The Fourth International Conference on Financing for Development (FfD4): Progress Signals amid Structural Shortcomings
- Saïd Skounti and Iskander Erzini Vernoit
- Jul 24
- 7 min read
(This article was originally published in French in the newspaper L'Economiste.)
The Fourth International Conference on Financing for Development (FfD4) took place from June 30 to July 03, 2025 in Seville, Spain, gathering around 15000 participants and about 70 heads of state.
Only five years remain to deliver the 2030 Sustainable Development Goals (SDGs), yet the world is behind, with an additional $4 trillion needed annually for development and climate action in developing countries. Despite this, parochialism is on the rise and the world appears to be moving backward — with Official Development Assistance (ODA) declining in 2024 by 7.1% compared to 2023, and further cuts in 2025, leading to the annual loss of millions of lives that would otherwise have been saved. In the UN climate process, developed countries only agreed a paltry $300 billion annual mobilization goal for 2035 during the last COP in Baku.
The "Compromiso de Sevilla", the FfD4 outcome text agreed under the UN, achieved consensus about two weeks before the conference. It was framed as a triumph of multilateralism – yet it saw the United States withdraw from the consensus after playing a regressive role in the negotiations, while the EU, UK, and other developed countries successfully prevented creating a process for a new UN Framework Convention on Sovereign Debt and blocked other advancements, then joining overall consensus while dissociating from various items agreed.
The “Compromiso” is thus lesser than it might have been, but still points to a world far from today’s – calling, for example, for fulfilment of the old commitment to spend 0.7% of GNI on ODA. Meanwhile, the Seville Platform of Action brought together over 130 initiatives aimed at catalyzing finance, addressing debt challenges, and reforming financial architecture. Overall, the FFD4 offered important takeaways and some signals of progress amid structural shortcomings – here follows some reflection of the main themes.
The role of private investment in a context of challenged public finances
In a current context of diminishing aid and disregard for international cooperation by Western governments, Seville saw a strong focus on efforts to scale private investment in support of development.
There was particular momentum in FfD4 around “country platforms”, a concept which dates back some years, notably in G20 discussions — intended as structures to help convene key stakeholders and mobilize diverse sources of financing toward national aims. FfD4 featured renewed support for Integrated National Financing Frameworks (INFFs) under the INFF Facility, as an approach which emerged from prior FfD processes. Today, over 85 countries, including Morocco and Egypt, are already using INFFs, and there is a common expectation that these may give rise to more focused country platforms, in particular for attracting private capital into climate-related sectors.
Blended finance was championed at FfD4 by many as a key solution for addressing climate and development financing needs, though there is increasing awareness of its limitations and caution about over-hyping the “billions to trillions” narrative. Total annual blended finance recorded worldwide is around $213 billion, far from the $5-7 trillion needed annually to achieve the SDGs, leading some to argue that governments are bringing billion-dollar solutions to trillion-dollar challenges.
Activating private investment to support policy goals remains an important priority for the world’s many public finance institutions in attendance in Seville, including multilateral banks, national development banks, and development finance institutions. Still, FfD4 highlighted considerable debates to be had about the merits of different approaches.
Various experts were clear that the agenda must not be a distraction from the need to enhance public finance, concessional and grant finance, including for catalyzing private investments, but also for areas that private finance cannot cover. Given the high cost of capital faced by developing countries, there is a continued need to mitigate financial risks and render finance more affordable, including via the concessionality of debt instruments in the context of the debt crisis.
Debt burdens highlighted as an obstacle for development and climate action
Debt issues dominated the official statements in the FfD4 Plenary Sessions and the Stakeholders Roundtables but also the side events and civil society interventions – with debt burdens acknowledged by a broad spectrum of actors in Seville as an obstacle to development.
The President of Cape Verde and other African leaders raised the alarm on debt and called for reform. External debt in developing countries hit a record $11.4 trillion in 2023, with 3.4 billion people living in countries spending more on interest payments than on health (SDG3) or education (SDG4). Africa, it was noted, faces on average debt service payments equal to almost 14% of government spending – twice the allocation for health. Governments face a severe dilemma of choosing between the needs of their people and paying their creditors.
