The global community is now preparing for the Fourth International Conference on Financing for Development commonly known as (FfD4), while it is coming nearer and nearer, the need for transformative financial action has never been urgent like before. As we are facing the severe impact of the climate change, and the changing landscape of the geopolitical tensions have impacted on widening the inequality to the global south with unfair and unjust debt crisis; FfD4 remains a pivotal platform for all the UN member states and financial entities to come together and realign international financial systems with the sustainable development goals.
The vulnerable nations are under the scrutiny of cutting down its development budget and budget for public services like education, health etc. from its revenue as it must fulfill its commitment through debt servicing. The financial gap to achieve the SDGs have widened since the pandemic as UN estimates that gap exceeded around $4.2 trillion annually for the developing countries.
What should be the demands?
For all these issues, FfD4 remains pivotal for the global south to voice their agenda through the agenda of debt cancellation and for the UN lead reestablishment of international financial structures. Thus, FfD4 should focus on restructuring of the international financial structure that could address immediate fiscal constraints along with long-term structural embedded inequalities while bridging the gap. As tax reform lies at the core of any sustainable finance, it should call for broadening the tax bases and enhancing the tax system. The UN-led global tax body should lead the enforcement of global cooperation on tax. Equally, introduction of a new global tax law should be enforced to control illicit financial flows.
The developed countries are yet to fulfill their commitment of 0.7% gross national income to official development assistance targets which are then disseminated to the developing countries. These commitments make a stark difference in achieving the outcome for the least developing countries like Nepal in the vital sector of health, education, and other climate actions. FfD4 should reaffirm this commitment of the ODA ensuring that aid is predictable, transparent, and aligned nationally. It should promote the investment de-risking strategies for developing economies adhering to strong environmental, social and governance (ESG) principles and harnessing the private sector with transparency on development outcomes from blended finance.
On behalf of the developing countries, it should demand for a fair and timely global sovereign debt workout mechanism. It should voice for scaled use of debt swaps for development and climate objectives. While there are pledges from developed countries for a $100 billion climate fund, it is yet to fulfill. Thus, FfD4 should demand for its fulfillment. In addition, it should seek to operationalize the loss and damage fund to the frontline countries, allocating at least 50% to climate adaptation.
Opportunity to voice out the regional priorities
The financing for development seeks to address the reform on the global financial architecture under the UN stewardship. The new global financing pact should be allocated and rechanneling of Special Drawing Rights (SDR) should be done. While addressing the debt crisis, the expansion of Special Drawing Rights (SDR) quota and restructuring of allocation criteria in favor of low-income countries. The representation in IMF and World Bank Governance should be viable for the developing countries.
These international meets are crucial in pivoting the narratives of new global financial order and inclusive principles. Thus, FfD4 now remains pivotal to design and adapt various cross-cutting issues while developing the global financial architecture.
FfD4 should emphasize on developing gender responsive financing ensuring gender equality and inclusion in budgeting, tax systems, access to public service and capital. The digitalization and technological advancement and investment should be more equitable, inclusive that could close the digital divide throughout the world.
Through a robust humanitarian, developmental and peacebuilding approach FfD4 has a chance to restore peace and conclude the regional and global conflict among its state members. The UN should continue to anchor the entire FfD4 processes. While the UN should coordinate the process, multilateral development banks (MDBs) on the other hand should step up in providing concessional finance, streamline safeguarding and support climate resilience approaches. The process should be inclusive, putting the civil society and youth voices at central ensuring inclusiveness, accountability, and long-term sustainability.
This platform is also an opportunity to voice out the regional priorities and perspectives, Asia-Pacific, including Nepal prioritizes infrastructure investment, digitalization, and social protection, while African priorities lie in new compact addressing climate justice, debt relief and expanded SDR access. Latin American priorities seek tax justice, valuation of natural assets, and debt sustainability.
Nepal’s key priorities at FfD4
Nepal being the least developed and climate-vulnerable country is under unjust debt stress. Thus, FfD4 forum is an opportunity for Nepal to advocate for the cancellation of debt; debt for climate or debt-for-education swaps while supporting the UN-led debt restructuring mechanism.
Nepal should advocate to re-channel the unused SDRs from developed nations for Nepal’s development. It should seek MDBs reform with the simplified access to concessional finance, and climate-focused lending criteria.
As LDCs member, Nepal should demand the renewed donor commitment and align those support with Nepal’s national plans. Being climate vulnerable country, Nepal should demand equitable access to the loss and damage fund with the delivery of climate finance as grant not as loan. In the meantime, Nepal should support a UN tax convention ensuring the global tax standards, and crack down on IFFs ensuring tax justice.
This platform also provides Nepal to seek the domestic resource mobilization through the technical and financial support to improve tax compliance and public finance management. Nepal should focus on tailoring financial mechanisms suitable to its geographical vulnerabilities emphasizing on gender responsive budgeting and peacebuilding. And finally advocate for the investment for just transition financing through renewable energy, climate-resilient infrastructure and green jobs for youths.
FfD4 is more than a technical negotiation-it is a political moment with transformative potential. It must address not only financial shortfalls but also structural injustices that prevent inclusive and more equitable global development. As the world approaches 2030, the urgency to realign global finance with sustainability, equity, and justice has never been so paramount.
If backed by political will and collective leadership, FfD4 can mark a turning point, reshaping the world investment that exclusively focuses on people, planet, and prosperity.
