In a UN assembly, Pakistan advocates for global financial overhaul and debt forgiveness to fill funding voids in achieving Sustainable Development Goals (SDGs)

In a UN assembly, Pakistan advocates for global financial overhaul and debt forgiveness to fill funding voids in achieving Sustainable Development Goals (SDGs)

In a recent address at the High-Level Political Forum on Sustainable Development in New York, Pakistan's Deputy Prime Minister, Ishaq Dar, highlighted the crucial yet insufficient role of concessional financing in closing the vast funding gap for achieving the Sustainable Development Goals (SDGs) in developing countries.

Dar's speech followed the debate for the follow-up and review of the 2030 Agenda for Sustainable Development and its 17 SDGs. He emphasised the need for developing countries to have scaled-up access to concessional and grant-based resources, meaningful debt relief, and scaled-up climate finance.

Concessional financing, which includes grants and low-interest loans, plays a vital role in lowering investment risks and costs for developing countries, particularly low- and lower-middle-income countries (L-LMICs). This financing serves as a catalyst to attract private sector capital for sustainable projects that otherwise may be financially unviable. However, mobilising sufficient concessional finance remains challenging.

The annual financing gap to achieve the SDGs in developing countries is estimated at around $3.9 to $4 trillion. Instruments like SDG-aligned debt (e.g., sustainability-linked bonds) and blended finance models, which combine concessional funds with private investment, are emerging as important tools to bridge this gap.

However, despite these efforts, current concessional finance models and blended finance approaches fall short of the massive scale and speed needed to close the SDG financing gap. This is due to limited available concessional resources and inefficient targeting.

Dar called for a "deep reform" of the international financial architecture to implement the SDGs more effectively. He stated that the implementation of the Compromiso de Seville, a new global framework, offers a clear roadmap to tackle the challenges of financing sustainable development. The Compromiso de Seville focuses on closing the $4 trillion annual financing gap for the SDGs, addressing debt crises, and reforming the international financial system.

Pakistan, currently treading a long path to economic recovery while facing adverse climate changes, is one of the countries that could greatly benefit from increased concessional financing. In his address, Dar announced that Pakistan is scaling up climate action, targeting 60 percent renewable energy by 2030.

Dar's statement comes as Pakistan faces adverse impacts of climate change, with more than 200 people losing their lives in the country during this monsoon due to heavy rains. Ishaq Dar mentioned that his country has undertaken key macroeconomic reforms to stabilise the fiscal outlook and improve the investment climate.

Dar is scheduled to hold a meeting with the UN Secretary-General as well as the President of the UN General Assembly in New York. This visit marks a week-long visit to the United States during which Dar will preside over key events in the UN Security Council during Pakistan's presidency for the month of July.

1. The Deputy Prime Minister of Pakistan, Ishaq Dar, highlighted the insufficient role of concessional financing in closing the funding gap for achieving the Sustainable Development Goals (SDGs) in developing countries.
2. In his address, Dar emphasised the need for developing countries to have scaled-up access to concessional and grant-based resources, meaningful debt relief, and scaled-up climate finance.
3. Concessional financing, which includes grants and low-interest loans, plays a vital role in lowering investment risks and costs for developing countries, particularly in the context of climate change.
4. Despite efforts to bridge the SDG financing gap using SDG-aligned debt and blended finance models, Dar stated that current concessional finance models fall short of the massive scale and speed required.
5. Dar called for a "deep reform" of the international financial architecture to implement the SDGs more effectively, focusing on closing the $4 trillion annual financing gap for the SDGs, addressing debt crises, and reforming the international financial system.
6. Amidst adverse climate changes, Pakistan could greatly benefit from increased concessional financing as it scales up its climate action, targeting 60 percent renewable energy by 2030.

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