Despite marked progress in reforming the United Nations development system to make it more responsive and effective, senior officials warned the Second Committee (Economic and Financial) today that serious funding gaps remain in meeting Member States’ needs.
Lotta Tähtinen, Director of the Office of Intergovernmental Support and Coordination for Sustainable Development in the Department of Economic and Social Affairs, introduced the reports “Implementation of General Assembly resolution 79/226 on the quadrennial comprehensive policy review of operational activities for development of the United Nations system” (document A/81/75-E/2026/61) and “Funding of the United Nations development system” (document A/81/75/Add.1-E/2026/61/Add.1).
She noted that structural transformation has made the UN development system “more coherent, collaborative and better able to support countries”, with an independent and empowered resident coordinator system now leading United Nations country teams in more than 160 countries and territories. Further, 94 per cent of programme country Governments rate UN development support as effective, with $981.1 million in realized efficiency gains in 2025 alone.
Unsustainable Funding Environment
While “the progress is substantial”, she warned of an “unsustainable funding environment”. Total contributions stood at $45.2 billion in 2024 and were projected to decline to around $40 billion for 2025. Core resources accounted for just 12 per cent of voluntary contributions, against the Funding Compact target of 30 per cent, while continued predominance of earmarked, short-term funding works against the coherence the reform was designed to achieve.
Despite substantial progress on reform, “the corresponding shift in funding quality has not followed”, she observed. And yet, Government recognition of effective United Nations support remains high, with all responding least developed countries and African countries, 96 per cent of landlocked developing countries and 89 per cent of small island developing States rating UN development system support as effective.
At the same time, development resources in least developed countries, landlocked developing countries and African countries have declined in real terms. Progress in implementing the quadrennial comprehensive policy review will largely be measured by results achieved there. Completing the work of the UN80 Initiative “is a shared responsibility”, she affirmed.
Dima Al-Khatib, Director of the United Nations Office for South-South Cooperation, introduced “State of South-South cooperation” (document A/81/321), noting that South-South trade “continued to demonstrate resilience” — accounting for more than one third of global commerce, with trade among developing economies expanding by approximately 8 per cent.
Artificial Intelligence Offers Development Opportunities
Artificial Intelligence (AI) presents significant development opportunities, with potential contributions of up to $20 trillion to the global economy by 2030, she said. However, persistent technological disparities underscore the importance of South-South and triangular cooperation in bridging digital divides and strengthening developing countries’ capacities to benefit from emerging technologies.
She cited the “catalytic role” of the UN system, leveraging South-South and triangular cooperation in more than 1,470 projects in 2025. In expanding partnerships, the Food and Agriculture Organization (FAO) reported an active South-South cooperation portfolio valued at approximately $34.9 million, supported through partnerships with Member States, including Brazil and China. Encouraging Member States to explore innovative financing instruments and partnerships with development finance institutions to bolster the UN Fund for South-South Cooperation, she further called for enhanced cooperation in digital public infrastructure, AI and access to affordable computing resources.
As Member States took the floor, the representative of Uruguay, speaking for the Group of 77 and China, reaffirmed operational activities for development “must remain firmly focused on poverty eradication in all its forms”. The resident coordinator system and country teams must be equipped with the necessary skills and resources to deliver coherent, demand-driven support. Further, while South-South cooperation is a vital and growing pillar of international development cooperation, he stressed that it is a complement rather than substitute for North-South cooperation, particularly in financing, capacity-building and technology transfer.
Only 15 Per Cent of Sustainable Development Goal (SDG) Targets on Track
Thailand’s delegate, speaking for the Association of Southeast Asian Nations (ASEAN), warned that only 15 per cent of the SDG targets are on track, underscoring “the foundational role of the 2024 QCPR [quadrennial comprehensive policy review] as the essential policy framework for UN development support”. He cited ASEAN as “a living example of solidarity and mutual growth through South-South cooperation”, committed to narrowing the development gap among Member States and implementing the Initiative for ASEAN Integration Work Plan V (2026–2030).
Echoing that targets are “alarmingly off track”, the representative of Jamaica, speaking for the Caribbean Community (CARICOM), called an empowered, well-equipped resident coordinator system “indispensable”. Voicing concern at the unsustainable decline in official development Assistance (ODA) and voluntary funding, he reiterated the call for funding mechanisms to address a “development emergency” — with small island developing States needing a system that recognizes the realities of geography, limited institutional capacity and the need for specialized expertise. He recalled that the Caribbean hosts four of the nine UN multi-country offices.
Gambia’s delegate, speaking for the Group of Least Developed Countries, stressed that progress under the Istanbul Programme of Action “fell short”, failing to achieve 7 per cent sustained economic growth, with limited structural transformations and weak productive capacities. With only four countries graduated by 2020 — against the ambition of half of least developed countries meeting graduation criteria — she called for “stronger, more coordinated and better resource support” from the development system.
UN Development System Must Respond to Small Islands
The representative of Palau, speaking for the Alliance of Small Island States, called the UN development system “central to whether international support reaches our countries in ways that are responsive, coherent and aligned with regional and national priorities”. Urging the system “to respond to our unique circumstances and vulnerabilities” and support implementing the Antigua and Barbuda Agenda for SIDS (small island developing States), she recalled that the quadrennial comprehensive policy review calls for multi-country offices to be regularly monitored, with adjustments to ensure the delivery of effective development resources.
Affirming that the development system “is often the face of the UN in a country”, Canada’s delegate, also speaking for Australia and New Zealand, called it “essential that they operate as effectively” and serve as many people as possible. Stressing that in a time of financial crisis, and need for accelerated action on the SDGs, “the status quo should not be acceptable”, she insisted that the Committee must “not shirk its responsibility”.
Timor-Leste’s representative, speaking for the Community of Portuguese-speaking Countries, echoed calls for strengthening coordination and coherence across the activities of the UN system, particularly through resident coordinators and country teams. Funding should reduce dependence on strictly earmarked contributions, with South-South and triangular cooperation focused on technical capacity-building and deepening joint initiatives in education, health, food security, gender equality and climate resilience.