“Sustainable” Finance: Do we need BlackRock to end poverty and save the climate?

By Antonio Diaz Caycedo

How is Global Development understood today?

In my first university class on Global Development, our professor told us that good intentions alone are insufficient. In fact, the field is ridden with examples of good intentions gone wrong. This article deals with such a case. In this article, I want to tell you how an ambitious plan to end poverty became perverted into a scheme to extract money from the very people it was intended to help. This is the story of how big finance, using the help of governments, took over Global Development, and how this continues colonial relations. But let’s start at the beginning.

In 2015, the UN General Assembly adopted the 2030 Agenda for Sustainable Development, an ambitious plan to end poverty, tackle climate change, and reduce inequalities. Codified in the Sustainable Development Goals (SDGs), this agenda is the successor of the Millennium Development Goals, which ended in 2015. What sets these two agendas apart is that, while the Millennium Development Goals were aimed at the poorest and most vulnerable populations in the world, the SDGs apply to everyone, everywhere. While this makes the SDGs look more neutral and unbiased, the content of the goals is still largely based on a Western (=European/North American) understanding of progress. Ideas such as economic growth, industrialisation, and the subjugation of nature and resources are baked into the SDG framework. 

Why is this problematic? If Development is defined as becoming more like Western countries by adopting their laws, institutions, and style of economy, then this also defines all societies that don’t conform to these standards as “underdeveloped”. By pushing this seemingly universalist framework, the SGDs therefore discourage self-determination and states’ rights to determine their own development path.This logic wasn’t invented yesterday. The same logic was used to justify European colonialism, arguing that colonised countries are backward, uncivilised, and in need of (European) development.

Now you might be asking yourself: “But is it really so bad to want to end poverty, world hunger, and save the planet?” Of course not. Everyone wants that. The question is: who decides how we get that done, and who should bear the responsibility (and the tab!). When it comes to responsibility, the SDGs are intentionally vague. Responsibility is framed as shared, voluntary, and non-binding. The actual question of who is responsible for financing development is not laid out in the SDGs, but in the Addis Ababa Action Agenda (AAAA). This agreement establishes that countries are generally responsible to finance their own development, while international aid is supplementary and private finance is called on to close the funding gap. Historically, it is of course the “developed” countries that have relied on resource extraction, slave labour, and general colonial plunder from the Global South to reach their current levels of “development”. But this historical perspective of responsibility is absent from the agenda.

Current Progress on the 'Development' Agenda

So how is the agenda progressing? Well, not great. The UN’s 2025 Sustainable Development Report states that “On average globally, the SDGs are far off-track”, and continues that “none of the 17 goals are currently on track to be achieved by 2030”. The problem? One could point the finger at many different factors, but a big one is a lack of financing. To get an idea of the scale of the challenge: UN economists have estimated that achieving the SDGs by 2030 would cost around 5.4 to 6.4 trillion USD every year. To put that in perspective, that’s around 5-7% of the global GDP¹.

However, the question of how such levels of public investment are supposed to be raised, was left unanswered by the AAAA. There are no mandatory spending targets, no global tax mechanisms, and no debt relief programmes. 

But what’s stopping Global South states from just spending the money needed to achieve their SDG targets themselves? Well, in the current post-2008-financial-crisis age of global neoliberalism², public spending is directed by global financial markets, not voters. Governments have to borrow to spend, and borrowing is constrained by bond³ markets, credit rating agencies, and capital flight risks. Let me explain!

An important point to make here is that, while financial markets may seem like neutral arbiters of credit, this structure covertly continues colonial domination. Global South states often inherited tons of debt in foreign currencies after independence. To pay back the debt, these countries therefore have to find ways to get foreign currency, mostly by selling exports on the international markets, or by borrowing from institutions such as the World Bank or the International Monetary Fund (IMF). These two institutions, which are essentially controlled by the Global North, only lend money under harsh conditions, often requiring borrowers to drastically reduce their spending. At the same time, credit rating agencies such as Moody’s, S&P, and Fitch Ratings wield enormous power over fiscal policy⁴. If a country is rated as “risky”, it can substantially increase the interest that that country has to pay on its debt, often leading to debt spirals. These seemingly neutral institutions often reproduce colonial assumptions in their ratings, treating Global South countries as politically unstable, fiscally irresponsible, and prone to populism, thereby justifying worse ratings. Thus, both the international financial institutions and the credit rating agencies have significant control over economic policy in the Global South, acting in a way as unelected colonial governors.

To make matters worse, traditional official development aid is under immense domestic pressure in Global North countries. Given all the other current priorities of the world’s traditional donor states, including aging populations, migration, and increasing militarisation, investing in development has ceased to be a priority. It is seen as optional, not as an obligation to historically colonised places. We have already seen the USA, the traditionally largest global aid donour, completely shut down its agency for global aid, USAID.

The New Paradigm: Development as an asset class

So where does that leave us with the ambitious plans of the SDGs? In 2015, when both the Agenda 2030 and the AAAA were signed, leaders were well aware of how unlikely it was that states could finance their own development needs under the current system. So what was the solution they came up with? Reform the global financial architecture to allow lower-resource countries to invest in their own development? Or assume responsibility for colonial injustices and make the Global North pay (e.g. as a means of climate reparations)? As it turns out, neither happened. 

