank you so much. And a question perhaps to both presidents of both institutions. There's this idea that the multilateral world and multilateral institutions without the United States, simply because they created them, cannot exist. We have to be frank, the U.S. is not even present here in this conference. Do you believe, however, that is wrong? There is an appetite for many other countries to come together, maybe create alternative institutions Even if the center of gravity changes, it doesn't mean the format is doomed to end. Do you believe there is still scope to create institutions and maintain them?


EIB · President · Nadia Calvino [1:08:33]:

Well, let me bring one reflection and two calls for action. I'm going to speak French in my initial remarks just because.

Because I want to emphasize the President of Senegal's message. I think about that every day. The multilateral system was created after the Second World War. Back then, there was only one country which represented 75 percent of world production. But the world has changed a lot, and we need to adapt the system. same as the European Union, was born from the ashes of our wars after the Second World War. And that period of 80 years of peace was the longest peaceful period in Europe, in our history. So we need to resist, absolutely. We need to fight for peace. We are fighting for civilization and democracy, and I think that we need to gather everyone around us. And this meeting here is very helpful for me because the term "crisis" can also mean "change," and I want to take away this lesson from this room.

Two concrete ideas. First, we need to rethink, and we have already mentioned this, we have to really move away from this sort of North giving development aid to the South, which was based in a colonial world and a different economic reality. We need to move to partnerships. Just before this panel, I had a meeting with the finance minister of India. And we're going to see how to build a stronger partnership between the European Union and India around the world. And I am sure that we can think of different approaches that move away from the large, powerful, small, vulnerable kind of logic. We need to work together with a different approach. And secondly, let's focus on concrete deliverables. For example, it has already been mentioned, health. For example, water. We're going to be producing a report on what multilateral institutions are doing in the area of water. Of course, food security, of course, energy security, women's empowerment, digital connectivity. Let's focus on concrete areas where we can make a difference working together, impact oriented. Just to mention in the area of health, just this week, The European Investment Bank has extended the 1 billion facility to the Gavi, to the Global Vaccine Alliance, to procure vaccines. We have signed and renewed our cooperation with the Gates Foundation and with other international institutions, the World Health Organization, to build vaccine production facilities in Africa. We have signed agreements to support primary health in some of the countries represented here. So let's focus on concrete areas where working together we can make a difference. And I think, you know, these are just two areas where a call for action coming out of Sevilla would already signal the path forward, and it is a path full of hope.


Moderator [1:12:17]:

Thank you so much. And sir, the same question to you. I mean, there's this idea of the center of gravity. It shows there's something in the air. Do you believe that is possible? These institutions can continue to thrive even if the center of gravity changes.


IDB · President · Ilan Goldfajn [1:12:37]:

So as I mentioned before, thank you for your question. As I mentioned before, this conference gives me hope on multilateralism. It actually shows us that we're stronger than we believe. I think we need to concentrate on things that unite us. And every time you concentrate on what unites us, you can reach out of consensus and concrete consensus. Let me give you some examples. Working the public sector with the private sector, that unites everybody. and there are concrete things that we can do. Some of you mentioned financial innovation. We are working very much on financial innovation. For example, here in Sevilla, in the platforms, we have announced three innovations. One, FX Edge, to help with the currency, volatility and risk, that's very important. The other one is about resilience, How can we work together with resilience, increased exposure, that clauses, catastrophe financing, this unites us, resilience. Number three, we look in the regions and the region, countries in my region wants to unite. So they say, we want to preserve the Amazon together. So we did a program called Amazon Forever, and we're announcing here the Amazon bonds, together with our other sister organization, with the World Bank and others. We will be the first one to issue Amazon bonds, $1 billion, but countries will come after it. So we can concentrate on what unites us in a concrete way. I think this conference is a place where I can see concrete deliverables that unite us. Thank you.


Moderator [1:14:43]:

Thank you. And Mr. Shatzman, now a question perhaps for you. We've heard now repeatedly the idea of the way that we look at development, it needs to now move into the idea of a partnership, and it also needs to become a win-win partnership. What does a win-win look like to you?


Gates Foundation · CEO · Mark Susman [1:15:03]:

Well, first of all, let me actually go back to the question you posed, their excellencies, at the start, which is that multilateralism is a very abstract concept and why does it matter. And I think the answer to that question really is the answer to what win-win looks like and what you've just heard from President Calvino and others. And it's really a challenge I would put to everyone here at this conference that is our shared obligation to stop making multilateralism and financing for development abstract concepts. The way to change minds is to be concrete and talk about the concrete deliverables. So you just heard some very specific examples of partnerships from President Calvino that, you know, we're doing with the European Investment Bank. We have a partnership that works together for the eradication of polio. We hope that polio can actually be in the next years, there are few more concrete examples of eradicating a disease that will only be done through a multilateral approach of both funders and recipient countries. You heard about the Gavi replenishment, which took place last week, which was co-hosted by President von der Leyen and Bill Gates, and President Sanchez was there, and that's where he made his announcement of an increase in the Spanish contribution. Gavi has saved 19 million lives to date. the vaccines provisions, and it hasn't just done it, it's done it through public-private partnerships that are win-win. It has driven down the cost of vaccine by over 50 percent. Each of the heads of state sitting here on the panel have had their countries have been recipients of Gavi support and support from the Global Fund to fight AIDS, TB, and malaria. These are very concrete actions which can only happen through multilateral platforms that themselves crowd in partners like us, philanthropies, that leverage the private sector, because it's the private sector that produces the vaccines or the bed nets or the antiretrovirals that are distributed by these actions. And that is an example of multilateralism in action that actually delivers for people. And I'm quite confident for the taxpayers, whether here in Spain or even in the United States, or elsewhere, when you explain that story to them, They feel very good about their dollar or euro going towards that contribution, and it is very much in partnership and driven by the development priorities of the countries of the Global South setting their own priorities. So that, to me, is what win-win looks like. That is the challenge we all face going forward, is to make it concrete, make it tangible, deliver results that allow results to be seen on the ground in the countries where we work, and results that will actually be persuasive politically in the countries and communities where we're seeing some of the pullbacks right now.


Moderator [1:17:51]:

Can I just ask you a follow-up to that question? You mentioned the taxpayer, and I think it's great that you mentioned that because yesterday the head of the Commission said, "Europeans, we now provide 40 percent of all this aid for development and cooperation." At the same time, Europe is also facing its own difficulties. And the French President also said it very clearly yesterday. We're talking about international cooperation at a time in which there's tariffs around the world. That's an aberration. It's It's very difficult to operate like that. So I wonder then what does a win-win look like? Because there is also a reality, which is in terms of what public governments can do, it seems we're now at that higher stretch. I'm not sure there's more room to run. So how do you see that you can play a bigger role there.


Gates Foundation · CEO · Mark Susman [1:18:35]:

Well, my answer comes back and I'd say it's be concrete about the partnerships that deliver outcomes. I gave you a number of specific ones in health. We have, again, just to take another EIB partnership that we're working on in real time, we have to have a commercial facility that's going to help provide loans to women across East Africa and elsewhere that will be very tangible and concrete. You just heard from the IADB about some very concrete financial instruments and partnerships that are supporting the Amazon, each of the governmental leaders here have very concrete initiatives in their own country that are supported, as you've heard, by multilateral at a time of pullback, and we did hear very loudly from the OECD and UNCTAD that we are seeing a pullback and a reduction and the first projected reductions in it, we need to show that the remaining money is spent as effectively and as high impact as possible. It needs to be helping the countries that receive the aid move on a path of long-term self-reliance. Gavi is another good example where 19 countries have graduated over the years. You heard from the OECD a number of countries are due to graduate, but you need to provide the support and the infrastructure that allows them to do this successfully and not be left with debt crises or other fiscal crises. So it is a challenge, but I think the answer for all of us is be concrete and specific about the deliverables, and then that is going to help change the narrative.


Moderator [1:20:02]:

Well, thank you so much for that. And now this is a fascinating conversation, but I'm being told we have to now enter the final round of questions. So my first question, well, perhaps to all of you, in fact, there is a declaration, a commitment that was signed in Seville. It's a political declaration. Perhaps not legally binding, but it shows there's political impetus behind it. What is the priority, the one thing that you believe after this we need to implement? And this is a question for all of you in a very practical terms. What would you like to see being implemented immediately after?


Mauritania · President · Mohamed Ould Gueswane [1:20:49]:

Thank you once again. I think that indeed this declaration is important. We've talked about very critical aspects, and we've covered topics in which, indeed, it was interesting to see, for example, multilateralism. But regarding your question, there is a clear priority, or perhaps several, amongst them we have to reinforce or establish trust. But we need to do more in terms of development. We need to dynamize relationships between donor and recipient countries. This relationship requires harmonization and needs to be dynamized in favor of development. I'm talking about the donors and recipients policies. Both aspects, we need harmonization in policies regarding procedures for development. I think that we need to reinforce dialogue amongst donors and recipients through regular consultation rounds so as to guarantee mutual understanding of the needs. That's the first thing. And also to secure better efficiency in the resources employed. Donor countries must support national strategies of the beneficiary or recipient countries, and they should adapt their contributions to the development plans established by the recipient countries. Likewise, donors need to conduct in-depth assessments of the needs and priorities of the recipient countries prior to defining their assistance programs. We need to systematize national procedures and have enough budget resources in order to promote governance reforms in developing countries. We should also act on streamlining and adapting these procedures. For example, we would need to implement flexible aid so that countries may shift their priorities based on their domestic context, that is, for recipient countries. And also, recipient countries would need to understand that they need to permanently learn in order to establish feedback mechanisms to adjust programs based on the results and lessons learned. We need to promote transparency and responsibility as well as accountability. We need to share information and therefore in order to guarantee transparency and access to data so as to allow better follow-up is also critical. We should do so with accountability mechanisms And we need to implement systems so that donor and recipient countries are accountable in terms of the use of the resources and their deployment. As a conclusion, I think we can create a synergy amongst the development strategies of recipient countries and the policies of donor countries. In that way, donor countries would become strategic allies that would support the policies implemented by recipient countries in a framework that enshrines trust, transparency, and mutual respect. Success depends not just on the resources mobilized, but also the trust between the partners.


Moderator [1:26:27]:

Leave Spain and you go back to Senegal, you would.

Like to see implemented.


Senegal · President · Bassirou Diomaye Faye [1:26:48]:

I'd like to underline the impact of implementation. When you have indebtedness issues, as is the case for Senegal, amongst the reforms that are to be implemented, we have the mobilization of internal resources. And these resources are those that are obtained through taxation. These are taxes paid by companies, and companies that needs to pay the most are those who pay the least. There are very important companies which have great revenues and turnovers, but what happens? Well, when a company comes and exploit mineral resources in developing countries, for example, the first thing that they look at is the tax environment. If there is a tax agreement that allows for paying less taxes in the countries where this wealth is created so that these taxes are paid in the countries of origin, in that case, we would be working on the efficacy of the resources. When countries cannot mobilize resources, they end up using the indebtedness mechanism, what we use or what we need infrastructure that the country that lends the money and to which the money will be repaid with interest. this country should not come with tax exemptions and then the country comes into the countries without paying any taxes in the country. In that way, it could have more profitable presence in the country. Then we have that interest. And and staff is interested in a wages policy. So when I come back to Senegal, I would like a new tax agreement that would allow us to impose taxes on the countries where wealth is created.


Moderator [1:29:38]:

I want to still ask this question to all of you. Just very briefly, what is the number one priority now, once we leave Seville, that has to be implemented?


Nepal · Prime Minister · KP Sharma Oli [1:29:56]:

I was disturbed by this. Please repeat again. I was listening hard.


Moderator [1:30:01]:

sure, sure.

The question would be, yeah, as as we leave now, what is the one thing that you would like to see implemented? We've talked about 20 things, but what is the one thing that you believe we need to get done in 2025?


Nepal · Prime Minister · KP Sharma Oli [1:30:20]:

Yeah. Uh, we We are a developing country. We are going to be in the developed, underdeveloped country until now. And we have focused our development efforts to create job opportunities and how we can create job opportunities without entrepreneurship. So we want to create entrepreneurship and through entrepreneurship using the youth and involving youth and entrepreneurship. We want to create new jobs, more jobs, and skill development programs, vocational training, et cetera, to make, to involve the people, entire people into development process. And so far the foreign aids, the foreign assistance and cooperation, question is, We want to use those investment, outside investments or loans or aids in our priority, according to our necessity. Where our necessity is, where our priorities are. We know our priorities. And for production and for generating job opportunities. These are our priorities for now.


Moderator [1:31:59]:

Well, thank you so much.


Nepal · Prime Minister · KP Sharma Oli [1:32:00]:

And one thing, we want to get whatever we get from our development partners, we must get through the peer channel to the government within the budgetary system. Without that channel, and if it disperses in this or that way, and this and that place, without coming through the budgetary system, as he mentioned before, that the recipient countries must be responsible. Yes, we are responsible, because we have to develop our country, we are responsible, but if the donors are not dealing properly, then our responsibility will remain meaningless. So I want to request all the donors and development partners to come through the channel, proper channel.


Moderator [1:33:11]:

Well, thank you so much. Now we have one minute left, but I still want to use it just very briefly, Deliverables for 2025.


EIB · President · Nadia Calvino [1:33:19]:

So when we get out of here, what I would like is that we change the conversation. Let's not focus on what's missing. Let's focus on what we can do together. Let's not only focus on amounts. Let's focus on our partnerships, the quality of the way we work together.


Moderator [1:33:35]:

Thank you. Well, thank you very much, Ellen. Mr. Goldfrin, same question, very briefly.


IDB · President · Ilan Goldfajn [1:33:42]:

I think my priority number one is to have concrete list of deliverables that we can actually implement, show, so that we gain the trust and we can move forward together.


Moderator [1:33:58]:

Thank you very much. And lastly, thanks.


Gates Foundation · CEO · Mark Susman [1:33:59]:

Just echoing that, deliverables that deliver trust.


Moderator [1:34:03]:

Well, thank you very much. To the point, we have now reached the end of this session. Thank you very much, Excellencies, President, Mr. Sussmann. Thank you very much. It was a pleasure. Thank you very much.


Chair · Masondo [1:59:36]:

Good afternoon, everyone. May I have your attention, please? If I was in Parliament, I would say order. Good afternoon once more. Your Excellency, President Pedro Sanchez of Spain.

Finance, honorable ministers, distinguished guests, it is my pleasure to welcome you today at this side event on forging a common agenda to achieve debt sustainability in developing countries, jointly hosted by South Africa and Spain. I have the honor of chairing today's session, which offers a timely and important opportunity to deepen the global discussion on how to relieve the growing debt burdens faced by developing countries. As we begin this session, it's important for us to remind ourselves what is the mischief What is the problem, the challenge we're seeking to solve? Many developing countries are experiencing rising debt vulnerabilities that divert scarce resources away from essential development priorities such as health, education, and infrastructure. Quite simply, we cannot have a serious conversation about financing for development without addressing the debt crisis. Recognizing this agency, both South Africa and Spain have placed debt sustainability high on the agenda under the South Africa's G20 presidency and Spain's leadership in the Fourth International Conference on financing for development. The objective of today's event is threefold. A, to send a clear message of renewed global support for tackling debt sustainability. To bring together international actors to identify and align efforts on debt relief initiatives for vulnerable countries. And lastly, to promote practical and innovative solutions that can help countries regain a path towards sustainable development. Under its G20 presidency, South Africa is advancing a comprehensive, multi-pronged approach to debt sustainability, including improving the effectiveness on debt restructurings, supporting liquidity-challenged countries, promoting local currency bond market development, advancing debt transparency, and lastly, exploring innovative debt instruments such as debt for nature swaps, state-contingent debt instruments, and climate-resilient debt clauses where appropriate. We have also prioritized giving debt countries a stronger voice. For instance, in collaboration with the African Development Bank, we hosted a side event in March that brought together various African borrower countries to directly share their perspective on debt sustainability with G20 stakeholders. Our focus also includes improving the implementation of the common framework for debt treatment through actions such as publishing a step-by-step guide to the debt restructuring process under the common framework to improve speed and predictability. This is now available on the G20 website. While these steps are important, much more needs to be done. The esteemed speakers joining us today bring very valuable insight and experience. Their contributions will help us build on the progress achieved and define further steps to support debt sustainability for developing nations. With that, we're now starting with our program today. I will now hand the floor to His Excellency Pedro Sanchez, the President of the Kingdom of Spain, for his keynote address. Over to you, President.


Spain · Prime Minister · Pedro Sanchez [2:05:31]:

Thank you, Ministers. Thank you, authorities. It is truly an honor to participate in this meeting that Spain is co-hosting with South Africa. This event reflects our common determination to work together find solutions, and promote coordinated action to strengthen global stability and well-being. So let me be clear. International debt architecture needs a profound change. We all agree on that. And more importantly, it needs concrete, effective solutions and foster sustainable development. Debt, if poorly managed, can be a trap that perpetuates poverty, weakens institutions, and limits the ability of countries to respond to crisis. But debt, when properly leveraged through innovative mechanism, can become a driver for investment, resilience, and stability. That is why Spain has moved from words to action, promoting ambitions and realistic proposals here in Seville, and I would like to share them with all of you today. First, as you know, we have launched the Debt Post-Close Alliance. All countries are exposed to threats, but the most vulnerable ones are the least capable of responding when they strike. If we do not act quickly, what begins as a temporary liquidity problem can spiral into a lasting debt crisis, costlier and harder to resolve, both for debtor countries and for creditors. Suspension clauses are designed to avoid that scenario. They temporarily pause debt service payments in the event of severe disruptions, freeing up resources to protect the population, rebuild infrastructure, and safeguard the social and economic fabric. These clauses already exist, and they work. But their use remains limited, inconsistent, and fragmented. That is why Spain has promoted the creation of an alliance that brings together debtor countries, creditors, multilateral banks, the private sector, and the credit, uh, rating agencies with a clear goal to make disclosures more consistent and to encourage their regular inclusion in both public and private loan agreements. So I'm pleased to announce that the alliance already has the backing of key partners such as France, the UK, Canada, Barbados, as well as institutions like the Inter-American Development Bank, the Asian Development Bank, the African Development Bank, CAF, and the European Investment Bank. So I'm really grateful for that support. We are pioneers and champions, but to truly succeed, we need to rally others. Our initiative needs to be global, inclusive, and ambitious, and that is why we invite all of you to join us. Second, Spain has launched an initiative to promote, as you know, debt for sustainable development swaps. This is a powerful instrument to tackle two challenges at once. First, easing debt burdens, and second, redirecting resources towards investments in climate action, sustainable infrastructure, health, education, and so on and so forth. In short, to help advance the sustainable development goals. So we know that swaps work, but their application is complex and often lacks coherence and scale. That is why we will establish a global debt swap hub within the World Bank. This hub will serve as a platform for sharing experiences, generating knowledge, building technical capacity. It will help create common approaches to swaps, support their design, implementation, and to promote their adoption by both official and private creditors. And we know that we need to go further. So that is why Spain will launch a national facility that will allow up to 60 million euros per year in debt relief for developing countries. Those resources will be reinvested directly and transparently in sustainable development programs, because we believe this is the way forward, practical, measurable, and transformative solutions. But we know this is not enough. We need to address the structural problems that prevent many countries from stabilizing their debt while investing in their future. In this regard, I would like to highlight and support a proposal advocated by the Jubilee Commission, whose representatives join us here today. A multilateral fund that enables countries to buy back their own debt at a discount on secondary markets before it falls into the hands of vulture funds. This idea makes perfect sense. In times of crisis, the sovereign debt of vulnerable countries is sold at significant discounts. Instead of allowing this asset to end up in the hands of speculative investors, we should help and enable countries themselves to repurchase their debt at reduced prices, lightening, of course, their financial burden and freeing up resources for development. Spain supports exploring the creation of this fund, which could be backed by the SDRs to provide loans and favorable terms to eligible countries. This is, I believe, a realistic proposal. It is aligned with social justice and consistent with the goal of building a more resilient and fairer global financial architecture. To conclude, my friends, Excellencies, we are at the moment of real opportunity to transform the way we manage sovereign debt. Marginal adjustments are not enough. We need ambitious, innovative solutions based on international cooperation and solidarity. And my country, Spain, is fully committed to this process And we bring to concrete proposals to strengthen partnerships and to work side by side with countries like South Africa under your current G20 presidency, so that debt can finally stop being an obstacle and become a tool for development and human dignity. Thank you very much.


