The preparations for the Fourth UN Financing for Development Conference (FfD4), which will take place in Seville, Spain, from 30 June to 3 July, are entering their latter stages. The co-facilitators of FfD4 released a wide-ranging revised draft outcome document on 10 March, as part of the preparations for the Heads of State-level conference this summer. The FfD4 draft document discusses the role of the Bretton Woods Institutions (BWIs, i.e. the World Bank and the IMF) at length, reflecting the fact that they remain key cogs of a global economic system badly in need of fundamental reform.

The conference takes place at an important inflection point – much like the first FfD conference in Monterrey, Mexico, in 2002, which occurred in the aftermath of the Asian financial crisis. The BWIs were much-criticised for their response to that crisis, where they mandated harsh austerity in countries seeking assistance, with long-lasting negative consequences.

The lead-up to FfD4 has been marked by increased global economic tensions, as the new US administration reviews its membership in all “international intergovernmental organizations” and ponders attempting to force a global economic realignment. While the focus of much discussion has been on US positioning, the US, Japan and European countries have sought to water down elements of the FfD4 draft document.

FfD4 should therefore initiate a profound review of the IFI…ecosystem, hence reaffirming the role of the United Nations in global economic governanceFfD CSO Mechanism

In this context, reasserting the need for urgent reform has once again been the rallying cry of civil society organisations (CSOs). As Bhumika Muchhala of global CSO Third World Network argued during an intervention at the Third Preparatory Committee for FfD4 in New York in February, “The Monterrey Consensus understood that…within an international currency hierarchy, recurrent balance of payments problems and sovereign debt distress, the deregulated flow of capital and global imbalances cannot be resolved on the national terrain and reveal their steep social and economic costs through recurrent exogenous shocks and financial crisis.”

Since Monterrey, FfD has offered an alternate convening space on global economic governance to that provided by the BWIs, where decision-making power remains unevenly tilted towards the US, Japan and European countries (see Inside the Institutions, What are the main criticisms of the World Bank and IMF?).

Bank and Fund’s unequal governance remains in the spotlight

The FfD CSO Mechanism, a civil society network that acts as a key stakeholder in the process, argued in its feedback to the revised draft outcome document that, “It is high time to bring the IFIs [international financial institutions]…under proper intergovernmental democratic governance….FfD4 should therefore initiate a profound review of the IFI…ecosystem, hence reaffirming the role of the United Nations in global economic governance.”

While the revised outcome document lacks a clear commitment to a UN-led review of IFIs, it does highlight a number of relevant BWI governance reforms. Despite recent BWI reforms (see Observer Autumn 2024), the document notes this work remains unfinished, stating, “we commit to enhance the voice and representation of developing countries in norm-setting, global economic governance, and decision-making in international economic and financial institutions to deliver more effective, credible, accountable, and legitimate institutions.”

On the IMF’s ongoing efforts to agree a redistribution of quotas, following its failure to do so in the 16th General Review of Quotas in 2023, the FfD4 draft outcome notes, “As IMF members, we will work through the Governors of the IMF to consider restoring basic votes back to 1/9 the total voting rights in the IMF, among other measures” (see Briefing, A way out for IMF reform). The draft also calls for a successful conclusion to the World Bank’s 2025 shareholding review by the end of the year, which “delivers a more equitable balance of voting power at the institution.”

Echoing longstanding demands from the G77 and civil society, the draft also calls for IFIs’ boards to “recommit” to a merit-based selection of their heads, a clear reference to the undemocratic gentleman’s agreement that sees the US and European countries handpick the heads of the World Bank and IMF (see Background, What is the gentleman’s agreement?).

At a cross-roads: debt, private finance and SDRs emerge as key themes

The draft FfD4 outcome document also outlines actions on key themes, including trade, debt, private finance, international development cooperation and reform of the international financial architecture – while also referencing linkages between key reforms and climate and gender (see Observer Spring 2025).

Encouragingly, on debt the draft FfD4 text notes, “we will initiate an intergovernmental process at the United Nations, with a view to closing gaps in the debt architecture and exploring options to address debt sustainability, including but not limited to a multilateral sovereign debt mechanism.” This reflects growing calls from Southern states for UN-based reforms to the global debt architecture. Nonetheless, the text also backs the expansion of the G20’s often-criticised Common Framework for Debt Treatments (see Observer Spring 2024, Winter 2020). The document does however note, “We encourage major jurisdictions for sovereign bond issuances to pass domestic legislation to limit holdout creditors and facilitate effective debt restructuring,” in reference to the UK and New York state (see Observer Spring 2025).

The document gives mixed signals on the role of private finance, which has been heavily promoted by the BWIs in recent years (see Observer Summer 2023). On the one hand, it notes that, “Despite increased attention to innovative finance instruments such as blended finance and adoption of sustainable business and finance legislation, investment in sustainable development has not reached expectations, nor has it adequately prioritized sustainable development impact.” Indeed, 2024 research by Prof Uli Volz and colleagues from SOAS, University of London, showed the global total of blended finance contracts amounted to less than $15 billion in 2023 – with levels staying relatively flat since 2015.

Despite this, the FfD4 draft text includes widespread support for country platforms, which have been promoted by the Bank and other IFIs as a way to create investible asset classes (see Dispatch Springs 2021) – i.e. as the next iteration of the “billions to trillions” agenda. It remains doubtful whether these efforts can be truly ‘country-owned’ beyond states holding the responsibility for de-risking projects.

Finally, the outcome document endorses a number of reforms related to IMF Special Drawing Rights (SDRs), including a commitment to “review SDRs to design a playbook that provides operational guidance and strengthens their role during future crises and shocks, including a rules-based approach to recommendations for SDR issuance to speed up approval…of new issuances.” This echoes recent calls from civil society and experts for an expanded use of SDRs to support climate and development goals, which has been resisted by the IMF and its wealthy shareholders (see Observer Summer 2024).