Its raison d’être is to help foster a good life for people around the world: the Pact for the Future, negotiated under co-facilitators Germany and Namibia and adopted by the United Nations in New York in September this year. Its aim is to supercharge the 2030 Agenda, in which the international community already defined 17 goals for sustainable global development back in 2015, among them ending extreme poverty and hunger, achieving gender equality, combatting pandemics, ensuring access to clean water and sanitation for all, and pursuing a sustainable economy.
But there’s a stumbling block: we are currently lacking 4.3 trillion US dollars a year worldwide to fund delivery of the 17 goals. So far, the question of where the money would come from has to all intents and purposes been left unanswered. But that, too, is set to change with the Pact for the Future, including as it does the promise to tackle the issue of financing. The international financial architecture is to be reformed such that countries in the Global South can access loans more easily and the excessive indebtedness of many a nation is contained. If this fails, poorer countries will be unable to cope with the climate crisis, for example, unable to switch to renewable energies.
The pivotal question, therefore, put to the experts at the recent annual conference of the German Council for Sustainable Development (RNE) was: What can we now expect and what specifically needs to be done? The debate was kicked off by the former Federal Minister for Economic Cooperation and Development Heidemarie Wieczorek-Zeul, who is a member of the RNE, remarking: “Given the current conditions, the Summit of the Future provided more orientation than had originally been feared, not least thanks to the good teamwork between European and African countries.”
Education in lieu of debt
Wieczorek-Zeul called above all for African and other countries in the Global South to have a greater voice in the decision-making bodies of the International Monetary Fund (IMF) and the World Bank. Both financial institutions having been founded 80 years ago at a conference in the US nature park Bretton Woods, the developing countries are still underrepresented on their committees to this day. Wieczorek-Zeul also argued for better financing opportunities for indebted states in the Global South – for instance, with a new debt relief initiative and better capitalisation of the regional development banks.
And Wieczorek-Zeul is not alone. The Coalition Agreement of Germany’s current three-party ruling government also states: “Our aim is for a new international consensus on debt management. We support an initiative for a codified international state insolvency procedure that includes all creditors and implements debt relief for groups of countries that are particularly vulnerable.” One potential idea is to cancel their debts if they in return put forward a plan for investing the ensuing funds in, say, their education or healthcare system.
The developing countries must be “released from the financial bottleneck”, echoed Maria João Rodrigues. The former Portuguese labour minister and current president of the European think tank Foundation for European Progressive Studies believes this also requires reform of the international tax system – because the global profit-shifting practised by multinational corporations means the public coffers are missing out on large sums of tax revenue.
Global taxation could make a difference
Already in late 2023, the United Nations passed a resolution on international fiscal cooperation proposed by African states. If this were not implemented, according to recent calculations by the Tax Justice Network, an NGO that advocates for a fair tax system, the world would lose 4.7 trillion US dollars’ worth of tax revenues to tax havens over the next decade. The negotiations are ongoing.
A global tax for billionaires could bring in a further 200 to 250 billion US dollars a year, explained Bodo Ellmers, Director of the Financing for Sustainable Development Program at the Global Policy Forum (GPF) think tank. Within the federal government, SPD Minister for Economic Cooperation and Development Svenja Schulze is currently driving the case for just such a tax on the super-rich, criticising the status quo: “An average worker in the EU pays 35 percent income tax, but the billionaires of this world effectively contribute less than one percent tax to the common good.” We’re still short of funds, too short, she said, and made way for three examples.
“We need enormous financial resources”, declared Arjun Kumar Bhattarai, President of the Nepal Development Initiative, an NGO based in Kathmandu. And they need to be assured long-term. In the Asian country, some 17 percent of the population live in poverty, with almost a third of children under five suffering from developmental delays brought on by malnourishment. Healthcare has long been inadequate. At the same time, Nepal is ranked the fourth most vulnerable country to the impacts of climate change; and 66 percent of the Nepalese workforce work in agriculture, which of course is dependent on the weather.
Prospects for young people
Kenya, too, is in urgent need of funds. The Global Sovereign Debt Monitor 2024 clearly shows that in 2024 a quarter of the country’s budget was spent just on interest and loan repayments to foreign creditors. Closing the financial gaps would also be in Germany’s own interests, pointed out Florence Syevuo, Executive Director of the SDGs Kenya Forum, which brings together 350+ diverse civil society organisations: “We must create prospects for young people.”
In many African countries they have no jobs, despite being qualified and full of energy. So they head off to Germany. “Why should they have to cross the ocean? That ends up costing Germany a lot of money. Why not invest it in Kenya instead?”, asked Syevuo. According to the International Labour Organization (ILO), youth unemployment in Kenya stands at 27 percent, but the Federation of Kenya Employers puts it as high as 67 percent.
A final example comes from South America, Ecuador to be precise: August 2023 saw a majority of the country’s population vote to stop oil production in Yasuní National Park. Gabriela Suárez Buitrón, director of FARO Ecuador, Foundation for the Advance of Reforms and Opportunities, said: “If a decision like that is recognised by the world, then the world must support it.”
Fidelis Stehle, UN Youth Delegate for Sustainable Development, underlined how crucial it is to change course. The efforts made thus far are simply not enough. “What we need is something different”, he insisted, referencing the climate researcher Johan Rockström. Rockström developed the concept of planetary boundaries, six out of nine of which are already deemed to have been crossed – making it all the more critical to free up sizeable resources.
Whether this would succeed, whether we would see any green shoots emerging, wondered RNE member Wieczorek-Zeul, could already become apparent at the autumn meetings of the IMF and the World Bank in Washington DC, currently underway at the end of October, and at the Fourth International Conference on Financing for Development in summer 2025 in Spain.