“Sustainable Development is not Free”

Event on Development Financing Post-2015

Expert Forum | 25/26 March 2014 | Marie-Schlei-Saal at the BMZ, Berlin, Germany

Development financing was one of the central topics covered during the negotiations at the United Nations (UN) General Assembly on the Post-2015 Agenda that began in September 2013.

On the first day of the two-day Federal Ministry for Economic Cooperation and Development (BMZ) event, Kreditanstalt für Wiederaufbau (KfW) board member Norbert Kloppenburg delivered his report on the work of the UN Intergovernmental Committee of Experts on Sustainable Development Financing, kicking off a discussion of development financing among the representatives from civil society, the private sector, the scientific community and politics. On the second day, official development assistance (ODA) reporting system reform was on the agenda.

In his introduction, BMZ State Secretary Dr Friedrich Kitschelt clearly stated that the German government was committed to its goal of investing 0.7 percent of the gross national product (GDP) in ODA – as set out in the coalition agreement. “But even when the 0.7 percent mark has been achieved, we will still be unable to solve global development problems,” Kitschelt predicted. As the priority issues for German development cooperation, he listed eradicating poverty and hunger, conserving nature, ecologically compatible growth, creating income opportunities, good governance and protecting human rights.

Dr Kitschelt went on to point out that new financing methods needed to be developed to make these goals achievable. These included holding developing countries more strongly accountable. The average tax quota, for example, was just 13 percent in many of these countries in contrast to 35 percent in industrialised countries – “that is not a good argument for increasing the influx of ODA,” according to Kitschelt. Otherwise there is the danger of “financing a bottomless pit”. He added that with the application of financing instruments that serve to leverage aid, a new indicator had been introduced into the financing debate.

Norbert Kloppenburg reported on the work of the 30-person international UN Committee of Experts that will present its final report with recommendations to the UN General Secretary by August. Committee members had already reached agreement on a number of recommendations, according to Kloppenburg. These included promoting the more efficient use of national funds in the developing countries, possibly increasing tax revenue, and cutting off illegal cash flows more effectively. With respect to ODA funds, he added that changes in distribution needed to be discussed. The fact that a country like Burkina Faso received ODA under the same conditions as Brazil or Indonesia, for example, was patently unjust. Kloppenburg: “ODA is important for the poorest countries, but not for all countries equally.” Annually around 130 billion dollars in ODA was available, and these funds were insufficient to meet total demand, he added.

As such, least developed countries (LDCs) should continue to receive subsidies preferentially. For emerging nations, less ODA was required and served more to mobilize additional funds. For the “traditional developing countries”, financing should serve to preserve global public goods, according to Kloppenburg. Additional private capital in particular needed to be mobilised to drive development.

The event was the second in a series and organised by the Development Policy Forum on behalf of the BMZ.

Digital Development Debates – Archiv

Peru: The Power of Citizens

Engaged and mobilised citizens can change the world we live in: four examples from Peru.

» more

“Environmental Activists Take Back the Power”

Governments are no longer the ones who rule the world, the power shifted to global megacorporations.

» more

The Loneliness of Power

The life of the politically powerful tends often to isolation and loneliness. But nevertheless, many politicians still aspire to this life.

» more

A Women’s World: Virtual Offices and Gender Gyms

How social innovation is pioneering a new reality for women across the Middle East and North Africa.

» more