VII.
Global governance for financing sustainable development
(145) To mobilize the financing detailed in the preceding section and to facilitate its effective use according to national priorities, it is necessary to have an adequate enabling international environment and policy architecture that provides the policy space necessary to implement effective national sustainable development strategies. This entails open and dynamic world trading and investment systems that are deemed fair to all, support sustainable development and poverty reductionand that respect social and environmental standards. An enabling international environment that reduces fragmentation and complexity of international public finance (including environmental finance) would ensure adequate capitalization of exiting funds and simplification and harmonization of rules for international public funds. (See Section VI.C.) It could expand international cooperation on innovative financing, particularly with regard to global public goods. An enabling international environmentincludes active global cooperation to remove the sources of international financial volatility, while striving to reduce global financial fragility. Other actions include completing ongoing reform processes of development banks and the IMF, deepening international cooperation on taxes and illicit flows, regulating banks and shadow banking systems and strengthening the means for cooperatively resolving sovereign debt difficulties. In short, it entails a strengthened global partnership for sustainable development. Strengthen systemic coherence and global economic governance (146) The global economic environment is overseen by separate and sometimes uncoordinated international bodies. Reflecting its existing mandate, the United Nations has the ability to serve as the global forum to bring the specialized international institutions and authorities together without challenging their respective mandates and governance processes. There is also a need within the UN system to reinforce the coherence of financing frameworks that developed out of two major strands of development debate – the Post-Monterrey and the Post-Rio+20 means of implementation. More broadly, there is a need to strengthen the integration and harmonization of existing international mechanisms, frameworks and instruments, including through the UN System Chief Executives Board, while avoiding the proliferation of new support vehicles as much as possible. (147) The effectiveness and legitimacy of international organizations also needs to be further strengthened. The IFIs, including the World Bank and the other international development banks, and specialized mechanisms such as the Global Environment Facility and the Green Climate Fund, have the potential to increase the mobilization and deployment of finance for sustainable development, and to facilitate learning and knowledge sharing within their respective mandates. They would also be well placed to significantly expand the use of risk sharing instruments. It is important for IFIs to continue to take steps to align their own business practices with sustainable development objectives. Other proposed initiatives, such as reserve pooling and trade facilitation mechanisms, also have roles to play. The international community will benefit from such experimentation and innovation. (148) In addition, a further review of the governance regimes of the IFIs is necessary to update their decision making processes, modus operandi and priorities, and to make them more democratic and representative. The IMF and the World Bank have been making efforts to further integrate the 42
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