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Dhaka Tribune

Financing the next step

Update : 16 May 2015, 06:30 PM

When the international community embarked on the Millennium Development Goals nearly 15 years ago, the world was a very different place. Bangladesh is no exception to this scenario. Since the Millennium Summit in 2000, the country has slashed poverty rates, brought gender parity into primary and secondary education, and ensured that less children die before their fifth birthday, among other notable achievements.

Volatility, however, is nothing new in Bangladesh. The risks are well known -- whether relating to climate change, rapid urbanisation, or even the high-level of dependence on the export-oriented ready-made garment industry.

Protecting development gains from the last 15 years is an essential foundation for future growth, and will require a strong economy that is resilient to internal and external shocks.

The upcoming High-Level Meeting on South-South and Triangular Cooperation in the Post-2015 Development Agenda: Financing for Development in the South and Technology Transfer, being held on May 17-18 in Dhaka, represents a strong, international step towards engaging the key players at home and abroad on a common path towards sustainable development.

This meeting is part of a global process of consultations in the lead-up to the Third International Conference on Financing for Development to be held in Ethiopia in July; however it is no accident that Bangladesh is the host country for this important discussion.

Innovative development solutions have long been a hallmark of this country. From pioneering the use of ORS, to combating cholera and diarrhea, to inventing modern micro-finance, the world has learnt much from Bangladesh. We are now presented with a new and unique challenge of global cooperation: Ensuring sustainable and predictable financing for development.

The commitments made in Monterrey and re-affirmed in Doha represent a core global development promise which all countries must honor. In 2013, OECD-DAC countries allocated on average just 0.3% of GNI to Official Development Assistance (ODA); the upcoming Third International Conference on Financing for Development represents an opportunity to reaffirm the 0.7% commitment and pledge to allocate at least 0.15-0.2% to Least Developed Countries (LDCs).

While ODA remains an essential enabler of development progress, it is also increasingly clear that the range of challenges that the post-2015 development agenda aims to tackle requires us to go beyond development aid.

It’s time to move beyond providing more space for southern countries at the negotiating table in global financing for development discussions. With growing incomes, increased connectivity, and technological advancements, south-south trade flows now rival those from north to south; approximately 56% of exports from developing countries went to developing countries in 2011.

However, while trade can serve as a catalytic source of development finance for the south, addressing key infrastructural, market and communications bottlenecks must be a priority. The relationship between the ODA-based Aid for Trade and poverty reduction remains fickle at best; we must find better ways to upgrade value chains where the poorest market actors work, and unlock the untapped potential of small-sized and medium-sized enterprises in agriculture, manufacturing, services, and other sectors that have high potential for poverty reduction and economic growth.

Although our countries are arguably more interconnected than ever, prudent public finance at the national level remains an essential element of financing for development. Strong public finance at the domestic level facilitates an environment conducive to macroeconomic growth and stability, while also providing pubic goods and promoting equitable societies.

One of the 17 Sustainable Development Goals proposed by the intergovernmental Open Working Group centers on reducing inequality -- a result that stems from effective domestic policies, and gains momentum through the strengthening of social safety nets and promotion of financial inclusion.

Today, innovative solutions to global problems are occurring all across the south; using the approach of south-south cooperation to share these practices will allow the impact to go from local and incremental, to global and exponential.

Some of the biggest emerging challenges faced at this moment are indeed very complex to finance. Mitigating crises, and adapting to our changing climate, will require us to generate additional resources beyond ODA, as these challenges are supplemental to the existing ones such as poverty reduction, gender equality, good nutrition and child mortality.

Pledges made to the Green Climate Fund under the United Nations Framework Convention on Climate Change (UNFCCC) are very promising, and the goal of developed countries to jointly mobilise $100bn a year by 2020 to address the needs of developing countries is an important commitment. Private sector investment in green technology is another new frontier in economic growth and sustainable development. South-south cooperation has an important role to play in sharing knowledge, transferring technology and creating new business ventures in renewable and green industries.

In Bangladesh, there exists both great challenges and even greater potential for solutions. As the world visits Bangladesh next week, the government, with the support of the UN and other development partners, is in the position to turn discussion in action, at a time when both the seventh Five Year Plan and the post-2015 development agenda are right around the corner. I look forward to discussing these important issues with all of the delegates, and welcome this important initiative by the government of Bangladesh to improve south-south cooperation in all aspects of financing for development. 

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