Describing a race to the bottom in which multinational corporations enjoy lower and lower tax rates around the globe, delegates at the Economic and Social Council's forum on financing for development follow-up today stressed that such practices are slicing deep into the funds countries need to achieve the Sustainable Development Goals by their 2030 deadline.
Throughout the day's three panel discussions � which focused, respectively, on the roles of domestic public resources, private business and international development cooperation in financing sustainable development � speakers repeatedly sounded alarm over the impact of such tax incentives on their countries' resource bases. Some also questioned the broader wisdom of entering into marriages with the private sector in an effort to finance sustainable development.
Still other delegates voiced concern that global tax policy is still crafted in outdated, undemocratic structures led by a handful of wealthy nations. To increase transparency and allow all countries to engage on an equal footing, many called for the establishment of a more democratic tax body within the United Nations system.
Governments are subsidizing private profit, stressed Fanwell Bokosi, Executive Director of the African Forum and Network on Debt and Development. Noting that foreign direct investment (FDI) in Africa fell by 21.5 per cent in 2017, despite many corporate incentives, he said the tax race to the bottom has not yielded results. Private actors by nature are not interested whether a person is starving, but rather, how much profit they will make by giving you bread.
Tove Maria Ryding, Head of Advocacy for the European Union Network on Debt and Development, said developing countries have long demanded a seat at the table in global tax policy negotiations but have repeatedly been blocked. Recalling the highly tense situation at the third International Conference on Financing for Development � held in Addis Ababa in 2015 � she said that meeting took place against the backdrop of negotiations by the Group of 20 on a new set of standards for taxing multilateral companies. Developing countries' calls to more firmly address tax dodging were ultimately rejected, resulting in the situation seen today, she said.
Several development actors and municipal leaders outlined concrete challenges faced on the ground as efforts to mobilize revenue are increasingly hampered by corporate tax incentives, tax evasion and persistent capacity constraints.
Ahmed Aziz Diallo, Mayor of Dori, Burkina Faso, said efforts to resource the Sustainable Development Goals look good on paper, but are rarely reflected in the realities of low-income countries. In Burkina Faso, for example, only 4 per cent of the national budget is transferred to municipalities for the purpose of sustainable development. Meanwhile, municipalities lack access to credit that could help them bridge those gaps.
A representative of Christian Aid, echoing concern about funding gaps, said the erosion of tax bases � due largely to plummeting corporate tax rates � disproportionately impacts the world's poorest people. In that vein, she joined other speakers in demanding that corporations pay their fair share and that all countries be at the table in the negotiation of international tax policies.
Liselott Kana, Head of International Tax Legislation for Chile's Department of the Revenue Administration, said the United Nations has considered various ways to address the challenges of base erosion and profit shifting � often known by the acronym BEPS. However, more work is needed. Among good practices, she cited the Organisation for Economic Co-operation and Development's (OECD) Due Diligence Guidance for Responsible Business Conduct, which steers companies to adhere to the letter and spirit of tax laws in the countries where they operate.
Several positive examples also emerged from representatives of private companies themselves. Sasmit Dwivedi, Senior Vice-President and Head of ESG and Research for the life insurance company Nippon Life Global Investors Americas, Inc., said his company began investing in sustainability long before it became cool. As the largest life insurance provider in Japan, the company has committed to invest over 700 billion in tree planting by 2020.
Meanwhile, Eric Hespenheide, Chairman of the Board of Directors for the Global Reporting Initiative, said his organization's work is used by 75 per cent of the largest 250 companies in the world. Among other things, it seeks to educate and harmonize recommendations by the Task Force on Climate-Related Financial Disclosures, aiming to illuminate a company's impact on the world � not the other way around.
The forum on financing for development follow-up will conclude its work at 10 a.m. on Thursday, 18 April.
This morning, the forum convened a panel discussion on Domestic public resources, one of the funding elements enshrined in the Addis Ababa Action Agenda. Moderated by Grace Perez-Navarro, Deputy Director of the Centre for Tax Policy and Administration, Organisation for Economic Co-operation and Development (OECD), it featured: Jules Yehouenou, Director-General, Ministry of Planning and Development of Benin; Liselott Kana, Head of the International Tax Legislation, Department of the Revenue Administration, Ministry of Finance of Chile; Ahmed Aziz Diallo, Mayor of Dori, Burkina Faso; and Federico Giammusso, Director General for Research, Ministry of Economy and Finance of Italy. Serving as discussants were Jose Maria Viera, Permanent Representative of the Stakeholder Group of Persons with Disabilities, and Tove Maria Ryding, Head of Advocacy, European Union Network on Debt and Development.
