May 2015

1. The effectiveness of the
international financial system in
advancing sustainable development
Mahmoud Mohieldin – Corporate Secretary of the World Bank and
President’s Special Envoy

2. Flows are trending higher, with strong
growth in private flows and remittances
Source: World Development Indicators (WDI), International Debt Statistics (IDS) and OECD Statistics
• Financial flows to developing
countries stand at around $1
trillion. Not enough to finance
SDGs.
• ODA has remained steady, at
around 16% of financial flows.
 Private sector resources
have increased tenfold since
2000.
 Remittances have also
grown considerably
 Entry of new players –
BRICS and philanthropy.
ODA
OOF and
officially-
supported
export credits
Other private
flows at market
terms
Private grants
Remittances
0
200
400
600
800
1 000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
USDbillion
34%
3%
36%
11%
16%

3. International financial regulation
• More recent regulations have come through Basel III
and AML/CFT
• Objectives/Benefits: contribute to a more stable
global financial system (Basel III) and safer world
(AMC/CFT)
• Unintended consequences: monitor and whenever
possible minimize them

4. Remittances:
the need to reduce cost of remitting
8% 12% 90%
Global average Africa Venezuela
20%
Within Africa

5. Foreign Direct Investment
• Domestic environment and opportunities matter
most.
• Favorable investment climate
• Transparent legal framework
• Natural endowments/production inputs
• International trade agreements

6. Sustainable financing the SDGs:
three critical areas
The development finance landscape has evolved. MICs play a larger role in the
world economy
• Official Development Assistance: ODA, grants, and concessional financing
remain critical for countries in special situations, such as Low Income Countries
and Fragile States; however it remains insufficient to meeting the SDGs
• Domestic resource mobilization: domestic resources constitute the largest
pool of funds available to developing countries. A country’s ability to mobilize
domestic resources (DRM) and spend them effectively – at the national, sub-
national and municipal levels –lies at the crux of financing for development.
• Private sector: Significant potential for the private sector to play a role. ODA
must be used to bring in the private sector. Flows are trending higher, with
strong growth in private flows and remittances. However, private flows tend to
be pro-cyclical and concentrated in a few developing economies. Most low
income countries still lack access to international capital markets.