Inputs to the Outcome Document

Illicit financial flows (IFFs) significantly drain resources, with trade-IFFs alone accounting 5-30% of total goods trade in pilot countries, financing crime, exacerbating inequalities and instability. Effective action requires data-informed analytics, whole-of-government approaches and stronger international cooperation for common tools and technologies. All countries need evidence-based policies to address IFFs, allowing crime prevention rather than costly corrective measures. FfD4 outcome should prioritize these strategies, resourcing data reporting and establishing a platform for collaboration and methods development.

Integrating Science, Technology, and Innovation (STI) into Financing for Development is essential for achieving the Sustainable Development Goals (SDGs). While technological advancements offer opportunities, they can disrupt growth pathways and increase inequalities if mismanaged. Key recommendations include directing technology to create middle-class jobs and labour-absorbing sectors, improving access to scientific knowledge and technological innovations through open science and flexible intellectual property regimes, fostering South-South cooperation, and mobilizing development financing, including Official Development Assistance (ODA) to close technological gaps.

Global FDI flows declined since 2015, hindering progress towards the SDGs. FfD4 should seek to leverage partnerships between investment stakeholders, enhance countries’ readiness to attract investment in SDG, and promote home-country initiatives to channel investment. SWFs and institutional investors possess substantial capital that can be directed toward infrastructure and SDG, while more de-risking initiatives need to be developed. Systematic efforts to advance sustainability standards and address greenwashing is essential to grow sustainable finance.

The momentum to measure South-South cooperation is growing rapidly, spurred by the endorsement of SDG indicator 17.3.1 and the voluntary ‘Framework to Measure South-South Cooperation’. Developed by the global South, the Framework aims to provide data on South-South cooperation to enable first-ever globally inclusive information on international development support by reflecting the realities of the global South. To unlock its full potential, significant support, technical training, harmonized tools, and targeted assistance, is needed for countries.

Sovereign Debt Workout Mechanisms: The G20 Common Framework and Beyond

Better Data on Trade in Services for Effective FFD Strategies

The policy brief emphasizes the need for a long-term perspective and a stable investment environment for CETM projects, highlighting the importance of clear government regulations. It advocates expanding the capital base in developing countries through innovative financing mechanisms and lowering borrowing costs via international cooperation. The policy brief also underscores the importance of a holistic approach to financing, promoting value addition and diversification throughout the CETM value chain.

Multilateral Credit: Filling in the Financial Gap?

Trade is vital for economic growth, but protectionism and unilateralism threaten the global trading system, limiting developing countries' participation. These nations face challenges in competing with developed economies' subsidies for green and digital transitions and struggle to secure financing for infrastructure. To enhance their role in global value chains, developing countries require substantial investment in transportation, energy, and digital infrastructure. A specialized infrastructure fund, supported by multilateral development banks and private capital, is crucial to closing this financing gap.