The United States, under the second Trump administration, recently stated that it “rejects and denounces” the United Nations Sustainable Development Goals (UN SDGs)—the core global framework adopted unanimously in 2015 as part of the 2030 Agenda for Sustainable Development to address environmental and social challenges worldwide. The 17 SDGs aim to protect the planet and enhance the quality of life by eliminating poverty and hunger, improving education, and safeguarding the environment.

This announcement, delivered by the U.S. Mission to the UN’s Counselor for Economic and Social Affairs (ECOSOC), came ahead of a vote on “creating an International Day of Peaceful Coexistence,” which reaffirmed the 2030 Agenda. It marks a broader withdrawal from international climate and sustainability efforts, including the U.S. exit from the Paris Agreement and retreat from key climate financing initiatives. This development is particularly concerning as the UN estimates a $4 trillion annual global financing gap.

The U.S. stance will likely cast a long shadow on the global agenda for financing sustainable development, particularly in the lead-up to the 4th International Conference on Financing for Development, scheduled for 30 June–3 July 2025 in Seville, Spain. This conference continues a process initiated by the Addis Ababa Action Agenda (AAAA) in 2015.

International Fora for Sustainable Development

The AAAA laid the foundation for financing sustainable development post-2015. At the Addis Ababa conference (13–16 July 2015), heads of state and government pledged to end poverty and hunger and to promote inclusive growth, environmental protection, and social inclusion.

Prior to this, the Doha Declaration of 2008 reiterated global commitments made during the Monterrey Consensus of 2002, which emphasized mobilizing domestic resources, attracting international flows, promoting trade, securing debt relief, and ensuring coherence across financial, trade, and monetary systems.

Resource Crunch

Financing remains inadequate to meet accelerating needs. Before the SDGs were adopted, the UN estimated an annual financing gap of $2.5 trillion in developing countries, needed for infrastructure, food security, education, healthcare, and environmental sustainability. By 2020, post-COVID-19, this gap had surged to $3.9 trillion—a 56% increase in six years. The latest estimates place the gap at $3–4 trillion annually, with climate-related needs comprising over 50% of this amount.

A Critical Situation

Even before the U.S. policy reversal, the global financing outlook for sustainable development was precarious. The withdrawal will further complicate efforts, especially for low- and middle-income countries.

Regional Economic Parameters: South Asia in Focus

Based on World Bank and OECD data from the World Development Indicators and International Debt Report, South Asia’s GDP grew at 7.2% (2021–2023)—the highest among regions. India, Bangladesh, and the Maldives drove this growth. However, regional disparities were also notable, with South Asia exhibiting the widest variation in GDP growth among its member countries.

Per capita Gross National Income (GNI) varies dramatically: from $11,070 in the Maldives to just $380 in Afghanistan (2023).

Debt and Financing Trends

South Asia’s total external debt stock in 2023 was estimated at $961 billion, about 22% of GNI. The region has increasingly relied on long-term debt, with a declining share of official credit—a trend it shares with Sub-Saharan Africa. Private, non-guaranteed capital has grown fastest in South Asia, while short-term debt remains relatively low. Interest payments on public and publicly guaranteed debt hit record highs in 2023. Bangladesh and India saw interest payments rise by over 90%; Pakistan ranked second in the region for such payments. Over the past decade, interest payments in South Asia have quadrupled.

Structural Debt Profile (Table Highlights)

• Official Creditors (OC): Minimal growth

• Private Creditors (PC): Rising share

• IMF Credit: South Asia’s share of IMF credit and SDRs declined from 16.3% in 2010 to 10.9% in 2023, while other regions increased their share.

Negative Disbursements and Sustainability Gap

Net disbursements (gross disbursements minus repayments) fall far short of what is required for achieving SDG and climate finance targets. Table 5 shows a rising share of principal repayments relative to long-term disbursements, further reducing resource flows to developing countries.

A Distant Dream: Climate Finance Goals

At COP29 (Baku, 2024), the New Collective Quantified Goal (NCQG) set a climate finance target of at least $1.3 trillion annually by 2035. The “Baku to Belém Roadmap” outlines this ambitious scaling. The Independent High-level Expert Group (IHLEG) reported that $1 trillion in external finance is needed by 2030 to meet Paris Agreement goals, with half expected from private sources. Achieving this would require a 15–18x increase in private finance flows to emerging markets and developing countries (excluding China). Public investment needs, especially in urban climate projects, are pegged at $800 billion annually.

Meeting these targets remains a distant dream without systemic changes in global financial architecture.

(The writer is a retired special secretary in India’s Ministry of Labour. Views are personal. He can be reached at ppmitra56@gmail.com)