At a Crossroads: Why the Fourth Financing for Development Conference Matters in a Fractured World

"The old world is dying, and the new world struggles to be born: now is the time of monsters." This quote from Antonio Gramsci, cited by a prominent diplomat during preparations for the Fourth Financing for Development Conference (FFD4), perfectly captures our current geopolitical moment. As multilateralism faces unprecedented challenges and the post-1945 rules-based order appears increasingly fragile, the climate for achieving meaningful outcomes via the July 2025 FFD4 conference in Seville, Spain could hardly be less favorable.

Financing for Development (FFD) is a UN-led multilateral process that brings together governments, international financial institutions, civil society, and the private sector to develop policy frameworks for mobilizing financial resources to support sustainable development, especially for making progress in low- and middle-income countries. The process culminates in a major international conference every 5-10 years—the fourth of which will be held in July 2025 (the first was March 2002 in Monterrey, Mexico). At the conference, negotiations ideally culminate with the adoption of an outcome document that establishes commitments and principles to ensure global development finance will flow during the next decade.

The road to Seville has already seen intensive preparations, including three Preparatory Committee meetings (PrepComs), a first draft outcome document released in March 2025, and various stakeholder consultations. What emerges from this process will determine whether the world is prepared to collectively address an international financial architecture that has fallen short and now faces a $4 trillion annual financing gap to achieve the Sustainable Development Goals (SDGs).

Despite these limitations, FFD4 matters for several reasons.

First, the multilateral system, for all its flaws, remains our best hope for addressing global challenges like inequality, climate change, and sustainable development. Many UN delegates negotiating the outcome document have emphasized that FFD4 is the first opportunity as a global community to support the multilateral system in this new era.

Second, FFD4 represents a chance to address the structural power imbalances in global economic governance. There is growing recognition of the structural exclusion of the global South from the IMF and World Bank. FFD4 could insist upon the norm of equitable representation in these institutions.

Third, development finance directly affects billions of lives. When countries lack fiscal space due to unsustainable debt burdens or insufficient development assistance, basic services like health and education suffer. A joint statement, "Joining forces to overcome global challenges," by presidents Ramaphosa of South Africa, Lula of Brazil and Sanchez of Spain notes, "many developing countries struggle under unsustainable debt burdens, constrained fiscal space, and barriers to fair access to capital. Basic services such as health or education must compete with growing interest rates. This is not just a moral failing; it is an economic risk for all."

Finally, addressing global inequality is essential for democratic stability. As Rachel Adams, CEO of the Global Center on AI Governance observed in her recent book, The New Empire of AI, "throughout the world, where inequality rises, democracy weakens. If people are unable to meet their basic needs, they will migrate to places where they believe their needs can be met, compounding the already unwelcoming migration systems."

The Trump administration's return to power in January 2025 has dramatically reshaped global politics. Its pivot toward far-right parties in Europe, support for authoritarian regimes, threats to withdraw military protection from traditional allies, gutting of aid to low and middle income countries, and imposition of punitive tariffs even on its allies has sent shockwaves through the international system. In this environment, FFD4 represents more than just another UN conference—it may be our first real test of whether meaningful multilateral cooperation remains possible.

Many analysts now argue that neoliberalism is effectively over. As Financial Times chair Gillian Tett recently noted, "January 20, 2025 marks a symbolic end to global neoliberalism. Both of its components are gone. Globalism has been converted into nationalism, neoliberalism now applies only to the economic sphere. Its social parts—racial and gender equality, free movement of labor, multiculturalism—are dead. Only low tax rates, deregulation and worship of profit remain."

We're witnessing a shift from neoliberalism to what economic historian Arnaud Orain calls "finitude capitalism"—a resource-scarce, zero-sum perspective where trade is viewed as competitive struggle rather than mutually beneficial exchange.

This transition creates tremendous challenges for development policy. As economist Branko Milanovic noted recently, "While the Washington Consensus was, and can legitimately be, criticized it had at least certain consistency. The current abandonment of the principles of neoliberal globalization leaves the entire field of international development in chaos."