Ms. PEREZ-NAVARRO, opening the discussion, said taxes are a key component of mobilizing resources for development. However, the question is not just how much money is raised, but how it is spent. Underlining the importance of building up infrastructure and improving people's everyday lives, she said that while much attention has been paid to the international aspects of taxation, that is just one component. OECD is working, among other things, to tackle such challenges as tax evasion and base erosion by multinational companies. Introducing the panellists, she asked Mr. Yehouenou what challenges still need to be overcome to improve tax resource mobilization and the delivery of public services at the national and subregional levels.
Responding to that question, Mr. YEHOUENOU echoed the importance of domestic resources. National public resources are drawn from several sources � including households, businesses and Government � through both taxation and private savings. Noting that the West African subregion has created a tool aimed at simplifying tax collection, he said Benin is also rolling out a platform to allow businesses to pay their taxes online. This is a major step forward, he stressed, adding that limiting human interaction on tax payments helps to limit bribery and corruption. Noting that the informal economy plays an important and dynamic role throughout sub-Saharan Africa, he said that can hamper tax collection and pose further challenges for Governments seeking to mobilize domestic resources.
Ms. KANA � responding to a question about how Member States can address the challenges of base erosion and profit shifting, use tax incentives to boost sustainable development and avoid a race to the bottom in lowering tax rates � said the United Nations has considered ways to address the challenge of base erosion and profit shifting, often known as BEPS, in various formats. However, more work is needed, as are more coherent policies at the national level. In addition, she noted that many countries that provide aid to others expect such assistance to be tax exempt, a policy which should be reconsidered as it erodes recipient countries' tax bases. Turning to business practices, she said the OECD due diligence guidance for responsible business conduct seeks to steer multinational companies to adhere to the letter and spirit of the tax laws of the countries where they operate.
Mr. DIALLO, asked how municipal budgets can best reflect national policies aimed at mobilizing resources to achieve the Sustainable Development Goals, said the latter are good on paper, but are rarely reflected on the ground. While targets in the 2030 Agenda for Sustainable Development are universal, the picture in OECD countries differs dramatically from the one in least developed countries. In Burkina Faso, for example, only 4 per cent of the national budget is transferred to municipalities for the purpose of sustainable development, and municipalities lack access to credit that could help them fill those gaps. In addition, he stressed that the resource bases of Sahel countries are shrinking due to the region's serious security concerns.
Mr. GIAMMUSSO described Italy's efforts to shift its tax and resource framework from one that was purely based in gross domestic product (GDP) to one that is more focused on human well-being. The country's definition of success now includes 12 sustainable well-being indicators, he said, noting that, while a handful of countries have begun to monitor well-being, Italy stands at the frontier of efforts to incorporate those indicators � including equity, education, health care, security issues and environment � into national policies. The idea is not to totally dismiss GDP as an indicator, but to complement it, he stressed, citing the development of better data collection and stronger analytical tools as two components of Italy's policy shift.
Ms. RYDING recalled the highly tense situation at the third International Conference on Financing for Development, held in Addis Ababa in 2015, which took place against the backdrop of negotiations by the Group of 20 on a new set of standards for how multinational corporations should be taxed. Many developing countries � which felt such decisions should be taken under the auspices of the United Nations and attended by all States on an equal footing � were not invited into those discussions. Ultimately, their call to more firmly address tax dodging was rejected, and a new package of standards was adopted by only a handful of countries. Pointing out that the Group of 77 developing countries and China have, in recent weeks, been calling once again for a United Nations negotiation to discuss the fact that multinationals are still not being properly taxed, she expressed regret that such demands were once again blocked by developed countries.
Mr. VIERA said many of the world's 1 billion people with disabilities experience compounded inequalities that are further exacerbated when disabilities intersect with other forms of discrimination. Calling for more accessible services to help persons with disabilities live and work independently, he said the provision of such resources is often hampered by corporate tax avoidance � which costs Governments an estimated $500 billion every year. Echoing concern over the fact that the United Nations lacks a dedicated tax body to tackle such issues, he urged the forum to call on the Inter-Agency Task Force on Financing for Development in its 2020 report to examine Government performance in conducting human rights impact assessments of fiscal policies, with a particular emphasis on responsiveness on the rights of marginalized persons.
