Fragmenting world worsens finance squeeze, reversing decades of progress on development, UN report warns

 UN Press Release: UNITED NATIONS, 9 April 2026 – Development financing trends are going in the wrong direction, the United Nations warned today. In many areas, progress has not only stalled but is reversing due to weakened global collaboration, rising trade barriers, increased geopolitical tensions, repeated climate-related shocks, and an alarming assault on multilateralism.

The Financing for Sustainable Development Report 2026: Implementing the Sevilla Commitment (FSDR 2026) assesses progress on the Sevilla Commitment — the blueprint for action on financing for sustainable development agreed at the historic Fourth International Conference on Financing for Development (FFD4) in 2025. Many of the reforms envisioned under the Sevilla Commitment, including the reform of the international financial architecture, would give developing countries better and more nimble access to the funding they need.

“Global development requires working together for common goals to avoid reversing the gains of what has been painstakingly built,” said United Nations Deputy Secretary-General Amina J. Mohammed. “Implementing the Sevilla Commitment is our best chance to demonstrate the global community's enduring commitment to cooperation and to unlock the finance needed to keep the promise of the Sustainable Development Goals.” 

The report notes that an increasing number of developing countries — especially the poorest and most vulnerable — confront large unmet SDG spending needs amid an overall financing squeeze. They simultaneously face falling aid, rising costs from environmental degradation and climate impacts, high costs of capital, and high debt service.

These developing countries face:

• Heavy debt burdens: Debt service in developing countries reached 20-year highs in 2024.
• Falling financial aid: Official development assistance (ODA) dropped 6% in 2024 to $214.6 billion and is projected to fall by 10–18% in 2025, and up to 25% for least developed countries (LDCs).
• Declining foreign direct investment: FDI fell 11% in 2024 to $1.5 trillion, marking a second consecutive year of decline.

Even before the latest economic disruptions caused by the closure of the Strait of Hormuz, trade and geopolitical tensions had driven steep tariff increases and placed economic costs on developing countries. According to the report:

• Average tariffs on LDC exports surged from 9% to 28% in 2025.
• For developing countries excluding China, average tariffs increased more than eightfold, from 2% to 19%.

“This is an extremely perilous time for international cooperation, as geopolitical considerations are increasingly shaping economic relations and financial policies,” said United Nations Under-Secretary-General Li Junhua, head of the Department of Economic and Social Affairs, which coordinates the production of the multi-agency report. “However, there has been welcome resilience in many areas, such as renewable energy investment, in part due to determined inter-country collaboration in the face of rising attacks on multilateralism.”

According to FSDR 2026 capital spending on renewable energy reached a record high in 2024 at $2.2 trillion, with investment in renewables totaling twice that of fossil fuels, which fell to a historic low. The value of South-South trade also increased more than fourfold in the last 20 years.

Yet FSDR 2026 finds that, due to global fragmentation and deepening geopolitical divisions, the reforms agreed in the Sevilla Commitment have become more difficult to implement.

Given global geopolitical challenges, FSDR 2026 concludes that economic hyper-globalization is no longer viable and recommends instead a multilayered approach to international cooperation that emphasizes moving forward on impactful reforms. Countries should not retreat from multilateralism and should link their domestic investments in their people and climate-proof infrastructure with regional and global support. The more than 130 high-impact voluntary initiatives launched under the Sevilla Platform for Action can support this progress. 

“We know how much global development depends on global cooperation,” Under-Secretary-General Li said. “As we get closer to 2030, our task is to come together as one, use the Sevilla Commitment as an impetus to spur action, and deliver a sustainable future for the world.”

- ENDS –

Notes to Editors:

• The Sevilla Commitment, the outcome document of the FFD4 Conference, was adopted by the conference in June 2025 and by the UN General Assembly in August 2025. It seeks to close the $4 trillion annual financing gap by scaling up investment, putting focus on sustainable development impact, and reforming the international financial architecture to strengthen multilateralism.
• The Sevilla Commitment defines the international financial architecture as the existing set of international financial frameworks, rules, institutions and markets that safeguard the stability and function of the global monetary and financial systems.
• The Financing for Sustainable Development Report 2026: Implementing the Sevilla Commitment  is a joint product of the Inter-agency Task Force on Financing for Development, which is comprised of more than 60 United Nations Agencies and international organizations. The Financing for Sustainable Development Office of the UN Department of Economic and Social Affairs serves as the substantive editor and coordinator of the Task Force, in close cooperation the World Bank Group, the IMF, World Trade Organization, UNCTAD, and UNDP. The Task Force was mandated by the Addis Ababa Action Agenda and is chaired by Mr. Li Junhua, United Nations Under-Secretary General for Economic and Social Affairs. The full copy of the report is available at rosengrenh@un.org.
• The report forms the basis for discussions at the ECOSOC Forum on Financing for Development where Member States discuss measures necessary to mobilize sustainable financing. Negotiations based on the report are ongoing. The report also informs the SDG Investment Fair, a platform which brings together government officials and investors for sustainable investment opportunities that support the achievement of the SDGs.
• This year, the FSDR 2026 includes in-depth coverage of the global economic context, private business and finance, trade, the international financial architecture and data.