Chair · Masondo [2:12:36]:

Thanks, Presidents. Sanchez for those words of wisdom and the political support for debt sustainability in developing countries. Thank you very much. We really appreciate it. Ladies and gentlemen, may I take this opportunity and you may leave if you want to, President, but if you want to stay, you're more than welcome. to stay at the right moment, you are at liberty to take leave. May I take this opportunity to ask the Minister of International Relations and Cooperation of South Africa, Mr. Ronald Lamola, to deliver the message on behalf of His Excellency President Cyril Ramaphosa. Minister, over to you.


South Africa · Minister of International Relations and Cooperation · Ronald Lamola [2:13:59]:

Thank you very much, dear Masondo. On behalf of President Cyril Ramaphosa, His Excellency of the Republic of South Africa, I greet Your Excellency, President Sanchez, and again convey President Ramaphosa's dear apology to yourself and all the distinguished guests here. We gather here today at the fourth Financing for Development Conference in a moment of great consequence for humanity. We face more daunting challenges than at any other time, from the growing devastation caused by climate change to persistent levels of poverty in many parts of the world. We have the means to confront these challenges if we want to. To do so, however, we must ensure that ambitious commitments that we have collectively made, among them to end poverty in all its forms, to reduce inequality within and amongst countries, and to take urgent actions to combat climate change and its impacts, are backed by adequate resources. The financing gap for achieving the SDGs is estimated at $4 trillion per year, a gap which can be closed through more affordable, long-term sustainable financing. A major contributor to this financing gap is the growing debt burden faced by many developing countries, particularly those in Africa. The average interest cost on external borrowing for developing countries is three times higher than of those developed countries, while the least developed countries now spend 14% of their revenue on interest payments, four times more than 10 years ago. In 2024, developing nations paid $921 billion in net interest on public debt, 10% more than the previous year. As a result, a growing number of countries are either in or at risk of debt distress. While few countries have defaulted on their obligations to creditors, as the Jubilee Commission notes in its report, they are defaulting on their people, their environment, and their future. The bottom line is that high debt levels and the high cost of capital are preventing countries from making the investments necessary for sustainable and inclusive growth. There is a tendency in some quarters to blame debtors, countries themselves, for their growing debt burden. Undoubtedly, there are things that countries can and should do to borrow responsibly, to manage their public debt soundly, and to ensure that borrowed capital is invested productively in a way that creates the conditions for growth. For many countries, however, access to affordable capital is limited and the cost of debt has risen more sharply than they can sustain. Developing countries have faced a succession of external shocks, from COVID-19 pandemic to the destabilizing effect of various conflicts around the world, disruptions to trade and tightening financing conditions. Many countries now face a wall of debt that will divert scarce resources away from infrastructure, health, education, and other pressing needs. At the same time, there is reason for hope. First, there is a growing consensus that the debt burden faced by developing countries is an urgent challenge that requires the world to take action. Secondly, there is a range of clear practical proposals on what needs to be done. Under our G20 presidency, we have been focusing on practical solutions to achieve debt sustainability, such as improving the G20 common framework for debt treatments to enable timely and adequate debt restructuring. Reports released in recent months by the Jubilee Commission, the UN Group of Experts on Debt, and the Expert Review on Debt, Nature, and Climate together with declaration by the African Union Conference on Debt and African Leaders Debt Relief Initiative, amongst others, provide specific, concrete recommendations that together points to a clear way forward for all. There is a remarkable degree of convergence amongst all these proposals. Our task is to translate proposals into meaningful action. to mobilize the political will to match the technical solutions that we now have in abundance. To do so, we must ensure responsible borrowing and lending and enhance data transparency. We must expand the use of innovative mechanisms to alleviate the debt burden in times of crisis, such as climate-resilient debt tranches and debt-for-development swaps. We must improve debt restructuring processes and ensure that countries emerge from these processes with sustainable debt, including through reform of debt sustainability frameworks. We must provide more support to countries facing liquidity challenges, intervening early enough and providing enough relief to avoid a crisis. We have shown that this is possible through previous efforts. such as the debt service suspension initiative that created fiscal space for low-income countries during the COVID-19 pandemic. Finally, we must increase access to affordable capital by ramping up concessional lending and encouraging countries to rechannel their special drawing rights through multilateral development banks. To effectively address the debt challenge, we must fix the underlying flaws in the international financial architecture which have produced it. We must ensure that borrowing countries have a voice in finding solutions through a process that is inclusive and encourage further dialogue amongst creditors, debtors, and international financial institutions. This will require bold, courageous, and forward-looking action, harnessing the work of the G20 and building on the clear outcomes achieved at the FfD4. To this end, at the inception of our G20 presidency, we appointed an Africa expert panel led by our former finance minister, Mr. Trevor Manuel, to develop recommendations that the G20 can take forward. We did so because we are convinced that Africa's development must remain front and center this year and into the future. Achieving debt sustainability is essential to the mission and requires that we act with the speed and scale that matches the proportions of the challenge. South Africa is committed to working together with Spain and other partners to make this to happen. Let this discussion take us one step further towards that imperative, particularly the one of acting on the commitments that we have agreed upon, the Compromiso de Sevilla, commitments of Seville. And we thank you very much for being here for this discussion. Thank you. Gracias.


Chair · Masondo [2:22:08]:

Thanks, Mr. Lamula, for raising those critical points on the gap for financing development and what we need to do as the world Ladies and gentlemen, may I take this opportunity to call our next speaker, Amina Mohammed, the Deputy Secretary-General of the UN. May you please take the floor?


UN · DSG · Amina Mohammed [2:22:49]:

Thank you. President Sanchez, Excellencies, friends, ladies and gentlemen, 10 years after countries adopted the SDGs, Development today, we can say, is facing formidable headwinds, slowing global growth and the threat of a trade war and repeated global shocks from climate and conflict. The most unsettling challenge facing developing countries is the debt crisis. Borrowing is critical for development. It provides the means for governments to invest boldly in a better future for their people. And it is especially critical at a time when all countries are required to undertake one-off generational investments to green their economies and build 21st century digital infrastructure. But today, borrowing is not working for development. Over two-thirds of low-income countries are either in debt distress or at high risk of it. 3.4 billion people live in countries that spend more on interest payments than on health and education. The debt crisis is a silent crisis in two respects. First, the crisis doesn't impact the lives or economies of those in advanced economies. The immediate effects of the crisis are contained and do not threaten the stability of global financial markets. Second, among global policymakers, there's a striking reluctance to acknowledge the crisis for what it is, perhaps driven by the increasingly unlikely hope that the problem will solve itself if interest rates come down. However, I'm pleased to report that thanks to many of you and many in this room, this is now starting to change. Over the last several months, we've seen the launch of several bold initiatives, the African Leaders Debt Relief Initiative, the expert review on debt, climate and nature, the Jubilee Commission, and the Secretary-General's expert group on debt that are all making crisis increasingly hard to ignore. And through the Seville Conference and its outcome document and the ongoing work of the South African G20, this crisis is finally being seen and heard. These efforts have laid bare the shortcomings of our debt architecture and the harms that they are causing in developing countries. They also identify actions that can arrest the debt crisis and enable debt to fulfill a supportive role in countries' development success. Now that we're finally getting the attention of policymakers, we still face the challenge of compelling action. Let me propose three things as a community that we must do moving forward. First, consolidate our message and asks. We have a rich set of analysis and recommendations, but we must find ways of bringing them together. This includes borrowing language and recommendations from the Seville commitment and bringing it forward into the outcome documents of this year's G20 and COP30. Second, everyone really has to do their part. For instance, Spain has shown outstanding leadership on promoting debt swaps and debt pauses. The UN stands ready to advance member states' call for the creation of a platform for borrowers to share experience, build capacity and coordinate approaches and strengthen borrowers' country voices. Third and finally, we must continue to expand our coalition. This includes winning the support of the leading board members at our IFIs. It also means mobilizing civil society as envisaged in the Jubilee campaign. With these three steps together, I believe that we can break the cycle of debt and usher in a new era of debt sustainability for all countries. Thank you.


Chair · Masondo [2:26:42]:

Thank you, DSG. Ladies and gentlemen, I have the pleasure of handing over the floor to Carlos Cuerpo, the Minister of the Economy, Trade and Business here in Spain, who will moderate the panel. and introduce the esteemed panelists. Over to you, sir. May I also call the panelists to join in, please?


Spain · Minister of Economy, Trade and Business · Carlos Cuerpo [2:28:01]:

So we're all set. Thank you very much. Thanks for the introductions. And so we're going to go straight to the panel because I'm-- actually, I'm very pleased. I'm very lucky to be in such a distinguished company today. So what I want is for all of us to be able to hear from them, to pick up their brains for new, bold, ambitious ideas. As you know, I've been repeating it for the past couple of days, but I won't get tired of it. We want Seville to be a platform for action. We want deliverables. We want real action to come out of this conference. And on this, we are very lucky to have been able to count on all these experts that have been pushing with the reports. We've been talking about the Jebali Commission, the African Leaders Debt Relief Initiative as well, and of course, the UN group of experts, lightning or paving the way, giving us a roadmap with specific recommendations. So because in the end, if you allow me, when we're thinking about how to provide change, how to push for that change which is needed. The way that we see it is these three I's. So the first one being, of course, the element of inspiration. We need political leadership. We need to rally around the proper, the correct narrative, which is, of course, a multilateral narrative, which will be the way forward on development. Then we need to integrate the different actors, uh, we need to bring them on the table and have them all push in the same direction, uh, and, and finally the, the I from innovation, we've heard the word innovate, we cannot expect to keep on repeating the same actions over and over again and, uh, and being expecting different results, um, out of them. I want to, as I said, have a to the top to get the experts' views on, so I will ask two questions. My first one would be on the identification of priorities of impactful initiatives that can be realistic, but maybe not that realistic, apparently, but in the end, the fact that we discuss them, that we push for them, can help us also somehow enlarge the boundaries, the perimeter of what we find unrealistic now, but might be realistic tomorrow. So I will start directly with Trevor. Trevor, former Minister of Finance of South Africa and also chair of the G20 Africa Panel Expert. Trevor, over to you. You got a mic?

You have a mic in your chair.


South Africa · Chair, G20 Africa Panel Expert · Trevor Manuel [2:30:50]:

Thank you very much, Minister. Good afternoon to all of you, distinguished guests. I want to start at a slightly different place. I come from the old school that requires predictability and certainty for policy. Now, a lot of work is going into the G20, and the principles of the G20 require a functioning troika. We're sitting in difficulty at the moment. We don't know what will happen at the end of this year. And I want to alert everybody to the fact that we shouldn't allow the G20 to die on its feet because the commitments made in this year need to be carried forward. And so there needs to be a call for certainty about who will take over the many programs that are built into the G20 in this year. And I think the FFD here in Seville is a fundamentally important part of that for us Chairperson, the challenge has been well articulated, and I am glad that Martin Guzman is here to represent the Jubilee Commission. They have done a formidable piece of work. I am glad that Mahmoud is here, because he chaired our process on debt. I will allow them to talk about that, but I want to highlight The Africa panel, we have a number of panelists who are here. Sitting next to Mahmoud is Patrick Dzoroke. In the audience somewhere is Anand Morsi. There is Hannah. Where is Hannah? Somewhere. Somewhere at the back there. And there's Daouda. So the panel is represented even here. We have It's a growing number of panelists. We have now 25 people on the panel. And the body of work that is gaining momentum, the challenge that we have, and this is why I'm concerned, Carlos, about continuity, is that we are not going to complete the body of work by the time the South African presidency runs its course. We're in the privileged position of UNECA and the AU being prepared to take on the work so that we can get into the detail. But it's abundantly clear what the mission is that we have to take on. And part of this, I think President Sanchez has spoken to, it's beyond just looking at debt to GDP. It's understanding the consequences of debt service costs on development. It's one of the issues we have to detail country by country and be able to articulate this and ensure that countries own the process that arises from this. We need to ensure that there's a lot more transparency in respect of debt. I've used the example of my own country, South Africa, where we publish our debt on an annual basis. If more countries did this, then we would know what is out there. we would be able to articulate these issues, and we can then move to the next phase of knowing who owns the debt. And we can get to understand what the flows are, because the outflows from the African continent where we have debt service costs are much too great. They're much too great because the ratings that African countries have is disadvantageous to Africa. But we won't be able to deal with this merely at the level of abstraction. We must be able to get into the detail, and this body of work is going to be fundamentally important for us. In addition, the Africa panel is looking extensively at, or intensively at, domestic resource mobilization. We aren't collecting nearly sufficient taxes on the African continent, and we need to build domestic capital markets so that we can borrow in the currencies of countries and not face the exchange rate risk with our borrowing. These are some of the areas of work that we're involved with. More and more interest. Yesterday, there was a question about resource flows onto the continent because the US has now decided that they will tax remittances. Now, you hit the poor multiple times. And these are all the issues. We're building up a body of work that deals ultimately not with merely the econometrics of the discussion, But the impact of these discussions on the quality of life of people, and this is the body of work that the Africa panel will undertake. And I'm saying we'll push as far as we can go during this year, but the ECA and African Union will take it forward. Thank you very much.


Spain · Minister of Economy, Trade and Business · Carlos Cuerpo [2:36:18]:

Thank you. Thank you very much. Now we headed to Martin. Martin Goodman, as you know, former Minister of Finance from Argentina. Also, as we said, together with Professor Stiglitz leading the Jubilee Commission. So we want to hear from you, Martin, please.


Argentina · Former Minister of Finance · Martin Guzman [2:36:34]:

Thank you. Thank you, Mr. Carlos Cuervo, for the great work you've been doing. And also thanks, President Sanchez, for the leadership in the Financing for Development Conference from Spain. So, uh, let, let me begin with providing a little bit of background, uh, basically a, a brief summary of what we've been experiencing over the last few years, which actually motivated the creation of, uh, these four different commissions that basically provide messages that could contribute to change the global narrative in the way that needs to be changed. Uh, we all know here in this room after 2008, uh, the US financial crisis, uh, or, international financial crisis, massive bailout of the financial system, creation of liquidity. Many countries that had never borrowed in international credit markets borrowed for the first time. Debt levels increased, but unlike 25 years ago, with other creditors, including mainly the private creditors and also the non-Paris Club creditors, and then we had COVID and we had the war in Ukraine. Already by the second year of COVID, there was significant increases in debt distress. And the G20 created the common framework for that treatment. That was supposed to be a mechanism for leading to better coordination among the different creditors and therefore contributing to more timely resolution of the debt crisis. Well, the way it went was largely ineffective to tackle the problem. The G20 common framework hoped to bring others to the table. That was important, dialogue matters, but it didn't change the set of incentives in a way that would lead to the restructurings that were needed. And we started to lose time, I would say waste time, Then the narrative went to the issue of we are facing liquidity challenges. So countries that are experiencing debt problems face the challenge of having more liquidity, which is a quite complicated, I would say, dangerous narrative, because that's always what creditors and want to be paid with resources provided by others generally push for. If an international financial institution says, okay, I'm gonna provide financing to this country because it has a liquidity challenge, and at the same time, given that money is fungible, that money is used to repay private creditors, that doesn't resolve the problem. Actually, that means a bailout of the holders of debt in situation of distress. So all this narrative on liquidity challenges also led, contributed to a waste of time. delaying the resolution of the debt problem. That doesn't work. So my continent, Latin America, in the 1980s, suffered a tragic lost decade in terms of economic development because of an unresolved debt crisis. And if you revise history, the narrative in the early '80s was not that clear. There was not so much awareness of what was going on. And this has been happening already here. The most affected continent is, of course, Africa, but other countries in Latin America and the Caribbean, in South Asia are also being affected. So first, if we want a solution to the problems of today, the global narrative has to change. And something that is encouraging from the Financing for Development Conference is that we are seeing a different narrative here. The different commissions are pushing that. And that's going to be very important because, again, what's going on now is that the flows, the flows, net flows to the private sector are massively negative from the low and lower middle income countries, $50 billion of transfers. on long-term debt, meaning debt that matures in more than one year, from the low and lower middle income countries to the private sector in 2022, 30 billion in 2023, at the same time that international financial institutions are providing loans. So imagine the situation in which taxpayers complain, taxpayers do not want to support in advanced countries more financing for development and at the same time what's existing, what we have there is used for bailouts of private creditors. That's of course a very bad outcome and that's what we need to change. So going out to Minister Cuervo's key questions of what's realistic to achieve, let me mention two broad things that could be achieved, that is realistic to achieve in the near term. First, if we want an international solution to the debt and development crisis of developing countries, there has to be a change in the incentives, both for the creditors and the debtors to participate in meaningful debt operations, restructurings, to restore or ensure that sustainability. And for that, first, we need a change in the practice and policies of the global financial institutions. They have the tools, they can do it. Money from the IMF and others should not be lent if at the same time, the countries in distress use that, again, money is fungible, to repay distressed debt. It can be done, and it can be done immediately. It just needs the global political support. Second, there could be changes in legislation in the main jurisdictions for debt issuance, New York State mainly and England. And we were close recently. The New York law favors delays in restructurings. First, it compensates the holders of debts in arrears at 9% interest rate annual. That's a flaw in the law. It's from 1981. The inflation rate in the US was 8.9% back then. That needs to change. It needs the support of the assembly in the New York state. And finally, Uh, Trevor Manuel referred to the importance of building domestic capital markets for getting financing in local currency. That can also be achieved with a different approach toward the adoption of capital account regulations. Most of the countries in distress today didn't adopt capital account regulations at the time in which they integrated in the global capital markets. So that favor hot money flows, destabilizing flows. And that, of course, is a bad environment for investments in the real economy, the ones that we need for long-term development. So to finalize, all the commissions, including the Jubilee Commission, were motivated on these realities. They include top experts. We have here some of them here in this panel, Mariana Mazzucato, a top global expert on economics of innovation, Mahmood Mohil, some here present as well. These reports lay out a practical path forward that if it's adopted, it could really help countries to initiate a recovery very quickly and lives could change. Thank you.


Spain · Minister of Economy, Trade and Business · Carlos Cuerpo [2:44:16]:

Thank you very much. Gracias, Martin. Just to make a point on the narrative, because I think it's essential the way we talk about things and how we build a narrative around also what's possible and what's realistic and whatnot. Now we turn to Mariana, Mariana, professor at UCL, Mariana Mazzucato, and also founding director of the Institute for Innovation and Public Purpose there. So, Mariana, your thoughts on impactful proposals and initiatives at this stage. Thank you.


