Inputs to the Outcome Document

This brief presents evidence on coverage and financing gaps for universal social protection (USP), offering actionable recommendations for FfD4. The ILO estimates that to ensure at least a social protection floor, low- and middle-income countries require an additional investment of US$ 1.4 trillion (3.3 per cent of the aggregate GDP) of these countries. To close the financing gap countries must increase investment in social protection, raising effective coverage by 2 percentage points annually (SDG indicator 1.3.1). At the international level, debt relief should move at a faster pace and access to international emergency financing must be enhanced to enable regular investment in USP in a climate-volatile world and avoid repeated rounds of austerity.

Investment is necessary but not sufficient for achieving inclusive economic growth and decent work. The ILO MNE Declaration provides an investment framework for coherent and synergistic policies concerning job creation, enterprise development, formalization, skills development and protection of workers’ rights. Consultation with social partners can ensure that decent work is prioritized while also enabling enterprises to grow. And dialogue between host and home countries could lead to better alignment of policies and ODA to support investment facilitation for development.

By grounding policy decisions in solid evidence, countries can better navigate the complexities of tax reforms and ensure that their strategies effectively support the financing of the SDGs. Administrative data and ex-ante policy modelling, such as tax-benefit microsimulation modelling, are indispensable in providing a full picture to policymakers. Data and modelling infrastructure should be public goods accessible to the government and its agencies, academia, think tanks and CSOs to enable an inclusive debate about the choices governments face when making decisions on tax and benefit policies.

This policy brief emphasizes the need for financing inclusive structural transformation to foster economic growth, create decent jobs, and ensure sustainable development. Developing countries face challenges due to limited financial resources, premature deindustrialization, and a shift towards low-productivity sectors. The brief recommends strengthening national public development banks, forming public-private alliances, and adopting tailored macroeconomic frameworks. These efforts, combined with social partner involvement and multilateral cooperation, are crucial to overcoming financing barriers and supporting long-term, inclusive development.

To realize their domestic revenue potential, countries need research and technical cooperation. International organizations and bilateral donors provide essential training and resources to strengthen tax administrations and skills for policy analysis in government and academia. Governments in the Global South can progress faster towards the SDGs by partnering with experienced institutions. Technical assistance and research collaboration are key, with hands-on learning from experts. Collaborative efforts, including South-South and North-South partnerships, are crucial for establishing robust policy analysis and research infrastructure in the Global South.

Addressing both social and environmental objectives is essential to mitigate risks and seize opportunities related to the low-carbon transition. A just transition requires supportive financial flows and enabling financial systems. Member States can support mobilization of financial resources for a just transition by leveraging public development banks, incentivizing the use of financing instruments that attract private capital, developing comprehensive sustainable finance frameworks that consider social and environmental objectives, and developing capacities within the financial system.

Scaling up the Global Accelerator on Jobs and Social Protection for Just Transitions