UN chief calls for more spending on development aid as US snubs Spanish conference

Trillions of dollars needed but assistance has been 'stagnant or declining'

UN Secretary-General Antonio Guterres and Spanish Prime Minister Pedro Sanchez talk during the conference in Seville. Reuters

UN chief Antonio Guterres has urged the international community to "rev up the engine of development" aid in "a world shaken by inequalities, climate chaos and raging conflicts".

Nations gathered on Monday in Seville for a UN conference were told both by host Spain and senior UN officials to spend more on development aid, but a last-minute US withdrawal from the conference raised doubts about their ability to narrow the gap between rich and poor countries.

The withdrawal of the US, previously a major contributor, was not directly addressed by officials, though they acknowledged difficulties in convincing countries to spend more to narrow the $4 trillion annual financing gap to promote development.

Opening the conference, UN Secretary General Antonio Guterres said delegates were gathered "to accelerate investment" faced with the "massive headwinds" buffeting the sector.

Those challenges included "a slowing economy; rising trade tensions and decimated aid budgets; a world shaken by inequalities; climate chaos and raging conflicts", he said.

Mr Guterres added: "The link between peace and development is clear. Nine of the 10 countries with the lowest Human Development Indicators are currently in a state of conflict."

The four-day meeting in southern Spain is taking place as many countries face escalating debt burdens, declining investments, decreasing international aid and increasing trade barriers.

The director general of the World Trade Organisation, Ngozi Okonjo-Iweala, said that the introduction of trade tariffs - a policy strongly pushed by US President Donald Trump - would lead to the further contraction of trade forecasts from close to 3 per cent for 2025 to 0.1 per cent.

"We currently estimate that global merchandise trade volumes will basically be flat," Ms Okonjo-Iweala said. "I don't think that the conference has ever gathered in such difficult times."

Up to $2 trillion are locked up in "harmful subsidies," according to Ms Okonjo-Iweala, including fisheries and fossil fuels that could be used instead to help achieve the badly lagging 2030 Sustainable Developments Goals. "Recognising the political difficulties involved in phasing out subsidies - I know this is not easy," she said.

Countries like Nigeria have struggled with the consequences of removing fuel subsidies. AFP

Official development assistance "remains stagnant or declining", UN Under-Secretary General Li Junhua said. "External debt servicing now consumes over 20 per cent of the public revenues in many lower income countries."

Risks of tighter financing conditions for developing countries are growing, warned IMF deputy managing director Nigel Clarke. Countries must prioritise strong domestic reforms. "Many countries can boost resources available to them by broadening the tax base and improving compliance," Mr Clarke said.

Meanwhile, King of Spain Felipe VI said he hoped the conference would be a success. "The tremendous shifts that we are living through heading towards a new form of geopolitics cannot and must not lead to a total revision of the rule of law or solidarity of human dignity of the world," he said.

More than 70 world leaders were expected in Seville, along with several thousand others from international financial institutions, development banks, philanthropic organizations, the private sector and civil society.

At its last preparatory meeting on June 17, the US rejected the 38-page outcome document that had been negotiated for months by the UN’s 193 member nations and announced its withdrawal from the process and from the Seville conference.

Speaking last week, UN Deputy Secretary-General Amina Mohammed said the US withdrawal from the conference was “unfortunate,” stressing that “many of the recommendations you see cannot be pursued without a continuous engagement with the US”.

After Seville, "we will engage again with the US and hope that we can make the case that they be part of the success of pulling millions of people out of poverty”.

The rest of the countries then approved the document by consensus and sent it to Seville, where it is expected to be adopted by conference participants without changes. It will be known as the Seville Commitment – or Compromiso de Sevilla in Spanish.

The document says the leaders and high-level representatives have decided to launch “an ambitious package of reforms and actions to close the financing gap with urgency,” saying it is now estimated at $4 trillion a year.

Among the proposals and actions, it calls for minimum tax revenue of 15 per cent of a country's gross domestic product to increase government resources, a tripling of lending by multilateral development banks, and scaling up private financing by providing incentives for investing in critical areas like infrastructure. It also calls for a number of reforms to help countries deal with rising debt.

While the US objected to many actions in the outcome document, American diplomat Jonathan Shrier told the June 17 meeting: “Our commitment to international cooperation and long-term economic development remains steadfast.”