## FINANCING SUSTAINABLE DEVELOPMENT — SECTION 1 (April 2015) ## Source details **Canonical URL:** [FINANCING SUSTAINABLE DEVELOPMENT — SECTION 1 (April 2015)](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2015/_041515.pdf) ## Other formats - [Markdown version](/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2015/_041515.pdf.md) - [Structured JSON version](/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2015/_041515.pdf.json) --- ### 2015 — a pivotal year for global development - 2015 is described as a pivotal year when the international community will commit to a shared vision on goals for international development through 2030 and beyond. - Key 2015 milestones: - July: “Financing for Development” Conference in Addis. On mobilizing the resources needed to achieve the new sustainable development goals (SDGs). - September: UN Summit in New York. Formal adoption of the new SDGs for 2030 - December: COP21 Conference in Paris. Agree on a related compact on carbon emissions. - Performance relative to the MDGs: - Aggregate performance has been impressive, but uneven across regions and countries. - Outcomes weakest in fragile and conflict-affected states (FCS); performance lagging on education and health goals. - The SDGs are characterized as ambitious but achievable if strong national policies are supported by the international community. - International assistance priorities highlighted: boosting official development assistance (ODA), especially for the poorest countries, and financial assistance for climate change mitigation/adaptation. ### Global action and the IMF’s multilateral role - The global economic landscape has changed since the MDGs; increased integration of developing countries has delivered benefits and increased exposure to external shocks. - Global economic stability is framed as a collective priority: - Policymakers in the major economies should maintain an ongoing dialogue to ensure national policies take account of spillovers and that the collective policy mix is supportive of global economic stability. - Financial regulations in the major financial centers need to be well-designed, mutually consistent, and rigorously implemented. - The global financial safety net must provide countries, and investors, with confidence that liquidity needs can be met in the event of shocks. - What the IMF will do: - Promote international economic cooperation and provide a forum for policy dialogue. - Review features of the multi-layered global financial safety net, including the need for close cooperation with regional facilities and institutions. ### International cooperation priorities - Key global policy priorities to support sustainable development (summarized from Table 1): - International Trade Liberalization: support a rules-based, non-discriminatory multilateral trading system; protect and broaden export opportunities for smaller developing economies. - International Tax Cooperation: enhance cooperation to protect tax bases and contain damaging tax competition; bring developing countries into the G20-OECD ‘Base Erosion and Profit Shifting’ project; enhance cross-country exchange of taxpayer information and transparency in company reporting. - Official Development Assistance and Climate Finance: boost aid levels including for climate finance; tilt aid allocations more towards the poorest and FCS; increase role of aid as a tool for leveraging private finance in specific circumstances. - Sovereign Debt Resolution Process: strengthen a market-based contractual approach so new debt issuances include features that facilitate debt work-outs; early restructuring when debt is unsustainable. - Climate Change: reach agreement on national targets to reduce CO2 emissions at COP21; most lower-income developing countries have a small carbon footprint but will need financial assistance to adapt to climate change. - What the IMF will do: - Deepen work on international tax issues of relevance for developing countries and support an inclusive forum to discuss tax issues. - Continue work on increasing the efficiency of sovereign debt resolution processes anchored on a market-based contractual approach. ### National action — macroeconomic resilience and IMF support - Resilient macroeconomic performance is required for sustainable growth: moderate inflation, dampened boom-bust cycles, and medium-term debt sustainability. - Emphasis on building buffers—fiscal, financial, and reserve—to absorb shocks; access to IMF financial support as a safety buffer. - What the IMF will do: - Assess macroeconomic and financial conditions through Article IV consultations and provide concrete recommendations. - Explore scope for a sizeable increase in access of developing countries to Fund support while ensuring self-sustaining concessional lending capability. - Intensify policy work for frontier market economies transitioning from aid to private capital markets. - Work with small island developing countries on policies for sustained growth. - Improve dissemination/availability of national economic data through the launch of cloud-based Open Data Platforms. - Potential proposals under consideration (Table 2): 1. Boost access to concessional (PRGT) loans for the poorest and most vulnerable Fund members. 