In contrast to bilateral aid, aid disbursed from
multilateral institutions increased significantly at the onset
of the COVID-19 pandemic. Yet, at a time when a coherent
and effective multilateral response is needed most, the
COVID-19 pandemic revealed a shifting landscape of donor
agencies that... struggle with basic functions, such as crossnational coordination. While multilaterals are uniquely
positioned to transcend national priorities and respond
to pandemics, functionally we find official development
assistance (ODA) from these entities may increasingly
mimic the attributes of bilateral aid. We explore three
important, but not comprehensive, attributes of aid leading
up to and during the COVID-19 pandemic: (1) earmarking,
(2) donor concentration and (3) aid modality.
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The world is facing a sustainable development crisis. The 2024 Financing for Sustainable Development Report: Financing for Development at a Crossroads finds that financing challenges are at the heart of the crisis and imperil the SDGs and climate action. The window to rescue the SDGs and prevent a c...limate catastrophe is still open but closing rapidly. Financing gaps for sustainable development are large and growing – the estimates by international organizations and others are coalescing around $4 trillion additional investment needed annually for developing countries. This represents a more than 50% increase over the pre-pandemic estimates. Meanwhile, the finance divide has not been bridged, with developing countries paying around twice as much on average in interest on their total sovereign debt stock as developed countries. Many countries lack access to affordable finance or are in debt distress. Weak enabling environments are preventing progress. Average global growth has declined, while policy and regulatory frameworks still do not set appropriate incentives. Public budgets and spending is not fully aligned with SDGs. Private investors are not incentivised to invest enough in SDGs and climate action. The world is at a crossroads. This is the last chance to correct course if we want to achieve the SDGs by the 2030 deadline. Only an urgent, large-scale and sustainable investment push can help us achieve our global goals. Next year’s Fourth International Conference on Financing for Development in 2025 will be a once in 80-year opportunity to support coherent transformation of financing.
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