UCL · Professor · Mariana Mazzucato [2:44:43]:

Great. So, yeah, it works. So thank you so much, Carlos. We met two weeks ago in Madrid. And we said it's so important for this conference to not only have an outcomes document, but to be a real stepping stone towards the G20. All these conferences have to be seen together. We can't go down the different silos. Just the fact that COP, if you think about it, has a COP for climate, a COP for biodiversity, a different COP for land and water. All those things are related. And we have Nick Stern here in the audience who has taught us so much how they're related. We have to use these conferences sort of as a battlefield, but really to pass the baton. So thank you. all the work that you do. One of the biggest issues is to see the problem of debt both on the financial side and in the openings that we heard, which very much stressed the fact that we need different tools and agreements, from the SDRs to the contingent resilience clauses to the debt-for-nature swaps and so on. If we do not look at some of the structural causes of the debt in the real economy, we will ultimately just be patching things up. That is what I want to focus on, because the problem that I will highlight has also a solution tied to it, right? There's no point in just saying what the problems are. So really the point for me is that these debt crises are the result of structural issues in the global economy around how we actually have thought about and mis-thought about, undervalued public investment. We have a real investment crisis, broken investment models inside many different countries, including of course in the so-called global north. Low-income countries' capital formation is stuck at 20 2% of GDP, far below middle income peers. Infrastructure investment keeps declining even as debt service goes up. And as we know, as we heard, these debt payments then end up being much higher than what we're spending on the much needed investments in health and so on. But that can't be solved unless we ask ourselves why. Why are we not actually even ex-ante making these investments, even when we have the money, by the way? I come from Italy, and we often get the money from the European Commission. And have sent it back. There has been many years over the last two decades, we have sent money back to Europe because we did not invest internally in implementation capacity, administrative capacity, a dynamic civil service that can actually govern with the private sector, of course, these very difficult challenges. And on that, I think there's a bit of self-harm, if I can use that word, and also external harm. The self-harm, I see it also in the UK today. It's much more extreme in developing countries, but just to remember, these are global issues, these problematic fiscal rules, right, where we kind of impose on ourselves this idea, or the lack of understanding of the difference between the day-to-day current spend and these long-run public investments that are absolutely needed in both the social infrastructure and the physical infrastructure, and knowing how to actually measure those dynamic returns to the economy of doing that. And in the UK, I would like to say on the back of a letter we wrote back in September, with some colleagues in the FT, there have been some minor changes to these fiscal rules to allow that fiscal space. But we also know that these problems are also externally caused, especially in developing countries, when we have the loan programs, for example, from the IMF historically being linked to actually making different types of cuts and kind of reductions of deficit, forgetting something that Spain knows well, that if you're simply reducing your deficit and not doing what I said before, devaluing those public investments, you get a dysfunctional relationship where the deficit drops in the case of developing countries because they have to to even get the loan, but debt to GDP rises, right? It's not rocket science. X over zero is infinity in mathematics. So if you're not investing in the long run drivers of GDP, you can be reducing the numerator, the denominator remains stagnant, the ratio can in theory go to infinity. high, right? So I do think that's the big elephant in the room. These IMF conditions, which apparently are relaxing a bit, have been proven to, over the last 10 years, including over the last two years, caused in different countries 5% contraction of the economy. Now, of course, we need to save, and the whole doge, doggy doge, I don't know how to call it, a debate in the US kind of reflects on how we have government efficiency, but it's not about a chainsaw, it's about being very clear about public investments we need and the investments we need within, again, our state capacity instead of outsourcing it to others. Second, and I'll stop after this, all of this is about public-private partnerships, right? So this whole concept about blended finance and we need public and private and capital mobilization from billions to trillions, we know the propaganda or the mantra, I should say, not propaganda, sorry, about the billions to trillions. Well, it ain't happened, right? We've had billions, low billions, about That is not even close to the so-called financial gap, which is around $7 trillion. That is part of the problem. We have seen it as a gap, as though there is a hole to throw money into. We need to think about the shape and structure of finance, not just the financial gaps. To do that, we need to think much more about what a good public-private partnership looks like. We have just published a paper on that, which is on the web. It is called "Mind the mission, not the gap". low additionality in current blended finance schemes. Impact, very unclear, let's just call it unclear, impact of what even is being tried to be done. That's why we call it mind the mission. The goal, what is the goal? Structure the partnership to be goal oriented. Very poor distribution. Most of these blended finance schemes go to, well, not to low income countries, only 80% go to low income countries. They're mainly in sectors, 54% of it goes to sectors that are kind of easy, like banking and high and big energy projects, and very few, again, go to poor countries, and very few to local firms. Most of these funds end up going to large multinational corporations working in these countries. And lastly, because there's been this excess reliance on senior debt instruments and guarantees, which often sit off budget, coming back to the problem of the fiscal rules being so difficult, we end up actually hiding a lot of debt. So debt risks have actually gone up because of this problematic way to do blended finance. So again, the solutions just take each one of those problems, scale, additionality, impact, distribution. We need a new social contract with all blended finance, the PPPs. There's good and bad partnerships. Must be transparent, conditional, and real benefits, mission-oriented, and backed by clear global standards for contingent liability disclosure. And just on that first point, again, the UK is an example where they're starting to think about the fiscal rules. But just another good example, because I think we need to always look at the good stuff that's happening, in Brazil, in terms of public investment. I say this also looking forward to COP in terms of passing the baton, the fact that the ecological transition doesn't sit far away in the Ministry of the Environment, but has been central to the Finance Ministry, Minister Haddad working very closely to Minister Marina Silva, that is radical. That means if it sits in the Finance Ministry, it means you need to rethink finance, rethink outcomes-oriented budgeting, rethink how a public bank like BNDES works if we actually care about the goals. And in terms of the G20, this this idea that you have a cost of capital commission brilliantly run by Trevor, but then a whole other commission around industrial strategy and green stuff. We need to start with the what's to be done and then ask how it gets financed. Again, relinking the real economy with the financial economy. And that's sort of going through everything I've just said. But I really hope that in the G20, we make sure we don't go down those silos and always ask, what is the finance even for? Otherwise, as I've said, even when the finance shows up, we forget to structure the economy to deliver on the what's to be done. Thank you.


Spain · Minister of Economy, Trade and Business · Carlos Cuerpo [2:52:54]:

Thank you, Mariana. Again, this idea of continuity also in the work of the different groups. We're looking forward also today to the COP with our Brazilian friends. Now I'm turning to Mahmoud Mahledin, Mahmoud, UN Special Envoy on financing the 2030 Sustainable Development Agenda. Please, Mahmoud, the floor is yours.


UN · UN Special Envoy · Mahmoud Mohieldin [2:53:13]:

Right, uh, thank you so much, uh, it's great to be, uh, to be here and, uh, to join this, um, great panel, let me, before I start, I commend really, um, your excellent work in hosting us here, the excellent work of the facilitators, and actually in a dark moment in international cooperation. your presidency, along with the presidency of South Africa and Brazil. You shared this great, inspiring letter that there are people who care and there are people who are going to be pushing for action, and that made many of us very proud to be associated with you. It's great and tough as well to speak after Mariana. We got that not the first time, and I hope it won't be the last. I normally agree with most of what you said, but there is one area that I'll come back to when it comes to the PPPs and the billions to trillions. But I like very much what you asked us to emphasize, what could be actionable, what will be happening in the next day after we finish this conference. The veterans of this game on finance for development, and I see many in the room, Nixter, Amar Bhattacharya, and others, We have seen that happening in Monterrey, in Doha, and, and then in Addis, and now I, I hope this time is going to be different in a different way, in a positive way. And that is basically about considering the urgency of debt. And thanks to Rebecca and her team, we're not just talking about numbers, we're talking about services, education, health. I was very happy to attend many meetings today when this approach had been articulated by some speakers, including the president of the Islamic Development Bank, translating the cost of debt and how we are prioritizing debt over education, health, to the number of schools clinics and support to those who are in need for that. So this tells me when my good friends prepared me for this discussion on the 11 proposals, they speak as economists, short term, mid term, long term. I don't think that we have this luxury of even mid term. We talk about urgent measures and short term measures. I very much agree with what Martin mentioned about what can we do next day, but there is an art of doing it as well. That's the art of getting the public, the private, the philanthropies, and think tanks together. And without revealing too much of secrets, because we are going to use the same trick with your permission, Martin, a couple of things happened with the IMF surcharges, and that didn't really happen because of some brave ministers like the Minister of Finance of Egypt, his successor, and he continued the job, Ahmed Khashoggi, the minister here, about the push for reducing the surcharges of the IMF. But the board members of financial institutions, especially from the global south, need to be empowered because we are facing a great deal of even-handedness in these institutions, and we are dealing as well with asymmetry of information when it comes to dealing with complicated matters vis-a-vis very sophisticated staff and management. So the way we did it, we know that surcharges are not fair. This is just an example of things that we can really follow on the same steps. But through good work and many discussions that we had with Martin, with Joe Stiglitz, many lunches, roundtables, workshops, and lobbying through think tanks and some advocates, we managed after three and a half years, I would say without exaggeration, of struggle from September 2021 until we got the result in October 2024. But you cannot go argue on the board about, uh, the impact on the poor people, yes, people will be sympathetic, but in order to speak into that language, you need to provide alternative solution, it's very much complicated and sophisticated elite industry that we're dealing with, so having good intention is good. It's very much a nice assumption. Sometimes it is generous, but I think it's basic about this kind of collaboration of the world. I'm happy that the three proposals that we emphasize in Washington and today by the President are all in our 11 measures, areas related to the swaps, matters related to better use of SDRs, including buyback debt under distress, and the other ideas that could really be pushed forward, including the SDRs and how can we use them, and you mentioned the buyback and the debt swaps, so these are basically areas on the spot that have been on our 11. our 11 measures. But if I can just add something here, that there are other things that should be done at the national level, but they need technical assistance, like improving debt management unit. And that's why the idea of having a club of borrowers or a club on debt, and I know that there is a football club here in Savile without getting into tougher discussion than that, talking about Spanish football, but I think we can really borrow a name, yeah, here we have another one. So So we can't really talk about, about how can we get the Borrowers Club to support, as mentioned by the DSG, Aminah Mohamed, on how to enhance voice, share knowledge, technical assistance, a couple of things. of the old ideas are supported again, like having debt service pools during crises. Is this new? No, it has been around for quite some time. If Mia Mottley, the Prime Minister of Barbados, was here, she said, well, we pushed for it. The Paris Pact has it. In what way this could be different? Better monitoring and better empowerment in the legal side, not somebody to play games with these legal contracts in insurance, because we need the work. Some people will really play games against putting these triggers into, uh, into action. And then I would say if these are urgent, could be doable, but having the G20 with us and the common framework for those who care about Africa as we can and as we should, Africa is not a continent of low income countries. 31 countries of the 54 are middle-income countries. So having the common framework today without the inclusivity of its approach to the middle-income country, and I followed the excellent work in the debt forum and from a distance in China, and this idea was entertained. I even heard that the IMF representative saying this could be a good idea. It's in the IFCA document that other countries could benefit from the common framework. Those other countries have a name, a category middle income countries that should really be entertained. The SDRs as well.

And their work could really be helpful in other things. But I would go into my last comment, which is about the use of the DSA analysis for low-income countries. And now they are under review, the DSA of the World Bank and the IMF. One of our proposals is pushing into that. But the one for the middle income and the one for countries with market access is not under review because it was reviewed a couple of years ago. But a couple of years ago looks like a century to me now when it comes to debt. So we need to reopen this one as well for middle income countries and many of the principles that we've been putting in distinguishing what's for consumption and what's for production, putting some principles related to low income debt, getting some of the good idea that coming from different experts, including from the Paris Club, could be a great idea. In what way I'm different, and so far I didn't differ at all in what Mariana mentioned, but on the PPPs. They have great examples, but I'm happy when you put them under this condition, that they need to be under clear, transparent approach. On that one, we are in agreement, because a great deal of funding for the SDGs happen to be on the infrastructure, 80 percent of that, and we have been talking about tales of bad airports and good airports, comparing my home country, Egypt, with Jordan. Jordan did the better job for building airports. I'm happy now that there is a consideration of the PPP approach, because this could be a better way of using money. But the billions to trillions, not just because it came from our offices when I was at the World Bank during 2015, I'm defending it, but actually the best example of the billions to trillions is the impact of IDA, which IDA, the Information Development Association, it's basic about billions mobilized with a multiplier effect. The very paid in capital of the World Bank, I am updated by the former treasurer of the World Bank, Jin Dong Hua, the $30 billion to $40 billion of paid in capital on the increase. managed through a AAA rating agency called the World Bank to mobilize almost $1 trillion of funds. And this is why it was an inspirational in a way to say those billions could be mobilized, but to be put in the right hand of the MDBs and the good work of the next turn, Vera Songwe and Amar Bhattacharya in closing gaps, including climate finance, is saying we don't have the luxury, love DRM more, domestic resource and hate private finance or do more in international and do less domestically. We need to mobilize all sources of finance. We need to double bilateral finance. We need to triple finance from the MDBs, as emphasized. If we do that better, including domestic resource mobilization, that can mobilize finance to quadruple the private sector finance with better conditions and with good spirit and leadership. And let's talk urgent measures and short-term measures and get the long-term to start solve itself. If we are in hell, as the hell of debt, as Mr. Churchill reminded us, we need to keep going. But if we are in the hell of debt, you need to keep going fast. So it's basically about urgency of action. Thank you.


Spain · Minister of Economy, Trade and Business · Carlos Cuerpo [3:03:23]:

Thank you, Mahmoud. So if I understood correctly, then we might have a name for the Borrowers Forum, which would be the Sevilla Club. Can we say that we put that on the table to be coined? So, Rebecca, please, we'd like to hear from you, Rebecca Greenspan, the Secretary General from UNTAC. Please go ahead.


UNCTAD · Secretary-General · Rebecca Greenspan [3:03:43]:

Thank you. Thank you so much. And it's difficult to follow such good interventions, but let me first go again to the narrative issue. Yes? First of all, there is an issue of visibility and urgency. And that's why this forum is so important. We have been working for more than two years in trying to make the debt problem visible. And you ask yourself, after hearing all this data, I have been saying this today, why there is no urgency? We know that countries are defaulting on development to not default on their debt. We have demonstrated that. It has become even worse during these years. None of the countries that were on the distress are out of the distress. For how long can you be in that distress? Yes, being a developing country. So we know that the situation is getting worse. We have the numbers. We said One year ago, that 3.3 billion people live in countries that spend more in servicing the debt than on health or education. Today, it's not 3.3, it's 3.4. It's not that this amount, because these are billions of people, 3.4, this 0.4, that increase is a huge number of people. So things are getting worse, and we don't feel the sense of urgency. And we say it's because of two things. First, because countries are continuing to pay. Because as I said, they prefer to, because it's so difficult to restructure, because the mechanisms are so slow, because the political price they have to pay is so high that they prefer to default on development than default on their debt. So we need to make the mechanisms and the incentives, Martin. Yes, the incentives have to change because now the incentive is to pay. So why will the creditors try to change the system? We have to really change the incentives for the creditors to be able to come to the table. But the second reason for no sense of urgency is that the markets are not in crisis. Because it's not the big countries, the ones that are defaulting on their debt. So they don't move the markets. It's the small and medium-sized countries, the ones that are in problem. And so we have to understand that though the markets are not in crisis, people are. People are in crisis. And when I think, and Martin referred to the 1980s in Latin America, I was in the government when we were negotiating our debt. And let me tell you that when you look not only at the, we talk always about the lost decade of Latin America, yes? But in fact, we had two lost decades in Latin America because we didn't get back to the social indicators that we had before the debt crisis, before two decades. Two decades it take us, two, to get back to the indicators that we had before the crisis. So we are talking about generations that we lost. So The thing what we are doing here is so important because if we don't move this needle, yes, and that's why what we have heard about the solutions, the commissions, the momentum We have to take this momentum to really change the system for countries to be able to solve their debt problem and for people to go back to the possibility of having a dignified life, starting by health and education that is not happening in many of these countries. My second point of narrative is we have to get You know, we have to overcome the blame game. Yeah. You know, when we talk about a country defaulting, the first thing we think is it's their fault. It's their fault. You know, when somebody doesn't pay their debt, it's their fault. It's because they did something wrong. Yes. But in this case, if you look at the numbers, most of the countries that are today in debt distress, they are in debt distress after COVID. They didn't have a high debt before COVID, many of them. COVID was really a blow that they have not overcome yet. And we forgot about COVID, yes? And then we had the very high interest rates, the hike in the interest rates in the reserve banks. And so they had to pay much more for their debt. And if you look at the numbers, The total debt, the stock, have gone up 4%. But you know how much have the cost of the debt gone up? 24%. So really hear, Tevo, about what you said. We have a problem in the cost of the debt that is really dragging these countries down. So let's get over the debt, the blame game. Obviously, Obviously, we have to be responsible in our domestic debt. Yes, we have to do the things right. We have to invest in what matters. We have to have good investment policies, and we have to understand how to do much more productive diversification for quality jobs. And we have to bring back investment into the realm of economics. We are underinvesting, all of us. are under investing. And it's true that there are rules in the IMF that push for under investment. Let me give you one. Let me give you one. In Latin America, investment of the companies, the state companies, that in many cases is water and electricity and fuel, you know, investment of the state companies enter into the deficit calculations. And this happened because in the debt crisis, many of these companies were used by the government. And so they said, no, no, no, so everything goes into the deficit calculation. It doesn't happen in all regions, it happens in my region. So obviously, underinvestment in basic services have been the rule since then in Latin America, because it's crowding out with other investment of the government. Even if the companies have self-sustained, even if they are viable in the market and they have good profits, we cannot scale up investment in the services when they are state companies. So there are rules that we have to change to make this better. But the first thing that we have to change is the mindset. There is a mindset that is still there that is not a systemic issue, it's an individual country's issue. And here we have to change the system and we have to change the system obviously in the, you know, in the IFES, but we have also to strengthen the system in other forms. We have to strengthen the multilateral development banks, because the other thing in which we have to change our mindset is that public-private won't happen in the countries that need it most if public is not strengthened. Private capital is not going to these countries alone. It has to go hand in hand with public investment. And public investment is mainly in the multilateral development banks. This is one of the changes between Addis and Seville. In Addis, we were very optimistic. in the billion to trillions because there are trillions in the private markets. And we thought we can bring them to the development realm. And we were very optimistic also about domestic resource mobilization. So in a way, this was a lot about domestic resource mobilization and private capital going. So this is still important, but the difference is that we cannot see them in isolation. It's not that private capital will come alone. It's not that public money can do the investment alone. It's not that domestic resource mobilization happens in isolation of what happens to the economy. Because if your economy is going down, it's very difficult to be able to diversify your tax base. So I think that the difference today in the change of the mindset is that there is here It has to be a coherent strategy that will bring these issues together. So it's not a menu that you choose. You need several of the elements of the solution happening at the same time so the problem can really be solved. And I think that we have instruments. and solutions that are practical, that are feasible. And I will go to one thing that today, Paolo Gentiloni, that was part of the commission on that, said, "Not because it's doable, it means it will be done." Yes? So what we have to make sure is not only that it's doable, is to be together with a collective will to make it done. Thank you.


Spain · Minister of Economy, Trade and Business · Carlos Cuerpo [3:14:34]:

Thank you very much, Rebecca. We love your energy, I have to say. So change your mindsets so that you can change reality. That's the appropriate way to go. So Patrick Njoroge, former governor of the Central Bank of Kenya, please, the floor is yours.


Kenya · Former Governor · Patrick Njoroge [3:14:51]:

Thank you very much, and excellent to be here and to follow such excellent panel members. Before I get into the substance of it, I want to go back to something that Trevor said, which is this thing of having the African panel presenting a report in the context of South Africa's G20 presidency. And as he said, the continuation of that into the future is essential. I don't think there's anybody in this room who believes that all these problems will be solved within a year or within two years. So continuity is important, and I'm glad to be part of an excellent team, also that has benefited from a lot of the discussions, Martin's Jubilee and other conversations, of course, the United Nations report that has been put out by Mahmoud and his team, and others. So that's the preamble on this. I think today and following the excellent comments that have been made in the keynotes and elsewhere in this conference, the idea that we have the worst crisis in more than eight years, debt crisis, I think that is well appreciated. And I think the speakers before me talked with to that point. The question though is, is this systemic? And today now, you could say, no, it's not systemic. We have a bunch of countries that are running around, maybe five countries. But the point is that running the debt numbers forward, we've seen in work that has been done and publicly available, more than 47 countries in the emerging market, EMDs, in the next five years will be in high debt distress. about 32 or 34 of those are in Africa. So that will be systemic from point of view of debt. Of course, then one says that the markets will begin to move. I think of the markets like a lion that's lying there. It's very dangerous, but if you poke it, it will react very, it will show you why it's called the king of the jungle. So in some sense, In the next five years, if we do nothing, the markets will react and we will have a major crisis, a systemic problem in hand. Of course, we don't want that to happen. Now, having said that, the question is, actually, we are having a systemic problem today on development. And it is true, we have got a point that what we are doing is we are defaulting on development. Many countries are spending, more than half the countries in Africa are spending more on debt service than on health and education. Those numbers are clear. But I think the numbers hide the reality. And we are economists, we love numbers. And we can say all sorts of things about how many people are below the poverty line, et cetera. But the issue is, that's where we have the systemic problem today. So consider just, I'll throw a few numbers again to, we know that if you think of, for instance, mortality, yeah, under five mortality, yeah, and the SDG target was 25 by 2030. The point is that in Africa, in Sub-Saharan Africa, this is at 68. 68, where the target is 25. And actually, it accounts, Africa accounts for more than 50% of the under-five mortality in the world. If that is not a problem that should shake us, I don't know what we need, what else we need to have that as a systemic problem. If you think of education as well, yeah, and if you actually even narrow it to women, to girls, yeah, We know that 47% of African girls either do not complete or never attend high school. Just think of that. And the point is that if that is not, if you run that in your own mind, what will happen with those half, I mean, that half of the female population in the next five years, the next 10 years, and what will happen, let's say, to to their kids, you have already today a systemic problem which will be generational. So that is what we are dealing with. And I think the point here is that the issue that was made before about urgency, these numbers should shake us so much that urgency becomes a matter of nothing else matters until we resolve this. And I think that should be the issue. There are many things we come to and fixing markets and all those, lowering interest rates and all that, fine. But all that means nothing if we don't deal with this fundamental systemic problem on development. Thank you. The second point I wanted to make is actually has been made by others, is a lot of this, of course, will be dealt with in the context of development. I mean, sorry, debt, debt, debt restructuring, et cetera. And I think there's a lot of already, a lot has been said in that space. But I think it is also important to note that we could have a sort of a debt restructuring of a kind, it's urgent. et cetera. But then what happens after that? Meaning the other elements in terms of a better financial architecture is essential. And in some sense, that may be an easier sell today. I don't know. I looked, Mahmoud, you're more familiar with this than others, than most of us. But I think the point is we cannot just say, okay, fine, let's do the debt restructuring, and then we'll see what happens in the later on, after everybody obeys the rules, et cetera. So I'm making the point that, for instance, the issue of perception of risk that finds its way in various things like in the credit ratings or the premium that we have on lending, et cetera, all those things need to be dealt with. And I think the issue here is to think about it in a sort of a logical fashion. For instance, one of the things that we have discovered in the context of the panel that we are in is that actually, if you look at the infrastructure projects that multilateral banks are involved in in Africa, they actually have the lowest default rate of 1.6% compared to other regions, 1.9% in Africa. In Europe, Western Europe and Asia, it's 4.6%. Latin America, it's 10.1%. Eastern Europe is 12.4%. Somehow, we have the lowest default rates, but we are paying the highest in terms of borrowing costs. Something doesn't make sense. So the issue of being fair comes back again. So whatever we do, the outcomes have to be arrangements that are fair for all. We are not asking for handout anymore. Handouts are gone, but we are asking for fairness and let the markets be fair in terms of the cost. so that they incorporate this relatively straightforward, I think this is, it makes sense, yeah, relatively straightforward outcomes. Or for that matter, when you think about banks, when they are lending into our countries, the risk weighting on that, you know, on those outcomes, on the lending to African countries, is actually set at a much higher rate. This is the Basel III arrangements, et cetera. And my point is that it doesn't relate to the reality of very low default rates. So that is something that we need to look at in the context of reforming the IFIs and indeed the overall international architecture. Finally, I want to make the point that at the end of the day, the countries themselves, that is, our countries, have to be at the table in making their presence felt. Now, it's true that we're having a lot of discussion in terms of the reform of, let's say, the international financial institutions, the IMF, et cetera. But I think the point here is it has to be something that is real. It's not a token movement from You think about the shareholding of the African countries in the IMF. It's somewhere like what, 4% or something like that, 4%? For a population of 1.4 billion, the same population as China, the same population as India, multiple times the population of the US that has a shareholding of 15%. So the point is we can manage, and somebody mentioned, we can do very well on the margins. right? Just throw a token 2% here, 2% there. But fundamentally, this is the time to change the architecture in a way that is true and fair for all of us. Thank you very much.


