April 17, 2015 – Washington D.C.
Check against delivery
Thank you for that introduction, Gavin.
And thank you to the International Finance Corporation and the World Economic Forum for bringing us all together today.
This is a pivotal year for development.
The Millennium Development Goals will expire in September and a new set of development goals will take their place.
In the meantime, a conversation about development financing has emerged.
There is consensus that official development assistance, or ODA, alone, cannot finance the post-2015 development agenda.
In 2014, ODA totalled $135 billion.
This is a significant investment for a relatively small group of core donors in a time of competing global fiscal demands.
However, the annual financing required to reach the Sustainable Development Goals is estimated to be in the trillions of dollars.
Two of the most stable sources of development finance are domestic public finance and private sector finance.
Canada takes a holistic approach to financing for development that includes supporting efforts to strengthen domestic resource mobilization, addressing illicit financial flows, and harnessing more private investment in developing countries.
In many countries, domestic public finance or tax systems can be improved: taxes can be more systematically collected, and they can be spent more efficiently and effectively.
Illicit financial flows are another factor that can hamper developing countries’ ability to finance development, both directly by reducing the funds available, and indirectly by weakening their ability to mobilize domestic resources through taxation.
We believe that donor agencies have an important role to play in helping to strengthen the tax systems in developing countries so that they can address illicit flows.
Canada believes the role of the private sector is equally important in terms of creating an enabling environment for economic growth and leveraging development efforts.
As an early adopter of the blended finance model—using public capital to leverage massive amounts of private investment—Canada has successfully mobilized more private investment into developing countries in a number of high-impact development sectors.
For example, in financial services, we are working with Sarona Asset Management to provide much-needed financing for small and medium-sized enterprises in emerging markets so they can grow and create new jobs.
In global health, Canada, the United States, Norway, and the World Bank Group recently launched the Global Financing Facility in support of Every Woman Every Child.
This exciting new facility will sustainably finance innovative initiatives with the private sector in maternal, newborn and child health—Canada’s top development priority.
Expanding blended finance is also a core purpose of the OECD-WEF Redesigning Development Finance Initiative.
As Chair of the Steering Group, I am committed to working with global partners to identify, test, and scale-up public-private blended finance models in a systematic way. The additional investment generated by this approach should significantly accelerate progress toward global development results.
I’m sure we will hear about more ideas and opportunities from our esteemed panellists today.
However, I urge you all to think beyond this meeting.
Canada, in partnership with the World Economic Forum, Dalberg Global Development Advisors, and a number of other players, is exploring the potential for a global finance exchange for social advancement.
This exchange would serve as an online marketplace, a knowledge broker, and accelerator of innovative blended-finance models.
It could harness the skills, expertise and resources of public, private and not-for-profit sectors. It would help reduce the time required to structure investments and forge new partnerships.
As we move forward with the development of the exchange, we hope that you will lend your expertise, support and commitment.
If we think back to that massive financing gap for reaching the Sustainable Development Goals, this could be part of the solution we need to:
- leverage new sources of financing;
- turn billions into trillions; and
- end global poverty while creating new investment opportunities for the private sector.
Thank you.
