29 March 2022 “Ways to deliver the G7 Germany priorities”: Speech by Federal Minister for Economic Cooperation and Development Svenja Schulze at the Global Solutions Summit

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Ladies and gentlemen,

When I accepted your invitation, one of the most urgent development tasks was the post-COVID recovery. Now this is being eclipsed by the question of what the war against Ukraine means for us all.

Bombs are falling on Kyiv, Kharkiv, Mariupol, and Donetsk. Every day, many people are killed. By the middle of March, UN News estimated that damage to Ukrainian infrastructure amounted to 100 billion US dollars.

The war also has dramatic consequences on a global scale. In particular, it is becoming harder to secure supplies for the poorest. After all, both parties in the conflict are important exporters of grain, fertilizer, fossil fuels and essential medicines. Prices are skyrocketing, supply chains are breaking down, commodity markets are in turmoil. The international peace order, which had been fragile even before the war broke out, has fallen apart. And it is unclear what a future global security architecture will look like.

But especially in times like these it is important to keep an eye on the situation in the towns and cities that are affected. In mid-March I visited the Romanian border city of Sighetu, which is hosting many refugees from Ukraine, including many children. The authorities and volunteers are doing a tremendous job there and in many other places. In total, Europe has taken in nearly three million people from Ukraine within the first three weeks of the war. This has only been possible because cities and municipalities, their citizens, local business communities and aid agencies have responded quickly and with solidarity. And let me say to our non-European participants that I realize that towns and cities worldwide are hosting displaced people.

The latest developments once more highlight the fact that, for the agenda of the German G7 Presidency, which is entitled Progress towards an equitable world, municipalities play an absolutely essential role.

Ladies and gentlemen,

Cities are growing at an unprecedented pace. By 2050, more than 70 per cent of all people will be living in cities. The dynamic pace of this urbanization comes with enormous risks – as a result of a high level of resource consumption, progressing climate change, eroding social cohesion, and a lack of economic opportunities for the poorer segments of the population. However, one can also look at this scenario from the other side and say that nearly all major issues for the global future will be determined in cities.

Urban areas are key to the achievement of the Sustainable Development Goals and the climate goals. Two-thirds of all SDG targets from the 2030 Agenda, and also the Paris Agreement, can only be reached in, and through, cities.

Even if the potential is huge, there are also enormous challenges which you as local government representatives have to meet, especially in small and medium-sized cities.

First, city authorities only have limited scope for action. Often, they cannot respond adequately to rapidly rising demand for housing, jobs and basic services.

Second, they often lack the necessary knowledge or do not have enough well-trained workers, especially when it comes to complex endeavors such as strategic urban planning and the management of large projects.

Third, the rapid process of urbanization requires high levels of financial resources. Cities cannot meet these needs on their own. It is estimated that the annual global urban investment gap alone amounts to one trillion US dollars.

Municipalities have to be fit for the future. To that end, they need support to plan, prepare and implement activities on the basis of clear frameworks. And they need access to sufficient funding.

So I will be working for the implementation of the decisions taken at the G7 summit in June 2021 and for the mobilization of funding for infrastructure partnerships.

Urban development has been a priority in Germany's development cooperation for many years. The purpose of urban development is to make urban areas more sustainable, climate-neutral, more resilient, and more livable.
This is in line with the five policy priorities of Germany's G7 Presidency:
making progress towards

  • a sustainable planet,
  • economic stability and transformation,
  • and healthy lives;
  • facilitating investment in a better future,
  • and being stronger together.

In order to achieve that, decentralization and integrated, participatory planning methods are just as important as sufficient public funding and better access to capital markets.

In practical terms, this means, for example, that cities need to be given support through instruments such as the C40 Cities Finance Facility so that they can prepare projects with high sustainability standards and ensure that funding will be available to keep the outcomes of such projects going.

This is exactly where the G7 infrastructure initiative comes in – it supports forward-looking investment in infrastructure. The German government is therefore happy to continue this UK initiative.

Ladies and gentlemen,

Cities have a key role in implementing our major global agendas. I already had a regular exchange with municipalities when I was Environment Minister. At the Development Ministry, I want to take my experience and contacts from that exchange forward and work with you to involve local governments even more closely in international policy dialogues in the future.