2. Boost access to non-concessional loans for better-off low-income countries that can borrow commercially. 3. Expand use of precautionary financial support for frontier markets integrating into world capital markets. 4. Boost access to fast-disbursing loans for countries hit by natural disasters or conflict situations. 5. Consider the extension of the current zero interest rate on all concessional lending. ### Revenue mobilization, public spending efficiency, and fiscal policy - Boosting development outlays requires increasing budgetary revenues and using resources more effectively. - Domestic revenue mobilization (DRM) is a key priority; well-designed transparent fiscal regimes for extractive industries are vital for resource-rich countries. - Opportunities to improve composition and effectiveness of public spending: reduce costly energy and other subsidies, implement public sector reforms, improve public financial management. - What the IMF will do: - Deliver assistance to enhance DRM, including designing effective tax regimes for extractive industries. - Provide technical assistance on improving quality, impact, and distributional effects of public spending. - Develop analytical tools to evaluate fiscal transparency and tax administration capacity. - Produce work on how best to scale back energy subsidies. ### Infrastructure, public investment capacity, and PPPs - Large infrastructure gaps in energy and transportation impede growth; decisions needed on project design and pace of scaling-up considering public management capacity and debt sustainability. - Priority on building capacity in project management, procurement, PPP frameworks, and strengthening debt management capacity — “investing in investing.” - What the IMF will do: - Analyze impact of boosting public investment using models for scenario analysis, debt sustainability frameworks, and a new PPP fiscal risk assessment tool. - Implement a new policy on borrowing limits to provide greater flexibility for countries boosting investment. - Deepen technical assessments of institutional capacity in public investment management, PPP frameworks, debt management capacity, and debt sustainability analysis. - Issue periodic assessments, with country consent, of public investment capacity to provide investors with better information. ### Financial sector development and stability - Financial deepening supports macroeconomic stability and private sector development, but must be balanced with financial sector stability to avoid severe impacts from crises. - What the IMF will do: - Conduct analytical and policy work on financial stability; provide policy advice, technical assistance, and national financial sector assessments (FSAPs). - Support capacity-building in financial sector regulatory oversight and targeted technical assistance for financial market development. - Operationalize analytical work on promoting financial market deepening. ### Inclusion, gender, and environmental policies - Sustainable growth requires policies to promote inclusion and contain environmental damage. - Key measures benefiting the less well-off include: - Improving delivery of public services (health, education, water/sanitation). - Promoting women’s economic participation, including through labor market reforms and removal of legal restrictions. - Boosting productivity in the rural economy. - Expanding access to financial services. - Implementing well-targeted social protection schemes. - Environmental protection should be calibrated to country circumstances and not viewed as a luxury. - What the IMF will do: - Expand analytical work on macro-relevant elements of inclusion: jobs and growth, inequality, access to finance, and economic impact of gender inequities. - Expand work on carbon pricing and environmental taxes; provide technical assistance to help developing countries design easy-to-administer carbon pricing schemes. - Draw lessons from ongoing pilot studies and other institutions to bring concrete policy messages to country work. ### Fragile and conflict-affected states (FCS) - FCS face complex, typically long-term development challenges requiring exceptional international support. - What the IMF will do: - Improve the effectiveness of engagement with FCS members, recognizing long-term processes and the need for close coordination with other development partners. - Increase resources allocated to work on FCS for country operations and capacity-building, with emphasis on building capacity in key state economic agencies. ### THE ROAD TO ADDIS: NEXT STEPS (Section 2) - The IMF is committed to supporting the post-2015 development agenda. - The third UN Financing for Development Conference in July aims to forge an international consensus on the actions needed to mobilize financing to support the attainment of the new Sustainable Development Goals. - The IMF is participating fully in the preparatory discussions; it will issue a new policy paper on “Updating the Monterrey Consensus” in June; and it intends to reach decisions on its own new “deliverables” before the world convenes in Addis. *Source: FINANCING SUSTAINABLE DEVELOPMENT — April 2015 (Section 1).