The African Union (AU) has been among the first official actors to call for a UN Framework Convention on Sovereign Debt. The proposed Convention is of great importance as it would entail agreeing a global consensus on the rules, principles, and structures of the debt cycle. It would also address issues like credit rating agencies judged unjust in their treatment of some countries, especially African ones. The Convention could also include elements around transparency to inform lending and borrowing.
In the Seville “Compromiso”, there is at least an agreement to “initiate an intergovernmental process at the United Nations, with a view to make recommendations for closing gaps in the debt architecture”. Unfortunately, agreeing to create an actual Convention was not possible for FfD4 as major creditor countries such as the European Union (EU), the United Kingdom (UK) were strongly opposed. As the FfD4 happens once in a decade, this arguably means an important opportunity was missed to restore trust in the whole multilateral system and address ongoing debt crises.
The Seville “Compromiso” calls for a wider use of debt swaps, and Spain and the World Bank notably launched the Global Hub for Debt Swaps with the aim of helping poor countries free up money for development and climate adaptation. Although debt swaps constitute a relevant instrument, their modest scale relative to systemic challenges led to the critique that they may be more of a distraction than a solution. Over three decades, debt swaps have led to roughly only $8.4 billion of debt treated, only 0.11 % of total debt payments by low- and middle-income countries during the same period.
In addition, rich creditor countries such as Spain and France alongside the Multilateral Development Banks (MDBs) launched the Debt Pause Clause Alliance. This initiative aims at the inclusion of pause clauses that suspend the external debt in case an indebted country faces external shocks, such as disasters linked to climate change.
Lastly, a Borrower’s Forum was announced to assist countries facing debt distress. This would serve as a platform for dialogue and sharing experience and best practices between countries.
During the last day of the conference, numerous civil society groups held protests calling for debt cancellation. These current calls for a debt jubilee evoke the Jubilee 2000 campaign — a movement started in 1994 which called for debt cancellation in almost 40 countries and secured over $100 billion in canceled debts.
Tax reforms and tax cooperation in the spotlight at FfD4
At FfD4, experts questioned, does the international community face a finance gap for development and climate action, or does it face a tax sovereignty gap? Indeed, the agreed FfD4 “Compromiso” calls on countries to promote progressive tax systems and to address tax evasion and avoidance by high-net-worth individuals.
In Seville, various tax-related solutions were put on the table to raise government funds for development and climate action, whether for domestic or international use — a gap exacerbated by increased military spending in rich countries especially. A joint initiative led by Spain and Brazil was launched to promote global taxation on the super-rich. Eight countries including France, Kenya, Barbados and Spain launched an aviation “solidarity levy” coalition, which will work towards COP30 on how to tax private jets, premium air travel and business-class tickets, responsible for around 2.5% of anthropogenic CO2 emissions.
However, Seville also told a wider story of how some of these governments, including France, are also responsible for standing in the way of tax cooperation that would raise important revenues. After years of negotiation, the OECD/G20 Inclusive Framework was created as a basis for raising corporate taxes and combating tax avoidance worldwide. However, the G7 governments in recent weeks decided to put the interests of multinational companies ahead of the interests of this international effort, by exempting US multinationals from the global minimum corporate tax. Speaking in Seville, Nobel prize-winning economist Stiglitz was critical of the decision: “In one day, one hour, the G7 destroyed 14 years of global governance, by destroying the global minimum tax on multinationals”.
Meanwhile under the UN, as referenced in the FfD4 outcome text, a new Framework Convention on International Tax Cooperation (UNFCITC) is being negotiated. This represents an essential step forward to more equitable global governance, away from processes such as those of the OECD and G20 which exclude many countries. Again, the African Group took the lead, putting forward the resolution “Promotion of Inclusive and Effective Tax Cooperation”, which was opposed by developed countries at the time.
The Seville “Compromiso” calls for strengthening the voice and representation of developing countries in the governance of international tax cooperation and calls for constructive engagement in the negotiations under the UNFCITC. The first session of the intergovernmental negotiating committee on the UNFCITC will take place between 4-8 August 2025 in New York and will serve as a test for evaluating the international community’s commitment to addressing global challenges together.
FfD4 marked some progress, but the status quo persists, still far from the transformations urgently needed for development and climate action. Only if the “Compromiso” commitments are translated into concrete action, and collective pressure maintains its momentum, can this conference be considered a major turning point in multilateralism. Time, however, is running out.
