United Nations MPTF Office September 2017 Financing the UN Development System Pathways to Reposition for Agenda 2030 Lead authors: Bruce Jenks, Senior Advisor at the Dag Hammarskjöld Foundation and Jennifer Topping, Executive Coordinator at the UN MPTFO, in close collaboration with Henriette Keijzers, Ylva Christiansson, Veronika Tywuschik and Lisa Orrenius. Production lead: Lisa Orrenius, Dag Hammarskjöld Foundation Contributors: Richard Bailey, Gaudenz Silberschmidt, Guitelle Baghdadi-Sabeti, Sven Grimm, Zhang Chun, Lisa Finneran, Annely Koudstaal, Romilly Greenhill, Nilima Gulrajani, Max-Otto Baumann, Pratyush Sharma, Gavin Power, Moramay Navarro, Sahba Sobhani, Robert de Jongh, Eric Usher, Careen Abb, Homi Kharas, Cordelia Lonsdale, Sarah Dalrymple, Judith Karl, Bianca Adam, Stephan Massing, Rachel Scott, the Institute for Economics and Peace, Khalid Koser, Jordan Ryan, Stephan Klingebiel, Li Xiaoyu, Scott Morris, Priscilla Atansah, Manfred Konukiewitz, Sarah Rosengaertner, Tom Cardamone, John Hendra, Claire Schouten, and Kevin Starace. Design and layout: Kristin Blom, Dag Hammarskjöld Foundation Cover image: Adobe Stock Images Text Editing: Annika Östman, Dag Hammarskjöld Foundation Copy Edit Emma Naismith Printers: X-O Graf Tryckeri Uppsala, Sweden August 2017 ISBN: 978-91-982875-6-1 2 Acknowledgements This publication is produced through a collaborative partnership between the Dag Hammarskjöld Foundation and the United Nations Multi-Partner Trust Fund Office (UN MPTFO). Doctoring an old proverb, it takes a village to write a report. Lead authors for the 2017 edition of the report have been Bruce Jenks, Senior Advisor at the Dag Hammarskjöld Foundation and Jennifer Topping, Executive Coordinator at the UN MPTFO. Lisa Orrenius has been the overall production lead. They were supported by staff in both organisations, mainly Veronika Tywuschik, Kristin Blom, Annika Östman, Henriette Keijzers and Ylva Christiansson. A special thank you goes to our many guest contributors and partners sharing their views and ideas on current financial trends: Richard Bailey, Gaudenz Silberschmidt, Guitelle Baghdadi-Sabeti, Sven Grimm, Zhang Chun, Lisa Finneran, Annely Koudstaal, Romilly Greenhill, Nilima Gulrajani, Max-Otto Baumann, Pratyush Sharma, Gavin Power, Moramay Navarro, Sahba Sobhani, Robert de Jongh, Eric Usher, Careen Abb, Homi Kharas, Cordelia Lonsdale, Sarah Dalrymple, Judith Karl, Bianca Adam, Stephan Massing, Rachel Scott, the Institute for Economics and Peace, Khalid Koser, Jordan Ryan, Stephan Klingebiel, Li Xiaoyu, Scott Morris, Priscilla Atansah, Manfred Konukiewitz, Sarah Rosengaertner, Tom Cardamone, John Hendra, Claire Schouten, and Kevin Starace. The range of different perspectives these contributions provide we believe make the report unique. Lastly, the devil is in the details, and the publication would have not been possible without the valuable support from Andrew MacPherson from the United Nations Department of Economic and Social Affairs (UNDESA) and Laura Gallacher from the Chief Executives Board (CEB) Secretariat who have provided us with the updated set of data for the figures and tables used in the first part of the report. 3 Table of Contents ACKNOWLEDGEMENTS ....................................................................................................... 3 OVERVIEW OF FIGURES & TABLES ...................................................................................... 6 EXECUTIVE SUMMARY ........................................................................................................ 8 INTRODUCTION ..................................................................................................................16 PART ONE: OVERVIEW OF UN RESOURCE FLOWS .............................................................18 CHAPTER ONE: REVENUE ................................................................................................. 20 CHAPTER TWO: INCOME SOURCES ................................................................................. 28 CHAPTER THREE: EXPENDITURES .................................................................................... 40 PART TWO: PATHWAYS TO REPOSITION FOR AGENDA 2030 ............................................ 45 CHAPTER ONE: FINANCING THE UN DEVELOPMENT SYSTEM – STATUS QUO, REGRESSION OR EVOLUTION? ................................................................. 46 From Funding to Financing – beginning the journey By Richard Bailey ................................................................ 48 Reforming the World Health Organization’s financing model By Dr Gaudenz Silberschmidt and Dr Guitelle Baghdadi-Sabeti .................................................................... 