STATEMENT ON BEHALF OF GROUP OF 77 AND CHINA BY MR. SAMEH ELKHISHIN, FIRST SECRETARY OF THE PERMANENT MISSION OF EGYPT TO THE UNITED NATIONS, ON THE AGREED CONCLUSIONS AND RECOMMENDATIONS OF 2018 ECOSOC FORUM ON FINANCE FOR DEVELOPMENT, AT THE SECOND INFORMAL CONSULTATIONS ON THE DRAFT CONCLUSIONS AND RECOMMENDATIONS ON 2018 FORUM ON FINANCING FOR DEVELOPMENT (New York, 16 March 2018)

Co-Facilitators,

I have the honor to deliver this statement on behalf of the Group of 77 and China, which includes the preliminary views of the Group.

Allow me at the outset to express the Group's appreciation for your positive response to our request of coordinating with the co-facilitators of the UNDS in order to ensure that no parallel meetings are held throughout the two processes. While we recognize the constraints you face in planning the schedule of informal consultations, we hope that due consideration is given to the need of member states to consult their capitals on the zero draft, and the need for internal coordination of the Group, taking into consideration the limited time between the release of zero draft (scheduled Friday, 23 of March) and the first reading of the text (scheduled Monday, 26 March).

The Group would like to reiterate its commitment to engage constructively throughout the upcoming process towards a consensus-based outcome document encompassing all action areas of the Addis Ababa Action Agenda (AAAA). The Group looks forward for a substantive document that addresses the gaps in implementation of AAAA based on evidence, where we could collectively agree on the proper solutions needed to accelerate such implementation. We also look forward for an outcome document based on negotiations among member states. In this connection, the group emphasizes that while 2018 IATF's Report is an important reference in advising this intergovernmental process, the deliberations of this process should not only be limited to IATF's findings.

Co-facilitators,

It is worthy to recall that AAAA represent means of implementation for 2030 agenda. In this context, Finance for development should focus on channeling resources to poverty eradication, which is the overarching goal of the 2030 agenda. Moreover, any resources to finance development must be aligned with national priorities and development strategies of the countries taking into consideration different realities and contexts.

The world faces many challenges and risks that could hinder achievement of 2030 agenda. IATF's report indicates that "cyclical upturn masks significant weaknesses and medium-term risks. A disorderly tightening of financial conditions, the adoption of inward-looking policies and associated increases in interest rates and debt vulnerabilities or an escalation of geopolitical tensions could derail development progress. Persistently high levels of inequality pose a challenge to robust growth and sustainable development. Declining private investment in infrastructure, along with a renewed increase in global carbon emissions in 2017, is a stark reminder of our inability so far to sufficiently align investment with long-term sustainable development. If left unaddressed, structural impediments will continue to undermine sustainable development prospects." In this context, our collective endeavors should focus on addressing those longstanding concerns, and identifying the means to accelerate the pace of progress toward achieving 2030 agenda.

Co-facilitators,

In this regard, we wish to highlight the following elements on the areas of AAAA for inclusion in the outcome document:

On International development cooperation

Official development assistance (ODA) is key and indispensable for achieving sustainable development goals. It is the main channel for international cooperation and will continue to remain so. While ODA increased since 2016, such increase is partly due to increases in funds for hosting and processing refugees within donor countries. This shift in ODA resources towards humanitarian and crisis situations is not consistent with long-term and sustainable approach to financing development needed to achieve 2030 agnda targets. Moreover, this increase is marred by the failure to increase concessional finance to the countries most in need as well as the decline in the share of ODA over which recipient countries have a significant say. In this context, the group stresses that ODA should be aligned with national priorities and development strategies of the recipient countries.

Moreover, developed countries still fall short of achieving UN target of 0.7 per cent of their gross national income. The average of ODA is limited to 0.32 per cent of GNI for donors countries combined. In this regard, the group calls upon developed countries to fulfill their commitments they have made as to ODA and to increase their ODA allocations to the most vulnerable countries and, in particular, African countries, least developed countries (LDCs), landlocked developing countries (LLDCs) and small island developing States (SIDs), as well as countries in conflict and post-conflict situations and countries and peoples under foreign occupation, in addition to the middle-income countries, in line with the AAAA and the 2030 Agenda.

The Group reaffirms that South-South cooperation is a collective endeavor of developing countries based on the principle of solidarity. The core of the South-South cooperation is the technical cooperation and shared experience and knowledge among countries of the global South. In this regards, we reaffirm that South-South cooperation is a complement rather than a substitute for North-South cooperation.

On Trade

International trade can be an important source to finance development and achieving inclusive economic growth as well as poverty eradication. A universal, rule-based, open, non-discriminatory and equitable multilateral trading system can stimulate development worldwide. In this context, the group reaffirms the significance of the principle of special & differential treatment for developing countries in harnessing the developmental benefit of international trade. The issues of particular concern to developing countries should be addressed, especially as related to sectors of special export interest to them with a view to enhance their capacities to finance development and to diversify their economies.