Spain · Minister of Economy, Trade and Business · Carlos Cuerpo [3:25:37]:

Thank you very much, Patrick. And I'm very much aware that we are running out of time, but it's because of all of you and all of your interesting ideas. So thank you very much. I'm just going to end the panel here by saying that My main obsession in Seville is that this is not just another conference, that it's not just about action, but it will be also about the follow-up of all the initiatives that have been set up here, which is usually less bright but very important tasks. So let us work also on the follow-up. Thank you very much.


Chair · Masondo [3:26:18]:

For moderating this session and to our panelists. Just one last speaker. Oh, one last speaker will be very brief. It's Mark Susman, the CEO of GATE Foundation. May I ask the panelists to remain seated there? We really also want to thank you, Mark, for supporting this event. The GATE Foundation has been central in putting this event together between us, South Africa, and Spain. Over to you, Mark.


Gates Foundation · CEO · Mark Susman [3:26:54]:

So, thank you very much, Minister. Thank you, Excellencies. I will be brief because I know we're over time. But I'll start by, why is it that an entity which is, we are the largest non-governmental provider of grant finance, we don't issue debt, why would we be supporting an event on debt? It's because we've learned the hard way that our investments in basic human needs and services simply cannot achieve their goals unless the wider issues around debt sustainability that you've heard today are dealt with. It is a fundamental roadblock towards human development right now. We have a human capital deficit and the existing system, as we've heard multiple times, is simply not working. We also have no shortage of solutions. I won't repeat what we've heard today. We have multiple panels. There are solutions ready to be acted on, but they are not being acted on. We need to move forward because we have two huge challenges that were highlighted right at the front by President Sanchez and on behalf of President Ramaphosa as our two co-hosts. We have at one level a fact that the countries that are busy working on financial solvency and dealing with debt distress, as we heard from Rebecca, the countries in debt distress are not moving out of debt distress, and as a result, they are defaulting on their own people. They are defaulting on those basic health and human services that this conference, this financing development exists to provide. That's what development is. We also know, and President Sanchez said this very eloquently, marginal adjustments are not enough. They are failing. Incremental country-by-country processes are not delivering. And if they don't tackle these with more urgency, we will face a much greater and more systemic crisis, as you've heard. So really, the truth is, while we applaud the leadership of countries like Spain in hosting the Financing for Development Conference, like South Africa in being the leader of this year's G20, we applaud the collaboration between the two governments to make sure this issue is front and center, that we simply do have to say that one of the fundamental actions that has to come out of Seville is going to have to be a debt restructuring process that is faster, fairer, more consistent, and more transparent, because without that, the Compromiso de Sevilla simply has no chance of becoming a reality. Thank you very much.


Chair · Masondo [3:29:27]:

Thank you very much. The session is adjourned, and you are released.


Speaker 75 [3:55:59]:

So we are going to start. Let's go to work now after the picture. So let's start.


ETTG · Senior Fellow; Director · Ileana Olivier [3:56:41]:

Good afternoon, distinguished participants of the Fourth International Conference on Financing for Development in Seville. It is my distinct honor to welcome you to this special event dedicated to exploring the critical role of development banks in advancing the financing of the sustainable development goals. My name is Ileana Olivier. I am senior fellow at Elcano Royal Institute, and I have the privilege of serving as the director of the European Think Tanks Group, an independent network comprising six leading European policy institutes committed to promoting global sustainable development through rigorous research and constructive dialogue.


AFD · Special Adviser · Regis Marodon [3:57:21]:

Good afternoon once again, and a very warm welcome to you all. My name is Regis Marodon, and I serve as a special advisor on sustainable finance at the Agence Francaise de Developement. I also have the honor of acting as one of the coordinators of the Global Research Networks on Public Development Banks, which is a coalition of scholars and think tanks working in close collaboration with the FIX, the Finance in Common System. Together, we strive to document and produce research on the transformative potential of development banks in mobilizing finance for the achievements of the SDGs.


ETTG · Senior Fellow; Director · Ileana Olivier [3:58:05]:

We are undoubtedly living critical times as our world is increasingly shaped by interlinked challenges ranging from the pursuit of peace and the urgency of climate action to food insecurity, poverty, the deepening of income inequalities and the degradation of nature. The very purpose of today's event is to hear from our distinguished speakers and panelists how development banks are uniquely positioned to catalyze transformative solutions. They have the potential to act as vital connectors, building bridges between governments and the private sector, while contributing to the resolution of a defining overarching challenge, the construction of a peaceful world, free from poverty, and anchored in a livable, viable, and equitable planet.


AFD · Special Adviser · Regis Marodon [3:58:50]:

So today, the Finance in Common movement, the FIX, together with UN DESA and the Agence Francaise de Developpement, is proud to present a landmark symposium featuring 400 research and policy contributions now compiled in the Public Development Bank Reference Book, published by Pearson on the occasion of the FFD4. So to frame our discussion, allow me to share a few striking figures drawn from the book. Development banks are present across the globe operating under a wide area of mandates to support investment in small and medium-sized enterprises, invest in infrastructure, bolster rural development, enhance financial inclusion, and of course, finance local governments. Our most recent global survey identifies more than 500 development banks operating in 150 countries. with a combined asset portfolio amounting to 23 trillions.


ETTG · Senior Fellow; Director · Ileana Olivier [4:00:00]:

Collectively, these institutions are responsible for financing over 10% of total annual global investments, a clear indication of their role within the global financial architecture.


AFD · Special Adviser · Regis Marodon [4:00:15]:

Indeed, the reference book represents a milestone in advancing our understanding of the rich and diverse universe of development banks. not only consolidates valuable data and insights on multilateral, regional, national, subnational institutions, but also serves as a springboard for the critical debate we will engage in today with our esteemed panelists. This debate will focus on how to enhance the effectiveness and scalability of development banks in meeting global challenges. Central to this discussion are the key questions concerning their business models, governance structures, institutional expertise, regulatory frameworks, and the clarity and alignment of their mandates.


ETTG · Senior Fellow; Director · Ileana Olivier [4:00:57]:

Today, we have the privilege of benefiting from the strategic vision and leadership of two distinguished keynote speakers. His Excellency, Mr. Lee Hsien Hua, United Nations Under-Secretary-General for Economic and Social Affairs, and Mr. Remy Rioux, President of the Finance in Common System. So it is my honor to first invite His Excellency, Lim Jun Hwa, to take the floor and share his key messages with the Assembly.


UN DESA · USG · Li Junhua [4:01:46]:

Well, good afternoon, dear friends, dear colleagues. I saw many familiar faces and also some new faces as colleagues to join us at FFD4. Well, I'm so glad to meet all of you. We all recognize that FFD4 serves as a milestone event in a global financing for development efforts. But, well, let me say first, I extended my sincere thanks to the development agency of the France and also to my old friend, Remy, for bringing a lot of us, and particularly my thanks goes to the FICS. I still vividly recorded a few months ago, we had such amazing summit today in Cape Town. You actually contributed enormously for this severe conference and the process to formulate and adopt this, well, compromise that is severe. But, Saeed, we met in such a different landscape, but fortunately, with all your efforts, with all the contributions, We landed to the words of such amazing document, of course, it's not the most desirable or most ambitious we want, but we have a very, very impactful and action-oriented roadmap. So achieving a sustainable development requires larger scale investment push. focused on the development impacts and the reform of the international financial architecture, which actually reflected in our commitment. But on both fronts, the public development banks are the key drivers for changes. So the FFD4 outcome document, as just now we mentioned, we all associated, that's the severe commitment. firmly places the public development banks at the center of the delivering of the global financing for development goals. National and the multilateral development banks are uniquely positioned to provide direct public investment while also leveraging in private investment. When the well-managed national PDBs will certainly contribute enormously to strengthen the financial ecosystem, also enhance the ability of the both public and the private sectors to invest in long-term sustainable development. Their ground level knowledge has helped international investors navigate the operational and reputational risks, while also building the capacity and providing technical assistance. Public development banks are the key actors in the national policy and institutional framework. So having said that, please allow me to just highlight three action we need to continue to advocate. First, it calls for strengthening existing public development banks through technical support, especially and also including the capacity building, increase the capital. especially for those most in need. Second, it calls for the establishment of the new national development banks in the countries that do not have them yet. Third, it seeks to better align the regulatory requirements with the unique development mandates for the public development banks. So there's a much scope for the PDBs to innovate, correct the market failures, and ensure the financial and the non-financial sustainabilities. Most importantly, severe commitment emphasizes cooperation between the multilateral development banks and the national development bank as a system. This includes the co-financing, joint programming, risk exchange, joint project preparation, hybrid capital, peer learning, and more, fostering the synergies and leveraging the comparative advantages. But dear colleagues, dear friends, we all know FIXES was born after the Addis Ababa Action Agenda. Now, 10 years later, it is time to elevate our vision and also the role of the FACS. So I'm so happy to co-sign the forward for the PDB reference book that we are launching today. It builds on the incredible work of the colleagues at the multilateral institutions and the FACS Research Network. It is a very comprehensive resource for the new era of the public development banking. We have the plan in Seville. We need to move forward with our delivery. So it is time for us, with the PBC, with the UN system, with the other stakeholders, that we to deliver what we committed from Seville. Thank you.


AFD · Special Adviser · Regis Marodon [4:07:43]:

Many thanks, Mr. Li Jinhua, for your very inspiring keynote. I am now inviting Mr. Remi Rioux, Chairman of the Financing Common System, better known as FIX, and CEO of the Agence Francaise du Developpement, to deliver his keynote address.


FICS · Chairman · Remy Rioux [4:08:04]:

Good afternoon, everybody, dear Under-Secretary-General, Dear Lee Hoon-hwa, Excellencies, colleagues, delegates, it's a great, great honor to have you here today behind, around Under-Secretary-General. I fondly remember the day I received his letter back in January 2024. so one and a half year ago, which gave us the mandate to officially contribute to FFD4. And now we're in this very room to launch the publication of, well, the first reference book about public development banks edited by Pearson. It's an important milestone for our movement and hopefully a publication that will be instrumental to the success of FFD4. I take the opportunity to thank the Spanish government, the co-chairs, the facilitators that negotiated this excellent paper, way better in my view than what we accomplished a decade ago in, uh, in, uh, Addis Ababa, uh, uh, notably because I think the, the role of public development banks is, uh, uh, way more precisely, uh, nicely, uh, captured and of course, positioned, uh, as part in connection with the rest of the financial sec- system, para 30, 37, 40 about country platforms. are particularly important. They will guide us, and we feel now obliged and responsible to do more. But I'm not here to talk about the result of the conference. I'm here to remind everybody that this journey, which started, let's say, in Addis, was only made possible because of science and research. Finance in Common was built from day one on research. And in a world of uncertainties, in a world of half-truths or fake news, we know in this room that research, robust evidence, have never been so important to foster well-informed policy decisions. And I mean, paying attention to the role of public development bank was a particular challenge and demonstration of the power of research. Of course, it's not about pro domo manifestation of our institution. And we know the debates among economists for a very long time about the role and necessity of state-owned banks. A debate that at the time turned into ideology. And so it was very good to come back to facts and figures and have this discussion that I hope the creation of finance in common helped reignite. I want to thank all the researchers who contributed in advancing this work. Of course, some of whom are part of the International Commission of Experts on Financing for Development, convened by UN DESA, notably Jose Antonio Ocampo and Mariana Mazzucato here with us on the panel. Thanks for all this. And I extend my warm regards to all the Global Research Network, special mention to Stephanie Griffis-Jones, back from the world of central bankers. And we will ask you for more. Jiajun Xu, Regis Marodon, Jean-Baptiste Jacoutin, I mean, all of you, so important, more than 50 academic researchers and think tanks. You published about 100 original papers for the last five years. It's a multiple by, I don't know how many times from previous publications. And only last February in Cape Town, 15 original papers were presented for the first time. So the WRI, ODI Global, Peking University, Stellenbosch University, I4C, the Ferdi, the McMaster University in Canada are absolutely crucial for their contribution. We consolidated, you consolidated in this PDB reference book what we learned from research from more than 400 references to provide this comprehensive review of the state of knowledge on this very specific institution. I also want to friendly thank colleagues at in the World Bank Group because, you know, they played a very important role in discussing, revising the document, and I wanted to pay tribute also to their dedication. And the Secretary General just said it, the book is intended to inform the conference here in Seville, and later contribute to the formulation of, uh, actionable policy recommendations. I think it helps think at the right, uh, perimeter, which is, uh, the 536 public financial institutions, a world that has been fragmented, uh, for too long, uh, and it will help, uh, set. the right division of labor between the different layers. It also gives a genuine picture of the diversity of the development banking ecosystem, distinct mandates, governance framework, a lot to learn and inspire all of us in dealing with our specific business, a very important chapter on PDB's business model. It's certainly a breakthrough, this analysis in the reference book. Of course, public development banks bear specific risks. Governance is the main issue, including corruption. There's a very nice chapter, as you probably noticed, about failing public development banks, a very candid one, to avoid in the future this kind of risk. If properly governed and regulated, we have a lot of examples that this is possible. including in France, the oldest one called Caisse des Depots et Consignations, which has, well, good services for our own fabric in France. So risks, but also opportunities. The book explains how, in which condition, practical examples on how PDB can enable and accelerate systemic change. and transform financial systems. So, thank you for that. Of course, my last point is to say this is only the beginning. So, somehow, the world of public development banks remains a bit of a mystery. So, we have a lot more to study. And the book is an invitation, a tool for dialogue with all willing partners to set the conditions for our institution to be the most efficient and articulate fiscal and monetary policies in an innovative way. The blank spot is probably public development bank regulation in the book, and I'm happy to see that it's coming. I never tried to do it first. We had to do all this work before so that the regulator pay closer attention to the group and then think if to reach its policy objectives, it could guide and regulate differently and maximize PDB efficiency. We need more consolidated data. It's also another challenge. The unique PDB database on the FIX website is extremely valuable, but we can do more, including on extra financial data we would be able to collect. And then, of course, the end game is for PDBs themselves to include the research outcomes in their own procedures and operational strategies. We have Serge Koua here at Masouta DC, Boitumelo Masmosako of DBSA was around, examples of institution that are fitted, that are working through and incorporating research results. I conclude by calling the audience to seize research outcomes and to contribute to the debate on the role of public development banks. Again, challenging the group to do more and to better its way of operating. And again, invite civil society. Civil society is part of the governance of finance in common, like academics from day one to come and discuss. And of course, invite young scholars There's a future for PhD specialized in public development banking. Thank you so much.


AFD · Special Adviser · Regis Marodon [4:19:09]:

Many thanks, Monsieur Riou, for that vision and also congratulations for the FIX initiative and to the GRN for this massive effort. If you allow me just a follow-up question, I know that you have a very busy agenda, but Mr. Li Jinhua already said that this is a very comprehensive document. You have also mentioned that the idea is for it to be instrumental for the process beyond Seville. You have also mentioned one blind spot, the end game. But maybe my question would be on which concrete next steps you are foreseeing for this piece of research.


FICS · Chairman · Remy Rioux [4:19:47]:

Um, we actually, we set on the civil platform, uh, for action, uh, for initiatives. One, uh, is, uh, probably the most important is really to work on, uh, public development banks as a specific, uh, asset class, uh, on the market. So, you know, there's, um, there's only 100 out of the 536 public development banks that are issuing bonds. So we just said, okay, why not double or triple that number in the next decade? And if so, of course, it will help set probably the right incentives. and hopefully regulation at the time and provide, well, this is the experience of AFD, now 56% last year of our funding was sustainable. And we know the discipline that tapping financial markets brings to a public financial institution, if financial institution as a whole. So I think if we have that, and of course, with the bulk of this institution, the legitimacy, the public dimension, I think it can also help turn the financial markets in the right direction. So that's one. There's, you know, TCX. is launching also an initiative on ethics management, we are part of it. Country platforms, the country platform playbook was discussed last year. We know at the heart of a national country platform, to operationalize it, you need a national public development bank. That's the lesson from Brazil with BNDES, from South Africa with DBSA, from Indonesia with PT SMI, and probably many other countries joining this new architecture where national institutions are the main driver. And the last one, I think this morning, we published the mapping of the technical assistance programs, 26 of them. that can accompany our institution in perfecting their own operation. Serge Kwe, the president of IDFC is here. We have an IDFC facility. We started with climate. Now it's really the instrument for all of us to do the training, share best practices, and learn from each other. So there are four examples of, uh, uh, what we can, uh, take from Seville, and of course, the, the, my last point is, uh, um, uh, well, you, you hear the, the, the corridors, the, the room, uh, the transformation that Seville means from ODA to sustainable development investment. from a fragmented architecture to a comprehensive one. And we are beginning to understand that ODA and multilateralism are so precious, but they are the exception. They are not the norm. The norm is the world of investment. The norm is the world of national institutions. And we have to think both together so that we help unlock the amount and the quality of financing that is needed for SDGs. Thank you.


ETTG · Senior Fellow; Director · Ileana Olivier [4:23:20]:

Thank you very much. Thank you very much, Remy. Okay, so it's now time to put some of the key questions discussed in the PDB reference book in debate with our distinguished panelists. Before calling them on stage, I would like to extend special thanks to Jean-Baptiste Jacoutot of AFD, who was really instrumental and even more in the production of the book, and of Peter Shoda, also from UN DESA, who also contributed like every week on our working sessions, and Thomas Melonio, our chief economist, who also, thanks to you, Thomas, for your constant confidence and support in the whole process of producing the book. So I have the pleasure to call on stage Professor Marianna Mazzucato, Professor in Economics of Innovation and Public Value at the University College London. Professor Jose Antonio Ocampo, Chair of the International Commission of Experts on Financing for Development. If I can help, yeah, yeah, yeah, yeah, please, whatever you want. Mr. Serge Eque, President President of the West African Development Bank and Chair of the IDFC, the International Development Finance Club.