* ### Section 1 ### FINANCING SUSTAINABLE DEVELOPMENT — SECTION 1 (April 2015) ### 2015 — a pivotal year for global development - 2015 is described as a pivotal year when the international community will commit to a shared vision on goals for international development through 2030 and beyond. - Key 2015 milestones: - July: “Financing for Development” Conference in Addis. On mobilizing the resources needed to achieve the new sustainable development goals (SDGs). - September: UN Summit in New York. Formal adoption of the new SDGs for 2030 - December: COP21 Conference in Paris. Agree on a related compact on carbon emissions. - Performance relative to the MDGs: - Aggregate performance has been impressive, but uneven across regions and countries. - Outcomes weakest in fragile and conflict-affected states (FCS); performance lagging on education and health goals. - The SDGs are characterized as ambitious but achievable if strong national policies are supported by the international community. - International assistance priorities highlighted: boosting official development assistance (ODA), especially for the poorest countries, and financial assistance for climate change mitigation/adaptation. ### Global action and the IMF’s multilateral role - The global economic landscape has changed since the MDGs; increased integration of developing countries has delivered benefits and increased exposure to external shocks. - Global economic stability is framed as a collective priority: - Policymakers in the major economies should maintain an ongoing dialogue to ensure national policies take account of spillovers and that the collective policy mix is supportive of global economic stability. - Financial regulations in the major financial centers need to be well-designed, mutually consistent, and rigorously implemented. - The global financial safety net must provide countries, and investors, with confidence that liquidity needs can be met in the event of shocks. - What the IMF will do: - Promote international economic cooperation and provide a forum for policy dialogue. - Review features of the multi-layered global financial safety net, including the need for close cooperation with regional facilities and institutions. ### International cooperation priorities - Key global policy priorities to support sustainable development (summarized from Table 1): - International Trade Liberalization: support a rules-based, non-discriminatory multilateral trading system; protect and broaden export opportunities for smaller developing economies. - International Tax Cooperation: enhance cooperation to protect tax bases and contain damaging tax competition; bring developing countries into the G20-OECD ‘Base Erosion and Profit Shifting’ project; enhance cross-country exchange of taxpayer information and transparency in company reporting. - Official Development Assistance and Climate Finance: boost aid levels including for climate finance; tilt aid allocations more towards the poorest and FCS; increase role of aid as a tool for leveraging private finance in specific circumstances. - Sovereign Debt Resolution Process: strengthen a market-based contractual approach so new debt issuances include features that facilitate debt work-outs; early restructuring when debt is unsustainable. - Climate Change: reach agreement on national targets to reduce CO2 emissions at COP21; most lower-income developing countries have a small carbon footprint but will need financial assistance to adapt to climate change. - What the IMF will do: - Deepen work on international tax issues of relevance for developing countries and support an inclusive forum to discuss tax issues. - Continue work on increasing the efficiency of sovereign debt resolution processes anchored on a market-based contractual approach. ### National action — macroeconomic resilience and IMF support - Resilient macroeconomic performance is required for sustainable growth: moderate inflation, dampened boom-bust cycles, and medium-term debt sustainability. - Emphasis on building buffers—fiscal, financial, and reserve—to absorb shocks; access to IMF financial support as a safety buffer. - What the IMF will do: - Assess macroeconomic and financial conditions through Article IV consultations and provide concrete recommendations. - Explore scope for a sizeable increase in access of developing countries to Fund support while ensuring self-sustaining concessional lending capability. - Intensify policy work for frontier market economies transitioning from aid to private capital markets. - Work with small island developing countries on policies for sustained growth. - Improve dissemination/availability of national economic data through the launch of cloud-based Open Data Platforms. - Potential proposals under consideration (Table 2): 1. Boost access to concessional (PRGT) loans for the poorest and most vulnerable Fund members. 2. Boost access to non-concessional loans for better-off low-income countries that can borrow commercially. 3. Expand use of precautionary financial support for frontier markets integrating into world capital markets. 