NefDef Policy Brief Series
The NeF DeF Policy Briefs aim to provide short, policy-relevant briefings on issues relating to private financing for sustainable development. We cover a range of topics in our five thematic areas and general concepts and policy and operational developments relating to the law, governance, regulatory and policy landscape of development finance.
Please also see our Policy Interventions.
Regulating Financial Markets for Sustainable Development Investments
Professor Celine Tan
Financial markets are emerging as important sources for Sustainable Development Goals (SDGs) and climate-related financing in developing countries, replacing traditional public finance, such as grants and official loans. International development organisations, including multilateral development banks (MDBs) and development finance institutions (DFIs), facilitate this shift by providing financial, policy and regulatory incentives to create markets for sustainable debt instruments, such as green, social or sustainability-linked bonds.
This policy brief explores the implications of increasing reliance on capital markets for sustainable development finance in four areas: (1) ownership and alignment of social and economic development programmes; (2) oversight and accountability of public finance; (3) financial stability; and (4) sovereign debt liabilities and calls for caution in a blanket turn to financial markets for sustainable development finance.
Sustainable Development Finance, ESG and Land Rights
Dr Kinnari Bhatt
Local communities and indigenous peoples (LCIPs) are central to sustainable land governance for global sustainable development and climate change mitigation and adaptation. Despite established practice and evidence that their inclusion in land projects are key to delivering sustainable outcomes, LCIPs continue to have their land rights violated.
This policy brief outlines how financial and legal architecture, contractual terms and operational practices for sustainable development and green growth frequently sideline human rights-based considerations, fail to apply or implement appropriate environmental, social and governance (ESG) standards and rarely obtain meaningful free, prior and informed consent (FPIC) from LCIPs. It recommends adapting ESG risk frameworks and impact assessments to deliver more ethical, inclusive and rights-compliant outcomes.
Stop. Look. Listen.
Why it is Time to Re-Examine Government Investments in Overseas Private Healthcare Providers.
Dr Benjamin Hunter
Governments and development institutions are increasingly investing in overseas private healthcare providers with little understanding of their impact on health and poverty. Evidence suggests that private healthcare sits in tension with universal health coverage favouring middle-class users and with limited mechanisms to protect users from catastrophic health expenditures. Foreign investment fuels the expansion of corporate healthcare chains, jeopardising inclusive healthcare. It is time to stop, look and listen before it is too late.
The Issue of Accountability in Multistakeholder Partnerships
Dr Gamze Erdem Türkelli
Over the last three decades, transnational multistakeholder partnerships (MSPs) have become key actors in financing and delivering the global sustainable development agenda. Yet, with limited oversight and accountability, MSPs are found to run the risk of eroding aid effectiveness, reinforcing donor conditionalities and promoting financialised instruments that privatise development. To minimise these risks, common reporting standards and peer-to-peer review and learning systems need to be developed.
Evidence to UK Parliamentary Inquiry on Debt Relief in Low-Income Countries
Professor Celine Tan and Dr Karina Patricio Ferreira Lima along with Dr Stephen Connelly submitted evidence to a parliamentary inquiry on debt and development. The inquiry examines the impact of high levels of debt on development in low-income countries (LICs) and the tools and strategies employed to reduce the debt burden. Launched by the House of Commons International Development Committee (IDC), the inquiry aims to examine the high levels of sometimes unsustainable national debt in low-income countries, much of which is owed to private sector creditors in high-income countries such as the UK and impact of the debt on development. The inquiry also focuses on the tools the UK government uses or could use to help bring debt levels in low-income countries down to more sustainable levels.
In their submission, published on the IDC website here, the authors argue that ‘the existing fragmented and highly politicised regime for sovereign finance law and governance is exacerbating the sovereign debt crises in low-income countries’ and that a ‘key area of concern is the lack of appropriate mechanisms to deal with the burgeoning debt owed by sovereigns to ‘private creditors’. The authors propose ‘an opt-in statutory standstill which will place LICs in a fairer position to negotiate debt relief with creditors’. They signposted the Committee to a proposal they had developed in 2020 for a statutory stay on recovering commercial debt repayments to free up resources in indebted countries to fight the COVID-19 pandemic. The authors believe that this proposal can be adapted to the current debt initiatives, such as the G20 Common Framework for Debt Treatments beyond the DSSI.
Contribution to the call to the Call for Input on ‘Development Finance Institutions and Human Rights’, Working Group
The New Frontiers in International Development Finance (NeF DeF) researchers submitted a contribution to the call to the Call for Input on ‘Development Finance Institutions and Human Rights’, Working Group on the Issue of Human Rights and Transnational Corporations and Other Business Enterprises, UN Human Rights Council. DFIs have become central to the international community’s mobilisation, disbursement and delivery of financing sustainable development as well as climate change mitigation and adaptation. Under the private finance agendas espoused by many development actors, DFIs have the institutional mandates and operational capacity to lend to and engage in partnerships with the private sector. This characteristic of DFIs and their hybrid public-private roles as investors and financiers make it imperative that they are subjected to greater scrutiny and accountability by national and international human rights laws and institutions.
The enhanced role of DFIs within this emerging public-private ecosystem of development and climate finance also calls for greater transparency, accountability and harmonisation of rules, standards and procedures for human rights and environmental safeguards in DFI-financed projects. Our research demonstrates that the rapid diversification and proliferation of financing platforms, including greater dispersal of official financing to private entities and public-private partnerships (PPPs), have fragmented and diluted the governance of development finance and undermined existing accountability and safeguards frameworks.
Our submission centres on key messages in the context of the State duty to protect human rights, including the duties of Home States of DFIs as well as DFIs’ responsibility to respect human rights.
You can find our submission here.
Consultation by the Special Rapporteur on the Right to Development
Researchers on the New Frontiers in International Development Finance (NeF DeF) project recently submitted our views to the consultation by the Special Rapporteur on the Right to Development: Consultation on Good Practices, Challenges and Areas for Improvement on the Implementation of the Right to Development (RTD) in the area of Financing for Development (FFD).
Our research indicates that current policy and operational changes taking place in the aid and other official development finance arenas will have significant impacts on the capacity of states, as primary duty bearers, to create the necessary national and international conditions for the implementation of the RTD. More specifically, these changes risk undermining the commitments enshrined in the 1986 UN Declaration on the Right to Development (hereinafter UN Declaration) and in the aforementioned international instruments for development cooperation.
We submit that, without adequate safeguards, the rapid movement towards private financing for development will: (1) fail to mobilise the resources necessary to meet the Sustainable Development Goals (SDGs) and address other global challenges, such as humanitarian crises, disaster risks and the climate emergency, and (2) undermine existing domestic and international efforts to engender a just and equitable international economic order that is facilitative of the RTD (see Article 3(3) UN Declaration).
You can find our submission here.