Following those remarks, Ms. KANA emphasized that such issues as resourcing and technical skills must be considered by any dedicated international tax body, whether in the context of the United Nations or OECD. Mr. YEHOUENOU struck a similar tone, stressing that national tax systems must be provided with the resources needed to perform oversight functions over multinational companies.
As the floor opened for comments, several speakers reiterated the panellists' concerns about a worsening race to the bottom wherein multinational companies are offered lower and lower tax rates, as well as instances of tax avoidance. Many also echoed calls for the establishment of an inclusive intergovernmental tax body under the auspices of the United Nations.
The representative of Christian Aid underscored the importance of enacting progressive tax policies and ensuring effective public spending, as well as curbing illicit financial flows. Many gaps have emerged in such efforts, including the erosion of tax bases due largely to plummeting corporate tax rates. Noting that such challenges impact the world's poorest people the most, she joined other speakers in demanding that corporations pay their fair share and that all countries be at the table in the negotiation of international tax policies.
The representative of Nepal was among speakers who drew attention to the many tax collection and enforcement challenges faced by developing countries. More investment is needed to help Governments collect revenue and provide services to their people, he stressed.
Also participating in the discussion were representatives of the Asia Pacific Forum on Women, Law and Development and the Society for International Development.
In brief closing remarks, Mr. GIAMMUSSO said that, besides attention to multinationals, tax compliance by domestic actors is also crucial. Mr. DIALLO called for the proper resourcing of local governments, policies to ensure those funds are well spent and an acceleration in the pace of sustainable development investments. Ms. KANA � declaring that the international tax system is breaking down � said such challenges also provide an opportunity to restructure and simplify that system. Mr. YEHOUENOU, for his part, said good spending controls will encourage more people to pay into the system.
The forum then held a panel discussion on Domestic and international private business and finance, the title of Action Area B of the Addis Ababa Action Agenda. Moderated by James Zhan, Director of the United Nations Conference on Trade and Development (UNCTAD), it featured presentations by Pio Wennubst, Assistant Director General, Swiss Development Agency; Albena Melin, Manager, Global Engagement and Outreach, International Finance Corporation, World Bank Group; Sasmit Dwivedi, Senior Vice-President, Head of ESG and Research, Nippon Life Global Investors Americas, Inc.; and Mwanahiba Mzee, Managing Director, Ecobank, United Republic of Tanzania.
Mr. ZHAN said today's discussion will examine actions that can foster financial inclusion � particularly by empowering micro-, small and medium-sized enterprises � as well as impediments to domestic and private investment in least developed countries, policies to overcome them and better align private investments with sustainable development, measures policymakers can take to ensure investing translates into impact and how to harness the benefits associated with new instruments, including fintech.
Mr. WENNUBST said sustainable impact investment is led by wealth management, family offices and individuals who, given depressed returns on investment in other areas, are looking for different avenues or wanting to align their investments with their values. The risk perception and the rules of the game must be considered, with questions focused on who is taking the lead in impact investing. Development agencies can help in this regard. The first element is to follow the leadership. For example, four countries in West Africa agreed on a shared investment plan and a political accord for a shared water arrangement. This is powerful leadership, he said, as investment plans will be discussed, re engineered and discussed again. When the private sector tries to follow this model, however, it cannot. From a development agency perspective, the goal is to support such arrangements by providing a link.
Ms. MELIN, on how to incentivize the private sector to better align with the Sustainable Development Goals, discussed real-sector and institutional investors, many of which do not need to be incentivized, as they want to do more with their money. Describing the International Finance Corporation's Operating Principles for Impact Investing, she said the first 60 signatories are investors around the world and institutional investors. Collectively, they have more than $350 billion in assets under management. Noting that the International Finance Corporation estimates the market for achieving social and environmental impact, with investment at $26 trillion, she cited the lack of framework and standard definitions as obstacles to investors making such investments. The Operating Principles will help in that regard, as they outline the intent of investors to have an impact, and measure how well they link their intent with a contribution to achieving impact. Private investment comes to low-income countries because there is an efficiently functioning market. Calling capital markets the glue linking the best use of money to the user, she said the International Finance Corporation has launched local currency bonds to attract investors and promotes better taxation systems, which in turn will improve tax distribution.
