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.

I. General

1. It is worthy to recall that Addis Ababa Action Agenda (AAAA) represent means of implementation for 2030 agenda for sustainable development. In this context, finance for development (FfD) should focus on channeling resources to poverty eradication, which is the overarching goal of the 2030 agenda.

2. Any resources to finance development must be aligned with national priorities and development strategies of the countries, taking into consideration different realities and contexts.

3. The principle of common but differentiated responsibilities is fundamental in implementation of the 2030 agenda.

4. Appropriate focus has to be placed on an enabling international environment and global partnerships for development, balanced against the increased emphasis being placed on domestic resource mobilization. It is counterproductive to highlight the significance of domestic resource mobilization in developing countries, while at the same time not vigorously tackle areas that impede their ability and constraint their policy space to capture necessary resources needed to finance development.

5. Adequate coverage should be 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.

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

7. The Group stresses the need for engagement of organizations relevant to the global south in Ffd process. Particularly, the Group looks forward for involvement of UNIDO and South Centre in IATF's process, taking into consideration their focus on various development issues relevant to the developing countries. UNCTAD; as the focal point within the United Nations system for the integrated treatment of trade and development and interrelated issues in the areas of finance, technology, investment and sustainable development; should be more involved in FfD process.

II. The Global Economic Context and its Implications for the Sustainable Development.

8. The world faces many challenges and risks that could hinder achievement of 2030 agenda. 2018 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."

9. In this precarious context, it is urgent to address the systemic problems and longstanding concerns with a view to identifying the means to accelerate the pace of progress towards achieving 2030 agenda.

III. Action Areas of AAAA

International development cooperation

10. Official development assistance (ODA) is key and indispensable for achieving sustainable development goals. It is the principal channel for international cooperation and will continue to remain so.
11. 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 agenda.

12. 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.

13. 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.
14. The developed countries must 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 AAAA and 2030 Agenda.

15. 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.

International trade as an engine for development

16. International trade can be engine for inclusive economic growth and poverty eradication as well as an important source to finance development and achieving sustainable development goals.

17. A universal, rule-based, open, non-discriminatory and equitable multilateral trading system can stimulate development worldwide.

18. The principle of special & differential treatment for developing countries is indispensable in harnessing the developmental benefit of international trade. It must be enshrined and strengthened in the architecture of the multilateral trading system, with a view to enabling developing countries to achieve structural transformation, industrial development, economic diversification, and food security.
 
19. The issues of particular concern to developing countries, including trade barriers, trade-distorting subsidies, and other trade-distorting measures must be addressed, especially as related to sectors of special export interest to them with a view to enhancing their capacities to finance development and to diversifying their economies. It is a matter of deep concern that the Doha Development Agenda, which aims at addressing the systemic imbalances in the multilateral trading system and ensuring more integration of the developing countries in international trade, has not been concluded.

20. The proliferation of protectionist measures and rhetoric is a matter of concern. It 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.

21. The WTO is the appropriate multilateral forum for setting the norms and rules of international trade. The developmental component of trade must be strengthened throughout the architecture of the WTO.

Debt and debt sustainability

22. 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. 2018 IATF's 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 SIDS, which remain vulnerable to natural disasters."

23. In this context, risks of a potential renewed cycle of debt crises and economic disruption, pose severe challenge to the achievement of the SDGs.

24. It is urgent to explore the necessary measures to reduce the indebtedness of the developing countries as well as the means and instruments needed to achieve their debt sustainability.
25. Debtors and creditors must work together to prevent and resolve unsustainable debt situations.

Addressing systemic issues

26. The 2008 world financial and economic crisis highlighted the regulatory gaps in the international financial system. The structural reform of the international financial and monetary 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. Reducing spillover effects of global financial crises to developing countries must be at the core of the reform agenda.

27. The reform of the international financial and monetary system must seek to curb speculative activities, which augment systemic risks and increase financial volatility.

28. Adoption of measures for addressing excessive volatility of commodity prices are needed to ensure the proper functioning of food commodity markets and their derivatives, taking into consideration the negative consequences of such volatility on food security and agriculture worldwide. Efforts must be made to ensure that commodity markets appropriately reflect demand and supply changes and to help limit excess volatility of commodity prices.

29. 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 through broadening and strengthening their participation in the global economic governance and the international economic decision-making.

Science, technology, innovation and capacity-building

30. Technology transfer is one of the core priorities of the developing countries in implementing 2030 agenda. Eliminating constraints on technology transfer to the developing countries is urgently required. The Group expresses its concern that consecutive IATF's reports don't address the issues relevant to technology transfer. The Group requests IATF to address the issues relevant to technology transfer in its 2019 report pursuant to AAAA.

31. Additionally, UNCTAD must intensify its efforts to enhance capacity building of the developing countries in negotiations of contracts that could incorporate technology transfer components.

32. Enhancing capacity building in science, technology and innovation is fundamental for the progress of the developing countries in implementing 2030 agnda. In this regard, there is an urgent need for allocation of financing for the fulfillment of the Technology Facilitation Mechanism's (TFM) mandate.

Domestic public resources

33. Mobilization of domestic public resources to finance development is not only limited to the relevant national policies. Global systemic factors beyond national jurisdictions can affect the ability of developing countries to mobilize their domestic public resources. Therefore, there is an urgent need to address the international-related aspects that could affect developing countries' capabilities to mobilize their domestic public resources to finance development. Among the most relevant issues are the challenges posed by the lack of international tax cooperation, the existing illicit financial flows and tax evasion.

34. While developing countries seek 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 aspects of taxation.

35. The Group reiterates the need to strengthen international cooperation on tax matters, recognizing with concern there is still no inclusive forum for international tax cooperation at the intergovernmental level. In that regard, we reiterate the need to upgrade the Committee of Experts in Tax Matters to an intergovernmental body with experts representing their respective governments. Furthermore, the Group emphasizes relevance and necessity of enhancing capacity building of the developing countries in the area of tax matters.

36. The Group stresses the importance of careful intergovernmental consideration as to defining and measuring illicit financial flows and their implications on the developing countries.

37. ODA in support of domestic resource mobilization remains small. In this regards, the developed countries should continue to increase their contributions to strengthen capacity building of the developing countries in the area of revenue mobilization.

Domestic and international private business and finance

38. 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.

39. Financial markets and the private sector's activities and operations must align with the sustainable development. The international community should seek to create the necessary conditions and the enabling international environment for private resources to be adequately channeled towards achieving 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.

40. In this connection, it is worthy to mention that 2018 IATF's report 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 the private business to finance development should not be overestimated.