Title: Radical Action Needed to Reform International Financial System for Developing Countries
Dozens of finance and foreign ministers have gathered in Addis Ababa this week to call for radical action to reform the international financial architecture in the interest of developing countries. The first Preparatory Committee meeting of the Fourth International Conference on Financing for Development concluded with a renewed focus on bridging gaps in Sustainable Development Goals (SDG) financing and delivering international financial architecture reform.
Nine years after the historic agreement on financing for development, the Addis Ababa Action Agenda, United Nations Member States are once again convening to push for sustainable development financing and the SDGs. The challenges facing developing countries in financing the SDGs have worsened due to various global shocks, including the COVID-19 pandemic, geopolitical conflicts, and economic instability.
The Secretary-General of the United Nations, António Guterres, highlighted the urgent need for reform, stating that developing countries have limited prospects of financing the SDGs due to high debt burdens and capital costs. The international financial system, according to Guterres, is outdated, dysfunctional, and unfair, calling for ambitious reforms to ensure affordable long-term financing at scale.
The meeting in Addis Ababa brought together representatives from over 100 countries, multilateral development banks, the private sector, non-governmental organizations, and other stakeholders to discuss key financing issues such as debt, taxation, trade, private finance, development cooperation, technology, and data.
Proposals for reforming the rules and governance of international taxation, as well as addressing countries facing debt crises, were unveiled by ministers and global experts. The focus is on reshaping the international financial system to ensure investment where it is most needed and to support the sustainable development aspirations of developing countries.
The Preparatory Committee meeting is just the beginning of a series of preparatory meetings leading up to the Fourth International Conference on Financing for Development in Sevilla, Spain, in 2025. Subsequent sessions will be held in New York and intersessional multi-stakeholder hearings will also take place to further support the reform of the international financial architecture.
The call for radical action to reform the international financial system for the benefit of developing countries is crucial in addressing the growing challenges in financing sustainable development and achieving the SDGs. It is evident that business as usual is no longer an option, and major changes are needed to ensure a more inclusive and effective global financial system.