“Short-term funding cuts have long-term implications, undermining the resilience of countries and their ability to invest in human capital, stabilise economies and build transparent, accountable governance systems”
expectancy and unprecedented inter- net connectivity. Yet, in today’s polarised domestic climate, investment in global development is becoming increasingly constrained. In 2024, the Organisation for Economic Co-operation and Devel- opment’s Development Assistance Committee members mobilised 0.33% of their combined gross national income for ODA, far short of the longstanding 0.7% target. This disparity underscores the growing gap between the commitments made and the support actually provided to those in need, challenging the notion that investing in global development comes at the expense of domestic priorities. Is anyone stepping in? Many countries are much smaller than the US so they cannot offset its withdrawal. Moreover, heightened security priorities in Europe have led to increased defence budg- ets, with reduced aid often justified as a necessary reallocation of resources to mil- itary spending. In 2024, more than $2,700 billion was allocated to defence spending globally, while a mere fraction of that – just $212 billion – was directed toward ODA. In reality, the greatest risk to a person anywhere today is not reducible to a terri- torial threat. Global development finance is about de-risking the greatest threats in the 21st century including pandemics, conflicts and climate impacts. It is about addressing our shared vulnerabilities, from pandemics to climate resilience, while nav- igating challenges such as cybercrime and cyber-terrorism. These are global issues that no country can tackle alone. Yet many developing countries are essentially left to their own devices, eroding confidence in global commitments. Can cash-strapped governments mobilise private sector financing for development? Given the divergence even within the G7, it’s difficult to see how countries will reconvene to make decisions that could transform development financing. Public support is shrinking. Can the private sector provide capital markets, programmes, incentives and policies that provide sig- nificant resources? Without question. However, private capital goes where it can make a robust return on investment. That’s only a dozen or two economies in the Global South. Most developing countries cannot attract substantial capital and pri- vate sector investment without measures
such as credit guarantees, export finance or hybrid capital. Billions of people live in economies struggling to attract signifi- cant investments. Most investment comes from the private and entrepreneurial sec- tors, but for transformative investments to make up for reduced aid, we need delib- erate policy measures and development finance institutions to infuse strategic cap- ital that can multiply investments that produce private sector infrastructure, ser- vices and economic growth. Is there a risk of a new digital divide over artificial intelligence? Artificial intelligence can drive economic development that is transformative for developing country economies. Yet we need transparent governance frameworks that ensure that technology becomes an asset for a country, a society and ulti- mately the global economy. To this end, the UN Development Programme, the Inter- national Telecommunication Union and
private sector partners are working along- side developing countries to create the robust ecosystems needed to reap the benefits of AI applications. This includes establishing the structures necessary to foster private sector–driven AI services and products, ensuring they are inclusive, sustainable and tailored to local needs. UNDP’s 2025 Human Development Report focuses on investing in the possibil- ity of AI. It argues how the world must find the optimal balance between market-driven innovation, entrepreneurial ingenuity and regulatory frameworks so that AI does not become weaponised or exclusive to the point of driving conflict, and aligns with human rights, including the right to pri- vacy. Can G7 leaders help get the SDGs back on track? The G7, by virtue of its economic size and influence, must find a way to act cohesively, rising above the challenges of the moment, not only as a stabilising force but also as leaders in ensuring a safer, more equitable future for all. This includes reversing the decline in ODA and recognising that the cost of inaction – on hunger, poverty, cli- mate change and instability – is far greater than the investments required now. Moreover, the G7 can champion bold reforms to international financial and governance systems, ensuring that insti- tutions such as the UN and Bretton Woods frameworks are fit for purpose in address- ing 21st-century challenges. By doing so, the G7 can help restore trust in multi- lateralism, mobilise private and public capital to fill critical gaps, and ensure that life-changing technological advancements like AI benefit all, not just a select few. Canada’s G7 presidency presents a piv- otal opportunity to set a bold new course for global progress. With courage and vision, the G7 can forge a legacy of soli- darity and transformation that will define this era. The world is not merely watch- ing; it is relying on the G7 to take decisive, impactful action to confront the defining challenges of our time.
// ACHIM STEINER Achim Steiner has served as the administrator of the United Nations Development Programme since 2017. He is also the vice-chair of the UN Sustainable Development Group, which unites 40 entities of the UN system that work to support sustainable development. Prior to joining UNDP, he was director of the Oxford Martin School and Professorial Fellow of Balliol College, University of Oxford. Mr. Steiner led the United Nations Environment Programme (2006–2016) and was also director general of the United Nations Office at Nairobi. He previously held other notable positions including director general of the International Union for the Conservation of Nature and secretary general of the World Commission on Dams.
X-TWITTER @Asteiner undp.org
83 globalgovernanceproject.org
Made with FlippingBook Digital Proposal Creator