Ban calls for new ways to finance development amid economic turmoil

The global recession is eroding traditional forms of financing growth in the poorer nations, Secretary-General Ban Ki-moon warned today, as he addressed a meeting in Geneva tasked with finding creative alternatives to funding development.

In his opening remarks to the I-8 Meeting on Innovative Financing for Development, Mr. Ban noted that as economies shrink, official development assistance (ODA) from governments come under tighter budgetary pressures.

He said that falling commodity prices, shrinking private investments and the slashing of overseas remittances underscore the importance of innovative financing solutions for development.

“Innovative financing must help to bridge the gap between what is available and what we need to reach the Millennium Development Goals [MDGs],” said Mr. Ban, referring to the eight internationally agreed anti-poverty targets with a 2015 deadline. “The economic crisis makes that job even harder.”

Innovative financing, identified at the UN Conference on Financing for Development in 2002 in Monterrey, Mexico, aims to find sustainable sources of funding that do not substitute ODA.

Since the Monterrey gathering, hundreds of millions of dollars have been raised through innovative financing initiatives such as (Product) Red, a consumer-based fundraising effort which raises funds to fight AIDS, tuberculosis and malaria.

Highlighting World Bank forecasts of another 45 million falling into extreme poverty this year on top of the 130 million people plunged into poverty in 2008, Mr. Ban stressed the urgent need “to strengthen and scale up existing innovative mechanisms, and explore new ones.”

Of the major initiatives launched to help achieve the MDGs since the Monterrey Conference, eight of them (the I-8 group) convened at today’s gathering.

“I hope that by coordinating an I-8 group, as was done for the H-8 for health, we will learn faster from each other’s experiences and stimulate best practices across institutions and initiatives,” said Mr. Ban.

He said that it was critical to ensure that future initiatives, whether new ideas or continuing current schemes, are implemented quickly and successfully.