'Financing Gap Of $4 Trillion Must Be Addressed Urgently', Says Sitharaman

(MENAFN- Live Mint) Union Finance Minister Nirmala Sitharaman on Saturday said that almost $4 trillion is urgently needed to accelerate progress on the Sustainable Development Goals (SDGs).

The finance minister while addressing the 3rd Voice of Global South Summit , said,“To accelerate progress on SDGs, there is an urgent need to address the $4 trillion financing gap.”

Sitharaman referred to the new UNCTA report, which mentions that developing countries have a financing gap of $4 trillion in sustainable development investments.

According to UNCTAD, the foreign direct investment in clean energy received by developing countries was $544 billion in 2022, which is much less than what is required.

Moreover, the Finance Ministe stressed that the high debt levels of the developing economies, particularly low-income economies, have limited investment in developmental needs.

She said that the implementation of many SDGs in developing economies is“stagnating” and“even regressing” as the global uncertainty has“affected the Global South disproportionately”.

UNCTAD emphasised on the importance of providing debt relief for developing countries which enables in giving fiscal space to the economies. This fiscal space will be utilised for spending on clean energy and will eventually help in lowering country risk ratings, which is required for attracting private investment.

The finance minister said it is important to meet financing requests made to Multilateral Development Banks (MDBs) with agility and speed.“To achieve this goal, reforms will be necessary at both operational levels as well as to identify new additional sources of income,” said FM Sitharaman .

“MDBs should engage with credit rating agencies to better flow private capital,” FM said.

Sitharaman also emphasised the need to revamp MDBs, as proposed at the G20 Summit 2023, which India presided over.

Sitharaman brought attention to the issue of sustainable financing when there is pressure on MDBs such as theWorld Bank and IMF to enable debt and sustainable financing for developing economies.

In a UN press release on June 4, UN Secretary-General António Guterres highlighted the need to bring the focus on SDGs and how developing economies are facing a crisis.“We need a surge in action now for the SDGs. Developing countries - and billions of people - are facing the worst economic outlook in more than a generation,” he said.

In order to address global challenges such as poverty, hunger among others, 17 Sustainable Development Goals were adopted in 2015 by UN member countries. These SDGs are expected to be met by 2030.

In order to bring the focus on SDGs economies should also emphasise on growth according to FM.“Growth remains the best antidote to many economic and social challenges. Growth creates a positive feedback... where improved economic performance leads to greater financial opportunities and vice versa,” Sitharaman noted.

“Our priority should be a people-centric growth path that empowers the most vulnerable and marginalised to participate in the development journey,” she added.

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