4. Boost access to fast-disbursing loans for countries hit by natural disasters or conflict situations. 5. Consider the extension of the current zero interest rate on all concessional lending. ### Revenue mobilization, public spending efficiency, and fiscal policy - Boosting development outlays requires increasing budgetary revenues and using resources more effectively. - Domestic revenue mobilization (DRM) is a key priority; well-designed transparent fiscal regimes for extractive industries are vital for resource-rich countries. - Opportunities to improve composition and effectiveness of public spending: reduce costly energy and other subsidies, implement public sector reforms, improve public financial management. - What the IMF will do: - Deliver assistance to enhance DRM, including designing effective tax regimes for extractive industries. - Provide technical assistance on improving quality, impact, and distributional effects of public spending. - Develop analytical tools to evaluate fiscal transparency and tax administration capacity. - Produce work on how best to scale back energy subsidies. ### Infrastructure, public investment capacity, and PPPs - Large infrastructure gaps in energy and transportation impede growth; decisions needed on project design and pace of scaling-up considering public management capacity and debt sustainability. - Priority on building capacity in project management, procurement, PPP frameworks, and strengthening debt management capacity — “investing in investing.” - What the IMF will do: - Analyze impact of boosting public investment using models for scenario analysis, debt sustainability frameworks, and a new PPP fiscal risk assessment tool. - Implement a new policy on borrowing limits to provide greater flexibility for countries boosting investment. - Deepen technical assessments of institutional capacity in public investment management, PPP frameworks, debt management capacity, and debt sustainability analysis. - Issue periodic assessments, with country consent, of public investment capacity to provide investors with better information. ### Financial sector development and stability - Financial deepening supports macroeconomic stability and private sector development, but must be balanced with financial sector stability to avoid severe impacts from crises. - What the IMF will do: - Conduct analytical and policy work on financial stability; provide policy advice, technical assistance, and national financial sector assessments (FSAPs). - Support capacity-building in financial sector regulatory oversight and targeted technical assistance for financial market development. - Operationalize analytical work on promoting financial market deepening. ### Inclusion, gender, and environmental policies - Sustainable growth requires policies to promote inclusion and contain environmental damage. - Key measures benefiting the less well-off include: - Improving delivery of public services (health, education, water/sanitation). - Promoting women’s economic participation, including through labor market reforms and removal of legal restrictions. - Boosting productivity in the rural economy. - Expanding access to financial services. - Implementing well-targeted social protection schemes. - Environmental protection should be calibrated to country circumstances and not viewed as a luxury. - What the IMF will do: - Expand analytical work on macro-relevant elements of inclusion: jobs and growth, inequality, access to finance, and economic impact of gender inequities. - Expand work on carbon pricing and environmental taxes; provide technical assistance to help developing countries design easy-to-administer carbon pricing schemes. - Draw lessons from ongoing pilot studies and other institutions to bring concrete policy messages to country work. ### Fragile and conflict-affected states (FCS) - FCS face complex, typically long-term development challenges requiring exceptional international support. - What the IMF will do: - Improve the effectiveness of engagement with FCS members, recognizing long-term processes and the need for close coordination with other development partners. - Increase resources allocated to work on FCS for country operations and capacity-building, with emphasis on building capacity in key state economic agencies. *Source: FINANCING SUSTAINABLE DEVELOPMENT — April 2015 (Section 1).* ### Section 2 ### THE ROAD TO ADDIS: NEXT STEPS ### The IMF is committed to supporting the post-2015 development agenda - The IMF is committed to supporting the post-2015 development agenda ### What the IMF will do - The third UN Financing for Development Conference in July aims to forge an international consensus on the actions needed to mobilize financing to support the attainment of the new Sustainable Development Goals. - The IMF is participating fully in the preparatory discussions; it will issue a new policy paper on “Updating the Monterrey Consensus” in June; and it intends to reach decisions on its own new “deliverables” before the world convenes in Addis. *_041515 - Section 2_* --- _Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2015/_041515.pdf_