The Elephants in the Room: Uncomfortable Perspectives on the Fourth Financing for Development (FfD) Conference
The Fourth Financing for Development (FfD) Conference is a crucial platform for tackling sustainable development financing. Yet, it faces mounting challenges: shrinking public resources, waning multilateral consensus, and rising geopolitical competition.
This op-ed sheds light on key but often overlooked issues that will shape FfD4, including the decline of Official Development Assistance (ODA), its use as a geopolitical tool, and debates over shifting ODA governance from the OECD to the UN. It also examines the potential fallout from Donald Trump’s return to the White House, particularly his freeze on U.S. development cooperation. Amid global crises and shifting power structures, the FfD4 process appears less about ambitious innovation and more about damage control for global development cooperation.
Introduction: What We Prefer Not to Discuss
The upcoming Financing for Development (FfD) Conference (30 June - 3 July, 2025, Seville, Spain; preparatory meeting: 10 – 14 February 2025 in New York) provides a vital opportunity to address sustainable development financing. As the fourth instalment of this UN-led format, it remains the most inclusive platform for tackling global financial challenges. From investments in social and economic infrastructure—such as healthcare, transport, and climate resilience—to broader financing solutions, the stakes are high.
However, the conference also exposes significant limitations, which are arguably more pronounced now than in previous decades. Public financial resources are dwindling, multilateralism is increasingly contested, and international cooperation is giving way to cutthroat competition and power struggles. The challenge remains: how can such a diverse group of stakeholders agree on a shared outcome? The zero draft of the FfD4 outcome document attempts a constructive stance:
"We, the Heads of State and Government and High Representatives, have gathered in Seville, Spain from 30 June to 3 July 2025 to put in place a renewed global financing framework for sustainable development, building on the outcomes of previous International Conferences on Financing for Development, the 2002 Monterrey Consensus, the 2008 Doha Declaration, and the 2015 Addis Ababa Action Agenda." (FfD Draft Outcome 2025)
Despite this optimism, several “elephants in the room” remain. These uncomfortable but essential topics—rarely given the attention they deserve—will shape the effectiveness of FfD4. Below, I outline some of the most pressing issues, focusing primarily on public resources and ODA, while leaving aside related concerns such as taxation, capital flight, and illicit financial flows.
The Elephants in the Room
(i) ODA in a Downward Spiral
For decades, Official Development Assistance (ODA) has been framed as a competitive but constructive effort among donor nations under the OECD’s Development Assistance Committee (DAC). Standards, peer reviews, and best practices have aimed to make development engagement more transparent and effective. However, criticism has persisted—especially regarding inflated ODA figures, such as when donor countries counted in-donor refugee costs as part of their aid contributions.
The FfD4 zero draft maintains the traditional call for an increase in ODA:
"We agree to scale up and achieve our respective commitments to reach existing targets of 0.7 per cent of ODA/GNI to developing countries, and at least 0.2 per cent of ODA/GNI to LDCs."
However, political reality tells a different story. Development commitments are becoming increasingly controversial within donor countries. Germany, for instance, has seen political parties proposing to peg ODA contributions to the OECD average (0.37% in 2023) rather than the long-standing 0.7% target—effectively slashing its contributions by more than half. This pattern is emerging elsewhere as well.
The most dramatic shift comes with Donald Trump’s return to the White House and his immediate 90-day freeze on U.S. ODA and the destruction of USAID. The long-term consequences could be profound, affecting not only ODA levels but also broader global development cooperation.
(ii) ODA as a Geopolitical Tool
Just as in earlier decades, ODA is increasingly being used as a geopolitical and geo-economic instrument. Global competition, especially with the growing influence of China in developing regions (in many African, Asian, and Latin American countries), has brought a new dynamic to the field. China has expanded its influence through soft power, primarily via development initiatives such as the Belt and Road Initiative (BRI) and the Global Development Initiative (GDI) and as the major shareholder of the Asian Infrastructure Investment Bank (AIIB). Europe, the United States, and countries like Japan, South Korea, and Australia are leveraging their development policies to counterbalance this influence. Meanwhile, for countries like India, development issues are also part of an accelerated geopolitical race. The same applies to other areas, such as access to rare raw materials or green hydrogen. For all these issues, South-South cooperation and ODA play a significant role, significantly influencing country- and topic-specific ODA allocation decisions.
