Low-Income Economies Lost More to Illicit Financial Flows than They Receive in Aid, Deputy Secretary-General Tells Dialogue on Development Financing
Following are UN Deputy Secretary-General Amina Mohammed’s closing remarks, as prepared for delivery, at the High-level Dialogue on Financing for Development, in New York today:
I am inspired by the determination to act and the spirit of collaboration that has been displayed in this room today. We have heard Governments, the private sector and civil society commit to act without delay on mobilizing financing to achieve the Sustainable Development Goals (SDGs). All are united by the common objective to realize the future we want.
We must do this with a strong sense of urgency. Global growth remains subdued amid unresolved trade tensions, high international policy risks and softening business confidence. Prolonged uncertainties and the accelerating effects of climate change could inflict significant damage on development progress. Multilateral cooperation is the only solution to the many challenges of our time. But we must work harder to ensure the multilateral system delivers inclusive and sustainable growth for all.
The series of high-level meetings convened at the United Nations this week has once again signalled the centrality of multilateralism in fighting climate change, building a healthier world, and above all, delivering the SDGs. Yet, we will need significant public and private investment to bring this vision to life for all people, everywhere. The most vulnerable countries, such as small island developing States, must be at the centre of our efforts.
Governments cannot achieve the SDGs alone. Private investors have a key role to play in closing the financing gap. The business case for investing in the SDGs is clear. Governments can and must use public policy to incentivize greater and more rapid alignment of private investment with sustainability, and to create an enabling environment for the longer-term investment flows that are needed.
Private sector actors, for their part, also need to increase the positive impact of their activities on sustainable development, and to act on the incentives that promote a long-term orientation and value‑creation. Catalysing positive change in the private sector and financial systems is a hallmark of the Secretary-General’s Strategy for Financing the 2030 Agenda.
Today’s interactive dialogues have highlighted the importance of mobilizing and effectively using domestic resources for financing sustainable investments, including for human capital and infrastructure. At present, however, many countries are struggling to collect enough revenues to finance their own development. Enhanced efforts to increase Government revenues must go hand in hand with a stepped-up global effort to fight illicit financial flows. Tax havens cost Governments between $500 billion and $600 billion a year in lost corporate tax revenue alone.
Of that lost revenue, low-income economies account for some $200 billion — a larger hit as a percentage of gross domestic product (GDP) than advanced economies, and more than the $150 billion they receive each year in foreign development assistance. Governments must do more to prevent illicit flows, assist in repatriating such funds and prosecute perpetrators. Official development assistance (ODA) is critical in complementing these efforts, especially in the least developed countries and other vulnerable countries.
Today’s dialogue has also highlighted the importance of systematically addressing the SDG investment gap. We must understand what is needed to finance the SDGs in each country, identify what resources are available and where there is a gap, and devise consistent and coherent policies to mobilize additional resources — public and private — at the scale needed.
The United Nations is stepping up its work to help countries close this gap. As chair of the United Nations Sustainable Development Group, I have made this a priority. Through enhanced coordination and integrated programming, the reformed United Nations development system is better equipped and ready to respond your requests for assistance in this regard.
Today’s Dialogue highlighted the need for accelerated action. The concrete commitments we have heard today will be vital in taking our efforts to scale. Moreover, this Dialogue must not be seen as a one-off event. The drive and commitments demonstrated today must be built on and go further. The next Economic and Social Council Financing for Development Forum will aim to rally policymakers to tackle the systemic challenges in all action areas of the Addis Ababa Action Agenda.
I look forward to working with all of you to translate our joint commitment into action in the year ahead and beyond. Thank you.