AFD · Special Adviser · Regis Marodon [4:24:52]:

And it is now my pleasure to call on stage Dr. Cristina Froes de Borja Reis. Tell me I did pronounce it well, please. Undersecretary for Sustainable Economic Development, Ministry of Finance, Brazil. And Mr. Admasu Tadessie. President of the Eastern and Southern African Trade and Development Bank.


ETTG · Senior Fellow; Director · Ileana Olivier [4:25:17]:

Okay. Let's start with a woman question for you, Mariana, if it's okay with you. For many years, public development banks were perceived as relatively inefficient institutions. sometimes even posing risks to national public finance. Do you think these perceptions still hold today?


UCL · Professor · Mariana Mazzucato [4:25:45]:

It works great. So first of all, I need to apologize because I have to leave earlier than expected. So it's a self-fulfilling prophecy. Depending on what we think a development bank is, that determines what we end up seeing. And if that's a dysfunctional version of what it should be, we shouldn't be surprised. So if the whole point is not to crowd out, if the whole point is just to fix a market failure and to see a financial gap, so fund, for example, what the private sector is not funding, which is like do what's not being done, which is not very interesting, as opposed to real additionality, lead with what I call missions, work well to get the private sector to actually invest, because the real issue is we have low private sector investment globally. We all obsess about the public side. In the UK, without even looking at the developing world, we are 26 in the OECD for business investment. So we have companies that make profits but don't invest. So the kind of role I think a public bank should have, and in that case it doesn't crowd out, it truly crowds in, but the word crowding in is still negative. You see how we have a narrative issue here, even the good is bad. is to really be thinking of, you know, what is a country's problem? How do you work then to catalyze business sector investment that otherwise is not happening? So true additionality test and in the structure of the loans needs to be that conditionality. The example I always give is both in Brazil with BNDS and in Germany, the only reason there's green steel is the KFW put it as a condition to lower the material content of production as part of the loan. Otherwise you get what we have in Italy and I'll with this, which is, I think, a dysfunctional form up until now. I hope the Italians in the room forgive me, but I'm Italian. I'm allowed to criticize Italy. Germans can't. We have a bank that just gives out money until recently to any sector in trouble, like, help, help, give me money. I'm the steel sector without actually saying, why are you in trouble? Where are all those investments you didn't make, whether it's improving working conditions, energy efficient supply chain. So really rethinking the social contract. And I don't like the word conditionality because of the implications of that. again, in the developing world, but conditionality in terms of public private catalytic investments. And truly, if you do that, then you are not only crowding in, but you're also potentially de financializing a system where you have many companies earning rents right? Just, you know, again, making profits without necessarily investing. And I do think public banks, we don't talk about it enough, can be a key catalytic role, not just for the SDG multiplier, for the reasons we know, but also to de-financialize, to get the private sector to really invest in the real economy in the long term to work well with the public sector. And just to say, we wrote a paper in 2022 for UNDESA of the SDG multiplier looking at MDBs, NDBs, and national banks. That's where all is and their new relationship with the private sector along the lines I'm saying?


ETTG · Senior Fellow; Director · Ileana Olivier [4:28:44]:

Thank you, Mariana. I turn to Jose Antonio, um, because in the expert reports, on the same line, you insist that PDBs could do more to scale up the financing in favor of SDGs. So according to you, is there still a problem of perception of the capacities of development banks to deliver that, or why is it that it's not happening simply?


Professor · Jose Antonio Ocampo [4:29:15]:

Well, let me thank you for the invitation to participate in this panel. Let me say that, let's say our expert group report as well as the Compromiso de Sevilla, are very strong on development banks. I think there's a significant increase in the emphasis in the role they can play. Now, one problem is the scale. I mean, the Compromiso de Sevilla brings back the recommendation of the expert group for the G20 of tripling the financing of multilateral development banks in 10 years. But aside from that, in the case of natural death. development banks. I think one of the major issues for developing countries is that we have to create more development banks in countries that don't have them. So that's one important task for your group, to see how you support the creation of more national development banks, as well as to scale up the activities of the national development banks. And let me perhaps add to this. one further idea, which is working as a group in a much stronger way, which of course, something that you can coordinate from your organization, because I think the, and of course, the World Bank should try to be a major coordinator of the activities of the multilateral development banks, but there is also the question of the relation with national development bank. which is something that I think your organization can do much better. And again, create more national development banks on a scale. For example, in Latin America, my region, we used to have a system which was very dense in terms of national development banks. But today, there are few countries that have really a significant scale. You can say Brazil, Colombia have a significant scale in banks. Chile is trying to come back because it went back. But for example, Mexico is relatively absent in terms of the activities of its national development bank. And some other countries don't have them. So I think this is a very important task in relation to the work on development banks.


AFD · Special Adviser · Regis Marodon [4:31:56]:

Mr. Admasu Tadisse, actually, the two previous interventions by Mariana and Jose Antonio, they have already touched upon effectiveness, which is one of the big debates around development banks. So from your point of view, which are the key ingredients for the successful financial effectiveness of PDBs?


TDB · President · Admasu Tadesse [4:32:20]:

Test, test, yeah. Thank you very much. It's a very straightforward question. I think efficiency is managed and reported in a particular way. There are specific ratios that speak to efficiency in financial institutions. Obviously, we know cost to income is one, employees, the number of employees, and so it's also a question of technology. how well you use technology to introduce innovations that have already been done in other financial institutions, often in the private sector. So I think there are a number of parameters that are well established in our industry. I think for PDBs, the sort of Achilles heel is because of the nexus with government and the political establishment, there's a tendency sometimes for over-employment. and that is in the report, for instance. So you have that aspect. But that can be solved for by having strong performance indicators that management is held accountable to through an efficient board structure. That also, of course, can be brought to bear by ensuring that PDBs or regional development banks, whichever way we want to call it, are subject to high standards in terms of obviously management professionals, processes that they use, benchmarks that they follow in related fields. It's not about following private sector bank benchmarks. It's about looking at operational structures and processes, looking at turnaround time issues. Because I think a lot of the public development banks in the world tend to be accused of being very, very slow to respond, right? So the turnaround time is a big accusation. And it's just dynamism in general is not something that most DFIs are known for. In fact, many private sector stakeholders who are borrowers of PDBs, they often make this point that, yes, we like the nature and the character of your money, but we just don't like your timeframes. Your timeframes are extremely slow, you're not responsive, and so on and so forth. So I think these are some of the things that come to mind. I think if one does have in place very professional management, it does win. It does win some of those points. But yeah, there's no formula for it.


AFD · Special Adviser · Regis Marodon [4:35:04]:

Thank you, Admasu. Dr. Cristina Reis, I'm sure you come from a country which is a paradigmatic case of development banks. You have a very comprehensive bank system, both at the national and the subnational level. Do you feel that PDBs are a bit underscored?


Brazil · Undersecretary · Cristina Froes de Borja Reis [4:35:26]:

Is this working? Yeah. Can you hear me well? Because I have the feeling that the mic's not working. All right. So Before answering your question, I just want to thank you for the invitation. It's a pleasure to be here. And in name of Professor Mariana, I say hi to everybody. It's good to be here discussing this. And before also answering, I want to make a pledge for peace. I think we are having huge and several troubles in the world now. There is a genocide in Palestine, and we cannot accept this. So if we are talking about financing for development, we should stand against any kind of war and pledge for peace. Yeah, it's true. The Brazilian National Development Bank is well known for its results, but still it's very much criticized. And this is more related to something that Professor Mariana, Professor Ocampo have been discussing for many years now. It's related to the view of the state, what's the role of the state, and what's the role of the state's institutions. So as they were saying, it's not true that there is crowding out effects between public and private investments. Actually, it can be, we can foster crowding in effects, but we have to find the right tools, the right policies, and the right way to implementing this policy. So I pretty much agree that we need effectiveness about indicators, about the way that the over periods of the loans and so forth. But we also need to commit the funding, the financing with development. When I hear that only 56% of a funding of a development bank is towards sustainable development, I found it very weird. So it would be 100% because in the end of the day, this is a development institution. So it should be 100% committed to sustainable development. And when we talk about sustainable development, we are not only talking about green investments or about decarbonizing the economy. We are talking about reducing inequalities, promoting gender and racial equity. So we need better ways to really promote this kind of transformation.


ETTG · Senior Fellow; Director · Ileana Olivier [4:38:11]:

Very good. Mr. Serge Ekoue, I think we should continue along the line opened by Cristina. One of the key question we have in our development banking system is how we can contribute to the rainbow of the SDGs, which means taking into account the complexity of the interrelations between the various impacts that a financing may have. So my question to you as a president of BOAD, so a practitioner of that on a daily basis, but also as president of IDFC, is to know How do you and your member make sure that the operations or measure the impact of your operation and make sure that they genuinely contribute to advancing the SDGs? I know it's a difficult question.


BOAD · President · Serge Ekoue [4:39:03]:

Well, thank you very much for having me and it's a real pleasure to be here. Well, yeah, I mean, difficult question, yes and no. Look, the objective of, I mean, the objective we follow is to be as impactful as possible. And I usually tend to say that if you can't change people's lives, then you're useless. So our point is to have the right KPIs to make sure that once we have the best and the strongest capital structure, Because the question for the, for the public development banks has been for a number of years, they're under capitalization. I think these days with the innovation we are all putting in place, these days are over. I think the innovation is not the matter of investment banking, it's not the sole the solely matter of investment banking, uh, it is, these are common tools and we are bankers, okay, so objective is to find solution, effective solution for effectiveness of our policies, so once we have strengthened our capital structure, enhance our credit structure, then the objective is to be as impactful as possible. How do we reduce poverty? How do we build, how do we enhance mobility? How do we fund crops? How do we fund fertilizers, et cetera? How do we, which is the most important, it's basically something we have discussion. I think we all agree here with my brother and Masu and the president, the chairman of the World Bank, how do we foster and make sure that we look at the job content, employment content on anything we do. So we're not here only to tick the boxes, but we're here to make sure that the policies we're putting in place are as efficient as possible.


ETTG · Senior Fellow; Director · Ileana Olivier [4:41:30]:

Thank you. Uh, and, Masuo, I would like to continue, uh, with you on the same line because, uh, I think this is important for differentiating development banks from the rest of the finance universe. And so I would like to know whether at TDB, you have specific procedures or specific, um, staff dedicated to precisely measure the impact, especially on climate, on biodiversity, on people, apart from the pure, of course, financial activity, which is a must for any bank as such.


TDB · President · Admasu Tadesse [4:42:12]:

I think most DFIs would agree with me that in board submissions, any appraisal of any intervention typically has a number of measures and KPIs that accompanies a credit paper, and so there's always some indication ex-ante of whether certain jobs will be created or certain households will be connected to basic services. number of women who would get specific job opportunities. So there's all sorts of indicators that are known in the universe of development reporting. So I think that art is there and I think most of us practice it. I think ever since the SDGs came out, of course, we're now segmenting our reporting per goal. So you'll even look at the strategies and the corporate plans of these institutions. you know, indicating that. So, yeah.


AFD · Special Adviser · Regis Marodon [4:43:14]:

I know, Mariana, that you have to leave really early, but maybe, maybe if we can just pick two additional minutes of your time. You have actually emphasized the fact that the role of the state needs to be behind the scenes in how the different, in how the PDBs perform. So, In line with that, do you think there is a role for the international financial community to help unlock concessional and blended finance for PDBs?


UCL · Professor · Mariana Mazzucato [4:43:47]:

Yeah, I mean, as someone said in the previous session, quoting, I think, Paolo Gentiloni, that just because we can do something doesn't mean we actually do it. So if we treat things as urgent, look at what happens with war. Money comes out of the woodwork. after saying there was no money for climate and health, there's always money for war somehow. So if you actually treat something as urgent, A, B, structure the relationship between the MDBs, which again have not as much money as the national banks, there's about two a bit more than 2 trillion, to have a bit of a mentoring role, if you want, soft capital with the NDBs to make sure they're aligned around the goals. Otherwise, there's no point to sign the 2015 Paris Agreement with the SDGs if then the tools we have, whether it's procurement, public banks, and so on, are not aligned. And then What we need in terms of that new public-private partnership, so a symbiotic, not a parasitic partnership, as a biologist would say, is make sure that, again, the way these loans, it's what I said before, right, directionality, additionality, conditionality, but also socializing risks and rewards, make sure, especially in countries where we have high rents, which, again, are not the same thing as profits, we not only get the private sector, not with the stick, with the carrot, these loans are carrots, to actually help move and transform economies in a direction. So we're not just having cute little projects here and there. You don't get transformation with cute little projects. You get transformation, what I call missions. If you have a challenge like climate change, a mission that's clear, a net zero, say in the city, what does that then mean for transport, for nutrition, for building materials, for cement and steel, for digital services? And if that's the goal that a country has, the question is, what does it mean for the public bank to kind of steer the system with the loan programmes to make that happen, only in the cases where that would not have happened anyway. If you are a small company, you need extra money, but the whole thing about SME lending, just because you are small, should be picking the willing, not picking winners, both in terms of sectors and firm size, and really helping those small and medium enterprises to transform. By the way, that does not happen if they cannot scale. The way to scale is, if we look at the national bank side as a supply-side measure and, on the demand side, for example, procurement, This is literally what the US government did with their military procurement. They allowed those companies getting the DARPA type funding, the SBIR kind of funding, then grow, sorry, through the SBIR program, which was a demand side tool from government. And I don't think we think enough about the ecosystem, all the different tools governments have, subsidies, loans, bailouts during COVID, procurement contracts, which are often 30% of government budgets, to work hand in hand. And it's not about micromanaging, it's a clear direction leave open the how through a portfolio approach, but definitely socialize not only the risks, but also the rewards. And that's a really interesting thing with public banks, because they retain equity. There's, you know, interesting ways to do that, which also fill up the government coffers again, versus what we see with just subsidies and again, different types of bailouts during hard times.


AFD · Special Adviser · Regis Marodon [4:46:58]:

Thank you very much, Mariana. Christina, I had two questions for you. I think that somehow you have already answered one of them, which is if you think that PDBs are legitimate institutions for implementing a public policy. I think your previous answer was a clear yes. But then the complementary question would be how compatible you see this with the banking imperative?


Brazil · Undersecretary · Cristina Froes de Borja Reis [4:47:29]:

I also think it's compatible. But then we have to have this coherence between the macroeconomic regime and the development policies, and then the national development banks or the public development banks policies. And to promote this coherence, we need special tools. And I will emphasize the importance of one of those tools, which is the taxonomy. So taxonomies nowadays are a methodological tool to really fostered not only the SDGs, but specific environmental and social objectives. And we need to foster these methodologies because this creates transparency in the financial system. And also it says to the agents and to the investors, what are the economic activities that are really sustainable, right? And this is in the national dimension, but also it could be in the regional and the global dimension. So we need to build interoperability among taxonomies. Then I think this is a way to promote this compatibility between the development policy, the development priorities of every jurisdiction or country, and the actual implementation of them.


ETTG · Senior Fellow; Director · Ileana Olivier [4:48:57]:

Thank you. Jose Antonio, I'm coming back to you. And one of the conclusion of the expert reports on how to finance these public development banks, and you're calling for more soft financing, affordable long-term capital in order to scale up the impact. The question is, why such a recommendation? How does it goes with the volume that everybody is calling upon that, you know, we should do more, but also in volume. In your vision, how are the two compatible, and is it more a matter of volume or a matter of affordability, to put it that way?


Professor · Jose Antonio Ocampo [4:49:45]:

Let me say that the affordability of bank, of the development banks, is the backing of the state. That's the main source of affordability so that the states should be able to, should be available to capitalize, even to support certain activities of the development banks. I mean, development banks, of course, should have the main public objectives. I mean, supporting the multilateral banks, the low-income countries, the national development banks, the local communities that are poorer, regionally and by social groups, let's say, for example, small and medium-sized enterprises, or micro, small, and medium-sized enterprises. And then you have, of course, the new development projects So, they should be an instrument to public sector support to development, which means that, for example, supporting the creation of new firms in new sectors, supporting the linkages of firms in different sectors, I mean, the different elements of a production sector policy. They generally call industrial policy, but I prefer to call production sector policy because it's also agriculture, it's also services, it's also, you know, the different parts of the economy. So you have this public object, very importantly also, the countercyclical function of development banks, which is a very important feature because private financing is procyclical. So the development banks should compensate for that with a countercyclical financing, supporting financing during crisis in particular. So that's it. So it's the map of different objectives of the state. And of course, And going back to your question, long-term financing, because depending on the sectors, you need long-term financing, and the private sector alone may not do that. So development banks as second-tier institutions should support the activities of the first-tier banks in trying to finance long-term. By the way, I have very strong views that the development banks should be second tier banks. You want to have first tier banks which are public, go ahead, but don't mix the two. The first tier public sector banks should compete with the private banks, but the second tier is basically to support the channeling of funds through the banking system. or through the financial system in general, because there may be other non-banking institutions at the first tier level. So that's my view on the public development, but then have these social objectives that should be at the center of the activities. I think we emphasize that quite well in our report, actually.


ETTG · Senior Fellow; Director · Ileana Olivier [4:53:20]:

Yes, Serge. Some are saying that, some researchers are saying that in fact there is plenty of money around and what is really missing are the good bankable projects. Is it your assessment seen from BOAD or again from your IDFC perspective?


BOAD · President · Serge Ekoue [4:53:43]:

Well, the two things. First thing is the plenty of money, yeah. The market is, I mean, the pockets are very profound and very sound. For example, when you look at all the recent and even past issuances by the public development banks, most of them, when it comes to the Eurobonds or whatsoever, Most of them have been over subscribed largely. Take the example of BayWaDee for last issuance, hybrids, for the 30 years non-call five, we were looking for 500 million hybrids. We got in hands over 2 billion. And what I say with 2 billion, it's 2 billion at reoffer. Which means it's sound demand, all right. When we have launched in 2021, it was a sustainable bond, we're looking for 750 million. We were, the book was up to 4 billion. So it means that there's a strong appetite for EM as an asset class, that's for sure. For the, when you look at the different portfolios of the asset managers in the world, the allocation of the amounts under management allocated to EM is sound, okay? So there is interest of investors. In a world that is characterized by the aging population, the need for savings, We're even in a world that over-saves, all right, over-saves. So there's over-saving, there's capital here to be invested, undoubtedly. Now, your very question raised the question of the bankable project. In BYD, what we have implemented is the originate to distribute business model, which literally means that we want to be at the source of the projects. First, we want to originate the project, to make sure that, after the origination, we work on the way in which we can structure the project and the funding of the project. Then, we go to the phase of underwriting and then to the distribution. If we follow that route and that method, we will definitely work on bankable project because we'll be at the origin of the project. And we strongly believe that replication is key in the business we run. If we have, let's say, an agricultural project in Benin, one can believe that we can easily replicate that in Togo, in Mali, in Cote d'Ivoire, et cetera, et cetera. So the link between the capacity of the market to absorb the projects, the number of projects we have, and the bankability of these projects, yeah, there's a link. And the link would go, from our perspective, through this originate to distribute method.


ETTG · Senior Fellow; Director · Ileana Olivier [4:57:24]:

Admasu, maybe also as a development banker, you want to comment on that? Maybe you have your views on that?


TDB · President · Admasu Tadesse [4:57:36]:

Well, before I was prompted here by my brother, I was going to say I agree with what he said. Yeah, no, I was just going to chip in and say that this problem of there not being enough bankable deals really has to do with risk appetite and also, you know, missing links in deals that, uh, simply, uh, are not easy to provide for, so that's why you, we have a lot of de-risking talk in our industry these days, people talk about blended solutions, people talk about first loss measures, um, people talk about, uh, uh, very, uh, creatively structured capital. in projects to allow those with less risk to come in, allow those with more risk appetite to come in at different levels of the capital structure. So, I mean, there are techniques that are there to help deal with this. But the truth is, you know, in the final analysis, the large money is risk averse. It doesn't really have serious appetite. They tend to be preoccupied with ratings. They get preoccupied with headlines. And they're not even willing to look sometimes at the project level and to say, okay, well, the headline may not be great, but is the actual project okay? Right. So the commitment is a problem, I think. And then just generally speaking, you know, you have currency issues. Those are macro issues that go beyond, you know, DFIs and project, because, you know, if you're lending in hard currency, if the underlying economy itself has deep balance of payments issues, that's a big part of non-bankability, because most of the money that's surplus of nature comes from outside. So that's the so-called original sin, right, where you end up mismatching, you know, the revenue stream currency with the capital or the loans that have come in. That's a big problem. That's why at TDB, because we have the T in our name, We, we, we, we, we look at trade linked feasibility, so we will actively look for export focused projects and then give them…

Take a little bit more risk on them because you know they're going to generate hard currency. And then you can do some tight structuring around having the perfection of those revenue streams being paid offshore. And there's all sorts of ways of getting around it, but it could be a risky jurisdiction. So I'm just saying there's ways and means to do it. It's not always easy, but you do need to have committed players who are willing to pull up their sleeves and panel be the structure. Look for partners who can come in and contribute in the riskier parts of the structure.


