Financing for Development

Published under: Solberg's Government

Publisher Ministry of Foreign Affairs

‘The UN member states are negotiating a new global agenda for sustainable development and an international climate agreement. Both will need financing. The Addis Ababa conference will be crucial for an international agreement on financing for development,’ said Minister of Foreign Affairs Børge Brende.

The Third International Conference on Financing for Development will be held in Addis Ababa from 13 to 16 July 2015. Mr Brende will lead the Norwegian delegation. The aim of the conference is to create a framework for financing sustainable development from different sources – national and international, private and public, and various types of public–private partnerships. These sources of finance will include traditional aid, national resource mobilisation through taxation, and facilitation of private investment.  

‘It’s important to reach agreement on maintaining a high level of development assistance. A number of donor countries are now cutting aid. Given the massive humanitarian needs in the world today, this is very unfortunate. But in addition to agreeing on development assistance, we must also agree to increase the mobilisation of resources in developing countries, for example through better tax systems and higher tax revenues,’ commented Mr Brende.

‘According to the World Economic Forum, USD 5 000 billion a year will be needed to build vital infrastructure in developing countries, such as roads, water supplies, and electricity and telecom networks. There is a huge need for private investment. Aid can play an important role in catalysing investment and preventing illicit financial flows,’ he added.  

Worldwide, the level of development assistance has never been higher. Nevertheless, such funds accounts for an increasingly smaller proportion of the financial flows into developing countries. While aid totals USD 135 billion a year, private investments in developing countries amount to some USD 760 billion a year. Remittances from individuals, totalling USD 418 billion a year, also account for a larger share of revenue than aid. Meanwhile, total illicit capital flows out of developing countries – estimated at between USD 630 billion and 980 billion per year – are many times greater than total aid these countries receive.  

‘It is crucial that the financing conference in Addis Ababa is a success. This will give a good starting point for both the UN summit to adopt the post-2015 development agenda in September and the climate conference in December,’ said Mr Brende.

The preparations for the conference in Addis Ababa have been led by Norway and Guyana. The focus of the conference is financing for the new sustainable development agenda. Emphasis will be on investment in various types of infrastructure in developing countries, social services such as health and education, and measures to strengthen agricultural production and create a more enabling environment for private sector activities.