International Financing: the Needed Cooperations to Keep the SDGs on Track

As the world edges closer to 2030, which is supposed to be the year that achieves all the promises of the Sustainable Development Goals (SDGs), matters still hang in the balance. Despite repeated commitments, global financing for development has failed to scale with rising needs. The Organisation for Economic Co-operation and Development (OECD) reports that while official development assistance has nominally increased, much of it has been redirected to in-donor refugee costs and responses to geopolitical shocks, such as the conflict in Ukraine, not to long-term development priorities. At the same time, research from Boston University shows a worrying trend: developing countries are now net payers to the global financial system, sending out more in debt service (repaying debts) than they receive in financing. How must the international community act amid this paradox of scarcity amid abundance?

FROM “BILLIONS TO TRILLIONS” TO BLENDED PROMISES UNFULFILLED

In 2015, nations met to affirm the Addis Ababa Action Agenda, which outlined a vision for leveraging small amounts of public finance to unlock trillions of dollars in private capital for development. Nearly a decade later, that vision has fallen short. According to Boston University, not only has blended finance declined in value since 2015, but tax-to-GDP ratios in low- and middle-income countries have also deteriorated, undermining the very premise of domestic resource mobilization. The cost of borrowing has surged in the Global South, with interest payments in many countries now exceeding those for education and health. It is evident that this confluence of weak domestic mobilization and constrained external finance has pushed more countries into debt distress, making inclusive, climate-resilient development increasingly out of reach.

A NEW MANDATE FOR MULTILATERALISM

In the absence of scalable market-based solutions, development finance institutions (DFIs) and multilateral development banks (MDBs) have become the last lines of defense. Still, their resources remain stretched. The World Bank and International Monetary Fund’s lending has doubled since 2015, yet demand continues to outpace capacity. The 2021 issuance of Special Drawing Rights (SDR) was a rare highlight, but it only temporarily alleviated liquidity pressures. The implication of this is that governments and international organizations must work together to address this systemic shortfall; humanity must move beyond a patchwork of voluntary commitments and adopt structural reforms. These include re-channeling unused SDRs, expanding DFI and MDB balance sheets, and establishing mechanisms for debt relief tied to climate and development outcomes.

The lesson of the last decade makes it clear that business-as-usual is no longer viable, for modest fine-tuning of outdated frameworks will not deliver the scale of finance required for today’s many crises. To tackle this issue means to rethink risk, reward public investment, and embed equity into global financial governance. If humanity truly believes development is a global public good, then financing it must be treated as a shared obligation that is anchored in solidarity, not charity.

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