Fourth International Conference on Financing for Development (FfD4): A must-know for UPSC exam
(Relevance: Important conferences and summits are important from both the Prelims and Mains perspective of the UPSC exam.)
Recently, the 4th International Conference on Financing for Development (FfD4) was held from 30 June – 3 July in Seville, Spain. A Sevilla Commitment was adopted ahead of the start of the Conference, which laid down a path to close the $4 trillion annual SDG financing gap in developing countries. However, the USA, one of the largest economies, skipped the Conference.
This Conference was supported by the UN Department of Economic and Social Affairs (DESA), through its Financing for Sustainable Development Office, and the UN Economic and Social Council (ECOSOC).
1. Financing for development (FfD) is an ongoing process to align financial flows and policies with economic, social, and environmental priorities. In 1997, the Agenda for Development was adopted by the UN General Assembly (UNGA), which called for consideration of holding an international conference on FfD.
2. According to the Earth Negotiations Bulletin, a division of the International Institute for Sustainable Development (IISD), 'the first International Conference on Financing for Development took place in 2002 in Monterrey, Mexico. The resulting Monterrey Consensus 'resolved to address the challenges of financing for development' and 'to eradicate poverty, achieve sustained economic growth and promote sustainable development.'
3. In 2008, a follow-up conference was held in Doha, Qatar. Building on this, the third Conference on Financing for Development adopted the Addis Ababa Action Agenda in 2015. It included a policy framework to realign financial flows to implement the 2030 Agenda for Sustainable Agenda and its 17 Sustainable Development Goals (SDGs). Ten years after Addis Ababa, the FfD conference was held in Spain.
Financing is the engine of development. And right now, this engine is sputtering. – United Nations Secretary-General Antonio Guterres statement at opening of 4th FfD4
4. Many countries face escalating debt burdens, declining investments, decreasing international aid, and increasing trade barriers. The Conference is seen as an opportunity to close the staggering $4 trillion annual financing gap, promoting development, bringing millions of people out of poverty, and helping achieve the UN's Sustainable Development Goals, which are currently lagging.
5. Last year, 3.3 billion people were living in countries that pay more interest on their debts than they spend on health or education, and the number will increase to 3.4 billion people this year, according to Grynspan. And developing countries will pay $947 billion to service debts this year, up from $847 billion last year.
1. Building on the 2015 Addis Ababa Action Agenda, the Sevilla Commitment reaffirms adherence to realizing sustainable development, including effectively implementing the 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals and upholding all principles enshrined in it.
2. With the approaching deadline of SDGs, the Sevilla Commitment charts a path on three fronts: catalyzing investment at scale for sustainable development, addressing the debt and development crisis, and reforming the international financial architecture.
3. Under the Sevilla Platform for Action, 'new financing mechanisms were announced to tackle unsustainable debt burdens, and additional initiatives aimed to enhance crisis response and climate resilience, expand access to social protection and support local and digital economies, among others,' according to the UN press release.
4. A Debt Swaps for Development Hub initiative led by Spain and the World Bank was launched. It aims to strengthen capacity and enhance collaboration to scale up debt swaps and lower debt service burdens.
5. Along with this, a Debt-for-Development Swap Programme by Italy that will convert 230 million Euros of debt obligations of African countries into investments in development projects and a Sevilla Forum on Debt to help countries learn from one another and coordinate their approaches in debt management and restructuring were announced.
6. Led by Brazil and Spain, an Effective Taxation of High-Net-Worth Individuals initiative was launched to ensure high-net-worth individuals pay their fair share.
India had made an uncharacteristically strong criticism of the Baku agreement, calling the final agreed amount 'abysmally poor' and 'paltry'. It has been said that the lack of adequate finance was not just an abdication of responsibility by the developed countries, but also a major setback to global climate action.
1. A few days before the start of the FfD4, the World Bank published a Report titled 'Foreign Direct Investment in Retreat', pointing out that the Foreign Direct Investment (FDI) into developing countries had fallen to $435 billion in 2023, the lowest in nearly 20 years. It warns that rising trade and investment barriers pose a 'significant threat to global efforts to mobilise financing for development.
2. According to M. Ayhan Kose, the World Bank Group's Deputy Chief Economist, the sharp drop in FDI for developing countries 'should sound alarm bells'. Reversing the trend, Kose said, was not just an 'economic imperative' but also 'essential for job creation, sustained growth, and achieving broader development goals'.
3. According to the Report, the prolonged and widespread investment weakness in emerging market and developing economies (EMDEs) has contributed to a large backlog of unmet infrastructure needs.
4. Weak investment growth is undermining efforts to achieve key development goals, including tackling climate change and accelerating the energy transition, and reducing poverty and inequality. By some estimates, EMDEs need to invest at least an additional 1.4 percent of GDP through 2030 just to address climate change and the energy transition.
5. Among EMDEs, China has been the biggest receiver of FDI from 2012 to 2023, accounting for nearly one-third of these inflows. Brazil was second at 10 per cent and India third at 6 per cent, the World Bank said.