(iii) From Paris to New York: The Call to Relocate ODA Governance
Calls are growing to shift the governance of ODA from the OECD (Paris) to the United Nations (New York), particularly under the UN’s Development Cooperation Forum (DCF). Many civil society groups argue that the DAC’s exclusivity—excluding recipient countries and South-South cooperation providers—undermines legitimacy. While a move to the UN could enhance inclusivity, past experience suggests that the UN’s bureaucratic inefficiencies and geopolitical gridlock could hinder effective decision-making.
(iv) Unconditional Transfers: Really?
For years, we have observed a global decline in democracy; Larry Diamond describes this as a "democratic recession." The majority of people worldwide now live in countries where leadership is not freely elected, and civil society is often under significant pressure. This frequently goes hand-in-hand with a lack of development orientation and systemic corruption.
Simultaneously, debates on development and climate financing increasingly demand unconditional cash transfers. This applies partially to civil society demands, but proposals like Global Public Investment (GPI) also fail to address how to tackle this fundamental problem. This is not about conditions unrelated to sustainable development (e.g., migration return agreements) but about ensuring the prerequisites for development efforts by a country‘s elites.
Given the ongoing democratic recession and tighter public budgets, the issue of unconditional transfers to potentially unaccountable or development-averse elites is likely to make maintaining development and climate financing more challenging in the years ahead. It is relevant to the underlying assumptions of the FfD process but is not explicitly on the agenda.
(v) The Particularly Large Elephant: Donald Trump’s Return
Donald Trump‘s return to the White House will profoundly impact the FfD conference and its themes (Klingebiel & Baumann 2024). Announced measures such as freezing development cooperation for 90 days and disregarding international rules -from territorial integrity to introducing an "External Revenue Service" for the US - signal that previous certainties and international norms may no longer apply.
Can serious discussions on revitalising international debates on issues such as tied aid or equitable burden-sharing in climate financing take place under such circumstances? It is difficult to imagine the rest of the world seeking global solutions undeterred while lacking an effective counter-strategy against a disruptive superpower.
Earlier "elephants in the room," such as the actions of Russia, China, or autocratic oil states, could at least be partially mitigated by shared values and Western cohesion. Trump‘s return, however, introduces a new dimension of intentional multilateral decline.
Conclusion: Slowing the Decline
The FfD4 is fast approaching, but it is clear that the conditions for success are challenging. The “elephants in the room” have always been present, but now they dominate the space. With Trump’s return and the backdrop of multiple crises, the prospects for a reinvigorated global financing framework seem slim.
Even without Trump, the context has fundamentally shifted. Russia’s invasion of Ukraine in 2022 marked a turning point for international cooperation, and since then, economic power plays have taken precedence over collaborative development efforts. Major economic players—including China and oil-rich Gulf states—continue to sidestep formal financing commitments.
Rather than aiming for ambitious breakthroughs, the realistic goal of FfD4 should be to slow the decline of global development cooperation. Innovation may have to wait. For now, simply keeping multilateral efforts afloat may be the best possible outcome.
Stephan Klingebiel heads the research department “Inter- and Transnational Cooperation” at the German Institute of Development and Sustainability (IDOS). He previously led the UNDP Global Policy Centre in Seoul (2019–2021) and the KfW Development Bank’s office in Kigali, Rwanda (2007–2011). He is also a guest professor at the University of Turin (Italy), a senior lecturer at the University of Bonn, and an Honorary Distinguished Fellow at Jindal University (India).
Photo by Liliana Drew