Mr. DWIVEDI said Nippon is the largest life insurance player in Japan and among the top 12 globally, with a history of involvement in sustainability long before it became cool, citing its tree planting programme in particular. The firm has committed to invest over 700 billion in such efforts by the end of fiscal 2020 and is more than half way to that goal. Discussing how to take environmental, social and governance efforts into mainstream corporate practice, he said the problem with research suggesting that 25 per cent of assets in the United States are managed using environmental, social and governance criteria is that it is dominated by norms-based screening processes that do little to advance the Sustainable Development Goals. The number one focus should be standardizing the disclosure process and improving investor awareness of what is available. He cited a survey showing that 75 per cent of 5,000 companies had published a corporate social responsibility report. However, Nippon's peers in the investment industry do not know what such reports are. From a regulatory standpoint, there should be more harmonizing of standards. Ratings providers are starting to harmonize the way they evaluate companies, which will lead others. The biggest challenge is that time horizons do not correlate with those set for the Goals, he said.
Ms. MZEE, said micro-, small and medium-sized enterprises are often defined in terms of annual turnover, by the amount of borrowing they do or by their management structures. Some 80 per cent in Africa are family owned, contributing up to 60 per cent of employment in their respective economies � making them important for the 2030 Agenda. They also are companies that reach the final consumer, whereas big corporates often do not. The main hurdle to accessing finance is often the nature of the enterprise: many have little experience and capital, and as such, are categorized as high risk. Another reason is the lack of trust between these enterprises and their bankers. Their entrepreneurial spirit can work against them if they are perceived as buying unrelated companies or investing in unrelated areas, for example. We need to improve their business management skills, she said, notably upon registration of the business. Also, financiers must assess them differently, as a one-size-fits-all assessment does not work. Regulators must be fair, and investors must understand the nature of their work.
As the floor opened for discussion, lead discussant ELLIOTT HARRIS, Assistant Secretary-General for Economic Development, Chief Economist, Department of Economic and Social Affairs, contrasted the long-term horizon for investing in the 2030 Agenda with the short-term nature of capital markets, noting that institutional investors care about their fiduciary duty requirements, or the duty of care. Many complain that, while they would like to consider environmental, social or governance issues, they are restrained by a responsibility to generate financial returns. We have to look at returns on human capital and natural capital, he said, stressing that, often, with greater financial innovation comes serious challenge to regulation. Financial market players say the consequence of the Basel III capital requirements is a shortened time horizon � but a focus on short-term risks hinders investment in the Goals. Governments can set incentives through tax policy � a potent instrument. Cautioning that there is no reason to allow favourable conditions for investing in damaging activities, such as coal, he said environmental, social and governance factors relate to how an enterprise manages itself. The impact aspect comes into play when examining what it produces. Company disclosure is often around how it manages itself, rather than an indicator of what it produces.
HANS EK, Acting CEO, SEB Investment Management AB, said he represents the Swedish fund management community with a focus on impact. Noting that there are fewer than 3,900 days until 2030, he said the 2030 Agenda is about three areas of impact: investing in companies at home that are at the forefront to achieving the Agenda, investing abroad in those needing capital the most and impact engaging. He urged participants to share experiences so that when they return home they can act more quickly.
ERIC HESPENHEIDE, Chairman of the Board of Directors, Global Reporting Initiative, said his organization has long been involved in sustainability. While some believe there is confusion around standard setters of sustainability, the Global Reporting Initiative is used by 75 per cent of the largest 250 companies in the world. It works with other standards setters through the corporate reporting dialogue to educate and harmonize recommendations by the Task Force on Climate Related Financial Disclosures. Its reporting aims to illuminate � notably for investors, employers and civil society � a company's impact on the world, not the other way around. As such, it is ready-made to go hand in hand with the Goals.
FANWELL BOKOSI, Executive Director, Afrodad, said foreign direct investment (FDI) in Africa fell by 21.5 per cent in 2017, despite all the incentives provided to companies. Governments are subsidizing private profit, he said, voicing concern that only 20 per cent of micro-, small and medium-sized enterprises are owned by women. He objected to the idea that companies and Governments must enter into a marriage to deliver on the Goals, stressing: The race to the bottom has not given us what we want. It is important to ask what Africa stands to gain from companies. Private actors by nature are not interested whether a person is starving, but, rather, how much profit they will make by giving you bread. They are not charitable organizations � and there is an inherent failure in the private sector to meet social goals. Governments are always held accountable, he said, citing elections as a case in point. Private actors are not. He described corporate partnerships with the public sector as expensive financing that comes with high costs, as they transfer risk to the public and walk away with the profits. He urged debunking the idea that the private sector is always more efficient than the public sector. If that were true, the public sector would not have had to bail out companies during the 2008 financial crisis. He described blended finance as the corporate capture of development finance, stressing that investments must respect human rights, be accountable, foster resilient economies and pay their fair share of taxes.
