Global Citizen is a community of people like you

People who want to learn about and take action on the world’s biggest challenges. Extreme poverty ends with you.

A woman gets her temperature checked before entering Mpilo Hospital in Bulawayo, Zimbabwe, April 25, 2020.
KB Mpofu/ILO/Flickr
NewsDefeat Poverty

Financing for Global Goals Under Threat When Most Needed: OECD Head

By Megan Rowling

BARCELONA, Nov 12 (Thomson Reuters Foundation) - The COVID-19 crisis has pushed to $4 trillion this year's shortfall in funding needed for developing nations to meet global goals to end poverty and hunger by 2030, throwing them further off track, a summit of public banks heard on Thursday.

Angel Gurría, secretary-general of the Organisation for Economic Co-operation and Development (OECD), noted that 90 out of 122 developing countries had entered recession as shutdowns to curb coronavirus hit sectors like tourism and manufacturing.

Developing nations have seen a $700-billion drop in external private finance this year due to a decline in foreign investment and remittances, he added.

Meanwhile, the pandemic has boosted by about $1 trillion their need for funding for health, social, and economic recovery measures, with many governments unable to borrow enough to cover those due to high indebtedness and poor credit ratings.

The challenges come on top of a preexisting annual funding gap of $2.5 trillion to meet the 17 Sustainable Development Goals (SDGs), which also include tackling climate change and gender inequality, and providing clean water and energy to all.

Related Stories Oct. 5, 2020 The UN’s Amina Mohammed Believes Women and Youth Are Key to Ending Poverty & COVID-19

"When we need it most, the global development finance system is at risk of collapse," with all types of resources under stress due to the COVID-19 crisis, Gurría said during an event at the Finance in Common summit, organised by the French government.

The mostly online gathering issued a joint declaration, backed by nearly all the world's 450 development banks, committing them to steer the global economy and societies onto a greener, more resilient path.

The public banks said they aimed to collectively shift their strategies, investment patterns, and activities to contribute to achieving the SDGs and the objectives of the Paris Agreement on climate change, while responding to the COVID-19 crisis.

Related Stories Sept. 25, 2020 10 Facts You Should Know About Poverty

"Because there is already a strong consensus on what needs to be done on climate issues and on the fight against social inequalities, because we are all seeking solutions to make our investments more sustainable, it only seemed natural to form this global coalition of public development banks," said Audrey Rojkoff, the summit's secretary-general.

Fossil Fuel Fail

But climate campaign groups expressed disappointment that the banks — which represent about 10% of global financial flows — did not agree on a clear commitment or deadline for phasing out funding for fossil fuel projects.

The declaration said the banks would promote sustainable alternatives to fossil fuel investments and consider ways to reduce those problem investments, while working on explicit policies to stop financing coal by the UN climate summit in a year's time.

Related Stories Sept. 15, 2020 Thomson Reuters Foundation Bill Gates: COVID-19 Has Worsened Inequity in Nearly Every Way

Laurie van der Burg, senior campaigner at Oil Change International, said the summit could not be considered a success for climate action because it did not make a concrete commitment to end public finance for fossil fuels.

But she noted bright spots, including some banks such as the European Investment Bank and Swedfund already banning oil and gas financing, while US President-elect Joe Biden has pledged stop financing dirty energy at home and abroad.

"Between now and the UN climate negotiations — COP26 in Glasgow next year — public finance institutions must... work together to stop funding fossils," she added in a statement.

Related Stories Jan. 20, 2021 Joe Biden Is Now President. It's Time to Get Back on Track to End Poverty.

UN Chief Antonio Guterres echoed that call, urging the development banks to come to COP26 with concrete plans to align their lending with the SDGs and a 1.5 degree Celsius global warming limit.

OECD head Gurría also pointed to a heightened risk of what he called "SDG-washing" — where companies and investors claim their business are aligned with the global development goals, but without showing how they are making a meaningful contribution.

"Corporations are often free to disclose on their positive actions but they omit the negative impacts," he said.

Related Stories Nov. 6, 2020 6 Ways the UN Is Helping Refugees Cope With the COVID-19 Pandemic

That problem exposes the need for both the public and private sectors to agree on common standards to define and measure sustainable business behaviour and investment, he added.

On Thursday, the OECD and UN Development Programme presented a framework to shift trillions of dollars in investments to become more sustainable and resilient, and to mobilise more money for poorer countries.

Of the $379 trillion in global financial assets, 80% are held in advanced economies, the OECD said in a report this week.

Related Stories Nov. 6, 2020 Discarded COVID-19 Masks and Gloves Found on Nearly a Third of UK Beaches

Reallocating just 1.1% of total assets held by banks, institutional investors and asset managers — $4.2 trillion — would be sufficient to fill the gap in SDG financing, it added.

Akinwumi Adesina, president of the African Development Bank, told journalists his continent needed far more investment in infrastructure, such as clean electric power, as well as in job creation for young people, and support for small businesses struggling during the pandemic, many of them women-led.

"Let's be bold, let's be creative, let's build this new ecosystem for transformative change," he told the summit.

(Reporting by Megan Rowling @meganrowling; editing by Laurie Goering. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit