London, United Kingdom, September 6, 2023 — At this year’s G20 Summit, world leaders have the opportunity to catalyze reform of international systems that have too often excluded the world’s most marginalized populations. Communities in fragile and conflict-affected countries have been left behind by international development finance and delivery, placing significant barriers on reducing levels of extreme poverty worldwide.
Amanda Catanzano, IRC Vice President for Global Policy and Solutions, said,
“Over the last three decades, extreme poverty has dropped by more than half, lifting over one billion people out of poverty. Behind this laudable progress lurks a dangerous divergence between stable countries and those affected by conflict. By the end of this decade, it is estimated that two-thirds of the world’s extreme poor will live where poverty is hardest to eradicate: countries marked by conflict and fragility. People in these countries face a perfect storm of threats from conflict, climate change, debt distress with the least international support. As G20 leaders gather in New Delhi to focus on sustainable development and climate action, they should put addressing the unique and growing needs of these countries and communities at the center of their debates and decisions.
One of the main priorities of this year’s summit is creating multilateral institutions for the 21st century. To meet this new geography of extreme poverty, these institutions, especially multilateral development banks (MDBs), will need to embrace new ways of working to ensure resources flow where they are most needed.
First, current MDB financing flows towards stable governments, with risk aversion and a government first approach constraining access to finance and stalling MDB program delivery in fragile and conflict settings. This means that development funding is not reaching the communities that are impacted by conflict and extreme poverty. In order to change the status quo, G20 leaders should push the MDBs to embrace a people-first strategy, rather than government-first, approach to financing in fragile and conflict-affected countries. This strategy is outlined in a new IRC report, which covers a people-first delivery and financing model which ensures these populations are not left behind. While we support the G20 Independent Experts Group’s recommendation to triple the World Bank’s International Development Association funding by 2030, this increased funding can only be effective if it works concurrently with operational reforms that expand and normalize non-government partnerships, allowing for more financing and programming to reach communities in fragile, complex settings.
Second, the current ground rules in public and private climate financing prevent funding for adaptation from reaching the conflict-affected communities most at risk of and vulnerable to climate shocks. Climate finance is skewed towards mitigation and is flowing, first and foremost, to wealthy countries and then to stable, development settings. There is little to no climate financing adequate, accessible, or appropriate for communities in fragile and conflict-affected countries – where climate vulnerability and extreme poverty are increasingly concentrated and need to be tackled together. We urge the G20 leaders to lay the groundwork for reforming climate finance to work for these crisis contexts that are most at risk and vulnerable to the impacts of climate change.
Finally, with another key priority of the G20 summit focusing on accelerating progress on the Sustainable Development Goals (SDGs), leaders must confront the slow progress towards the SDGs in these conflict-affected countries and the danger of millions being left behind. Hunger has increased in the last year and is at the same level as in 2005, progress toward gender equality is nowhere near what is needed, and the number of people living in extreme poverty is higher than it was four years ago. The work of the IRC and other humanitarian organizations are often the only source of support and hope for survival for so many populations facing extreme poverty. Without fundamental reforms of MDB finance and delivery, sustainable development in conflict-affected countries will be significantly set back. As we pass the halfway mark towards the SDG 2030 ambition, conflict-impacted countries are in danger of being left far behind. G20 leaders must refresh their commitments to the SDGs and support national governments and non-governmental partners in reducing poverty and inequality in crisis contexts.”
Prioritizing conflict-affected, climate vulnerable states in climate action, and expanding multilateral development and climate finance delivery partnerships, should be an ambition set in the G20 Leaders’ Declaration and must be given full support by world leaders. This will set a strong foundation for subsequent high-level policy milestones this fall, namely the UN General Assembly, the World Bank and IMF Annual Meetings, and COP28.