A speaker from the European Network on Debt and Development said the financing of social infrastructure must be done cautiously. She voiced concern about the disconnect between using public funds and the increased risk of creating a new debt crisis in an era of deepening inequalities. The use of public-private partnerships to deliver infrastructure and social services is also deeply problematic as they often cost more than conventional public funding, disproportionately impact women and violate human rights. Governments should stop promoting them and instead ensure that financing mechanisms align with the 2030 Agenda.
A speaker from civil society said she represents more than 2,200 organizations and that the achievement of the Goals will be impossible if multinational corporations violate human rights.
This afternoon, the forum held a third panel discussion on International development cooperation. Moderated by Maria-Francesca Spatolisano, Assistant Secretary-General for Policy Coordination and Inter-Agency Affairs, Department of Economic and Social Affairs, it featured four panellists: Carin JA�mtin, Director General, Swedish International Development Cooperation; Gladys Ghartey, Head, United Nations Unit, Ministry of Finance and Economic Development of Ghana; Hans Docter, Ambassador, Director for Sustainable Economic Development, Ministry of Foreign Affairs of the Netherlands; and Kotaro Katsuki, Director, Global Issues Cooperation Division, Ministry of Foreign Affairs of Japan. Serving as discussants were Sheka Bangura, Director of Central Planning, Monitoring and Evaluation, Ministry of Finance and Economic Development of Sierra Leone; Laurent Sarazin, Co-chair of the TOSSD Task force of the European Union; and Patrick Kryticous, Executive Director, Civil Society for Poverty Reduction of Zambia.
Ms. SPATOLISANO, opening the discussion, said the meeting was a chance to review progress and challenges in the implementation and commitments made through the adoption of the Addis Ababa Action Agenda. Noting that development cooperation is adjusting to the demands of a changing landscape, as well as of the 2030 Agenda, she asked the panellists to consider what steps can be taken to further strengthen the contribution and effectiveness of official development assistance (ODA) for the achievement of the Sustainable Development Goals.
Ms. JA�MTIN underlined the need to work in new ways, but also to protect the levels and integrity of ODA. Recalling that 0.7 per cent of gross national income is the minimum States can set aside for that purpose � but that very few countries actually live up to that goal � she said Sweden recognizes that ODA alone will never be enough. In response, Sweden has been working in innovative ways, both with ODA and other instruments, including by pushing private actors to invest more in least developed countries. Noting that the Swedish Investors for Sustainable Development Group has been active in that arena for some time, she added that strong tax systems, regulation schemes, judicial systems and governance also can help drive private investment.
Ms. GHARTEY, responding to a question about the role of South-South and triangular cooperation, recalled that those instruments have long been considered a complement to, and not a replacement for, traditional North-South cooperation. Noting that capacity-building and the transfer of technology have historically been central to all those practices, she said a resulting lack of institutional memory and capacity at the national level has nevertheless proved challenging for countries of the South. Capacity-building must be part of the design of all international development assistance projects, and not an afterthought, she stressed.
Mr. DOCTER, asked to spotlight good practices in the use of blended finance, said the latter is not an end in itself, but merely a tool to achieve it. Cautioning that blended finance must be used intelligently � and with restraint � he described some ways the Government of the Netherlands employs it in support of projects in developing countries. Those include a Dutch Group Growth Fund, which is financing small and medium-sized enterprises, and a Health Innovation Fund that tracks private sector investments in health care provision in various African nations. When used sparingly and smartly, blended finance can really help deliver development impacts, he said.
Mr. KATSUKI, on Japan's vision to scale up innovative finance in the Group of 20 context, said his country chairs the G-20 Leading Group on Innovative Financing for Development. He touched on social impact investment, blended financing and an international solidarity tax, noting that social impact investment is a good means for making use of private money. In terms of an international solidarity tax, the amount of money that can be mobilized is smaller and he noted that France has experience in financial transaction taxes. Japan will use the G-20 Summit to promote innovative financing and contribute to technological discussions.
