As the global financial system undergoes reforms, experts are highlighting the importance of multilateral support to drive development.
However, they point out several challenges. The system is expanding and becoming fragmented, there's concern about the quality of funding, and financialization poses certain risks.
To address these issues, experts suggest focusing on funding mechanisms that make the most impact, ensuring the system continues to support the world’s poorest populations, and securing sufficient resources for essential strategic functions.
They also stress the need for better coordination to be more effective on a larger scale. Encouraging collaboration with emerging donors is another key recommendation to strengthen multilateral development finance.
These points were discussed during a webinar co-hosted by the Centre for Policy Dialogue (CPD) and the Organisation for Economic Co-operation and Development (OECD) on Sunday.
Fahmida Khatun, executive director of CPD, chaired the session and gave the opening remarks. Abdoulaye Fabregas, an economist from the OECD’s Development Cooperation Directorate, presented the keynote address.
Fahmida Khatun noted that in 2015, global leaders committed to fighting poverty, hunger, and deprivation while also aiming to protect the planet. They promised to leave no one behind.
"While there has been some progress on the Sustainable Development Goals (SDGs), overall, it has been disappointing," she said.
The report mentioned that progress on many SDGs has slowed significantly, and in some cases, it's even worse than it was in 2015. Years of progress in sustainable development are being undone.
"Poverty, hunger, and inequality are worsening, and human rights are under greater threat, putting millions at risk of marginalization. Meanwhile, the challenges posed by climate change, biodiversity loss, desertification, pollution, and other environmental crises are damaging both our natural world and our future development potential."
She emphasized that closing the SDG funding gap in developing countries is crucial to avoid a permanent divide in sustainable development and increasing inequality both within and between nations.
Global leaders also recognize that addressing this financial gap is essential to restore trust in international relations, she added.
Sabyasachi Saha, associate professor, Research and Information System for Developing Countries (RIS), India emphasized on domestic resource mobilization. He said: “The developing countries are losing more resources than they receive. Inequality is going to rise so development finance is important.”
“Private capital is not flowing; it will be challenging. We have to think about how to improve our credit rating. There are structural issues which should be addressed,” he added.
Rishikesh Ram Bhandary, assistant director of the Global Economic Governance Initiative, Boston University Global Development Policy Center said: “Revisiting development finance as climate change becomes a reality. Concessional finance for developing countries is crucial.”
Muhammad Asif Iqbal, managing director of Social Policy and Development Centre (SPDC), Pakistan emphasized regional collaboration saying: “South Asian nations should maintain partnership approach for the effective financial system as a whole.”
Research, Institute of Policy Studies of Sri Lanka (IPS) Director Nisha Arunatilake, South Asia Watch on Trade, Economics and Environment (SAWTEE) Programme Coordinator Dikshya Singh, Centre for Policy Dialogue (CPD) Research Fellow Syed Yusuf Saadat were also present among others.