#financing gaps

While achieving the 2030 Agenda demands the maximization of synergies and the breaking down of silos, ensuring that financial and economic systems are coherent with sustainable development is critical, well-functioning national and regional development banks can play in financing sustainable development, particularly in credit market segments in which commercial banks are not fully engaged and where large financing gaps exist, based on sound lending frameworks and compliance with appropriate social and environmental safeguards. This includes areas such as sustainable infrastructure, energy, agriculture, industrialization, science, technology, and innovation, as well as financial inclusion and financing of micro, small and medium-sized enterprises. National and regional development banks also play a valuable countercyclical role, especially during financial crises when private sector entities become highly risk-averse. We call upon national and regional development banks to expand their contributions in these areas, and further urge relevant international public and private actors to support such banks in developing countries.

Nonetheless, it should be noted that financing policies do not work in isolation. Integrated financing frameworks should not only respond to financing challenges, but also to the realities of a changing global landscape. For example, to combat inequality, including gender inequalities, national policies will need to address the falling wage share, growing vulnerabilities, digitization and increasing market concentration, among other issues. Governments should revisit their labour market policies, social protection systems, fiscal policies, competition policies, trade policies and financial sector regulations and strategies to ensure that they are in line with the new realities.