When the floor opened, lead discussant LAURENT SARAZIN, Co-chair of the Total Official Support for Sustainable Development Task Force of the European Union, said the bloc supports the drive for countries to create integrated financing frameworks as complements to their development plans and called on the Department of Economic and Social Affairs to help countries in that endeavour. Voicing concern over the lack of relevant data on which to base development strategies, he said the European Union provides easy to access data online, notably through the EU Aid Explorer. The bloc supports the creation of the Total Official Support for Sustainable Development to fill the knowledge gap on official flows, beyond ODA, to help countries achieve the Goals. A better knowledge of those flows is a necessary for building financing strategies, he said. The Union also supports countries in tapping other financial flows, notably through a plan to leverage Euros 44 billion of investment in Africa by 2020.
PATRICK KRYTICOUS, Executive Director, Civil Society for Poverty Reduction of Zambia, said Governments should not be shy to acknowledge failure. The Goals will not be met unless more is done to meet ODA commitments. The pledge to allocate 0.7 per cent of gross national income to development assistance � made 50 years ago � remains elusive and is reducing. Meanwhile, the issue of resource bleeding receives little attention, while the focus on private sector resources only increases. Stressing that least developed countries are challenged to attract FDI and access concessional financing under growing debt burdens, he said interest rates in Zambia, averaging 37 per cent, make it impossible to grow a domestic private sector. Global public finance should be used to tackle poverty and he called for ending its use for military purposes, both domestically and internationally. Governments should endorse plans to achieve internationally agreed commitments on the quality and quantity of ODA, while the private sector should adhere to ODA effectiveness principles and at the same time adopt accountability standards. This is as much a political discussion as it is a technical one, he said.
The representative of Nepal asked panellists about ensuring the greater availability of ODA and its efficient and effective use.
A speaker from the civil society group on financing for development, including the women's working group on financing for development, said development cooperation is fundamental to attaining the Goals, but the pledge to allocate 0.7 per cent of gross national income remains unfulfilled. Strengthening ODA's contribution to the Goals starts with political will, she said, raising concern over the issue of blending and blind faith in private finance to reach the Goals.
A speaker from the Youth Constituency of the Partnership for Development Effectiveness encouraged Governments to review their commitments, stressing that ODA has a purpose which should be looked after. It should not be used for other purposes. There is also a lack of young people's involvement in the discussion and she asked panellists about how that issue is being addressed. The use of private finance to solve development challenges lacks evidence.
A speaker from the International Trade Union Confederation advocated for the creation of criteria for the private sector involvement in development, including alignment to development principles and the Sustainable Development Goals. There should also be a fair redistribution of risks. He called for evidence that blended finance mobilizes the private sector before the donor community supports it.
Ms. JA�MTIN said ODA itself will never be enough to reach the Goals. One of her agency's instruments involves issuing sovereign-backed guarantees to various sectors, including small and medium-sized enterprises, and including in Somalia and Afghanistan. When using instruments other than ODA to reach the poor, it is possible to target Goal 1 and reach the poorest of the poor. Sweden supports the Total Official Support for Sustainable Development working group as a way to complement ODA.
Ms. GHARTEY said the point that ODA is insufficient for reaching the Goals was known before the third International Conference on Financing for Development, which partly explains the focus on domestic resource mobilization. A number of actors are involved in mobilizing resources. She drew attention to the principle of mutual accountability in updating domestic mobilization plans. On the issue of youth inclusion, she said Ghana has never left young people behind, and July's high-level political forum will reveal the country's strong representation of young people in all the Goals.
Mr. DOCTER, noting that Ghana and the Netherlands work together to improve tax revenue collection and make it more fair, said his country uses blended finance instruments. On youth education, for example, when the Netherlands contributes and the private sector contributes � because it needs the skills young people acquire � that is blended finance. Afterwards, companies pay salaries. It is very practical, and means that companies pay for what they need. At the same time, education is a Government responsibility, which is where ODA can play a role, he said, stressing that job creation for young people is a priority.
Mr. KATSUKI echoed the point that ODA by itself is not enough and private money � sometimes earned by private investors � must be used. Given a $2.5 trillion annual funding gap to realize the Goals, the discussion must include the private sector. He added that Japan is working on a national plan for business and human rights.
The representative of Norway offered comments about investment linked to ODA, noting that his country's sovereign wealth fund is tasked with earning money along ethical guidelines. Invested in Africa, Latin America and Asia, it is not ODA. She also described the activities of Norfund, which uses capital from ODA to invest in the private sector. As Parliament has mandated that it be profitable, it has grown substantially by investing in companies in developing countries, and using those funds to then invest in new companies.
Source: United Nations