Brazil · Undersecretary · Cristina Froes de Borja Reis [5:00:34]:

I'm not in the development bank, but I also agree with them.


Moderator [5:00:42]:

One of the sort of constant conclusion of research, and it is reflected in the reference book, is to emphasize the importance of closer cooperation between multilateral development banks and national development banks. So most researchers calls for a system of public development banks, which means in particular revising the financial and strategic relations between multilateral and national development bank and even subnational development banks.

Yeah, I guess the question is, Well, two questions for all of you. First, do you think it's possible to build such a system? And in case your answer is yes, which would be good news for FICS, then what are, from your points of view, the institutional, political, and financial barriers? So I would like to hear all your thoughts, but maybe let's start with you, Jose Antonio.


Professor · Jose Antonio Ocampo [5:01:41]:

Well, I think it is not only possible, but necessary. to have those linkages. I think, by the way, there's different dimensions, I think, which I will emphasize the regional dimension. So the development banks that provide services to a region, they should try to complement each other. By the way, it's very good for a country that actually has several alternatives. several multilateral development banks. I said that was one of the privileges of my country, Colombia, which has access to four multilateral development banks. And now we'll have a fifth because it's a new development bank. But the, so it's quite, but they, competition between them is good. For the countries that are, you know, like for any firm, the competition between banks is good. to be able to see what is the best alternative they have. But at the same time, I think trying to see, standards of cooperation in critical areas. Again, I forgot to mention developmental areas in my previous answer. But in climate change, adaptation, mitigation, biodiversity, you know, what are standards that can be common between the banks, as well as, for example, support to infrastructure, support to small and medium-sized enterprises, support to regions that are lagging behind. internationally and nationally, et cetera. So, I think there could be a standards, which is a way of, of cooperating in some cases doing joint financing, you know, of different sort. Now, At the same time, I think the work with national development banks, uh, is critical, and, and to, uh, to support them technically, uh, but also, again, my first answer, you know, please support the, the creation of new banks, uh, and the, um, and the strengthening of banks in the countries where they are too small. in terms of the, uh, of the national economy. Uh, I think that's a, that's an important task, uh, that has to be done. Uh, and by the way, uh, I think the, the, uh, dialogue among the national development banks of a region, uh, are, is particularly important, uh, so that the, the, the, they said that we can work with better this. with the Colombian development banks and tries to support the new institutions in Chile, for example, which are being created, try to resurrect the Mexican bank. Anyway, so it can continue. And that work between the Asian situation is quite productive. In Latin America, there is actually an institution that more or less supports. that cooperation, and I think it's a very, very important task also. So, the multiple level for me is quite, quite important, and the cooperation between the international to the national, among the international and among the nationals.


Moderator [5:05:02]:

Gracias, Jose Antonio. Cristina.


Brazil · Undersecretary · Cristina Froes de Borja Reis [5:05:07]:

Well, I think Professor Ocampo provided a very complete answer on this. And then I was thinking that maybe I could provide another example on a area where the MDBs and the MDBs could interact, which could be financing instruments for women. So I see here Fernanda, Santiago, Roberta, Matias from our team at the Ministry of Finance in Brazil. And we are trying to launch this platform for women in finance. And one of the ideas on the table is that we could make a board with members from different MDBs and NDBs in order to force it to exchange experiences and also to benchmark some initiatives that could be promoted in many places. And this is one topic. And then taking the, making a bridge with your answer, there are other financial instruments that we are also fostering that could be better worked in a network, such as the Eco Invest program, which is a tool for a platform for leveraging public finance and public private finance, providing exchange rate hedging, and then lending in national local currencies. I think your point is precise, it's perfect. Developing countries have always a constraint in the balance of payments, so we have to find a way to prevent those constraints and to... prevent the volatility of the exchange rate. So if we, we, if we don't have this macro prudential, uh, uh, uh, activities, it's very difficult to really foster the, the national development banks and all the private sector as well. So just to finalize, and then I'll take the opportunity to talk about our key initiatives for the Brazilian COPs presidency this year. So one of the pillars is precisely leveraging domestic resource and MDBs are there as a key actor, as a key agent to make it. And not only this, but also taxing the super rich. So we need to find this correct budget cycle that will redistribute income and wealth in the country. And as Professor Ocampo said, if we don't have a public sector that values this, how come that we will have instruments for the national development banks to grow. So we need a coherent macroeconomic fiscal regime in order to really foster the development banks and then the private investments.


Moderator [5:08:18]:

Thank you. Maybe Serge, let's continue with you.


BOAD · President · Serge Ekoue [5:08:22]:

Yeah, a few things. I think the willingness is there and do agree with Professor Ocampo, it's a real necessity. Today, when you look at the situation, I think there are a number of things we should do. A number have been already done, but the number that are still yet to be done, first of all, this question of cross-equity participation. If you take the example of BYD and the African Development Bank, yeah, we have a cross equity participation, even where it works equally with Afrexim Bank. So this is one. The second thing is sharing pipeline. Sharing pipeline, meaning working on club deals, working on syndication, even to the extent that we could even work on sub participation. So as sometime not only to offset the risk we have, but also to offload the risk we have. Then I think that this question of the last element I would like to mention is to implement this kind of a subsidiary principle, what cannot be done at local level will be done at regional level, and what cannot be done at regional level will be done at the continental level. The more we are integrated, the better it is. So from my standpoint, these are one of the elements that we should implement in the view of restructuring, reshuffling the financial the financial architecture.


Moderator [5:10:19]:

Thank you. Last but not least, Admasu.


TDB · President · Admasu Tadesse [5:10:26]:

So I think the in principle answer that Professor Ocampo mentioned and that Serge confirmed is yes, yes, yes. I agree with that. That's the principle response. The practical response, it also depends on who you're talking to because there is a lot of variability in the industry. Not all NDBs are good for certain partnerships. So co-financing is easy because in many cases we can come with hard currency, they can come with local currency, it's a very nice fit. But if you're going to use them as intermediaries and you're going to lend to their balance sheets for them to on lend onwards, You get the exchange rate risk issue, but then there's a question of whether they are fit for that purpose. And I think this is where we know that the industry has variable geometry, right? Not all NDBs are structured well or governed well or have the right capacity. But I think in my experience in the African continent, there are many that are very strong. We know the case of, of course, DBSA. Morocco has some very strong ones. Rwanda has a strong one. Botswana has strong ones. Angola has a strong one. Mozambique has a reasonably good one. So, I mean, out of 55 African countries, I can think of a good, you get close to half that are actually even good enough for you to lend to their balance sheets for them to on-lend. So I think it's practically also very much a yes. But you can't say it's universally the case because you have a lot of countries that still have to go through the process of baking their development banks to a point where they can stand on their own.


Moderator [5:12:14]:

Thank you very much. So we have a few minutes to conclude, and I wouldn't like that you would have regrets in leaving the stage. We are the FDF4, and of course, we are dreaming of a better world. one where, you know, we would mobilize finance at a level at scale and with the level of quality that would permit, you know, advancing SDGs in an accelerated path. We, development bank, have a mission here, a mandate to accomplish. And my question would be, according to you, from where you observe the system, the international system, your own national system, what would be your one key reform? What do you think that is really an impediment for the system to move quickly into a system delivering solutions? And, Masoud, we finished the previous two with you, so let's start with you for that question.


TDB · President · Admasu Tadesse [5:13:17]:

Well, I think in the world we're in today, where interest rates are very high by historical standards, even the cost of funding from well-positioned G7 players is not cheap. So I'm just thinking what Remy Rioux was saying in his opening remarks, that creating an asset class of PDBs, 100 out of 500 are currently issuing bonds. If you want to raise that to 200 or 300, I mean, that sounds very mission-like. I think the good professor at the end there was saying one or two transactions doesn't move the system. But if you take a mission approach, so I mean, I would say building on Remy's comments, if you could find willing partners who have high ratings, who can back up other PDBs who don't come from investment grade jurisdictions, and you actually lend them guarantees, it's not a financial contribution, you're giving a form of a guarantee. So it's off balance sheet in a sense, it doesn't come with an interest rate cost. It's very feasible and easy to do if you're committed, right? So you have the Megas of this world at the World Bank AAA level. You have many others like the European Investment Bank, you have AFD, you have KFW, you have all of those. It wouldn't be so difficult, I think, for them to sort of identify a number of PDBs that are fit for purpose and worthy to give guarantees so that they can tap global markets, bring in private finance. It's a form of de-risking, right? But it's not just de-risking for the investors. For the recipient, it becomes affordable finance. You can work with it. For us to go and tap 10% interest rates in US dollars today, and you're going to pass that on at 11, 12, $13, whatever the number is, it's just prohibitive, right? So I think very practically, the senior members of the Financing Common Movement, those who have strong ratings, you don't have to necessarily give ODA, give guarantees and give it on a scaled basis. And then you'll really put wind in our sails and it will be affordable and you will not be creating a future structural problem because these people will now be able to better repay you, right? Because if you take expensive market money, you're introducing more risk in the system because they, your ability to repay becomes a lot harder. And then you have to on lend that at so much higher of a rate. And I had a discussion recently with some stakeholder in the global financial community, and they said, but you don't lend like the World Bank. I said, I wish I could. I really wish I could, but I can't because my cost of funding is so much higher, right? So I think there are some low, there's low lying fruit there for entities like us who could actually benefit from the ratings of double A's, triple-A, even a single A DFI partner. Thank you.


Moderator [5:16:20]:

Thank you, Masou. So asset class, getting together, better financing, diminishing the costs. Serge, what is your dream?


BOAD · President · Serge Ekoue [5:16:32]:

Well, I cannot agree more with what and Masu said. Look, our population cannot today in the current world, our population cannot understand or would not understand that, you know, this very project have been funded by AFD. Population wise doesn't work. Population would agree If we tell them, well, this project has been funded by BYD, this is fine. Politically wise, it's fine. Now, what the market can understand is that the very project funded by BYD has been derisked by AFD. This scheme works. And we can even go further. We can even say, okay, it has been derisked by AFD. The bond that we have issued has been credit enhanced, has been insured by XYZ insurer, credit insurer from the Lloyd's track, for example. All right? And then the bond insured can be sold to investors in London, New York, wherever. This scheme just worked. So it's this risking model that is implemented, and you can see how from a non-investment grade projects can be transformed in an investment grade paper bound format using the de-risking models. And the de-risking model, there are plenty of techniques, plenty, plenty. So for me, if I had a kind of a magic stick, this is what I would do immediately.


Moderator [5:18:27]:

Okay, we try to give you the magic stick and follow up on this very interesting proposal. Christina, what would you do with your magic stick? It does not have to be finance, can be.


Brazil · Undersecretary · Cristina Froes de Borja Reis [5:18:40]:

I know, that's why it's so complicated to answer this, but I would go, let's support the global alliance for fighting poverty and hunger. I think there we have, it's an opportunity to reduce inequalities and to go against things that are striking and hurting people, thousands, millions of people in the world.


Moderator [5:19:09]:

Cristina, so Jose Antonio, if you would like to conclude.


Professor · Jose Antonio Ocampo [5:19:14]:

Yeah, let me say two different things. First, capitalize. the institutions. Without that, nothing is possible. So that's number one. But I also think that the, you know, trying to promote instruments that have been less used by banks could be important. I mean, for the risking a system of guarantees, a good system of, you know, guarantees which could be the banks or could be independent institution that the risk. That's very important for the high risk activities, let's say from climate change to lending to micro enterprises, let's say. So you have to have a good de-risking system with a different allies. And the other is venture capital funds. I think this, I am fan of the venture capital fund idea I mean, in the past, when you see the history of Latin America, the governments used to create, you know, to capitalize new enterprises from public funds. I really think the venture capital system is much better so that you could have the, how to multiply, you know, venture capital funds in, you know, associated to the development bank, to the national development bank. which I think is a, would be a very good instrument, including, I mean, one of the basic advantage of that system is that you can have a multiple sources of financing to the venture capital. You can have the, of course, the National Development Bank, but also some multilateral banks, you know, investing and private investors, which may be interested in those venture capital. So I guess, you know, trying to promote that model, which is very incipient, Uh, in the developing world, I think it's a, it's a, it's a good idea.


Moderator [5:21:16]:

Thank you very much. So I think we finished the panel here. Thank you very much to our distinguished, uh, panelist, uh, and, uh, let's continue, uh, with the magic stick.


Moderator · Shari [5:51:37]:

General for the Department of Economic and Social Affairs, followed by our distinguished panelists. I'd like to start by inviting the Under Secretary General to give his remarks. Thank you very much.


UN DESA · USG · Li Junhua [5:52:06]:

Well, good evening or good afternoon, colleagues. It seems that this is really a gathering of family members, the family members for the FFD. But, well, I've been prepared this very formal remarks, so that I guess here everything seems that in a very UN style. So that I hope it won't be too boring for you just to listen to a few opening remarks. I don't know the colleagues on the back rows can hear me clearly. Well, I won't say the excellencies. I just want to highlight the dear friends and dear colleagues. It is really a great pleasure to have you all here for this FFD4. I know you are the veterans and also some of the new faces just join the FFD4 process, but they all character indicated one thing, we are all committed to the financing for development. So, colleagues, this is the timely moment to reflect on how far that we have come since the first international conference on financing for development, held in Monterrey, I guess, my colleagues here, about a quarter century ago. I'm especially pleased to share this moment with many colleagues who have been very, very much instrumental in shaping the financing for development process, well, across decades, across sectors, across institutions, and across regions. As we gather here in Seville for the FFD4, we certainly face a deeply challenging global landscape. We know that the official development assistance is declining, trade tensions are escalating, and the debt burdens are increasing. So against this new geopolitical or new global economic landscape, on contract, our global macroeconomic outlook remains quite fragile. was the constraint of physical space in many developing countries. So we will say, consequently, with this expanding gap on SDG financing, to achieve the 2030 agenda remains a big question mark or faces more uncertainties. But we should not be, we must not be pessimistic or over pessimistic. We definitely believe severe represents a chance to change the course. We have to come a long way to be having these discussions at the United Nations. Even before the Monterrey, financing debates at the United Nations were largely confined to the official development systems. Broader discussions on ******** economic and financial issues were often confined to less inclusive forums. But financing affects every aspect of the people's life. It touches every goal of the 2030 agenda. Bringing all those issues to the United Nations through the Financing for Development process was a milestone. So thank you so much to all colleagues. It anchored the financing discussion in development agenda, and the UN's convening power made a space for perspectives that were too often excluded. The FfD conferences from Monterrey to Doha to Addis has produced concrete gains in three key areas. First, They mobilized the new additional and better quality resources. Following the Monterrey, we saw the sustained rise in ODA. After Addis, we witnessed reforms in multilateral development banks through the Capital Adequacy Initiative. Over the 80 hundreds are now implementing the INFFs, a concept was born after Addis. Second, FFD process enhanced the inclusiveness of the global financial dialogue. It helped to bring the voices from the developing countries into the conversations around tax debt and the financial regulations. Also, after others, in particular, advanced the cause for a more inclusive and participatory international tax system. That is an ongoing process in UN now. Third, FFD strengthened the policy coherence, bringing together finance, development, and the foreign ministries around the shared objectives. It elevated the development of finance to the political level. We witnessed how more than 60 leaders attended the address at the opening session and also attended a special event and the side events. So, dear colleagues, we must be proud of our efforts and must be proud of this severe commitment. To me, to you and DESA, and to all of you, I believe the commitment here actually builds our legacy and served as our next roadmap as well as the yardsticks. So let us maintain and maximize the momentum from Seville with such a warm hospitality, with such a warm weather. Thank you.


Moderator · Shari [5:58:28]:

So I'd like to welcome our speakers to the stage. While they're all coming up, I'm going to sit down with them in a second, but here's the entrance. Just to say that when Barry Herman, who's here, and I were talking before FFD started, the fourth conference, and, oh, there's steps right over here. Yeah. And then we saw in the SPA initiative that some of the old, the veterans of Monterey, the founders, the main thinkers behind Monterey, were planning on coming to Seville to have a SPA launch. And we thought we have to bring everyone together to have a conversation from Monterey till now and really thinking about what does it mean going forward. So Really just welcoming everyone to the stage, and I'm gonna move over here, and we're gonna start our conversation. So anyway, this is my fifth event of the day, but the one I'm most happiest to be doing is to really be looking at the history of this process, what we can learn from the history of the process, and how we can think about the UN's role going forward into the future after Seville.

And we have many really exciting, the people on the stage and also in some of the people in the seats, I know have been to many of these conferences. And I see Anna Heidi in the back from Norway, who was instrumental in helping to facilitate the Addis Ababa Action Agenda as well. So really excited to have everyone here today. And I will quickly go through just to mention who we have. So we have His Excellency Mauricio Escanero, the former facilitator of the Monterrey Consensus and now an ambassador of Mexico to Israel. We have His Excellency Mr. Samuel Issachar, the Deputy Permanent Representative and the Permanent Mission of Ethiopia to the UN, and who we just worked with very closely on the first preparatory committee meeting that was in Addis Ababa, following 10 years after the last agreement. We have next to me Her Excellency Merete Fjeld Rathestad, who is the permanent representative of Norway to the United Nations and has been the co-facilitator for the Seville Commitment, the outcome document that we're all talking about today, this week. We have Professor Eduardo Galvez, the former lead negotiator of the Monterrey Consensus as coordinator of the G77 in China. We have Ms. Mary Lou Ouy, former director and secretary of the G24, the Intergovernmental Group of 24 in International Monetary Affairs and Development, also a member of the Independent High-Level Expert Group on Climate Finance and a member of the Jubilee Commission, and also a longtime at the World Bank. And finally, but oh, not finally, we have Professor Jose Antonio Ocampo, who is also a member, who is the lead of the International Commission of Experts on FFD for this process, but was also the former Minister of Finance from Colombia and also the former USG Undersecretary General in DESA. And finally, we have, the only one I don't know, haven't met before, so very nice to meet you, Reverend Jacqueline Makina Mutuma from the World Council of Churches. So, we're going to start our conversation. I'm dropping everything as my, this is the end of the day at a very exhausting time, so this is why everything is dropping here, but okay. So, yes, so we're going to start with Ambassador Mauricio Escanero. There you are. Yes. Okay, great. So FFD began as a Latin American initiative and has grown into really a global political phenomenon. If you could just elaborate on the source of the spirit behind the Monterey Consensus, the first FFD conference, and if those of you who haven't heard it, everyone always talks about the spirit of Monterey. And so and how you've seen it having developed over the years.


