Fostering investment in sustainable development
outlines the need for strengthening
sustainable development movement
Twenty six years after being invited to serve as the first Executive Director of UNEP, I am more than ever convinced that the environment should have a central place on the international agenda well into the 21st century.At the 1992 United Nations Conference on Environment and Development, the 'Earth Summit', world leaders agreed to a comprehensive and far-reaching blueprint for a transition to a sustainable mode of development - Agenda 21. It has since been embraced by people throughout the world and local initiatives have proliferated with more than 2,000 towns, cities and communities having now developed their own local Agendas 21 based on that of Rio. Although nearly all governments have made some progress towards its implementation, overall the performance of governments has not lived up to the expectations raised in Rio in 1992.
Indispensable to the implementation of Agenda 21 is the need for new finances. Through the agreements reached at the Earth Summit, the expectation was generated that 'new and additional' finances would be available to developing countries to support their transition to sustainable development through implementation of Agenda 21. Developing countries have reason to be disappointed. These expectations have not been realized, and indeed there has been a decline in overseas development assistance since Rio. Despite this, many developing countries have moved ahead with the implementation of their own versions of Agenda 21.
Against this background, the role of the GEF stands out as the single most important new funding organization set up specifically to finance sustainable development. Its tripartite character, the partnership between the World Bank, the United Nations Development Programme (UNDP) and UNEP, makes it unique among international financial institutions. And in providing funds, it has become an important and influential catalyst in the implementation of sustainable development. Indeed, it has proven to be remarkably adept in utilizing its own modest funding capability to mobilize and lever funds from a wide variety of sources - public and private. This is why replenishment of the GEF is of such great importance - not only to the continuity and strengthening of the GEF itself, but for the entire sustainable development movement.
Private sector investment
Private capital is now the principal source of external financing for the rapidly developing countries of Asia and Latin America. It is essential therefore that private capital become an instrument for the implementation of sustainable development. International financial institutions have an extremely important role in catalyzing private sector investment through partnerships, co-investment and various supporting activities. The International Finance Corporation, the private sector investment arm of the World Bank group, has a key role in supporting the flow of private capital to developing countries and helping to develop domestic capital markets. UNDP is also an especially important actor in respect of project development, material assistance, and employment of some innovative techniques in the provision of grant funding. The value of these sources of funding is increasingly being recognized as they encourage and facilitate private sector investment. None is more important or influential in fostering investment in sustainable development than the GEF.
Maurice Strong is Chairman of the Earth Council, Under-Secretary General and Special advisor to the Secretary-General of the United Nations and former Secretary-General of the Earth Summit.