Towards an emerging consensus?
“Common Solutions for Global Sustainable Development Finance: Perspectives and Case Studies”
On 11 and 12 November, the Finance for Development Lab and the Shanghai Institutes for International Studies (SIIS) jointly hosted a high-level workshop on development finance that gathered participants from China, Europe, the Americas, Africa, and Asia.
Joint FDL/SIIS High-level workshop
The conference addressed pressing issues in development finance and reached a consensus on the crucial need for innovative financing strategies in light of declining growth prospects and high levels of debt.
Key discussions emphasized the significance of diversifying investments and exports while tackling debt-related challenges. Other topics included enhancing debt restructuring processes and frameworks alongside the critical role of liquidity provision. Additionally, there was a notable call for greater collaboration among borrowing countries, creditors, and multilateral institutions, stressing the importance of aligning project support with budgetary requirements.
The conference aimed to ignite discussions and foster ongoing consensus among think-tanks and practitioners. The dialogue highlighted the increasing diversity within the multilateral landscape, presenting both opportunities and challenges for future financial strategies.
As the landscape evolves, it opens doors to innovative approaches while introducing new challenges of fragmentation. This will likely require major reforms in multilateral systems, OECD countries, the private sector, and Chinese institutions. Coordinating these reforms should be the focus of more collaborative research.
Four themes emerged from six sessions, signaling a consensus yet illustrating the difficulties in implementing agreed-upon solutions. Key points included:
- Many countries are facing reduced growth under current models, needing new financing strategies that prioritize investment and export diversification. However, high debt levels hinder these efforts, and there’s a need for alignment between project support and budget requirements to avoid fragmentation.
- Restructuring is often necessary, but there is widespread dissatisfaction with existing frameworks. Progress has been made through mutual learning among stakeholders, but a change in approach is critical for future resolutions.
- Liquidity provision is crucial, with a call for all creditors to contribute. Major concerns include the potential moral hazard for borrowing nations and the involvement of private creditors.
- The multilateral landscape is evolving, offering opportunities but also presenting challenges due to fragmentation.