Summary of the Joint SIIS-FDL Workshop: “Common Solutions for Global Sustainable Development Finance: Perspectives and Case Studies”
Martin Kessler, CEO, Finance for Development Lab
On 11 and 12 November 2024, the Shanghai Institutes for International Studies (SIIS) and the Finance for Development Lab (FDL) jointly hosted a high-level workshop focused on development finance. This conference was an opportunity to share perspectives across continents, spanning various sectors, and views on the challenges within the development finance architecture. Participants from China, which included think-tank researchers, academics, and officials, discussed the recent developments in debt and financing issues with their counterparts from Europe, the Americas, Africa, and Asia. The striking conclusion is the extent to which perspectives have converged, but also the long journey ahead to address the challenges that lie before us.
During the six conference sessions, four central themes emerged, each of which highlighted broad areas of consensus but also showed challenges in translating agreements into action. The narrative that sparked the most discussions among economists and practitioners from various geographies can be summarized as follows:
(i) Numerous countries are experiencing diminished growth prospects under current economic models. Fostering growth will require different financing strategies, focusing more on investment and export diversification. However, high debt levels limit these options, and new financing must be somewhat aligned between project support and budget needs to prevent excessive fragmentation.
(ii) In some cases, restructuring is necessary. However, there is a general dissatisfaction with current existing frameworks. There has been mutual learning and progress across borrowing countries, bilateral creditors (Paris Club, China, and others), multilateral institutions, and the private sector, but a shift in approach is necessary to resolve future cases with the appropriate depth and speed.
(iii) For other cases, liquidity provision is essential, and all creditors and potential finance providers must play their part. Key questions remain, including moral hazard for borrowing countries and the role of private creditors.
(iv) Overall, the multilateral landscape is becoming more diverse, presenting opportunities for new approaches, but there are also growing challenges in fragmentation.
The objective of this conference was to spark new conversations and continue building consensus between think-tanks and practitioners.
You may also find the full content through FDL's website link: https://findevlab.org/towards-an-emerging-consensus-on-debt-and-development-finance-joint-siis-fdl-workshop-in-shanghai/
