Statements: 3rd Preparatory Committee for Financing for Development

Statement by Mr. Oddur Stefansson
Specialist at the Ministry for Foreign Affairs of Iceland
3rd Preparatory Committee for Financing for Development
Domestic public resources: paragraph 30 in the zero draft
11 February 2025 



Thank you Mr./Madam Chair 
 
I am pleased to deliver this statement on behalf of Iceland.  

We appreciate the constructive language on the topic of international tax cooperation and innovative taxes. 

Strong international tax cooperation is integral to fighting tax evasion and avoidance. We would like to highlight the importance of responsible tax behavior in relation to the use of tax haven jurisdictions as well as intermediary jurisdictions, which we suggest adding a reference to. It is vital that untaxed income is brought into developing country economies from offshore, tax havens, and intermediary jurisdictions. 

We also welcome the reference in section g) to international tax cooperation frameworks such as the Two-Pillar Solution as well as the negotiations on a UN Framework Convention on International Tax Cooperation. 

I thank you. 


Statement by Mr. Oddur Stefansson
Specialist at the Ministry for Foreign Affairs of Iceland
3rd Preparatory Committee for Financing for Development
Domestic and international private business and finance: paragraphs 33-36 in the zero draft
11 February 2025 

Thank you Mr./Madam Chair 
 
I am pleased to deliver this statement on behalf of Iceland.  

We appreciate para 33 on domestic financial sector development, enabling environments and access to financing. In particular, we would like to emphasize the point that increasing women‘s full, equal and meaningful participation in the workforce and in leadership positions can drive significant economic growth and foster sustainable development. 

We would also like to highlight that developing domestic financial sectors and capital markets is a crucial aspect of leveraging the private sector more broadly to achieve sustainable development, and we welcome the constructive language on this.  

In this regard, we would like to highlight an example from our own experience. Last year, Iceland became the first country in the world to issue gender bonds as a way to leverage capital market financing for projects conducive to gender equality. This is an example of innovative financing that we suggest to add this to the list of thematic bonds in para 34 c. 

I thank you. 

Statement by Mr. Oddur Stefansson
Specialist at the Ministry for Foreign Affairs of Iceland
3rd Preparatory Committee for Financing for Development
International development cooperation: paragraphs 37-41 in the zero draft
12 February 2025 

Thank you Mr./Madam Chair 

I am pleased to deliver this statement on behalf of Iceland.  

We appreciate the language in this important section on international development cooperation and ODA. There is no replacement for ODA and grant financing, and there is no financial innovation that can create grants.  

In this light, the emphasis on ODA/GNI targets of 0,7% overall with at least 0,2% to LDCs remains important. In para 38, we would like to suggest a reference to gender equality, both in the context of stepping up efforts to address critical socio-economic priorities, as well as funding levels. An ambitious target for ODA dedicated to gender equality would be constructive as OECD DAC data indicates that gender equality-focused ODA has decreased in recent years. 

We would like to underscore the recognition made that MDBs have indeed significantly scaled up lending capacity in recent years, including replenishments and balance sheet optimization measures. We encourage a continuation of these efforts. 

Regarding para 38 j), while we are positive to the use of complementary measures of progress that go beyond GDP, we must also be mindful that the use of such measures do not diminish our focus on supporting the LDCs. 

We appreciate the language on MDBs and the system of public development banks. However, we would like to see an even greater emphasis on MDB coordination and cooperation. There is scope for the MDBs to work more and better together, and the text should encourage developments to that end. In order to achieve the impact and scale necessary to address multi-faceted development challenges, it is necessary that the MDB’s work together as a system. 
 
In relation 38 h) to the rechanneling of special drawing rights (SDRs), we question having this paragraph timebound by the end of 2025. Moreover, we also question determining an exact minimum number of countries to contribute to the SDR-based hybrid capital channeling solutions by AfDB and IDB. 

On para 40, We welcome the section on development effectiveness and note the well justified concern about growing fragmentation and increasing transaction and compliance costs. It is imperative that we work against fragmentation in development cooperation, and the emphasis on strengthening national systems is well-taken. We would suggest to also mention the importance of strengthening government systems on sub-national and municipal level in this regard. In part 40 b) We also appreciate that the importance of core contributions to multilateral institutions is well reflected in text. We would suggest an additional reference to the UN Funding Compact in that context. 
 
I thank you. 


Statement by Mr. Oddur Stefansson
Specialist at the Ministry for Foreign Affairs of Iceland
3rd Preparatory Committee for Financing for Development
Debt and debt sustainability: paragraphs 47-51 in the zero draft
13 February 2025 


Thank you Mr./Madam Chair 

I am pleased to deliver this statement on behalf of Iceland.  

The section on debt and debt sustainability is a key component of the outcome document, and we welcome the excellent draft on the topic. Indeed, as is mentioned, all too often, countries in need of debt workouts face „too little, too late“ restructurings that carry with them detrimental impact on development. 

