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Cooperation and development
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The challenge at UN aid conference: Governments cannot paper over the cracks in development funding

At the United Nations summit in Seville, governments cannot simply cover up the shortcomings of a collapsing developing finance system

ONU en Sevilla

World leaders gathered in Seville this week for the U.N.’s International Conference on Financing for Development have an immense challenge before them. The hope originally was to find the additional money needed to reduce poverty, promote growth and fight climate change. Now, the worry is that matters may get even worse than they already are. Aid cuts have thrown critical health and humanitarian work into turmoil, and economic uncertainty and unsustainable debt burdens are draining government budgets. This means there’s no money left to deal with pandemics, violent conflict, and the climate crisis, which in turn could destabilize societies everywhere. No country will be safe.

There is a 20% chance of the world experiencing another pandemic as deadly as COVID-19 within the decade. And now, humanity risks losing control of some of the world’s deadliest epidemics. Treatment disruptions linked to funding cuts have led to several new mpox cases in Malawi. If U.S. funding permanently disappears and is not replaced, there could be an additional six million HIV infections and four million AIDS-related deaths by 2029. Ten million people could acquire tuberculosis, leading to two million deaths.

In Seville, governments cannot simply paper over the cracks of a collapsing developing finance system.

In 2015, at the time of the last U.N. Financing for Development Conference, some rich countries had reached the global target they had set for themselves of contributing 0.7% of their Gross National Income to global development. But a decade has passed, and governments are now turning away from that ambition to focus on defense spending. In 2024, not a single G-7 country approached that goal, and 2025 will be the year of the largest decline ever in aid to developing countries.

With NATO states being the largest aid donors, their recent agreement of NATO to increase defense spending to 5% of GDP by 2035 will only make matters worse. Aid is not a panacea, but it has made an enormous difference. It has enabled investment in critical priorities like the HIV response. A new generation of international cooperation, emphasizing not just humanitarian assistance, requires a Global Public Investment approach for global public goods — of which global public health is among the most important.

Meanwhile, developing countries are suffocating under $3 trillion in debt, with more than half of low-income countries either in debt distress or at high risk of it. The result is that today, net, money is flowing from developing countries to the advanced countries — just the opposite of what should be happening. Over half of Global South debt is held by private banks and firms, but they are typically slow in participating in debt relief, and when they do, often offer far less than is needed. Their importance, even amongst the poorest countries, makes debt restructuring more complex and slower. It took Zambia four years to reach an agreement for debt relief. Even for Ukraine, amidst war, it took four months.

Over the last few years, money has actually been going from developing countries to private creditors in the advanced countries. What enables the perverse flow of money is that the international financial institutions, the IMF and the multilateral development banks, are engineering a de facto bailout for private creditors with the money they are providing to the developing world. What makes this especially disturbing is that in spite of this and repeated earlier bailouts, private creditors receive high interest rates, well in excess of what is needed to compensate them for the risk they bear.

Austerity is not an option. Already, countries are barely covering the basic needs of their citizens. Low- and middle-income countries are doing all they can to fund lifesaving programs, but they simply don’t have the money needed to meet the burden. Today, 3.3 billion people live in countries that spend more on servicing debt than on health or education.

That’s why Pope Francis, in the last year of his life, launched the Jubilee Commission — a panel of leading economists, legal scholars, and development experts tasked with understanding how the world ended up in this mess. They found that by forcing countries to cut investments in health, education, and climate adaptation to service unsustainable debts, our development financing system does not just fail to prevent crises, it makes them worse and more frequent.

However, every crisis creates an opportunity. Governments now have a chance to build a better, more sustainable global financial structure. What is needed is more than just resolving the current debt and development crisis, but reforming the architecture in ways to make sure another such crisis doesn’t happen; to provide not just more financial assistance, but enhancing growth opportunities, by, for instance, fairer trade arrangements, ensuring that developing countries aren’t exploited through illicit financial flows finding their way to advanced countries, through western corporations paying less than fair market value for the resources that they take from developing countries, through enabling poor countries to capture more of the tax revenues that are their due based on the activities that originate in their countries, by encouraging productive capital flows to developing countries rather than the exploitive flows into and out of these countries. Indeed, Africa alone is losing more than $88 billion every year to illicit financial flows, mostly tax abuse, as such money seeks, and finds, a safe-harbor in one advanced country or another.

At the turn of the millennium, as AIDS was killing millions in Africa, unfair and unsustainable debt burdens were worsening the continent’s suffering. But governments, charities, and faith groups pushed for change through the Jubilee 2000 campaign. They secured more than $100 billion in debt relief, enabling governments to invest in health, education, and social protection. HIV infections fell by the millions over the following two decades, helping to put the world on track to end AIDS as a public health threat by 2030. Innovations are available today that can change the HIV trajectory keeping millions safe through long acting injectables, yet intellectual property rights are standing on the way; our system of intellectual property requires structural reform, too — something that became all too evident during the pandemic, with so many unnecessary hospitalizations and deaths simply because IP related to COVID-19 was not shared.

In Seville this week, leaders have an incredible opportunity to make a renewed commitment to global justice and solidarity. It’s even in the self-interest of everyone in the world: diseases don’t need passports or visas. An unhealthy global population provides a fertile field for development of a pandemic that could spread quickly around the world. Global inequalities breed societal breakdowns and polarization that fuels the conflicts that also know no borders.

A new multilateralism is necessary. What happens in Seville can build on the momentum set by the 2023 agreement to move forward on the U.N. Framework Convention on International Tax Cooperation, an agreement that could help to ensure that the wealthiest individuals and corporations pay their fair share. And Seville should mark a point of departure for a new debt restructuring system that allows developing nations to have the fiscal space necessary to lead their own future.

What will be important at Seville is not just the official agreement that emerges, but the commitment, the momentum, provided by the Seville Platform for Action, motivating alliances to work together in solidarity for the wellbeing of the entire world.

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