The UN Financing Conference for Development (FFD4), held in Seville, again opened key debate about the future of the planet: can private capital provide the abolition of public funds in the fight against poverty, inequality and climatic emergency?
In recent years, a combination of consistent crises, such as the health crisis caused by the Covid-19, the food and energy crisis due to the war in Ukraine or the geopolitical crisis at points such as Gas or Sudan, put international systems of cooperation against lines. At the same time, many world northern countries reduced their official budgets for development assistance (AOD): in 2024, it fell by 7.1% around the world, and in 2025 an additional reduction is expected to 17% in 2025 if the announced abbreviations are consolidated.
Meanwhile, the growth of mechanisms such as mixed financing (Mixed finances), Warranty tools and public alliances combined the role of companies and investment funds in the field of development. The trading shell that began ten years ago at the ADís Abeba conference in 2015, where the motto was increased: “billions for trillions”, which intended to convey the idea that private investments would turn into thousands of millions of people intended for development. Ten years later, however, the results did not correspond to promises.
The failure became recognized as the main economist of the World Bank, who recently admitted that the slogan “turned out to be a fantasy.” “The bad news is that everything turned out to be a fantasy. On the other hand, the panorama of financing for development was broken. Since 2022, foreign private lenders have extracted almost $ 141,000 million more in payments for borrowers of the public sector in the economy last December.
Therefore, civil society with concern noted the fame of the private sector at the last conference of Seville. “Billions were not mobilized, and worried that the use of AOD funds to promote private investment to subtract resources to the main goal: eradicating poverty and reducing inequality,” explains Eldiario.es Maite Serrano, director of the Spanish coordinator of development organizations.
Unfulfilled promises
Since 2015, institutions such as the World Bank and the European Union have chosen mixed financing as a path to attract private capital. Programs such as Global Gateway, the flagship of European cooperation, sought to encourage large infrastructure through guarantees for public tenders. But, according to the European court, these mechanisms have limited efficiency and slight transparency.
A recent investigation conducted European network for debts and development (Eurodad), along with Oxfam and Counter Balance, show that in 25 of 40 projects analyzed by Global Gateway, at least one European company was beneficial. This reflects the risk that the commercial and geopolitical interests of the world north determine the priorities of development in the south.
Maria Jose Romero, responsible for politics, promotion and financing for Eurodad, explained in an interview with Eldiario.es that the failure of “billions of billions” is obvious. Despite the efforts to reduce risks for private investors through state and private associations, state guarantees and mixed financing, “data show that billions in private financing have not come.”
In addition to a quantitative failure, qualitative influence is also worried. According to Romero, “evidence that private financing supports the agenda on 2030 is not enough,” and in many cases, projects related to private capital caused hidden debt, lack of transparency, exclusion of vulnerable communities and deterioration of inequality, especially gender. In addition, “mixed financing tends to concentrate on the countries of average income and profitable sectors, such as energy and critical infrastructure, and not where it is necessary,” Romero from Eurodad insists.
In Seville, in the final document known as the obligation of Seville, it recognizes the importance of the private sector, but avoids establishing connecting mechanisms for accountability or coordination with human rights, the environment or gender equality. “If private capital is involved in financing development, it must correspond to severity: respect the rights of human, fair tax systems, democracy and sustainability. If this is not so, this is not financing for development, ”says Serrano.
Political commitment
The international business forum, conducted in parallel with the official conference, made it clear that political leaders consolidate this alliance with the private sector. The President of the Spanish Government, Pedro Sanchez, proposed a “global contract for sustainable development” based on three pillars: state cooperation, financial system reform and long -term investment mobilization.
“The agenda on 2030 is at risk. The international financial system should be reformed: more resources, more coordination and greater political will, ”said Sanchez in his inaugural speech. “We need a business community to bet on developing countries. His prosperity is necessary for ours, ”he added.
At the same time, the Secretary General of the United Nations, Antonio Gaterryz, warned: “Development is connected with the business. Companies should help build the business fabric of the countries of the global south. ” To achieve this, he asked to revise the role of multilateral development banks: “They should use state resources to reduce private investment risks. Only in this way can funding be significantly increased. ”
Who establishes the rules?
However, reading is less optimistic from the global civil society. The growing centrality of the private sector causes serious doubts about who determines the priorities of development and under what conditions. “Private funds cannot replace the historical duties of the world north,” says Serrano. “Development cannot be captured by corporate interests. We need feminist, environmental, fair and transforming cooperation, ”he insists.
The risk, as they indicate the OGD coordinator, lies in the fact that state private alliances not only replace resources, but also consolidate the development model due to the logic of the market, weakening financial justice, multilateral liability and democratic responsibility.
From Eurodad, Romero warns that the current approach “is at risk of people’s right to high -quality universal public services.” State private alliances often include user rates for basic services, such as water, education or healthcare, which may exclude those who cannot pay. In addition, “the human value of these projects is high, especially for women who depend more on these services and work on them.”
Mixed financing also implies the risk that limited assistance resources will be redirected to sectors and countries where economic profit is safe, not necessarily where the need is more. Since Romero continues to indicate the Eurodad, a chronic lack of transparency is added to this, often justified in commercial provisions on confidentiality, which weakens the mechanisms of accountability before the affected communities.
What alternatives does civil society offer?
Romero states that it is urgent to reduce the rules of the game so that private financing corresponds to human rights, climate and economic justice. To this end, protect the need to discover the state process under the guidance of the United Nations, which allows you to strictly evaluate the real influence of tools intended to attract private investments with a financial, social and environmental point of view.
It also emphasizes the importance of the deep role of international financial institutions and multilateral development banks, not only casting doubt on the development paradigm that they promote, but also their internal stimuli, their measurement and measurement framework, still greatly dominant in the global northern countries.
In addition, from Eurostat they advocate an international political agreement, which establishes a mandatory regulatory frame for cooperation in the field of development, through the Convention sponsored by the UN, which clearly defines AOD rules and guarantees compliance with the requirements through measurable and forced indicators.
