Securing the Future of Development Finance in a Fragmented World

This briefing by the International Institute for Sustainable Development analyzes geopolitical risks to development finance ahead of the Fourth International Conference on Financing for Development (FfD4) in Seville. It identifies critical vulnerabilities for low-income countries—including aid cuts, trade instability, and debt crises—and proposes six implementation priorities to 'future-proof' the global development finance landscape.

• The Fourth International Conference on Financing for Development (FfD4) outcome document was reached by consensus only after the United States withdrew from the process, which the author notes raises questions about the agreement's effectiveness given the absence of a major global actor.
• Development finance for low-income countries is threatened by four primary geopolitical risks: shrinking Official Development Assistance (ODA) budgets, an unstable global trade system characterized by unilateral tariffs, growing external debt vulnerabilities involving complex creditor mixes, and the risks of over-relying on domestic resource mobilization (DRM) without external support.
• The briefing proposes six priorities for post-FfD4 action: restructuring ODA into poverty reduction and global public goods streams; protecting low-income countries from trade disputes; coordinating debt relief based on balance of payments pressures; strengthening DRM through wealth, natural resource, and corporate tax reform; eliminating fossil fuel subsidies in favor of green taxes; and diversifying exports.
• Specific high-impact domestic revenue reforms include closing offshore tax loopholes and taxing high-net-worth individuals, noting that a 5% tax on EU billionaires could generate over EUR 280 billion annually, and rationalizing corporate tax breaks which currently cost countries an estimated 4% of global GDP.

APA

Morra,, A. R. (2025). Securing the Future of Development Finance in a Fragmented World. International Institute for Sustainable Development. https://www.iisd.org/articles/deep-dive/ffd4-securing-future-development-finance-fragmented-world

Chicago

Morra,, Alexandra Readhead,Fernando. Securing the Future of Development Finance in a Fragmented World. International Institute for Sustainable Development, 2025. https://www.iisd.org/articles/deep-dive/ffd4-securing-future-development-finance-fragmented-world.

Wikipedia

{{cite report |last1=Morra, |first1=Alexandra Readhead,Fernando |title=Securing the Future of Development Finance in a Fragmented World |publisher=International Institute for Sustainable Development |date=19 June 2025 |url=https://www.iisd.org/articles/deep-dive/ffd4-securing-future-development-finance-fragmented-world |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{morra2025securing, author = {Morra,, Alexandra Readhead,Fernando}, title = {{Securing the Future of Development Finance in a Fragmented World}}, institution = {International Institute for Sustainable Development}, year = {2025}, month = jun, url = {https://www.iisd.org/articles/deep-dive/ffd4-securing-future-development-finance-fragmented-world}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }