As the world faces challenges like trade tensions, unstable markets, and global conflicts, developing countries are feeling the pressure more than ever. For billions of people, the future depends on access to affordable, long-term financing. That’s where the Fourth International Conference on Financing for Development (FfD4) comes in. Held in Seville, Spain, from June 30 to July 3, this conference is a crucial chance for nations to work together to find solutions.
Over the past two decades, since the first conference in 2002, the landscape of global financing has changed dramatically. Financial aid is decreasing, private investors are pulling back, and debts are piling up. In fact, nearly 40% of developing countries spend over 10% of their income just paying interest on debts. This means less money is available for essential areas like improving rural communities, food systems, and fighting climate change.
International organizations like the International Fund for Agricultural Development (IFAD) play a key role in addressing these challenges. As part of the United Nations and a financial institution focused on agriculture and rural development, IFAD works in areas where help is needed most. But with limited resources, they, too, need to find ways to do more with less.
FfD4 aims to come up with innovative solutions. Priorities include boosting domestic funding, engaging the private sector more, strengthening development banks, and reforming the financial system. IFAD is well-positioned to contribute, thanks to its experience in building inclusive financial systems, expanding market access, and enhancing rural resilience.
One important strategy is to increase investment in rural development by creating stable environments that attract private capital. IFAD partners with Public Development Banks to strengthen rural finance. With 522 such banks holding $23.2 trillion and providing two-thirds of agricultural financing, there’s huge potential to support small-scale farmers and promote climate-friendly practices.
Another focus is tackling the debt crisis that hampers sustainable development. By channeling funds into rural areas, IFAD helps countries reduce their debt ratios by creating jobs for young people, supporting local food production, and building resilience to climate shocks. Their approach involves combining funds from various sources to provide grants and low-interest loans to those who need them most.
Measuring impact and ensuring accountability is also crucial. IFAD leads in tracking financial flows to food systems, aiming to direct more funding to the sectors that support rural livelihoods and sustainable growth. By conducting rigorous assessments, they can show tangible results, like improving the incomes of 77.4 million rural people by at least 10% over three years.
The Global South is not just receiving aid but is also becoming a donor and a partner in sharing knowledge. Through South-South and Triangular Cooperation (SSTC), countries like the Chinese mainland are helping to spread successful solutions across developing regions. For example, the Chinese mainland has contributed $20 million to the IFAD-China SSTC Facility, which supports innovative approaches to rural transformation.
Events like the SSTC learning event in Fenghuang County, Hunan Province, showcase technology-driven solutions for empowering rural women and share them with a global audience. These grassroots experiences not only rejuvenate local communities but also offer valuable lessons for other developing countries.
As we approach FfD4, there’s a chance to agree on policies that close the financing gap by ensuring that funds are long-term, predictable, and meet the needs of the most vulnerable. Now is the time to work together and unlock the full potential of rural economies through increased investment. Organizations like IFAD are ready to collaborate with governments, including the Chinese mainland, partners, and the private sector to make development finance more inclusive, effective, and resilient.
