Amid growing food and energy crises stoked by Russia’s full-scale invasion of Ukraine, an uncertain global economic outlook, and the escalating impacts of climate change, the 2023 Financing for Sustainable Development Report: Financing Sustainable Transformations, says that “urgent, massive investment” is needed to accelerate positive transformation of the electricity supply industry, farming, transportation and construction.
There are signs of sustainable growth that could benefit all countries, and create a realistic platform to reach the SDGs, the report suggests, such as the extraordinary expansion in internet use, with over 38,000 new users getting online each hour.
Falling further behind
“Without the means to invest in sustainable development and transform their energy and food systems, developing countries are falling even further behind,” UN Secretary-General António Guterres said in the foreword to the report.
“A two-track world of haves and have-nots holds clear and obvious dangers for every country. We urgently need to rebuild global cooperation and find the solutions to our current crises in multilateral action.”
Some of the necessary changes are already taking place, the report highlights. The energy crisis caused by the war in Ukraine has spurred investment in global energy transition, which skyrocketed in 2022 to a record $1.1 trillion.
Meanwhile, energy transition investments in 2022, were greater than those in the fossil fuel sector, for the first time ever, but these are almost all in China and developed countries, the report states.
No money left
Most developing countries do not have the resources for investment, unlike their developed counterparts, the report lays bare.
Climate change, the war in Ukraine, the COVID-19 pandemic, and debt payments up to two times higher than in 2019, have combined to put massive fiscal pressures on most developing countries, limiting the ability to fund transformation.
Using post-pandemic spending as a comparison, in developed countries the average was $12,200 per capita – 30 times higher than for developing countries (that’s $410), and 610 times higher than for least developed countries (just $20).
‘We know what to do’: Deputy UN chief
“Without delivering a reformed international financial system while scaling up investments in the SDGs, we will not deliver on our shared commitment to the 2030 Agenda for Sustainable Development,” said United Nations Deputy Secretary-General Amina Mohammed.
“The good news is that we know what to do and how to do it. From launching critical transformations in energy, food and education to ushering in a new green industrial and digital age—we all must quicken the pace and leave no one behind.”
Where industrialization has traditionally been the growth engine in economic development, the report calls for a “new generation of sustainable industrial policies”, underpinned by integrated national planning, to scale up investments and lay a foundation for the future.
38,000+ people an hour going online
There are many opportunities for inclusive growth in the agroindustry, green energy, and manufacturing sectors, the report suggests.
The recent rapid uptake in technology points to the possibilities for an equally rapid transition to sustainable industrialization and growth.
For example, between 2021 and 2022, 338 million more people used the Internet regularly, an increase of approximately 38,600 additional people every hour.
However, manufacturing capacity remains uneven, the data warns. In least developed countries in Africa, manufacturing value added – instead of doubling as the SDG timetable requires – fell from around 10 per cent of GDP (gross domestic product) in 2000 to 9 per cent in 2021.
It will take targeted policies from governments to build the domestic productive capabilities to achieve low-carbon transitions in order to slow climate change to the necessary pace, create decent jobs, and boost economic growth – all while ensuring gender equality – which is essential for productivity.
Women learn how to farm their land in Chipata, Zambia.
Prescription for sustainability
The 2023 Financing for Sustainable Development Report calls for a combination of strengthening tax systems, enabling more private investment, and scaling up of international public investment and development cooperation.
Changes to the international financial architecture are also essential to raise sufficient resources, and escape the shackles of unaffordable debt repayment.
As international institutions work to adapt to the rapidly evolving needs of countries, the report warns that if reforms are piecemeal, incomplete, or fail to take the SDGs into account, sustainable development will be unachievable.
‘We have the solutions’
“We have the solutions to avoid a lasting sustainable development divide, and prevent a lost decade for development,” said Li Junhua, head of the UN’s Department of Economic and Social Affairs (DESA), which led the production of the inter-agency report.
“We must find the political will to overcome the rising political tensions, splintering of inter-country alliances, and worrying trends towards nationalism and seize the moment now, to urgently invest in our common future.”