With only a year left on the timeframe set for the conclusion of the Millennium Development Goals(MDGs), the international community is actively in the process of developing a new framework which will set the tone for the international development scene after 2015. Centering on the values of human rights, equity, and sustainability, the Post-2015 Development Framework is expected to show a mid- to long-term vision in tackling global challenges and environmental changes in line with the establishment of the Sustainable Development Goals (SDGs).
One of the most significant features of the current discussion on the Post-2015 development agenda is its particular focus on the means of implementation for the new goals in the Post-2015 era. As a means of implementation, financing for development is deemed central to achieving the goals. Considering the current circumstances where the international environment is changing rapidly while new challenges arise, additional financing is absolutely necessary in the pursuit of renewed development goals. As a consequence, Korea must expedite progress in expanding the development agenda as well as increasing finance for development.
In this regard, this policy paper aims to review the discussion on increasing financial resources for development and seeks to draw implications for Korea in order to respond appropriately to the issue. For these purposes, this report first provides an overview of the chronology of discussions on SDGs and analyzes international observations on the scale of finance necessary for achieving the SDGs. Then we further explore some technical details on financing for development, including the modernisation of the ODA definition and new measure of total official support for sustainable development. The paper moves on to seek various ways of utilizing public support to stimulate private sector resource mobilization. By conducting case studies on development finance mechanism of the German KfW Development Bank and France Development Agency (AFD), the report provides insights on additional types of financing, such as blended financing, guarantees, capital subscription, and mezzanine finance.
In conclusion, the paper suggests some policy measures to efficiently raise resources to finance the Post-2015 development framework; First, greater emphasis should be placed on expanding and utilizing other official flows(OOF) as well as ODA instruments from the view point of private resource mobilization. This effort should not become a way to avoid the pledges to increase ODA volumes, but rather an additional form of effort to effectively incentivize and leverage private sector investment for financing sustainable development goals. Also, domestic financial institutions for development such as the Economic Development Cooperation Fund (EDCF) need to propose and share various financial instruments and wide-ranging expertise to strengthen public-private partnership for international development cooperation programs. Lastly, the paper suggests measures to connect climate finance with financing for development, which is imperative to the post-2015 framework.