The Next Frontier for Sustainable Development
And the next step will require trillions of dollars of investment throughout the global economy, says John McArthur.
When the Millennium Development Goals (MDGs) were first established nearly 15 years ago, the half-joke reminder among global health experts was that they needed to replace the “M” with a “B” when talking about financing – meaning the solutions required budgets in the order of billions rather than millions of dollars. Today, as the MDGs approach their 2015 deadline and the world negotiates a new global vision for sustainable development, the time has come to shift mindsets from “B” to “T”, since the next frontier is talking about trillions of dollars in required investment throughout the global economy.
To that end, members of the Global Agenda Council on Poverty and Sustainable Development released a report last week distilling key financing challenges to be addressed in establishing a new generation of global development goals. The report, Paying for Zero: Global Development Finance and the Post-2015 Agenda, stresses the crucial complementary roles and opportunities for public, private, and “blended” finance at the domestic and international levels. The word “zero” is used to signal a broad theme of transformation for sustainable development: eliminating extreme poverty, eliminating the most pernicious forms of inequality, and eliminating environmentally unsustainable economic activities.
Stressing ongoing generational shifts in the global development landscape, the report argues that ambitious post-2015 goals will require accompanying ambition and innovation in development finance.
The conclusions tackle a wide range of issues, including:
- Development finance will increasingly be integrated across types. Flows from public finance will need to leverage additional private finance, and all forms of finance will need to adhere to common standards of transparency, measurement and reporting.
- As many developing countries continue to make long-term economic gains, the process of graduation from official development assistance (ODA) needs very careful consideration. For example, emerging lower-middle-income countries, especially those with large numbers of extreme poor, should not face a stark drop-off in access to external finance.
- It is crucial that the international community place special emphasis on protecting and enhancing properly-targeted ODA budgets. These will need to prioritize the poorest countries and programmes that most effectively reduce poverty. But even with complete success in eliminating extreme poverty by 2030, ODA will continue to play a crucial role tackling many deep global priorities through to 2030 and beyond.
- Improving the capacity of developing countries to mobilize their own resources should be an important element of ODA, without imposing unwanted conditionalities.
- Greatly enhanced instruments are needed to incentivize the amount and nature of required private finance post-2015. Big ticket investments in infrastructure, energy and agriculture will all require some degree of blending between public and private sources.
- Many of the infrastructure investments for sustainable development will be the same ones that determine the future of the world’s climate change mitigation and adaptation efforts.
A version of this article originally appeared on the blog of World Economic Forum. An earlier draft of the paper was circulated for public comment in January. The report’s release coincided with meetings of both the Intergovernmental Committee of Experts on Sustainable Development Financing and the Open Working Group on Sustainable Development Goals at the UN Headquarters in New York. The Global Agenda Council on Poverty and Sustainable Development brings together a variety of eminent leaders and practitioners from public, private and non-profit sectors around the world.