Financing sustainable development in a turbulent world
As we head toward the G20 summit in Rio de Janeiro, Spain sees this moment as a critical juncture in addressing pressing global challenges. The summit comes at a time of extraordinary turbulence. As we continue to witness – and condemn – Russia’s illegal and unjustified war of aggression against Ukraine and its devastating impacts, we denounce the appalling humanitarian situation in Gaza, the unbearable loss of civilian life and the terrible consequences of this conflict, which threatens to explode into a broader one. Spain supports the implementation of the two-state solution between Israel and Palestine and will continue to advocate for a just and lasting peace in Ukraine. We believe that it is the G20’s duty to reaffirm its commitment to upholding the principles and purposes of the United Nations Charter and international law, including international humanitarian law and human rights law, in all contexts and at all times. Now more than ever, multilateralism and collective action are essential, and Spain stands firm in expecting the same from all G20 members.
Despite these grave geopolitical crises, the G20 must also focus on the economic and financial challenges that are increasingly intertwined with global instability. Spain, as the host of the fourth International Conference on Financing for Development next year, will bring a forward-looking perspective to the Rio Summit, focusing on three crucial pillars: accelerating the reform of multilateral development banks and the international financial architecture; setting an ambitious post-2025 climate finance goal that matches increased mitigation and adaptation commitments; and advancing international tax cooperation and reforms to both fight inequality and help finance the major investments for sustainable development that the world needs – in a just manner.
Reforming MDBs
The global debt crisis, exacerbated by geopolitical tensions and the lingering effects of the Covid-19 pandemic, is pushing many developing countries towards financial instability. Small island developing states and the least developed countries are among the hardest hit, facing both mounting debt and the growing threat of climate change.
MDBs must be empowered to play a larger role in addressing the fiscal needs of countries on the frontlines of the debt and climate crises. Spain supports increasing the lending capacity of these institutions while also advocating for the creation of innovative financing mechanisms to provide long-term stability and expand concessional financing, including for vulnerable middle-income countries. Further, to fully implement the reforms set out in the Capital Adequacy Framework review, we need to optimise the use of the International Monetary Fund’s special drawing rights and its possible rechannelling mechanisms, including to MDBs. The G20 must lead by endorsing and implementing these reforms, ensuring that all countries have access to the resources they need to secure a stable financial future.
Setting an ambitious post-2025 climate finance goal
As we convene in Rio, the meeting of the 29th Conference of the Parties to the United Nations Framework Convention on Climate Change will be underway in Baku, with the goal of setting a new and ambitious post-2025 climate finance goal. The G20, responsible for over 80% of global greenhouse gas emissions, must lead by example in increasing climate finance commitments for the most vulnerable.
Climate financing must transcend the traditional donor-recipient model. This means, on the one hand, breaking down artificial barriers that have historically limited contributions to climate finance and mobilising resources from a broader base. On the other, alongside increased financial flows must come bolder commitments to mitigation and adaptation action. G20 members should commit to updating their nationally determined contributions with more ambitious targets, and we should use the Rio Summit to start devising concrete ways to implement our commitment at last year’s COP28 to transition away from fossil fuels.
International taxation and resource mobilisation
Spain fully shares the Brazilian presidency’s aim for the G20 to lead in fighting harmful tax practices and advancing concrete measures to boost domestic resource mobilisation. These efforts are crucial in combating the increasing inequalities within and between countries that are at the root of social discontent.
The Rio Summit should give a final push to the full and prompt implementation of the Organisation for Economic Co-operation and Development–G20 Two Pillar Solution for the taxation of multinational enterprises – a landmark agreement among almost 140 countries that should also form the basis for a future UN Framework Convention on International Tax Cooperation. We should also aim for further progress in Brazil’s proposal for a global wealth tax on high-net-worth individuals, which Spain has proudly supported from its inception.
Only by implementing more effective, transparent and fair tax policies will we be able to build the just world and the sustainable planet that our citizens rightfully aspire to.
In a world where conflict and instability seem to have become the norm, the G20 must rise to the occasion. Spain believes that the Rio Summit is not just an opportunity for economic and financial reforms, but also a moment for the G20 as a whole to reaffirm its commitment to multilateralism – to finding global solutions to global challenges: from the governance of artificial intelligence to climate change, and from fighting poverty and hunger to building a global governance system that is more inclusive, effective, democratic and accountable.
With the right leadership and a renewed sense of purpose, the G20 can chart a path towards a more just, sustainable and equitable world. It is time to start crafting a future where no country is left behind and where financial and environmental stability is within reach for all.