6. While data for the 2023 calendar year is the latest available at a global level, FDI into India as per Reserve Bank of India (RBI) data increased to $81.04 billion in 2024-25 from $71.28 billion in 2023-24. However, net FDI into India – which adjusts the gross FDI number by deducting the funds repatriated by foreign investors and the investments made by Indian entities abroad – fell to just $353 million in the last fiscal from $10.13 billion in 2023-24.
Consider the following statements about the International Conference on Financing for Development:
1. The first International Conference on Financing for Development took place in Doha, Qatar.
2. The Sevilla Commitment was signed by the USA, UK, France, Germany, and Italy.
3. The Effective Taxation of High-Net-Worth Individuals initiative was launched by Brazil and Spain.
Which of the following statements is/are incorrect?
(a) 2 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2, and 3
(Source: US skips global UN meeting aimed at raising trillions of dollars to combat poverty, uneca.org, enb.iisd.org, unsdsn.org, un.org, 'Alarm bells' for developing nations as 2023 FDI lowest since 2005 – World Bank)
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Key Points to Ponder: • Read about the status of India's bilateral relations with Cambodia and Thailand. • What is happening at the Thailand-Cambodia border? • Why have Thailand-Cambodia ties deteriorated of late? • What is India's diplomatic response to the Thailand-Cambodia clashes? • Read about Prasat Ta Muen Thom. • What is ASEAN (Association of Southeast Asian Nations)? • What is the significance of regional groupings like ASEAN in conflict resolution within Southeast Asia? • What is India's Act East Policy? • How do border disputes in Southeast Asia impact India's Act East Policy? • Map work: Cambodia, Thailand and ASEAN member countries Key Takeaways: • The Ministry of External Affairs also urged Indian travellers in both countries to contact embassies in case they needed any assistance. • 'We are closely monitoring the situation along the border between Cambodia and Thailand,' said MEA spokesperson Randhir Jaiswal while responding to media queries. • 'India has close and friendly relations with both countries and hopes that both sides will take measures for a cessation of hostilities and prevention of further escalation,' he said, adding, 'Indian travellers in the region may contact our respective embassies in the two countries for any assistance.' • At least 32 people have been killed and nearly 1,50,000 displaced in the border clashes between the two Southeast Asian countries that erupted on Thursday. Both countries have recalled their ambassadors and Thailand has closed its northeastern border crossings with Cambodia. • During an emergency meeting on Friday, members of the United Nations Security Council called for de-escalation and urged the regional bloc, the ASEAN (Association of Southeast Asian Nations), to mediate a peaceful solution. Do You Know: • Cambodian Prime Minister Samdech Thipadei Hun Manet Sunday said he agreed to an 'immediate and unconditional ceasefire' in armed clashes with Thailand following a phone call with US President Donald Trump late Saturday night. In an official statement, Hun Manet said, 'On the night of Saturday, 26 July 2025, I had a phone discussion with Honorable Donald Trump, President of the United States, regarding the armed clashes along the Cambodia–Thailand border.' • He added, 'The President of the United States expressed his desire not to see war or fighting that would lead to many deaths and injuries on both sides, including soldiers and civilians.' • Thailand confirmed in principle its agreement to a ceasefire but urged 'sincere intention' from Cambodia. 'Any cessation of hostilities cannot be reached while Cambodia is severely lacking in good faith and repeatedly violating the basic principles of human rights and humanitarian law,' Thailand's foreign ministry said in a statement cited by AP. Other Important Articles Covering the same topic: 📍Explained: The border dispute, and the Hindu temples at the heart of deadly Cambodia-Thailand clashes Subscribe to our UPSC newsletter. 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Hindustan Times
2 days ago
- Hindustan Times
UPSC Recruitment 2025: Apply for 45 Assistant Director posts at upsc.gov.in
Union Public Service Commission, UPSC has invited applications for Assistant Director posts. Eligible candidates can apply online through the official website of UPSC at UPSC Recruitment 2025: Apply for 45 Assistant Director posts at This recruitment drive will fill up 45 vacancies in the Directorate of Income Tax (Systems), Department of Revenue, Ministry of Finance. The last date to apply is August 14, 2025. Eligibility Criteria Masters' Degree in Computer application/Computer Science or Master of Technology (M. Tech.) (with specialization in Computer Application) or Bachelor of Engineering (BE)/Bachelor of Technology (B Tech.) in Computer Engineering/ Computer Science/Computer Technology of a recognized University or equivalent OR Degree in Computer Applications/ Computer Science or Degree in Electronics/Electronics and Communication Engineering from a recognized University or equivalent OR Masters Degree of a recognized University or equivalent or Degree in Engineering of a recognized University or equivalent. Application Fee Candidates are required to pay a fee of Rs. 25/- only either by remitting the money in any branch of the SBI by cash or by using net banking facility of any bank or by using Visa/Master/Rupay/Credit/Debit Card/UPI payment. No fee for SC/ST/PwBD/Women candidates of any community. No "fee exemption" is available to Gen/OBC/EWS male candidates and they are required to pay the full prescribed fee. Other Details The category-wise minimum level of suitability in interviews, irrespective of whether the selection is made only by interview or by Recruitment Test followed by interview, will be UR/EWS-50 marks, OBC-45 marks, SC/ST/PwBD-40 marks, out of the total marks of interview being 100.
