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NEW DELHI — Finance Minister Nirmala Sitharaman on Saturday said that there is an urgent need to close the $4 trillion financing gap faced by developing countries to achieve their Sustainable Development Goals (SDGs) and called for reforms in multilateral lending institutions to help achieve this goal.
Speaking at the Finance Ministers' Session of the third Voice of the Global South Summit, Nirmala Sitharaman said that it is "critical that financing requests made to Multilateral Development Banks (MDBs) are met with speed and agility. This will require reforms both at operational levels as well as identifying new additional sources of finance".
Nirmala Sitharaman cited an UNCTAD report which highlights that developing countries actually face a staggering $4 trillion gap in sustainable development investments.
UNCTAD has also emphasised the importance of debt relief for developing economies, to provide them with the fiscal space needed for clean energy spending and to help lower country risk ratings, a prerequisite for attracting private investment.
The Indian Finance Minister's observations came in the backdrop of the Global South pushing for multilateral lending institutions such as the World Bank and IMF to put in place measures to help meet the goals set for financing SDGs.
She also pointed out that multilateral development banks need to engage with credit rating agencies to better incentivise the flow of private capital for development financing.
Nirmala Sitharaman said that elevated debt levels of the developing world have limited the resources available for financing development needs, particularly in low-income countries.
She also sought ideas from the Global South on how to put in place better processes for debt relief and liquidity support for low and middle income nations.
The Sustainable Development Goals, adopted in 2015 by the members of the United Nations, address a variety of global challenges which include the eradication of poverty and hunger and ensuring sustainable cities and communities.
The UN has fixed a 2030 deadline to achieve these goals.
Also read: PM Modi proposes ‘Global Development Compact’ at Voice of Global South Summit