SHORT PROJECT DESCRIPTION
Financing Sustainable Development & Donor Partnerships
The Addis Ababa Action Agenda (AAAA), or Addis Agenda for short, sets out binding principles for financing sustainable development. It builds on the 2002 Monterrey Consensus on Financing for Development (FfD) and the 2008 Doha Declaration. The Third UN International Conference on Financing for Development adopted the Addis Agenda in 2015 and paved the way for a new development finance architecture, as an important cornerstone of the 2030 Agenda.
The Addis Agenda provides an integral answer to the complex question of how sustainable development can be financed. The Agenda follows a holistic approach that addresses all financial as well as non-financial means of implementation relevant to sustainable development. The Addis framework is based on seven action areas: (1) Domestic public resources (especially taxes and tax systems); (2) Domestic and international private business and finance; (3) International development cooperation; (4) International trade as an engine for development; (5) Debt and debt sustainability; (6) Addressing systemic (macroeconomic, governance) issues; (7) Science, technology, innovation and capacity building.
Four years after the adoption of the Addis Agenda and the 2030 Agenda, progress at country level has been slow. Many governments focus more on policy adaptation and streamlining the 2030 Agenda and less on broader financing issues as set out in the Addis Agenda. The financing gap for sustainable development remains large and external funding flows to developing countries are declining overall. The tax revenue of the least developed countries hovers below 15% of gross domestic product. Climate change, migration, protectionist trade and an alarming deterioration of the global debt situation are likely to impede the implementation of global development agendas.
The objective of the German development cooperation is the implementation of the financing for development agenda, together with strategic partners. Against this background, the project advises and supports BMZ Department 512 "Financing for Development, Donor Partnerships" in three main fields of activity: "International Positioning of German Development Cooperation", "Approaches and Instruments of German Development Cooperation" and "Cooperation with key Stakeholders". Among others, the project also covers innovative financing mechanisms and South-South cooperation.
Department 512 was able to continuously expand its internal role as main interlocutor for financing sustainable development. Through German support of UN-DESA, the FfD office, as a central coordinating actor in the FfD process, is now in a better position to set the agenda and to include shared priorities (e.g. integrated financing approaches) in the implementation and monitoring of the Addis Agenda. The close cooperation with Mexico and Switzerland through the Group of Friends of Monterrey led to improved coherence and facilitated the annual intergovernmental negotiations of the FfD outcome documents.
Together with the KfW, the project defined and developed the basics of innovative financing mechanisms. The results helped with the international positioning and dissemination of tools. The Leading Group of Innovative Financing (LGIF) used e.g. German climate finance examples at the FfD Forum, while the OECD incorporated German blending approaches into its work on blended finance and its development of the Blended Finance Guiding Principles.