Mexico · Ambassador · Mauricio Escanero [6:02:49]:

Maybe I can speak from here. It is working. Can you hear me? Well, thank you, Shari. I'm very happy to be here again at the FFD process. I thank the organizers for inviting me, and I thank all of you for your kind attention. I really feel like Under-Secretary-General Li Jinhua was saying, "Is my family here together with you?" I will be having this conversation in my personal capacity as a former facilitator of the Monterrey Consensus, the core nucleus of the financing for development process. I have been asked by Shari to elaborate in about seven minutes on the source of the spirit behind the Monterrey Conference, the first FFD conference. So let me quickly start from the very beginning. Monterrey was always impossible till it was possible. It didn't happen. It was made through a bottom-up democratic process guided by a wholehearted drive for change and clear sense of purpose. Monterrey was possible First and foremost, as an act of collective will of committed individuals who at the challenging historical juncture of the time, dare to imagine and move along a new path. Two main factors made the call for Monterey urgent and shape its substantive approach. Firstly, From the systemic perspective, the negative social impacts of the late '90s international financial crisis highlighted the need to lead globalization and interdependence with more equity and fairness. And secondly, arising from the series of UN conferences of the '90s, Monterrey came about as a much needed cross-cutting platform to address the financing for the implementation of the emerging global development agenda, today epitomized by the sustainable development goals. On both accounts, a policy shift was needed. That is why Monterrey launched itself as an innovative multilateral and multi-stakeholder process, pioneering two main pathways towards an improved global economic governance. Firstly, by proposing its holistic agenda to address the interconnected national, international, and systemic dimensions of financing for development. And secondly, by promoting the convergence of efforts of all relevant stakeholders at all levels towards strategic, transformative actions. At its core, the genius of Monterrey was to put into full play the legitimacy and convening power of the United Nations in order to provide the all-inclusive consensus-building table that we need to ensure that justice, gender equality, the realization of all human rights in their broadest sense, and our planet's well-being are at the heart of financing for development worldwide. Its overall political message was that collective and coherent action is needed in each interrelated area of the global financing for development agenda for the common good, involving all its stakeholders in active partnership. That is why Monterrey was not only innovative in its substantive proposals, but also in its democratic forms of trust building, dialogue, outreaching, consultation, negotiation, and consensus building, which included the coordination among the ministries of finance, foreign affairs, development, cooperation, and trade at the national level, and the active participation of the Bretton Woods institutions, the WTO, and other international organizations, as well as representatives from the private sector and the civil society. In doing so, the FFD process deliberately projected itself as an organizational blueprint for building such a global partnership. And let's not forget, against all odds, Monterrey managed to become a summit. Today, The challenges and opportunities that gave birth to Monterrey and its ambition continue to exist, but with a significant difference. Now, the stakes are much higher. The next steps will be extremely challenging, especially in the current state of multilateralism and in the midst of increasing geopolitical tensions and military confrontations, which deeply complicate any international comparative scenario. I believe that herein, at this challenging historical juncture, is where taking forward the spirit of Monterrey can be of help. If we manage to do it at a scale fit for purpose, taking full advantage of the unique strengths historically built into the FSD process from Monterrey to the Compromiso de Sevilla. Above all, we should understand that our true challenge is to relaunch our FFD process as a global leadership undertaking, to once again put into full play the legitimacy and convening power of the United Nations to galvanize political will and to foster multi-actor cooperation. Our FFD process should remain an inspiring beacon of multilateralism in the challenging years ahead. On this path, the review of the accomplishments and shortcomings of the 2030 Development Agenda should provide us with a window of opportunity to build significant political momentum. I believe that the fifth International Conference on Financing for Development should be a summit a Monterrey plus summit, converging with and fully supporting the transition to a necessarily broader, more ambitious, and more effective post-2030 development agenda, during interconnected with other multilateral process supporting the pursuit of equitable and sustainable development, such as those addressing climate change and biodiversity, as well as the technological revolution global governance. Dear friends, in the spirit of Monterrey, let's stay engaged to the best of our potentialities in the collective pursuit of an improved global economic governance for shared development and prosperity for all. It will be a long and challenging journey. I'm looking forward to it. Thank you for your kind attention, and I'm at your disposal for any comments or questions. Thank you.


Moderator · Shari [6:11:16]:

Thank you, Ambassador. And I'm going to move forward by 13 years, I guess it was, to-- we're going to come back to the Monterrey later, but we're going to move forward now to Addis and to the Addis Ababa Action Agenda. And that was 10 years ago. We met in Addis for the third International Conference on Financing for Development. And that conference updated the agenda that was in Monterrey. And specifically at the time, it was at the time of the SDG Summit, the 2030 agenda was happening right afterwards, and then the Paris Summit. So the idea was that it expanded thinking about financing for development to what does it mean to finance sustainable development while maintaining a core component of the financing, ensuring that the development component is there. And then it also tried to say, to go a little deeper into some the specifics. So you see that it's much fatter and much thicker, the Addis Ababa Action Agenda than the Monterrey Consensus. And it tried to go a little bit into some of the details of how do we actually make some of these big ideas and agreements happen. What are the details, what's needed? And in doing so, it brought up some specifics. Looking at the time, for example, it made a separate chapter on domestic resource mobilization to really highlight the importance of that in the development agenda and particularly in the sustainable development agenda. So many and many see that chapter and that discussion as the setting the basis for the African led initiative for a UN framework convention on tax cooperation that's happening now. Those negotiations are happening in the UN. So His Excellency, Ambassador Samuel Challa, from your experience, what do you think are the opportunities of FFD post Seville for building enthusiasm around proposals for continuing to advance the global reforms and what is required to build political momentum to ensure that they are implemented and monitored through a follow-up process.


Ethiopia · Deputy Permanent Representative · Samuel Issachar [6:13:28]:

Thank you, Sherry, for the floor, and good afternoon, distinguished guests and colleagues. The fourth International Conference on Financing for Development in Cevia marked a critical moment of convergence where political will, systemic urgency, and reform-oriented proposals come together. For CBI, we now have a powerful opportunity to channel that momentum into real structural change. CBI reframed the financing for development agenda, not as technical, technocratic conversation, but as a central pillar for solving the major challenges of our time, debt distress, climate vulnerability, and the widening inequality. For the first time in years, we saw broad Coalition building among developing countries, the G77, the African group and the LEDCs, alongside reform-minded partners from the global north. This spirit of shared purpose must be preserved and expanded. CBI offers us three major opportunities going forward. One, a unifying narrative. It aligned diverse global agendas, the SDG Summit and the Summit of the Future into a single, cohesive reform platform. We must now treat these milestones as connected processes, not isolated events. Second, amplification of global South leadership. Calls for SDR reallocation, inclusive climate finance, fair taxation, and institutional reform were not only voiced, they were heard. That energy must now translate into influence. Third, momentum for coalition of action. Champion of groups can now advance specific proposals on debt relief, tax justice, and inclusive representation in global financial institutions. But opportunities alone are not enough. To build and sustain political momentum, we must focus on five essential actions. One, states commitments into action plans with clear timelines, deliverables, and mechanisms for accountability. Second, keep the political attention high. This is not merely a technical debate. It requires the leadership of ministers of finance, heads of state, and the multilateral actors. Three, when the base of Widen the base of public pressure by engaging civil society, youth networks, and the justice movement who can keep urgency alive and demand accountability. Fourth, strengthen South-South solidarity on key reform pillars, tax, debt, and representation in global institutions. And the fifth, institutionalize the follow-up process with the UN at its core. permanent intergovernmental space for global economic governance is long overdue and essential. Let us be clear. The cost of inaction will not be evenly distributed, but its consequences will be global. For developing countries, inaction means deeper fiscal distress, delayed SDG progress, and limited climate resilience. For the global economy, it means market instability, fractured supply chains, heightened instability, and erosion of trust in multilateralism. We are at a crossroads. CBI can be a turning point or a missed opportunity. If we fail to implement what was agreed, expand alliances, and institutionalize reform, we risk reinforcing a two-tier global economy, one that entrenches division, fuels migration crisis and the limited collective progress. Let us not allow political courage to dissolve into procedural rates. CVA must be used as a launchpad for structural transformation so that global finance, global finance, financial services, service, the many, not the few, and the promise of 2030 agenda becomes a reality. Thank you.


Moderator · Shari [6:17:38]:

Thank you so much. Thank you so much, Ambassador. And we're going to move forward another 10 years. So, and Norway, and I think that, you know, each of the FFD conferences has happened at a different moment in time. And so today's, this year's fourth conference, international conference is happening at a moment where the, as a poet, which we've all heard all week, where the excitement and the The feeling of optimism that we felt in Addis and certainly in Monterey as well has been sort of gone. And when we've seen the SDGs backsliding and investment falling and a time when it's really hard, it was really, I think, at the beginning of the FfD4 negotiations, it was almost We didn't, first of all, things got worse after we started the negotiations. So we were ready in the negotiations when there were enormous announcements of ODA cuts of 7% last year and much more up to 20% or even more probably this year in 2025. And second, a time when we were in the aftermath of the COVID crisis, when really the cracks and the fissures in the international financial architecture that starting in Monterrey we were trying to fix were really laid bare. And so we came into this new negotiation for Seville in a really critical time and a really challenging time, with enormous geopolitical differences, where a lot of distrust between countries was already existing, and this very almost impossible challenge of trying to come up with an agreement in this really challenging time. And whereas in Monterey, how many years did you have of negotiations? You can pick up the mic, yeah. just talk right into it. Yes.


Mexico · Ambassador · Mauricio Escanero [6:19:32]:

Okay. I think that we can pinpoint out 1997 as the beginning of the process, but we began fully speed in 1999. It took us six months intensive negotiations only to agree on the topics of the agenda.


Moderator · Shari [6:19:53]:

So that was 1999, so another three years.


Mexico · Ambassador · Mauricio Escanero [6:19:57]:

Another three years. so we finally arrived to the summit.


Moderator · Shari [6:20:00]:

So over five years. And then in Addis negotiations, we had a very short time. And this and coming into these negotiations, we had a little bit of like a little over a year, I guess. But by the time we really got started, when were you appointed in a little less, a little less than a year to get this whole thing running. So a really short amount of time and a really challenging time. And so Ambassador Miretta Bratiste, reflecting on your experience as a co-facilitator of this late most recent process, can you elaborate on efforts required to make FFD work? And a lot of the challenges we had were also engagement with the multilateral institutions, again, with enormous distrust between DC and New York, where we also saw that ministries of finance and ministries of foreign affairs weren't even from the same countries, had different positions and weren't talking to each other. So it was a real challenge to bring all of this together. And so over to you on your reflections on this and then we're going to start thinking about after that how do we move forward?


Norway · Permanent Representative, Co-Facilitator · Merete Fjeld Rathestad [6:21:04]:

Well thank you Shari and good afternoon everybody. Let me just start by reflecting a little bit on why Norway wanted to engage both in FfD3 and in FfD4. And thank you for pointing out on there Heidi, who has moved to the front row, who was instrumental in co-facilitating the Addis Ababa Action Agenda. But since which Norway then in 2015 did together with Guyana. Since 2015, we have actually tried to have an active role in following up and implement what was agreed in Addis. First of all, we integrated specific agreements from the Addis Ababa Action Agenda into our development cooperation efforts. And secondly, we kept taking roles in multilateral space to keep the momentum going and promoting it even further, because for us, it's important. I wanted to give you a couple short examples of how we did this. In 2015 and others, we all made commitments to support revenue administrations. From that, Norway went on to become one of the founding members of the Addis Tax Initiative. I am proud to say that, nationally, we have fulfilled our commitment from 2015 to more than double our contributions to tax-related development assistance. I see the co-facilitating of FfD4 as a continuation of that engagement. We are proud to have been part of this big co-facilitation team, starting last June together with our dear friends Zambia, Nepal and Mexico. Before the decision was even made in 2023 to hold the fourth FfD conference, Norway was interested to have a key role in the process. Therefore, when the decisions were taken, we very quickly nominated ourselves to sit on the bureau and to have the co-facilitator role. It has been an incredible journey. It has been work intensive and, at times, quite challenging. Whereas I would say 2015 was somewhat of a golden year for multilateral cooperation. Shari mentioned all the, we agreed on the ADIS agenda, the SDGs, we agreed on the Paris Agreement. Right now, we live at a time marked by profound global changes. and reaching consensus on an ambitious and action-oriented document was very far from guaranteed. We had a solid co-facilitation team and fantastic support from the UN secretariat, through both expertise and secretarial support, and we had a full year to conduct negotiations with member states. We managed to reach consensus, minus one. We also engaged extensively with Bretton Woods institutions, with civil society and with private business, and we have been listening to inputs throughout the year from all the stakeholders. Adoption of the Compromiso de Sevilla sends a very clear message that the global community remains committed to multilateralism, to cooperation, and to financing sustainable development for a brighter future. Now, the literal trillion dollar question is, how can we ensure that the Compromiso de Sevilla is implemented? As so many have underlined over the past two days, and as we know from others, this week is not the end of the story. On the contrary, now are joint efforts across Governments and across stakeholders really, really begin in order to make the financing for development and Cevia commitment work for all. Norway actually started the implementation of the Compromiso de Sevilla today. And now I actually have to look up a press release because I don't have all this in head. But literally one hour ago, our Minister for International Development signed three new agreements to the worth of $13 million in order to support countries to improve systems for tax and public revenues to finance their own development. These three agreements are part of our Tax for Development program. I come from a country that truly believes in the value of taxation. And they are with the African Tax Administration Forum, UNDP, and the regional organization of African state audit institutions. So this is an example of how we have started to make the Compromiso de Sevilla work. Now, implementation of the document depends on actions and decisions by all stakeholders, from governments to civil society, to UN system. the private sector and all other entities that have a role to play in the over 250 action points contained in the document. And here, of course, also the financial, international financial institutions and multilateral development banks are central and essential. Many of the action points are strong signals from UN member states. But for the implementation, it will be up to the boards of executive directors of those institutions to decide whether to take action. In the boards, almost all of the same countries that are members of the UN sit, but in different constellations of groups and of quota shares. As Shari said, it is often representatives that come from different ministries than those posted to the UN in New York. And in our view, it's therefore very, very important to continue to take a whole of government approach with comprehensive and frequent coordination between the different relevant line ministries in capital and with the various representatives from member states sitting in New York, but also in Washington, DC in these institutions. We must continuously encourage and promote closer coordination and cooperation between the multilateral institutions. And in this regard, the decision in others to establish the interagency task force on financing for development is a great example. I will not go into that, just say that the Compromiso de Sevilla has additional follow-up actions that need now to be operationalized and implemented. And with that, I thank you for the opportunity.


Moderator · Shari [6:29:12]:

Thank you so much. We were, I think all of us, we're very, very, oh. And all of us were very, very lucky to have your leadership in this process, 'cause I really think you and the other co-facilitators pulled a rabbit out of a hat. and came up with an agreement that was, that many times it was really unclear that we would get to. But I also think that going back to Monterrey, that the financing for development agenda was always about coherence. And so the issues that you're talking about are even including coherence between foreign affairs and finance ministries. It's coherence in all aspects between different financing flows, between different SDG topics, which became in 2015, and also really now stressing the importance of having coherence between. between ministry, different ministries within governments. But we're now going to look forward to start thinking about how do we continue this process forward? What role does the UHEN have going forward? What role does the FFD process have going forward? And how do we continue the momentum and use this moment again as not as an ending point, but as a beginning for going forward. And so I'm going to go to Professor Eduardo Galvez, who was very, who was instrumental in as coordinator of the G77 in China. And so one question is, how do you see the FFD process having evolved? And also, and this is how I knew you were coming, that you proposed an initiative under the Seville Platform for Action with a focus on global economic governance involving many of the leaders of the original movement. So how can this initiative help give momentum for a renewed multilateralism in the post-Seville era?


Professor · Eduardo Galvez [6:31:01]:

Thank you. I'm very honored to chair this panel with very dear friend of the FFTA community. I'm glad to be again in the middle of the process, 23 years after the first conference in Monterrey, Mexico. I was lucky to be in Doha and in Addis also. So this is my fourth conference on finance for development. I think that with the Sevilla conference, I think we close a cycle of our financing for development process. We have four regions. The next one, I think, is going to be in Latin America with our woman Secretary General of the United Nations. So I know it's going to be a very strong one. Now, we need to think beyond the Sevilla Compromise to implement this commitment, and perhaps in the future, We are a new summit dedicated to global economic governance as our friend, Ambassador Mauricio Escanero, is proposing today. A kind of Monterrey plus summit synergizing with the launching of the post-2030 development agenda. Why a summit? Because you need the engagement of the highest authority in order to ensure the coordinated implementation of the agreement by the Minister of Finance, Trade, Development, Cooperation, and Foreign Relation in each country. This will also ensure the coordination implementation at the international institutional level. I think that it's going to be an international summit led by the UN, and I said that I guess a Latin American UN woman who's going to be in charge of the UN at that time. but of course with the Bretton Woods Institution and the WTO as co-sponsor, and open to all the stakeholders, including the private sector and civil society, which will promote a development perspective in financial matters and in trade issues. And today, I will also include something very important for a small, weak developing country, respect for the rule of law in international relations. In this context, to promote the ideas and ideals of the FFD process, we are implementing a Latin American initiative in the context of the Seville Platform of Initiatives. The Latin American initiative is called Toward an Improved Global Economic Governance for Equitable and Sustainable Development. It's a forward-looking strategic reflection after the Seville Conference. which I think is going to be organized with dialogue, seminar, workshop, and roundtables of committed individuals from universities, international organizations, civil society, et cetera, like we did for Monterrey. This is organized by the Institute of International Studies of the University of Chile and the Diplomatic Academy of Chile as lead implementing entities. with the Latin American WTO Chairs Network as an endorsing entity, with a global aspiration open to all stakeholders around the world. This initiative is a continuation of the academic panel Middle Income Countries and the Holistic Action Agenda for Financing for Development, Challenges and Opportunities of FF4, organized at the UN in December 2024 in the preparation for the Trivilla Conference. The panel in New York recommended three key actions for this purpose. First, tackling the systemic challenges for advancing toward an improved and more inclusive global economic governance architecture, including by enhancing the participation of developing countries in decision-making at the Bretton Woods institutions. Second, confronting the challenges of financial stability in the very critical moment that we are confronting now. We must be aware that finance for development has started in some way as a reaction to the 1997-1998 Asian financial crisis and that the Doha Conference was in the middle of the great recession of 2008. In this regard, it is not difficult to understand that many of the champions of the finance for development process were from Latin America. I think in our region we have a doctorate in financial crisis. Third, I think we need to revitalise international trade as an engine for development with the WTO at the centre of multilateral trade system, improving its function and broadening its actual benefits. Of this regard, I would like to say that the situation is presently very menacing. For a paper published this week, it's called "From MSN to Refractory Tariff", it is said something that I'm going to quote, a very short. By awarding each trading partner his own reciprocal tariffs, the government of the United States was tearing apart the central fundamental principle of the GATT and its successor organization, the WTO, namely the principle of non-discrimination enshrined in Article 1, number 1 of the GATT. The initiative has the purpose of contributing from a Latin American perspective to articulating basic principles and key action-oriented recommendations to advance towards an improved global economic governance as called by the FSD4 outcome. In our view, a key challenge for the international community, one of high complexity today, especially amid current geopolitical tension, is to maintain the spirit of multilateral and international cooperation. supporting the UN leadership in the promotion of equitable sustainable development. Finally, I would like to end this presentation with two brief general comments that I think we should keep in mind when reflecting on our initiative. First, I believe that the most important of the FfD process is the process itself. As I stated in the concept paper for this panel, 23 years after Monterrey, the funding for development, remind its unique place in global governance. My second and final point is, as you know, everything depends on political will. I'm afraid that we now live in a moment of deteriorating global geopolitical situation, a fragmented world of economic and military confrontation in which multilateralism is being questioned. where a great power is disregarding the fundamental principles and institutions of an international society, against international solidarity and against cooperation among nations. Therefore, what should be done beyond this conference? As it is said in the Seville Compromise, we must reaffirm our strong commitment to multilateralism, international cooperation and global solidarity based in mutual respect and collective action, and also reaffirm our unwavering commitment to international law, including the UN Charter. Thank you, Emma.


Moderator · Shari [6:38:56]:

Thank you so much. And so, and I certainly feel like the agreement that we got and by consensus was really a testament to the desire for countries to really come together to support multilateralism and to defend multilateralism in this current context. But I do have one correction for the Spanish speakers amongst us, which I am not, that the Sevilla, the Compromiso de Sevilla actually means the Sevilla commitment. And so it's not the Seville Compromise. It's actually, the title is actually the Seville Commitment. And just to, and I'm dropping everything, just as we move forward. So I'm going to go now, but thank you for those comments and for your initiative, which we look forward to seeing the outcome of as you move forward with it. To Mary Lou So the FFD process is part of a bigger momentum to reform the international financial architecture, which includes the G20, the boards of the BWIs, the Bretton Woods institutions, and then your old group where you used to work in the G24. You also worked on these issues. And what role do you think the UN and FFD have played in this bigger process? And how do you see it playing a role in the current geopolitical context going forward?


