New souces of financing (3 September 1996)


We must be innovative and resourceful in seeking new sources of financing to support the transition to sustainable development within the existing economic system.

Opening remarks by Maurice Strong at the MIT Symposium on "Session on Financing Sustainability Strategies"

Some three years have now passed since an unprecedented number of world leaders and people representing every sector of civil society gathered in Rio at the Earth Summit to frame a new vision of a secure and sustainable future for the human community. To be sure, the agreements reached fell short of the ideal to which we aspired. But despite shortcomings, they constitute the most comprehensive and far-reaching measures for the future of the human community ever agreed by governments.

However, it is clear that substantial financial resources are required in order to ensure implementation of Agenda 21 and the Rio Agreements. Sustainable development cannot be financed by add-ons at the margins of the traditional economic development process. Just as sustainable development must integrate the environmental and social dimensions into every aspect of the development process, so must this incorporate its financing. This will not be fully achieved until governments re-orient the system of fiscal policies and practices, subsidies and budgetary priorities so as to account for environmental and social costs and provide positive incentives for sustainable development.

It was clear at Rio that the substantial increases in resource flows to developing countries would not come about through increases in foreign aid in traditional terms. In fact. since then the ODA has actually declined. Meanwhile, there has been a major increase in flows of private capital, particularly to the more rapidly developing countries of Asia and Latin America to the point where they now surpass official assistance to many developing countries. And this trend is bound to continue. Making private investment a vehicle for sustainable development is emerging as the principal challenge now confronting us on the road to sustainability.

In the meantime, we must be innovative and resourceful in seeking new sources of financing to support the transition to sustainable development within the existing economic system. This will enable some immediate needs to be met while contributing to the longer term processes of fundamental change. During this session you will be hearing about a number of other specific initiatives for innovative financing of sustainable development.

I congratulate Professor Nazli Choucri for taking this timely and welcome initiative which promises to make an important contribution to the 5th Anniversary Review of the Earth Summit and to revitalizing its program and its vision.