The UN’s inter-governmental committee of experts on sustainable development financing met for the last time this month to put the final touches to their much anticipated report on how the world should finance the post-2015 Sustainable Development Goals – or SDGs.
I’ve had the opportunity to attend many of the committee’s sessions, and they’ve had a mammoth task. So what have they come up with? You can read the full report here, but below is a quick heads-up.
The range of issues they’ve had to cover is massive: from assessing how much cash is needed to finance sustainable development to thinking about where the cash could come from and where these funds should be directed.
The report draws up a ‘menu of options’ for the financing of sustainable development. This allows policymakers in different countries to make choices as to what policies and financial instruments are most suited to them. That makes perfect sense of course; the strategy that will be best for a climate-vulnerable small island state such as the Maldives won’t necessarily be the same for a larger resource-rich country such as Kazakhstan. On the other hand, it could also lead governments to ‘cherry-pick’ among the ideas presented, and to leave the more difficult issues to one side.
On private finance, issues such as the importance of financial inclusion and the need to support greater access to finance for small and medium-sized enterprises are discussed. It’s suggested that national development banks can play a role here. Also the need to reduce ‘red tape’, strengthen the legal environment and ensure wider political and macroeconomic stability to stimulate private investment, both domestic and international, is highlighted.
Governments could also consider policies to change investment patterns to make them ‘greener’, such as direct emission restrictions on investments, subsidizing research into new ‘clean’ technologies, tax incentives and payment for ecosystem services.
There are sensible suggestions around the need to strengthen international tax cooperation – an issue which has recently been high on the political agenda – in order to stem tax avoidance and tax evasion, and enable the poorest countries in particular to retain larger shares of revenues.
More official development assistance (ODA) is needed and the report suggests it should focus on the countries where the needs are greatest and the capacity to raise resources is weakest, such as the least developed countries and small island developing states. Larger shares of ODA should also be oriented towards capacity building of revenue and customs administrations.
Positively, the report recognizes that all forms of finance are important, have distinct characteristics and play distinct roles; they are therefore complementary and should not be seen as substitutes.
But there are few specifics and no commitments. The report simply describes policies and actions which could make a difference to sustainable development – if implemented. And of course, that’s the crucial point. Will these important suggestions be implemented? And what will happen next?
Next year, the UN will host another international conference on financing for development in Addis Ababa, Ethiopia in July. This report will be an important contribution to discussions there. It’s expected that this event will offer the international community an opportunity to discuss how concretely they plan to implement – and finance – the SDGs. Many countries are also likely to want to see some financial commitments put on the table.
At UNDP, we are committed to working with all partners to ensure success to put in place solid foundations for the implementation of the world’s new sustainable development agenda. These are exciting times and this report represents just the beginning.