52 Rising powers in United Nations development funding – Growing responsibilities, growing engagement? By Sven Grimm and Zhang Chun ................................................................................................................ 55 Scaling up financing for the poorest countries through innovation By Lisa Finneran and Annely Koudstaal ......................................................................................................... 59 Strengthening bilateral finance for multilateralism: Considerations for the United Nations system By Romilly Greenhill and Nilima Gulrajani .................................................................................................. 62 A new contract for financing the UN development system: What does it mean and how can it be achieved? By Max-Otto Baumann and Pratyush Sharma ............................................................................................... 66 4 Table of Contents of Table CHAPTER TWO: THE VALUE OF LEVERAGING ...................................................................70 Mobilising private finance in the era of the Sustainable Development Goals By Gavin Power and Moramay Navarro Perez ............................................................................................... 72 Business and the Sustainable Development Goals: Why it matters By Sahba Sobhani and Robert de Jongh ........................................................................................................ 76 From fund-raising to market transformation By Eric Usher and Careen Abb......................................................... 80 The promise of ‘blended finance’ By Homi Kharas .............................................................................................. 83 Blended finance in fragile contexts: Opportunities and challenges By Cordelia Lonsdale and Sarah Dalrymple ................................................................................................... 88 Reaching the last mile: The role of innovative finance in meeting the Sustainable Development Goals By Judith Karl .... 92 Financial protection: Planning today for the disasters of tomorrow By Bianca Adam .................................................. 96 UN pooled funds: A game-changer in financing Agenda 2030 By UN Multi-Partner Trust Fund Office ..................................................................................................... 100 CHAPTER THREE: FINANCING PREVENTION AND SUSTAINING PEACE ......................... 103 Financing for peace By Stephan Massing ......................................................................................................... 106 Financing sustainable peace: The right way By Rachel Scott.............................................................................. 109 Is peacebuilding cost-effective? By the Institute for Economics and Peace .......................................................... 112 The potential of innovative financing to sustain peace By Kevin Starace, Commissioned by the Dag Hammarskjöld Foundation and UN MPTFO ........................ 115 Financing the prevention of violent extremism By Khalid Koser .......................................................................... 119 Assuring that nothing happens - Reflections on financing conflict prevention By Jordan Ryan .................................. 121 CHAPTER FOUR: BUILDING NORMS, PROVIDING GLOBAL PUBLIC GOODS AND MEETING THE CHALLENGE OF MIGRATION ............................................................124 A global platform for support of norms, standards and monitoring in development cooperation By Stephan Klingebiel and Li Xiaoyun........................................................................................................ 126 Global norms: Building an inclusive multilateralism By the Dag Hammarskjöld Foundation................................ 129 Multilateral development banking for 21st century challenges: Addressing global public goods By Scott Morris and Priscilla Atansah .......................................................................................................... 132 The Green Climate Fund – The ‘new kid on the block’ By Manfred Konukiewitz .............................................. 135 Why the United Nations should embrace the concept of global public goods By the Dag Hammarskjöld Foundation ....................................................................................................... 138 Who will pay for safe, orderly and regular migration? By Sarah Rosengaertner, Commissioned by the Dag Hammarskjöld Foundation and UN MPTFO ............ 141 CHAPTER FIVE: FINANCIAL TRANSPARENCY AND ACCOUNTABILITY: LOW HANGING FRUIT? ....................................................................................................146 Illicit financial