Finance Minister Nirmala Sitharaman emphasized the urgent need to close the $4-trillion financing gap to accelerate progress on Sustainable Development Goals (SDGs). Speaking at the Finance Ministers’ Session of the third Voice of the Global South Summit on August 17, Sitharaman highlighted the critical financial challenges faced by developing nations.
Referring to a recent UNCTAD report, Sitharaman pointed out that developing countries face a $4-trillion gap in sustainable development investments. The report also revealed that the foreign direct investment in clean energy attracted by developing countries in 2022 was $544 billion, which is far below the required level.
UNCTAD underscored the importance of debt relief for developing economies to provide them with the fiscal space needed for clean energy investments and to improve their country risk ratings, which are essential for attracting private capital. Sitharaman stressed that financing requests made to Multilateral Development Banks (MDBs) must be addressed with speed and agility, calling for both operational reforms and the identification of new sources of finance.
The Finance Minister’s remarks come at a time when there is increasing scrutiny on MDBs like the World Bank and IMF to adapt their processes to meet the growing demands of sustainable development. She also called on the Global South to contribute ideas for improving debt relief and liquidity support for low and middle-income countries.
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