As prepared for delivery.
I would like to appreciate a Government of Qatar for a invitation to this vicious discussion co-organized by a United Nations Department of Economic and Social Affairs. This discussion provides an glorious event to plead swell on financing for tolerable expansion and share nation experiences. UNDP is gratified to minister to a Financing for Development routine as one of a 5 vicious institutional stakeholders.
Getting financing right will be vicious to accommodate a SDGs by 2030. There is no necessity of collateral in a tellurian economy. The sum batch of tellurian financial resources has been estimated during tighten to $300 trillion. However, now a tellurian financial complement is not channeling those immeasurable sums effectively towards investments for tolerable expansion and achieving a SDGs.
For example, general institutional investors — such as emperor resources supports and extend funds— reason an estimated US$115 trillion in resources underneath management. This is a poignant intensity source of financial for tolerable development. Yet, when we demeanour during a portfolios, for example, of a largest extend funds, reduction than 3 percent is invested in infrastructure and even reduce shares in building countries. Reorienting even a fragment of these investments would accelerate tolerable development.
By some estimates, a executive zone and item managers now reason as many as $10 trillion in disastrous agreeable assets. Governments have a pivotal purpose to play to emanate incentives to align incomparable shares of private financial with tolerable expansion objectives by approach financial interventions such as subsidies or guarantees as good as strengthened policies and institutional, authorised and regulatory frameworks.
Many investors and private zone companies are heading a approach and investing in a SDGs underneath innovative categories like ‘sustainable finance’ or reliable investments. The sum impact investment portfolio is an estimated US$114 billion, with 26 percent expansion in commitments this year alone. Sixty percent of impact investors are aligning their portfolios to a SDGs. The private sector’s impasse has also been on a arise in corporate amicable shortcoming initiatives, munificent giving, and thorough business approaches. All these developments can assistance expostulate SDG swell and should be scaled-up.
To daub this potential, UNDP and a Islamic Development Bank launched a Global Islamic Finance and Impact Investing Platform final year, that promotes market-based solutions to tolerable expansion challenges. The distance of a blurb Islamic financial attention is approaching to strech US$3.5 trillion by 2021. Islamic amicable financial – including Zakat, endowments, and hospitality – represents an vicious event to precedence a resources indispensable to leave no one behind. The Islamic Development Bank estimates that Zakat contributions might surpass US$500 billion per year. Tapping into a fragment of this pool for a 2030 Agenda would have a really vast impact.
To assistance precedence this financing for a SDGs, we have scaled adult a rendezvous with Islamic financial in innovative ways. In Indonesia, for example, UNDP is partnering with BAZNAZ, a inhabitant Zakat collection physique to request Zakat towards internal SDG plans, commencement with renewable appetite projects in under-served communities. Islamic Finance projects are being explored locally by a teams around a universe from a Philippines to Palestine, from Turkey to Suriname.
Domestic open financial and general expansion team-work but sojourn executive for a feat of a SDGs. Domestic open finance, in particular, is a largest and many vicious source of financial for tolerable development. Enhancing a ability of taxation administrations, widening a taxation bottom and creation it some-more progressive, and some-more effective taxation of multinational enterprises are vicious for effective domestic apparatus mobilization. However, opening varies significantly opposite countries. Some are compelled due to slight taxation bases, coherence on a few line and vast spontaneous sectors. Many face a hurdles of taxation deterrence by multinational enterprises, as suggested recently by a Panama and Paradise Papers. These hurdles are generally strident where taxation administration capacities are weak.
One approach we are ancillary countries to tackle this plea is a corner UNDP-OECD beginning “Tax Inspectors Without Borders”. Through this programme, we have supposing 25 building countries with targeted taxation review assistance programmes to assistance build internal capacities to tackle formidable general taxation questions. These programmes have mobilized an additional US$328 million in taxation revenues so far.
To fight taxation semblance and avoidance, and unlawful financial flows that empty building countries from vicious resources, both domestic efforts and general team-work are necessary. In new years, efforts quite within a G20 have been entertainment movement to residence bottom erosion and distinction changeable (BEPS) as good as urge taxation clarity by a involuntary sell of taxation information. We should build on this momentum; strengthened general team-work in this area can make a genuine disproportion to a financing for a SDGs.
In serve to mobilizing new and additional resources for development, countries also need to use existent resources some-more efficiently. Phasing out emasculate and damaging subsidies, such as hoary fuel subsidies, can expostulate win-wins: (1) by pardon adult resources in budgets that can be used for tolerable development, and (2) by improved capturing disastrous externalities, such as environmental impacts. The IMF estimated that a dismissal of post-tax appetite subsidies in 2013 would have resulted in a tellurian gratification gain of US$1.4 trillion, homogeneous to 2 percent of a universe GDP. As these subsidies are being phased out, it will be vicious to safeguard a lowest segments of societies are protected.
In many building countries, even with extended efforts, domestic resources will sojourn insufficient. International open financial will continue to play a vicious role, generally in a lowest countries and those that have a slightest ability to lift domestic resources as good as those many exposed to shocks, conflicts and disasters. Small island building states are a box in indicate as demonstrated so tragically recently with a extinction wrecked by Hurricanes Maria and Irma. Concessional expansion assistance will sojourn vicious for these and other countries, for instance those that horde vast interloper populations, regardless of their grave income classification.
ODA can also have a catalytic impact in crowding in financial from a private sector. For example, final year by a clever partnership with environmental straight funds, UNDP helped countries entrance US$3.1 billion in 143 countries. These extend investments leveraged another US$14 billion in co-financing; thus, some-more than US$17 billion was invested in tolerable expansion priorities in these countries.
South-South team-work is vicious too, as we are already saying in initiatives such as a Belt and Road initiative. Countries of a Gulf also have a longstanding story of expansion cooperation. To serve support and foster South-South cooperation, UNDP has determined initiatives such as “SSMart” that is a tellurian marketplace that fosters real-time exchanges of solutions demanded and granted by building countries to residence hurdles in achieving a SDGs.
More broadly, UNDP is ancillary countries to interpretation inhabitant tolerable expansion financing strategies, with a concentration on identifying catalytic interventions, crowding-in financial from a private sector, building partnerships, scaling-up innovative financing mechanisms and improving a efficacy of financial resources. At UNDP, we trust that a efficacy of a work during a nation turn should outcome in obscure a process and institutional risk for prolonged tenure private investment to assistance secure SDG outcomes. Our Derisking Renewable Energy Investment (DREI) beginning is an instance of an innovative horizon to support policymakers in building countries to cost-effectively foster private zone investment in renewable energy.
Climate change is already impacting us all. The discussions in a COP23 in Bonn have shown that we need to muster some-more meridian financial and that financing needs to be risk-informed. For instance, instead of ad hoc and ex-post responses to debt trouble following vicious shocks and crises, there is a clever box for scaling adult innovative approaches, such as GDP-linked executive zone lending. These instruments that aim to ex-ante and automatically trigger downward adjustments in debt use during shocks and mercantile downturns have a intensity to assistance countries conduct risk and cope with shocks some-more effectively.
To conclude, in sequence to grasp a SDGs we need an general financial complement that works for all countries. This needs to be total with scaling adult innovations and new financing instruments and approaches. Many building countries need support to build capacities to maximize these opportunities. UNDP is resolutely committed to aiding Member States in achieving a 2030 Agenda and looks brazen to personification a pivotal purpose in relocating a financing for expansion bulletin forward.