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The upcoming Financing for Development (FfD) conference will address major challenges hindering the efforts of developing countries towards sustainable development. The Group of 77 (G77) – a key platform for the Global South in the UN – will play an important role in bringing the interests and demands of the Global South forward. Unlike other more exclusive fora, FfD allows interested stakeholders to speak on eye-level and influence decision-making, which the G77 can utilise to its advantage. Negotiating as a coalition can improve capacity and improve bargaining position of developing countries. However, the G77 is also highly diverse and at times struggles to present a common group position, which can undermine its role as a driver of the Global South agenda in the FfD negotiations. This raises the question of the group’s unity during this process.
The G77 was established in 1964 during the United Nations Conference on Trade and Development (UNCTAD) with the goal of articulating and promoting the economic interests of developing countries while also enhancing their collective negotiating power. From its founding moment, the group has been emphasising unity and solidarity as primary sources of its strength and crucial instruments for achieving these goals. However, the expansion of its membership, coupled with uneven economic development and global power shifts, has led to new divisions within the group. Its 134 members vary widely across multiple dimensions, including income, political system, and climate vulnerability. On issues like poverty, the fissures within the group are particularly pronounced, as it includes both the least developed countries with persistent poverty and emerging economies with strong middle classes. Nevertheless, the G77 has a set of group positions, the most recent of which is presented in the Third South Summit outcome document. These positions cover various aspects of development, as well as support for an independent State of Palestine and rejection of “unilateral coercive measures” (UCM) in solidarity with Cuba.
Addressing the structural imbalance of the current “unfair international economic order” is central to the G77, including during the FfD process. Hence, the group pushes for the reform of international financial architecture to ensure inclusive global economic governance and strengthen the representation of developing countries in relevant financial institutions. It views the UN, with its one-country-one-vote principle, as the most suitable for these reforms: unlike other institutions (e.g. the World Bank) where influence is tied to financial contributions, UN provides a more balanced forum where developing countries can engage on equal footing with developed nations and make sure their voice is heard. The relevance of this demand has been highlighted by US’ interventions during the 3rd preparatory meeting seeking to limit decision-making to exclusive institutions where it holds greater influence. A key illustration of this dynamic is the 2023 Tax Resolution, an unprecedented victory for developing states long excluded from decision-making on tax matters, which took place in OECD. Led by the African Group and backed by most G77 members, the resolution paved the way for an intergovernmental process to establish a binding international tax convention. This shift brought tax discussions into a more inclusive UN framework, where developing countries could exercise their strength in numbers and push the decision through despite the opposition from the majority of Global North states.
A major concern of the G77 is the persistent financing gap for the implementation of the 2030 Agenda. The group emphasises the need for the fulfilment of unmet financial commitments by developed states, particularly the long-standing target of allocating 0.7% of GNI in ODA. Since its approval, this target has never been met collectively by the Development Assistance Committee (DAC) members, though some individual donors have reached it. Against this background, the G77 calls for concrete, binding timeframes from developed nations to deliver on their promises. Additionally, the group asserts that ODA should not be diverted to humanitarian or climate actions, nor should other types of financing be put forward as substitutes for ODA. The group highlights that ODA remains the primary channel for development financing and underlines that developing countries should not be overburdened by attracting private capital to finance their development needs.
Across all thematic fields presented in the FfD4 zero draft, the G77 advocates for clear and precise language that explicitly defines the obligations of developed countries regarding ODA commitments, climate finance, and other financial and technology transfers. Given the longstanding grievances over unmet commitments and broken promises in development and climate funding – concern that have become increasingly audible in the past few years – the G77 strongly pushes for the inclusion of firm, and in some cases binding, language in the FfD4 document to ensure that developed nations fulfil their obligations. This call for precise and binding language on the obligations of developed countries has been explicitly opposed by the US.
The positions of individual G77 members, as presented during the 3rd PrepCom, demonstrate that the G77’s collective stance is largely shared by its membership. Most developing countries – individually or represented by like-minded groups such as middle-income countries (MICs) and least developed countries (LDCs) – aligned their statements with the position presented by Iraq, the current Chair of the G77, demanding the reform of IFIs, debt relief, fulfilment of ODA commitments etc. In some cases, they expanded on and/or underlined demands that were particularly acute and relevant to them. For example, Morocco on behalf of other MICs advocated for inclusion of specific consideration of middle-income countries in sections on international development cooperation and debt and debt sustainability. Cabo Verde as a small island state called for a more explicit reference to the multidimensional vulnerability index and Yemen advocated for financing mechanisms for countries in crisis and the strengthening of integrated humanitarian-development funding.
The differences among G77 member states that were observable reflect familiar friction points, similar to those seen in other UN processes. An issue that fell outside the broader group consensus and where G77 members held diverging positions is gender – an issue traditionally divisive for the group. The G77 has not put forward specific demands on how this issue should be addressed in the outcome document, thereby agreeing with what was presented in the zero draft. Individual states, however, have expressed their views on the matter in their national capacities. Notably, Nigeria requested removal of language on gender and sex, considering these terms “superfluous, redundant and controversial”. Pakistan, Iran, and Saudi Arabia also called for reconsidering such language. While it is an important issue that sparks lengthy and heated discussions among G77 members in the UN General Assembly setting, it seems unlikely to disrupt the group’s consensus on other action areas discussed in the FfD format.
The unity of the G77 around major aspects of the FfD4 conference – at least as projected in statements and positions – is not surprising given the nature of the issue. Development finance has traditionally been a relatively uncontentious topic on which the group can find common ground. For example, in the negotiations of the Pact for the Future, the chapter on sustainable development and financing for development was one of only two areas where G77 members negotiated as a bloc. It is not to be expected that developing countries will succeed in having all of their demands included in the outcome document, particularly due to political shifts in the US and budget cuts among ODA donors. However, given the growing challenges related to development, debt and climate crises, there is a clear momentum to leverage the unity of the G77 and push for an ambitious outcome document.
This blog post is part of a series on the 4th FfD conference by the German Institute of Development and Sustainability (IDOS). Please also read the previous contributions to this series:
- How Seville Can Sow the Seeds for a New Spring: Financing (Sustainable) Development Must Turn Universal!, by Adolf Kloke-Lesch
- Trump and FfD4 – the Elephant in the Room Starts to Speak (and Destroy), by Sören Hilbrich, Yabibal Walle, and Clara Brandi
- Rationalising Tax Expenditures – a Core Element of Financing for Development, by Christian von Haldenwang and Agustín Redonda
- Forging Consensus: Navigating Trade Controversies in the FfD4 Zero Draft, by Clara Brandi
- Cumbersome but Essential – The United Nations Financing for Development Process Ahead of its 4th Conference, by Kathrin Berensmann, Clara Brandi, Sören Hilbrich, and Yabibal Walle
All blogs express the views of the author(s).