G24 · Former Director and Secretary · Mary Lou Uy [6:40:17]:

Thank you. Does it work? Yes. Okay. I just have to speak out a bit louder. Okay. Well, thank you very much for inviting me and joining this distinguished panel and sharing the celebration of the achievements of the FFD process. Now, just to respond to your query, let me draw on my experience with the intergovernmental group of 24 developing countries, actually now 28, that coordinates the members' views on international monetary affairs and development financing. Our principles are finance ministers, and they have focused on issues aimed at addressing imbalances in the international financial architecture, and many of their concerns or views have been echoed in the FFD agenda over time. Now, as Shari said, decisions, and as our Norwegian ambassador said, the decisions are made by members of international financial institutions through their executive boards and some others in some other forum. Now, IFIs have near universal membership, but have governance structures that are based on the income of its members and their share in the global economy. Now, other forums have limited memberships, but have historically been decision makers, nor catalysts, and leadership roles in areas such as the global tax architecture. Now, given these structures, developing countries have found a broader, more inclusive forum in the UN FFD processes. to put IFA reforms on the table. Consensus building among members is on equal footing, and the process also provides space for voices from non-state organizations. It's a completely different process than in the boards of international financial institutions. Now, the FFD in particular has provided an avenue for developing countries or coalitions of countries to discuss and put forth IFA priorities, such as ready access to liquidity support in times of crisis, affordable development financing, and a fairer global tax architecture. Now, often the advocacy starts out as aspirational, but over time, the calls gain momentum, often pushed by global developments. And in some areas, notable steps have been taken. Yeah, I know. So let me speak louder. So let me just mention a few examples illustrating the evolution of calls of action within the FFD and what happens over time. Now, one is the use of special drawing rights to expand global liquidity in times of crisis. Much has happened since the Monterrey Consensus. when the document asked the IMF to review the need for SDR allocations, noting the impact of the East Asian financial crisis that was unraveling at that time. Now, Seville welcomes the largest 2021 SDR issuance to respond to multiple global crises and is asking to do more and expand the agenda, particularly on the re-channeling of SDRs from countries that do not need extra reserves to those that need liquidity support. And new issuances are on the table as an ask from emerging markets and developing countries. The second example is on the reform of the global tax rules to support domestic resource mobilization. The Monterrey Consensus briefly noted strengthening international tax cooperation, particularly to give attention to developing countries and their concerns. At the Addis Ababa Convention, the UN engagement in global tax matters was a prominent issue. Now, meanwhile, global decision-making or discussions was intensifying at the OECD, to discuss an agreement that then was made in 2021 on the so-called two-pillar solution. Developing countries engaged in that inclusive framework, but following that, it is evident that they felt the need for a more inclusive forum through the UN, where they can raise on equal footing the inequities in the global tax architecture that disproportionately affect them. So this has catalyzed movement toward a UN tax convention, an achievement indeed, and charting the road ahead is prominently in the Seville commitment. The third area is increasing voice and representation of developing countries in the Bretton Woods institutions. The call is simply to correct an underrepresentation of developing countries, given their increased shares in the global landscapes, and ensuring that the poorest have a voice in their executive boards. Now, decisions are with the boards, of course, but at this point, while this ask seems highly aspirational, and the UN process can continue to advance the proposal and perhaps come up with feasible options towards this end for the future. Now, going forward, and Shari did say, we'll ask if what might be the role of the FFD process in a period, in a time that we are facing. The stakes are actually high going forward. Here, the Seville commitment noted the enormous financing needs and the enormous financing gaps that would be needed to meet the SDGs and achieve climate goals. That said, we are also facing a time where prospective growth is much lower than in the past two decades, and multilateralism is in flux. Now, the UN and the FFD process has a strength that it can draw upon. It can continue to amplify the voice of developing countries. It can continue to support coalitions of countries, as it has done in the past, and build it into consensus building. Now, these efforts could potentially advance the agenda and not let it die at a time where multilateralism is at its flux. And I do believe that from where I sat and where I'm sitting, that the FFD process has the strength to be able to create the momentum going forward to make sure that implementation happens, even while things seem aspirational at this time.


Moderator · Shari [6:47:32]:

Thank you. Thank you for your thoughts on that, Mary Lou. And also, I mean, I just wanted to say that the comment on in the past 10 years, having been part of this FFD process, I do have to say that We've had the interagency task force, which the ambassador mentioned, which brings together the entire UN system. So the IMF and the World Bank and WTO are core members of it. And we have more than 60 UN agencies that are part of it, including non-UN agencies as well, like the South Center, the Basel Committees, the OECD, are all come together to have one statement on FFD issues. And bringing the UN system-- and I see that the colleague from the IMF was here, so he's not here now, but he was very part of this process and the IMF is very active in it. And having a forced place where everybody has to listen to each other from the entire system not only has helped bring coherence, but I think has really helped bring creative ideas to the process. That the UN is a place because so many voices from different places are there, you really hear creative ideas that at the first might sound not like they're aspirational and, oh well, this will never happen, and then Over time, as everyone discusses them and thinks them through and sees what's so useful in them, they become shaped into things that are implementable. And we've seen that happen, I think, in this FFD process now, and it's something that I really, it's made me, over 10 years, really believe in this process, I have to say. So I have nobody, can think of nobody better to think about the future of the UN and the future of the UN and FFD than Professor Jose Antonio Ocampo. So you've been, I think, at all of the, three of the four in conferences on FFD. You also were the leader of the International Commission of Experts on FFD in preparation for the fourth conference. And given your experience, what role do you see in the UN and FFD going forward?


Professor · Jose Antonio Ocampo [6:49:28]:

Well, thank you, Shari. And thank you for the invitation to be in this panel. Let me start by actually emphasizing one point that you said, Compromiso de Sevilla is commitment. In Spanish, compromiso is commitment.


Moderator · Shari [6:49:46]:

Right, that's what I said.


Professor · Jose Antonio Ocampo [6:49:47]:

Totally different in English.


Moderator · Shari [6:49:48]:

Right, it's commitment, we agree, it's commitment.


Professor · Jose Antonio Ocampo [6:49:51]:

So it's the commitments of Sevilla, that's the correct translate, okay, that's one point. But on the historical framework, since I was also in Monterrey and in the process leading to Monterrey, let me say that the, first of all, the relation with Monterrey also with the Asian crisis. And the, uh, and the impact that they had in Latin America also, you know, Brazil and Argentina had a, you know, significant crisis after, after, after Asia, the, uh, the, the, the risk margins of a Latin American, of emerging market bonds reached one of the peaks. historically at that time. So it was a very complex time. And I think one thing.


Moderator · Shari [6:50:38]:

-- Speak into the mic, thanks.


Professor · Jose Antonio Ocampo [6:50:39]:

Okay. One thing that was very important is, in a sense, the decision of developing countries to bring this issue to the United Nations, which, in a sense, had been excluded from economic issues for a couple of decades, let's say. And I think that was a very, very important issue. And since I was, actually you, the division was created, the division that you now had was created after Monterrey. And there were many other effects of Monterrey. I remember, since I was under Secretary General, soon after Monterrey, one year after Monterrey, the capacity of the United Nations to convene the World Bank and the IMF to discuss these issues, and more generally, what is now called the interagency task force. So I think that was a significant improvement in the capacity of the UN. The UN has one basic advantage. It's more inclusive, and therefore much better to reach global consensus. Now, the implementation of those agreements have to be in many organizations. And that's why we have to see how to organize the process going forward in that regard. And let me say that in any case, the interagency task force that DESA coordinates on the one hand, and also the forums of financing for development that take place every year after the meetings in Washington or the Bretton Woods Institution. Those are two very important points for a global follow-up of the commitments. But of course, the commitments have to be implemented in many, many areas. Let's say we have to see how to move forward in many areas. Let's say in the areas where, let's say, I think, Sevilla goes forward, I will really emphasize the issue of multilateral development banks and national development banks. It's much stronger in this document. the Compromiso de Sevilla, than the previous documents of financing for development. International tax cooperation, also, because also the convention that is being negotiated in the United Nations. Let's say environmental financing. Also very important, I mean, I could continue. There are some weaknesses that I hope, for example, actually the debt issue, I think much more action is required. And I hope that there is more action in that regard. But the capacity of the UN to reach consensus, to be the place for consensus building, is very important. And let me say the process was very active, et cetera, et cetera. I congratulate the four co-facilitators because it was here represented by Norway, the ambassador of Norway here. But because it was a very active process, after we finished our expert group report, we had meetings with them, as well as some country groups. And, and I think, uh, uh, the, uh, the process of, you know, uh, bringing new ideas and, and, and the co-facilitators, uh, supporting, uh, the process of bringing new ideas into the agenda, it was a very, very productive process. So going forward then, I think the main, main issue is, first of all, the, you know, in a sense, those two UN processes, the UN task force on the one hand, and the, let's say, the financing for development forums in the UN that take place after the meetings in Washington or the Bretton Woods institutions, those two processes should, in a sense, be continue to do the coordination or the follow-up. But at the same time, we have to push countries in different directions. For example, one very nice part of the Compromiso de Sevilla is what they say about the reforms of the World Bank and the IMF. Very good paragraphs. But that, of course, is the agenda that has to be brought by countries to those institutions. So, maybe, uh, maybe Lou, uh, as a former head of G24 can push the G24, uh, and perhaps the G24 has to play a very important role to play in that regard. Anyway, so I think those, uh, but the actions then have to take place in, uh, in the different organizations, and I hope in some cases the, uh, the process that is going in the wrong direction will be reverted. And let me finish actually one point in that regard. One of the very good effects of the Monterrey Consensus is that it reversed the downward trend of official development assistance. It really changed after Monterrey. And I hope this, Seville, will also have that result. I hope the ODA you know, will overcome this, the current crisis it's facing, and then initiate the process in that regard. But there are many, many other topics that are in the Compromiso, and I hope the United Nations coordinates the follow-up of that process. Thank you.


Moderator · Shari [6:56:35]:

And one of the places where there was a lot of discussion about the trends in ODA was that not only is ODA going down, but it also, even before the recent cuts, was going down ODA that actually reaches developing countries was going down. And so one of the commitments was actually to turn that trend around as well and to increase the amount of ODA reaching developing countries.


Professor · Jose Antonio Ocampo [6:56:57]:

Yeah. I appreciate that the 0.7 is mentioned.


Moderator · Shari [6:57:01]:

Yeah, but, yes.


Professor · Jose Antonio Ocampo [6:57:02]:

That's the oldest UN target in development cooperation, the 0.7 percent of GDP. 1970 was the agreement.


Moderator · Shari [6:57:10]:

Jose Antonio, I have a question for you or for anyone also, just What about the date of the Financing for Development Forum? So one thing that's being considered would be to change it. Should it be moved before the spring meetings? Is there a reason to have it after or does it make sense to have it at a different time?


Professor · Jose Antonio Ocampo [6:57:28]:

Very good question. I don't know. I think it works well like it does now. but maybe before the meeting. The problem is rather a different one. It's to have the commitment to have more finance ministers to come to New York. I think that's probably more important than the date as such.


Moderator · Shari [6:57:48]:

Okay, great, thanks. So I'm going to go to our last speaker. So Reverend Jack, oh. Thanks for the applause and remember to do so. I'm Reverend Jacqueline McKenna. And this is a jubilee year, and it's yet a very politically difficult year. And how do you think we want to, one of the, more than any other intergovernmental forum, the United Nations really insists that values matter, that human rights and obligations should inform global policymaking. And the Ecumenical Panel on a New International Financial and Economic Architecture brings this moral and theological dimension to global policymaking. So in this Jubilee year, how can religious leaders be bolder in the face of really, really complicated present-day challenges and support building responsible global relations? And how do you see the FFD process fitting into this?


WCC · Reverend · Jacqueline Makina Mutuma [6:58:50]:

Right, thank you so much, Moderator. As a young female African faith leader, I come before you with a heart heavy with cries of my people in the Global South, especially Africa, where survival is a daily battle against the weight of systemic injustice. Picture a mother in a rural African village, rising at dawn to fetch water from a distance, contaminated streams because clean water systems are unfunded or underfunded, siphoned away by debt repayments. Imagine children crammed into a crumbling schoolroom, their dreams stifled by a lack of books, teachers, or even electricity. Our government and as governments, they've got scarce resources to servicing loans and mostly they are not even servicing loans, but interests, rather than building conducive learning environment.

And these children are expected in the future to compete for global opportunities. Envision a father in coastal community watching his livelihood vanish as climate-driven storms battle his fishing boat, with no access to health care to treat his child's malaria because public hospitals are starved of funds. In the Global South, 2.33 billion people, nearly 29% of the global population, face moderate or severe food insecurity, while the wealthiest double their fortunes. Basic amenities like clean water, electricity, sanitation remain out of reach for millions. Education systems crumble with overcrowded classrooms and underpaid teachers, denying children a chance to break free from poverty, systemic poverty. Healthcare systems falter. The financing for development process, now at its fourth conference, is a matter of life and death for Global South. As the World Council of Churches, representing over 600 million Christians globally, we declare this a Kairos moment for global financial transformation. Staggering inequality, climate breakdown, and a global public debt surpassing $100 trillion, nearly four times the level in 2000, reveal the cracks in a system that serves the privileged few. In the global south, over half of developing countries are in or nearing debt distress, forced to choose between debt repayment and human rights or dignity. The climate crisis driven by the global north and the industrialized states exacerbates these burdens, with developed nations failing to deliver promised climate finance. The fourth industrial revolution and artificial intelligence widens your economic gaps, consolidating wealth and power while eroding trust in institutions. As the World Council of Churches, we see this crisis as moral or ethical failures and therefore demand for a new international financial and economic architecture rooted in justice, equity, and care for all creation. The new international and financial economic architecture, call it NFEA, championed by the ecumenical bodies, calls for a global financial system that prioritizes economic, social, and climate justice. It rejects an order where billionaires thrive while billions go hungry, demanding instead sustainable grassroots economies that uphold human dignity, limit greed, and restore environment. For Africa, for instance, Nefi addresses the colonial legacies that continue to plunder resources and trap nations in debt. It advocates for a wealth redistribution, regulation of speculative finance, and reparations for historical injustices like colonialism, slavery, and ensuring that the global South can reclaim its future. Nefi brings a moral and theological imperative to FfD4. This is not time for incremental change. we face a moral crisis requiring bold transformation. As religious leaders, we are called to be bolder, prophetic, unyielding, and united in confronting these challenges, building responsible global relationships that uphold human dignity and God's creation. Then maybe the question that you've asked, what is our role as religious leaders? In this Jubilee year, the ecumenical movement harnesses the moral authority of faith to challenge the greed and exploitation embedded in the global financial system. We stand as a prophetic voice, urging governments to foster global relationships defined by solidarity, equity, and care for the vulnerable. We denounce immoral inequalities, where billionaires thrive while billions go hungry, as betrayal of vision for a just world. Inspired by NIFIA, the ecumenical movement advocates for a financial system that prioritizes sustainable grassroots economies, limits wealth concentration, and invest in social welfare and environmental restoration. We reject the colonial legacies that trap the Global South to debt, calling a reparative global relationships that address historical injustices such as colonialism and slavery. We are also embarking in the Turn Debt into Hope campaign, which is rooted in biblical jubilee under Leviticus 25 for Christians who are listening, as a clarion call for immediate action to address debt crisis strangling the global south. In many countries, debt servicing consumes resources than health and education budgets. forcing governments into austerity measures that slash essential services. The Ecumenical Movement demands the international financial institutions and governments to cancel unjust and unsustainable debts, reject austerity, and establish transparent UN-led debt convention. For communities across Africa and beyond, this means liberating resources to provide clean water, build schools, and ensure healthcare. These fundamental human rights denied by financial systems rooted in exploitation. Through this campaign, we amplify the voices of the vulnerable communities fostering global relationships grounded in compassion and accountability. We are also embarking on ZAKTAX campaign, inspired by repentant tax collector Zacchaeus. This campaign demands a global tax system that promotes equity and justice. We call on governments to implement progressive wealth taxes, unitary cooperation taxation to curb multinational tax evasion, close tax havens, and introduce carbon taxes to fund just transitions and support climate-vulnerable nations, particularly in the developing nations. Illicit finance flows driven by corporate tax abuse Drain billions annually from global South, depriving communities of resources for basic amenities and climate resilience. tax is a lifeline. The ecumenical movement informed by the marginalized voices calls on the UN and the governments to amplify the perspectives of women, youth, and the poorest who bear the disproportionate burden of economic and climate crisis. And as I conclude, Faith leaders need to boldly speak truth to power and to empower. FFD4 is a pivotal moment to mend the fractures of a global finance systems that condemns the global south to survive on the margins. I speak for those whose lives hang in the balance, mothers without clean water, children without schools, families without healthcare. Incremental change is not enough. We need a bold transformation of global finance to serve people and the planet, not the privileged few. Governments must act with urgency to deliver just justice, harnessing FFD process to build a world where no one is left behind. Nefi turned that into hope and that tax provides a roadmap for systemic change. Thank you.


Moderator · Shari [7:09:40]:

Thank you so much. Thank you for also reminding us what FFD4 is about and what financing is about. It's not about the money, it's about the impact on people's lives. But I think there's also a, you know, the contrast that we have between our aspirations, and then how we actually make that change happen, how we get to consensus with some of the countries that need to be part on board for these changes to happen, and how do we bring them on board. And it comes very much to the comment that Jose Antonio said earlier about, is the debt language strong enough or not? It's a question of what-- when we had in 2014, we had a debt process at the UN. And not a single developed country came. Norway was the only one sitting in the room. And the result was that it didn't have any impact in the end. And so this real question of how we can make this change happen and bring both sides together is one of the really big challenges that we have. So we have a few minutes, if there are comments or questions or thoughts from the audience, from all of you on this, or if not. You can just raise your hand or yell out if you have something to say and while nobody is doing that I'm going to go to Mary Lou for a second and Because Mary Lou is part of we were just in Rome together for the the Jubilee Debt debt meeting and she's part of the Jubilee debt group that's led by Joseph Stiglitz I think and so who's coming here tomorrow and so Mary Lou if you have thoughts on following up on discussion on the debt section and What's coming out of the Jubilee Commission and And this question of, can the Jubilee Commission build on F54? Can it use part of what happened in F54? And how do we make this politically happen? Because we all know what we want, but the real challenge is how do we get there?


G24 · Former Director and Secretary · Mary Lou Uy [7:11:35]:

Okay. So just very briefly, we don't have much time. The Jubilee report was commissioned by Pope Francis this year. And one has to remember that in 25 years ago, Pope John Paul II at that time advocated and called for in the Jubilee year for a debt relief at the time when debt burdens were really high and there was a lot of debt distress. So what did the Jubilee Commission find? That very close to what the Reverend says, that the debt crisis is not only a financial crisis, it is a development crisis. And inaction has devastating effects on people and planet. Then the second part, which pertains quite directly to the IFA, is that it says it's important to address the current situation of debt distress. It's urgent, but that will not be enough. There are flaws in the international financial architecture that generate dynamics that would most likely bring about debt distress again. Remember that the last episode was only 25 years ago, and now we're at it again. And so it's important to address the flaws in the international financial architecture, which brings me to FFD. Both share the view that there is a need to reform the inequities in the international financial architecture. In fact, many of the proposals are in the FFD agenda, and perhaps more needs to be done, but this is a very good start, and I think following through many of the elements in the Seville commitment will go a long way towards supporting the change that is advocated by the Jubilee Commission.


Moderator · Shari [7:13:32]:

Okay, thanks, thank you, and I don't know if any of the of any of the other speakers who have anything they want to add on these issues. But having just sat through the negotiations, and if you do, just let me know, I do think that the elements in the debt part of this that were so brilliantly negotiated and facilitated by our co-facilitators has both, again, it has issues of prevention but then also has a new facility to lower the cost of borrowing, a new facility that the Spanish and one of the SPA initiatives are now actually setting up for debt swaps. But also the original language that was deleted from the outcome really talked about using a wide range of instruments for this, including debt buybacks, which is a big part of the Jubilee recommendation. And then finally, on the debt architecture, so there were many calls, and we just heard one for a a framework convention or for some sort of a bankruptcy court, some sort of a sovereign debt restructuring mechanism. And the question I think that we all, that all those who are advocating for this and for a more just change in the architecture need to really, we need to think through is how does one get there? So in the current situation, if the creditors don't show up and they refuse to be part of it, it's not going to work. And so the question, I think, is what steps to take and how does one build on what's there and build on the elements that were so brilliantly negotiated by the co-facilitators. There is a process now at the UN on debt that came out of this negotiation. And a real question for everybody, for civil society, for member states, and for everyone to think through is if this is going to be there, let's not just waste it. I mean, how do you make this process a meaningful process that means something for all, for humanity, and for countries dealing with debt crisis. So it's really a call to all of you to think through, how can we take what comes out of this agreement and not let it be a useless process or something just on paper, but to turn it into something that can actually be meaningful. So with that, unless anyone wants to say the last word, If not, thank you all for coming and thank you for staying this late in a very hot room and see you all tomorrow. And thank you so much for my panelists. It was really wonderful to bring everyone together for this conversation. Thanks.