Development finance

The persisting lack of financing for sustainable development is worsening in 2025. With ODA falling for the first time in five years (down 7.1% in 2024), and a stagnant overall FDI to developing economies, with declines in 2024 observed in Latin America and the Caribbean (-12%) and Asia (-3%), as well as a drop of SDG-related investments (-26%), heads of state and government gather at FfD4 this year to discuss how to reshape the global financial architecture for sustainable development. South-South cooperation, grounded in peer-to-peer partnerships, knowledge exchange and non-financial support, plays a critical role in sustainable development for all, reinforcing other mechanisms, especially through mutual support, cooperation and knowledge sharing. The Bridgetown Covenant -—
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strongly emphasized the essential contribution of ODA, private investment, and South-South and triangular cooperation, in addressing the challenges related to development finance, including mounting debt of the most vulnerable economies.

Approaching UNCTAD 16, redefining international support to developing countries is high on the agenda. The following chapters address related challenges:

  1. Bringing South-South cooperation into focus: the journey to measurement
  2. With falling foreign direct investment, investment-promoting regimes increasingly more important to reach the SDGs
  3. Costlier debt servicing undermines the achievement of the SDGs
  4. Measuring illicit financial flows for stronger domestic resources
We need a global financial architecture that puts people and planet first.Read more on this in UNCTAD SG’s report ahead of 16th session of the Conference.

Early pilots showcase non-financial support is an essential South-South cooperation modality.

Investments in SDG-related sectors dropped 26% globally in 2024.

The external debt of developing economies reached $11.7 trillion in 2024.

Without reliable data, government efforts risk remaining ineffective or inadequate.

References

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