The Future of Development Finance: How to Close The Financing Gap?

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Recording from Sat, 23rd October 2021

Speakers:
Christiane Laibach (KfW Group)
Dr. Erik Berglof (Professor at LSE; Asian Infrastructure Investment Bank)
Alexia Latortue (Millennium Challenge Corporation)
Faheen Allibhoy (JP Morgan DFI)
Dr. Hans Peter Lankes (Professor at LSE; World Bank)

Description:
Mobilizing capital for critical investments in developing economies is one of the most pressing tasks for the international community. In 2019, the annual financing gap to achieve the Sustainable Development Goals (SDGs) was estimated at around $2.5 trillion per year, or 7.4% of the combined GDP of all developing economies. On top of that, the threat of climate change to livelihoods has never been more acute. Under the UNFCCC framework of “common but differentiated responsibilities” financial support for adaptation measures has long been called for but continues to be in short supply.

The ambition of raising more funding for the SDGs is certainly not opportune in the present environment: trade restrictions and protectionism have been on the rise, the steep growth in public debt in response to the pandemic is widely expected to lead to fiscal austerity in the near future, and the international order itself has come under severe strain, not least because of the growing great power tensions. Many developing countries are already over-indebted and criticism of “predatory lending” practices is growing louder.

Yet there are reasons to be hopeful: with the Build Back Better World (B3W) Partnership, G7 leaders recently launched an initiative that aims to deliver global, value-driven, high-quality infrastructure. At the same time, growing private sector led penchant towards development regions may unlock large and as yet untapped sources of funding.

Bringing together leaders in development finance from the US, Europe and around the world, we want to discuss what the international community needs to do to close the financing gap, what role the Transatlantic partnership can and should play in this effort, and how considerations of foreign policy and great power competition will influence the agenda.