Instead, calls were made to bring in private finance as a development partner. The idea was, as the World Bank ambitiously called it in 2015, to use “billions” in public budgets to unlock “trillions” private finance. A catchy slogan: “From billions to trillions”. The theory was that, if we turn Development into privately-owned, for-profit investment projects, and use public money to improve returns (in financial jargon: to de-risk them), then large asset managers and investment banks will pour their money into the Global South. Thus, the idea of investible development was born. For instance, imagine a development project to build a hospital in Kenya. Instead of using government budgets to fund the hospital directly, the World Bank gives, for instance, BlackRock (the world’s largest private asset manager) a favourable loan. Once the Kenyan government promises to subsidise and guarantee the profits from the hospital, and guarantees it won’t put in place any unfavourable regulations, the project becomes “investible” and the private money flows in. The same sort of strategy applies to housing, education, nature, and renewable energy.

Big finance therefore becomes the central agent of Global Development, and the role of the state is reduced to creating the right conditions for investments to happen. You might already sense that there is something inherently wrong with this approach, but let me spell it out clearly. This literally means that we are privatising the gains and socialising the losses of Development. If the project works well, the profits flow to the private lender. If the project happens to fail, the government has to pick up the tab and compensate the private lender. Not only that, but it covertly alters the trajectory of Development towards privatised, for-profit projects that charge fees for the supposed beneficiaries of Development. For instance, imagine a Development project funding a bridge in a rural area. If the project was financed directly via Official Development Assistance (ODA), the project would be looked at in terms of how effective it is at helping people, and it would not charge a fee to users. If the project is financed via private investors using government guarantees (=investible development), the users of the bridge will be charged a fee for crossing the bridge every time. In this case, the project is looked at in terms of how much money is being generated for the investors, and how safe those returns are. This example highlights two problems central to investible development: First, that beneficiaries of the project are charged fees, and second, that projects are selected based on financial return, not on the needs of the population. There are already many examples of aggressive profit-maximisation within this investible development paradigm, from hospitals in Turkey to Kenya⁵. But can you really blame the private companies for this? As the influential economist Daniela Gabor put it: “Extractivism is the feature, not the bug, of investible development.”

Funnily enough, the money isn’t even flowing. Instead of going “from billions to trillions” , research now shows that, for every dollar of public money used, only a meager 30 cents of private capital is mobilised. The World Bank has quietly abandoned their slogan. But maybe that was never the point. “Development aid” was never a mere altruistic policy on part of the Global North. Its history goes back to the geopolitics of the cold war and America’s effort to align countries with their bloc instead of the USSR. Perhaps the point was always to maintain Western hegemony. But even if the intentions were good, investible development continues the extractive colonial legacy of previous development models. Just as the current investible development paradigm enables big finance to extract value, previous development models, namely the Washington Consensus⁶, have also drained the Global South from resources by enforcing privatisation and the free flow of capital and resources.

Nonetheless, by the Fourth International Conference on Financing for Development (FFD4) last July in Seville, Spain, investible development remains the only game in town. This conference was a good metaphor for today’s development issues. While temperatures outside almost reached 100 degrees Fahrenheit, nearly 6000 corporate lobbyists (almost half the attendants) gathered to make their case for investible development, while representatives from the Global South pleaded for debt relief.

In the decade since the inception of investible development, the Global South has actually been forced to take on more debt than ever. In 2023, the debt servicing costs, in other words the interest payments on loans, of the Global South reached a record 1.4 trillion USD. Instead of the promised trillions in investments, the Global South is now paying trillions to private investors in the Global North, money which is often redirected from much needed spending on health or education (and reaching SDG targets!!). Private investors have drained the Global South, not developed it.

So what can be done? Is there really no alternative? Of course there is. Civil society actors in Seville last year had plenty of ideas. The establishment of a binding multilateral UN sovereign debt resolution mechanism with debt cancellation, an automatic debt relief mechanism in case of external shocks such as extreme weather or war, and the recognition of historical responsibility for environmental damage and colonialism through reparations were just some of the demands made.

So can we afford the future that we want, without the help of big finance? Absolutely. The idea that there is no public money available is political fiction. What is missing is the political will to curb the power of private capital, and to take a bold step towards locally-, community-, and state-led development. The money is there. As the perhaps most influential economist of all time, John Maynard Keynes put it: “Anything we can actually do, we can afford.”

¹ GDP=Gross Domestic Product, the sum of everything a region, country, or the world produces in a year.

² Neoliberalism is an ideology that favours free markets, deregulation and privatisation, while reducing the role of government in the economy. ³ Bonds are government debt papers that can be sold in markets, give a fixed interest payment and are repaid after some years. ⁴ Fiscal Policy= How much a government decides to spend and tax, and consequently how much debt it takes on.

⁵ If you want to read more about the Kenya case: https://www.icij.org/investigations/2025/07/the-world-bank-set-out-to-transform-health-care-for-the-poor-in-africa-it-drove-patients-deeper-into-poverty.com. Or an Oxfam article on the issue generally: https://www.oxfam.org/en/research/sick-development

⁶ The Washington Consensus is a set of development policy prescriptions promoting free markets, privatisation, and deregulation. They were conceived in the 80s by the World Bank and IMF.