Towards Malaga 2022: Listen to cities on 14th June! A step towards the policy roadmap for a financial ecosystem that works for Cities and Local Governments

Dear Freinds and Colleagues, previous blog entries proposed the three broad policy areas of the Malaga coalition arising from the multiple conversations with local government leaders including the second series of the podcast Capital LoCAST, the 2020 conference and subsequent work on rebuilding local fiscal space in the aftermath of the COVID19 pandemic and the broader work on local government finance carried out by coalition members.

This led to the circulation of the draft policy roadmap for the coalition, detailing three areas of reform:

  1. Increase capital flows for public infrastructure and transformative financeable investments at the local level;
  2. Build effective partnerships for financing and managing local infrastructure assets;
  3. (Re)Build local fiscal space

At the height of last years’ pandemic, UCLG, Metropolis and UN-Habitat, in collaboration with the FMDV and UNCDF, convened a Live Learning Experience session to assess the impacts of the COVID-19 pandemic on local and regional finances, and the challenges ahead to respond to the emergency and prepare the recovery. Participants called for a continued and enhanced policy dialogue between local decision-makers, national governments and international financial partners to support local and regional action in the aftermath of the pandemic. Simultaneous to the live learning sessions, UNCDF published a widely used Guidance Note on Local Government Finance in the COVID Response.

In the first half of 2021 there have been encouraging signs of a wider understanding of the role of local government finance to the world’s development goals. One example is the recent Mayors Migration Council and C40 report on Cities Climate and Migrations : The role of cities at the climate and migration nexus. This report shows how cities as diverse as Anchorage (United States), Freetown (Sierra Leone), Bristol (UK), Dhaka (Bangladesh), São Paulo (Brazil) and Houston (United States) are leading the way in addressing the challenges and opportunities that emerge from these two global development issues. The city of Malaga in the Spain has been another innovator in seeing migration as an opportunity. Both the mayor of Malaga and the mayor of Freetown describe their experiences in the Capital LoCAST second series.

The C40 report highlights sustainable financing mechanisms including initiatives such as the International Municipal Investment Fund (itself created as an instrument of the coalition), the Local Climate Adaptive Living Facility and the BluePeace water basin financing initiative, amongst others. All of which open up access for cities to different forms of long term finance. Other examples will be presented at the upcoming High Level Political Forum on Sustainable Development in July 2021.

There have also been wider discussions on the financing arrangements required for local infrastructure finance and how these can be embedded in the COVID19 recovery packages to ensure that the response to the pandemic does not result in greater sovereign indebtedness accompanied by reduced fiscal space and investment flows at the local level. Previous blog entries have described the indispensible role of local government in responding to the pandemic and its recovery. It is important their their role in driving national recoveries is not hampered or weakened.

Now we are half way into 2021 it is time to take stock. How are cities doing? How serious is their fiscal crisis? What measures are being taken? Is central government supportive? What policy agenda and type of financing meets the demand? These are the questions that will be answered by a panel of local government leaders on Monday 14th June in the first of two meetings towards Malaga 2022. This discussion will feed into the second meeting, to be held in the final quarter of 2022 which will drill down on the proposed policy agenda, amending it if required, to produce an actionable programme to be adopted in early 2022. This will be a roadmap for meaningful reform towards a global financial ecosystem that works for cities and local governments.

The aforementioned Mayors of Malaga and Freetown will be speaking on the 14th. The meeting will be opened by Emilia Saiz, Secretary General of United Cities and Local Governments and by Preeti Sinha, Executive Secretary of United Nations Capital Devlopment Fund. Login details at this link and full agenda below. Looking forwards to seeing you there!

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