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Financing for development

According to UN estimates, reaching the Sustainable Development Goals (SDGs) will cost several thousand billion dollars a year over the next 15 years. In this context, Official Development Assistance will continue to play a critical role. However, it will only contribute with a fraction of the required finance. The SDGs can only be achieved if all major financing sources, including private finance, contribute. 

The Ministry of Foreign Affairs helps mobilize funding through various financial instruments. This can pave the way for the private sector to contribute to the SDGs. Partnerships with the private sector, new lending and financing models, along with measures to increase domestic revenues in developing and growth countries are among the important tools to help achieve the SDGs.

Lake Turkana

Doing good and doing business goes hand in hand
Inclusive economic growth is a prerequisite for achieving the SDGs. Furthermore, it creates opportunities for Danish engagements in new markets and for investments in developing and growth countries, thereby contributing to reaching the SDGs. Markets and the need for investments constantly evolve. Denmark will live up to our international commitments, including by securing responsible conduct in business and investments.

The Ministry of Foreign Affairs prioritises considerations of environment and climate as well as social and human rights. Developing and growth countries will be able to benefit from the high technical, social, and environmental standards of Danish expertise. In addition, transparency and openness are the foundation of our work. 

Business opportunities
Through the network of Ministry of Foreign Affairs, potential partners can engage in strategic discussions and develop solutions to the priorities and needs of developing and growth countries. The Danish business sector, investors, and partners in developing countries can benefit from the Ministry of Foreign Affairs’ knowledge and network when considering opportunities, risks, and partnerships in frontier markets. Thereby, perceived risks often prove to be reduced or eliminated.


Improved tax collection

Over the last ten years, tax revenues in developing countries have only increased marginally. SDG 17 on “Partnerships” addresses the need to strengthen developing countries’ ability to collect tax. OECD estimates that if developing countries increase tax collection by one percentage point, an additional revenue of USD 300 billion can be raised. Being around the double of total official development assistance, this additional finance is greatly needed.

With a view to achieving the SDGs, Denmark will strengthen its effort to assist national and local authorities in collecting taxes and secure increased revenues. This requires greater transparency of the tax revenue of the poorest countries and insight into their tax deals with private investors. In this context, the authorities in developing and emerging countries can benefit from cooperating with the Danish tax authorities and draw on their expertise.


Finance for development and debt relief

Along with other providers of development assistance, Denmark participates in the Paris Club to discuss lending and debt issues related to developing and emerging countries. The Club monitors whether the developing countries’ debt becomes unsustainable. If so, it could undermine the ability of the country to achieve the SDGs. Therefore, a highly indebted country can approach the Paris Club with the view to renegotiate its debt. Subject to careful assessments, debt relief measures can help achieve budgetary room and get the country back on a healthy economic development path.

 

Danida

Ministry of Foreign Affairs of Denmark
Danida
Asiatisk Plads 2 
DK-1448 Copenhagen K
Tel. +45 33 92 00 00
Fax +45 32 54 05 33
um@um.dk

 

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Theo Ib Larsen

Email: Thelar@um.dk

Telephone: +4533920607