In this challenging context, what can FFD4 reasonably hope to accomplish? The realist in me says the most important indicator of success would be producing a joint statement with practical, concrete recommendations and reasonable timelines. This would indicate that the multilateral process is working and repudiate some of the attacks on multilateralism and development.

While this may seem like a modest ambition, preserving the embers of multilateralism is critical in an era of increasing fragmentation. Many observers note that we face debt distress and anger in the global South, while the global North looks to the private sector to bring in more investment. We need an ambitious narrative that acknowledges the needs of the global South as well as the situation of the global North.

Several key deliverables remain possible:

1. The UN Framework Convention on International Tax Cooperation: The draft maintains a commitment to "engage constructively" in negotiations to address tax evasion that strips developing countries of vital resources and to support a global agreement to effectively tax high net worth individuals.
    
2. Reform of the international debt architecture: While comprehensive reform seems unlikely, there is broad support for improving the G20's Common Framework for Debt Treatments (CF), especially extending it to middle-income countries. The challenge now is to marry short-term CF reform to a timetable for opening an intergovernmental process in the UN framework convention on sovereign debt.
    
3. Mobilizing climate finance: Member States recall the New Collective Quantified Goal agreed at the UN Climate Summit in Baku and propose a working group to address the problematic double-counting of climate finance and official development assistance (ODA). FFD can strengthen the controversial but necessary link between climate finance and development.
    
4. Transformation of Multilateral Development Banks (MDBs): Member States broadly support efforts to increase MDB lending capacity and establish more sustainable pathways to replenish concessional funding windows.
    
5. Special Drawing Rights: Governments support the regular use of SDRs decoupled from IMF quota share to finance inequality reduction, as well as annual allocations of around $200 billion with a doubling of the share that goes to low- and middle-income countries.
    
6. Increase public investments to close the gender gap, including in the care economy, by agreeing on a minimum level of public investment for the care economy so that it can be measured, tracked and made publicly available.
    
7. New measures of progress beyond GDP growth have support to become a core goal of public policy. New multidimensional and intersectional measures can reflect how income and wealth are distributed and account for the unpaid and care work done disproportionately by women and marginalized people.
    
8. The Seville Platform of Action: This announced initiative will allow for concrete pledges and campaigns, potentially enabling progress even where consensus proves elusive.

However, these potential achievements must be viewed realistically. ODA is declining as major donors like the USA, UK, and the Netherlands announce significant cuts. The SDG financing gap remains largely unaddressed. And most importantly, the current geopolitical environment makes comprehensive reform extraordinarily difficult.

The challenges facing FFD4 reflect deeper questions about the future of global economic governance. Moving forward requires acknowledging that neither simple defense of the status quo nor retreat into nationalist isolation will suffice. Instead, we need a reformed multilateralism that:

1. Addresses structural inequalities in global economic governance, giving developing countries meaningful voice in decisions that affect them;
2. Recognizes the legitimate concerns of all countries, including those feeling left behind by globalization;
3. Prioritizes debt sustainability and development needs over short-term creditor interests;
4. Creates space for diverse development models rather than imposing a one-size-fits-all approach; and
5. Builds trust through concrete action and fulfilled commitments.

Many civil society organizations have argued that the quintessential measure of success in Seville will be a comprehensive multilateral debt mechanism based in the UN. While current negotiations may fall short of this ambition, they contain seeds that could grow into more meaningful reforms if properly nurtured.

As emphasized during preparatory discussions, everything needs to be assessed in terms of action and impact. The time for words is over. FFD4 will ultimately be judged not by the elegance of its declarations but by whether it delivers tangible benefits to those who need them most.

For policymakers, parliamentarians, and activists concerned with global economic justice, FFD4 represents a critical opportunity to push for concrete commitments that advance sustainable development. Even modest victories in this challenging environment could help preserve the multilateral cooperation essential for addressing our shared challenges.

The invocation of Gramsci reminds us that periods of transition are fraught with danger. But they also create possibilities for positive transformation. The "old world" of neoliberal globalization may indeed be dying, and what emerges will depend greatly on our collective choices. In this interregnum, the FFD4 process offers a platform for shaping a more equitable and sustainable global economic order—if we have the wisdom and courage to seize it.