The Group is concerned with the increase in the protectionist measures and rhetoric that will not only undermine the multilateral trading system, but also will lead to negative impact on access of the developing countries' exports to the global markets. The group stresses that the WTO is the appropriate forum for setting the norms of international trade. In this regard, we encourage WTO to strengthen the developmental component within its architecture.

On Debt and debt sustainability

Emerging debt challenges and vulnerabilities have intensified across developing countries since 2017. Several developing countries are fiscally constrained in generating resources needed for implementation of 2030 agenda due to their debt burdens. IATF report indicates that "many natural resource producing countries have seen rapid debt accumulation as governments have attempted to cushion the shock from falling commodity prices. Strains are also evident in several countries experiencing conflicts or political unrest, and in some small island developing states (SIDS), which remain vulnerable to natural disasters." In this context, risks of a potential renewed cycle of debt crises and economic disruption, pose severe challenge to the achievement of the SDGs. The groups stresses the need to explore the means and instruments needed to achieve debt sustainability as well as the necessary measures to reduce the indebtedness of the developing countries.

On Domestic public resources

While developing countries seeks to maximize their domestic public resources in order to achieve 2030 agenda, through broadening the tax base, there is a need to continue addressing the international dimension of taxation. Furthermore, ODA in support of domestic resource mobilization remains small. In this regards, the developed countries should continue to increase their contributions to revenue mobilization capacity building of the developing countries.

The Group reiterates the need to strengthen international cooperation on tax matters, recognizing with concern there is still no single global inclusive forum for international tax cooperation at the intergovernmental level. In that regard, we reiterate the need to fully upgrade the Committee of Experts in Tax Matters to an intergovernmental body with experts representing their respective governments. Among the most relevant issues are the challenges posed by the lack of international tax cooperation, the existing illicit financial flows and tax evasion. The outcome document must stress the importance of intergovernmental consideration as to defining illicit financial flows. Appropriate emphasis has to be placed on an enabling global environment and global partnership for development, balanced against the increased emphasis being placed on domestic resource mobilization. In this regard, the continued relevance and necessity of capacity building in the area of tax matters cannot be overstated. It is counterproductive to highlight the importance of domestic resource mobilization in developing countries, while at the same time not robustly tackle areas that impede their ability to capture necessary resources.

On domestic and international private business and finance

The private sector must contribute in mobilizing resources needed to finance sustainable development. The need for accountability and transparency as well as the commitment towards a long-term approach must be emphasized.

The international community must align financial markets with sustainable development. States should demonstrate their willingness to implement the commitments they have made, both in the national and international levels, in order to create the necessary conditions and the enabling environment for private resources to be adequately channeled towards long-term sustainable development goals. Foreign direct investment must be increased and become more long-term oriented and aligned with national development priorities to support developing countries in implementing the SDGs.

In this connection, it is worthy to mention that IATF recognizes that "even with long-term horizons, and incorporation of material long-term ESG drivers of value, markets may provide insufficient financing for sustainable development across countries and sectors. This is the case when the risk-adjusted returns are not competitive with other opportunities, for example due to high risks (or externalities that are not priced in to private investment decisions)." This demonstrates that that contribution of private business to finance development should not be overestimated.

On Systemic issues

The 2008 world financial and economic crisis highlighted the regulatory gaps in the international financial system. The structural reform of the international financial system and the relevant institutions is urgently needed to avoid recurrence of crises that could have severe negative impacts on the economies of the developing countries.

Moreover, there is a need to make the international financial system and the relevant institutions more responsive to the needs and concerns of developing countries including broadening and strengthening the participation in the global economic governance and the international economic decision-making.

On Science, technology, innovation and capacity-building: addressing the constraints on technology transfer along with enhancing capacity building in science, technology and innovation is essential for the progress of the developing countries in implementing SDGs. In this regard, the outcome document must emphasize the need for allocation of financing for the fulfilment of the Technology Facilitation Mechanism's (TFM) mandate.

Co-facilitators,

The Group seeks to ensure that adequate coverage was given to the issue of sustainable consumption and production, for ensuring that the issue as a whole, including SDG12, is given the necessary political support.

The Group would like also to dedicate due consideration for implementation of para 134 of AAAA, regarding holding a follow-up conference by 2019.

We also look forward for more engagement of UNCTAD in the FfD process as the focal point within the United Nations system for the integrated treatment of trade and development and interrelated issues in in the areas of finance, technology, investment and sustainable development taking in accordance with para 88 of AAAA. Moreover, the group seeks involvement of organizations such as UNIDO and South Centre in FfD process taking into consideration their focus on various development issues relevant to the developing countries.

Co-facilitators,

The elements presented in this statement will also be provided in writing for your consideration to be followed by further elements.

I thank you, Co-Facilitators.