The level of debt distress in developing countries is exceptionally high, particularly in LDCs, with severe impacts on fiscal space that is critical to enabling reforms. We welcome the constructive language on debt and debt sustainability, including on scaling up capacity-building to support national debt management offices in developing countries. Indeed, sustainable borrowing and lending practices are pivotal to long-term economic development, as is sustainable debt management and debt transparency, and we suggest acknowledging the pivotal role played by IDA in this regard. 

In relation to para 48 a and d), we suggest to include a reference to the Global Sovereign Debt Roundtable. It is important that we build on existing debt restructuring mechanisms and avoid duplication of efforts.   

On para 50, we welcome the language on debt architecture for debt crisis resolution. Indeed, efficient, fair, coordinated, and not least, timely, debt restructuring, building on the call made in the Addis Ababa Action Agenda, is required. 

In para 50 a) We welcome the strong text on reforming the debt architecture, including potentially extending the G20 Common Framework to MICs in debt distress, and recognize the need for reaching agreements with both public and private bilateral creditors based on comparability of treatment. We suggest that adding a reference to the World Bank and IMF’s advisory work in this regard would be useful. Also, we suggest to add a mention of the Multilateral Debt Relief Initiative and the lessons-learned. It is important to build on initiatives and measures that are already in place. 

Another important point that should be reflected in this para is that MDBs must be excluded from debt treatments to protect their Preferred Creditor Status and Treatment, which is crucial to avoid risk of increased borrowing costs and preserve concessional lending capacity. 

Finally, in para 51 a), we have an edit to suggest, that we urge the IMF and World bank, within their respective mandates, to continue to refine debt sustainability assessments. 
 
I thank you. 

Statement by Ms. Gudrun Thorbjornsdottir
Counsellor at the Permanent Mission of Iceland to the UN
3rd Preparatory Committee for Financing for Development
Addressing systemic issues: paragraphs 52-57 in the zero draft
13 February 2025 

Thank you Mr./Madam Chair 

I am pleased to deliver this statement on behalf of Iceland. 

We welcome the constructive language on reform of the architecture of international economic and financial institutions. Important and comprehensive reform and evolution process are already well underway in many MDBs, such as the World Bank, as well as the IMF, which is important to recognize. 

In relation to 53 b) on shareholding, we would like to highlight the importance of adhering to the Lima Principles, and the dynamic formula, in delivering on reviews of voting power and shareholding. However, the reference to recent efforts to realign IMF quotas and World Bank shareholding should be made clearer as to what developments are being referred to. 

Also, on 53 c), we welcome the emphasis on the importance of achieving a gender balance in the executive boards of international organizations, not least the MDBs and the IMF, and would suggest adding concrete timelines for such measures. It is also important to recognize the reforms already carried out in the IMF and World Bank in relation to adding additional African chairs.  

Further, we suggest to add a reference to the IMF’s expertise and ability to provide capacity development on domestic resource mobilization reform and policy-making. 
In relation to para 54 on the global financial safety net, it is important that the text is clear on the mandate of the IMF and relevant institutions and the premises and dynamics of the arrangement. On para 54 a), we have three points, first, we must recognize the challenges of raising fresh concessional capital, illustrated by recent examples such as for the Poverty Reduction and Growth Trust, as well remind of the conditionalities required in potential IMF financing arrangements which aim to provide the basis for further lending by MDBs and others. Second, any adjustments of IMF facilities, such as multilateral swap lines, must be consistent with IMF’s statutory mandate. Third, adjusting borrowing limits in all layers of the safety net cannot be agreed independently of the availability of financial resources.  

As for part d), we have doubts about the feasibility of rechanneling the large amounts of unused SDRs as suggested. We are also concerned that the suggested premises for SDR allocations may not be consistent with the Articles of Agreement of the IMF and that extensive rechanneling could affect the role of SDR as an international reserve asset. 
 
I thank you. 

Statement by Mr. Oddur Stefansson
Specialist at the Ministry for Foreign Affairs of Iceland
3rd Preparatory Committee for Financing for Development
Data, monitoring and follow up: paragraphs 62-66 in the zero draft
14 February 2025 



Thank you Mr./Madam Chair 
 
I am pleased to deliver this statement on behalf of Iceland. 

We welcome this section on the crucial need to invest in data and statistics systems in order to facilitate and advance the financing for development agenda. 

In particular on para 64, we would like to highlight the crucial role of high-quality data and statistics aggregated by gender in informing and tailoring policy-making to be able to respond to the often highly gendered impact of the many development and climate challenges faced by developing countries. In that regard, we suggest that the rationale for why gender-disaggregated is important can be strengthened further. 

The success of FFD4 rests in its successful implementation, monitoring and follow-up and we welcome the emphasis on this in this section. It is integral that the action agenda developed through FFD4 be carried out and implemented to a greater extent than its predecessor, the Addis Ababa Action Agenda. 

On para 65, we would like to highlight the importance of improved coordination between official creditors beyond the Paris Club, including on debt transparency. The development finance landscape has changed significantly in recent years and it is important that the main coordination institutions reflect this. 
 
I thank you.