We need to move forward—or backward—in what we expect development finance institutions (DFIs) to do in terms of financing private sector development in the world’s poorest countries.
CGD Policy Blogs
We’re a third of the way through the lifetime of the Sustainable Development Goals, which were set to transform the world by 2030. But when it comes to SDG 5 on gender equality, global progress towards targets remains either unmeasured or too slow.
These remarks were prepared for the Global Development Network (GDN) 2019 Conference, held in Bonn, Germany on October 23-24, 2019.
Every MDB is now confronted with the question of what to do with middle-income countries, given the need to focus on the Sustainable Development Goals in general, but very concretely on goal #1—poverty eradication—which will be difficult to achieve based on recent trends. MDBs are very important for MICs, but at the same time MICs are vital for MDBs. This is essentially a two-way relationship. Without MICs, MDBs will be less innovative, will have less knowledge and, importantly, will require more capital from shareholders. I will explain why I believe so in this short note.
Ministers are gathering at the UN this week to discuss the financing needs to meet the Global Goals—with the challenge that resources will clearly fall short, not least because most high-income countries are still failing to meet their financial commitments. We reviewed the pathways taken by the countries that agreed to the UN 0.7 percent target on overseas development assistance as a share of national income, and find that—perhaps unsurprisingly—aid as a share of the economy rises with per capita income.
On the sidelines of the 74th annual proceedings of the UN General Assembly, one recurring idea caught my attention: interconnectedness.
As the United Nations General Assembly meets this week, global leaders will be taking stock of their countries’ progress towards the SDGs and mapping out where they still have to go. Our research has shown that, together, financial accounts, ID, and mobile phones can facilitate a wide variety of cross-cutting programs to meet the SDGs, which can be cost-effective at scale.
How much progress is made in achieving the Sustainable Development Goals (SDGs) is likely to depend crucially on resources low and lower-middle income countries (LIC/LMICs) can mobilize domestically. This is because the financing needed to achieve the SDGs is large.
The global narrative on development finance centers on enabling all countries to achieve the Sustainable Development Goals (SDGs) by 2030. This cascades into a set of questions about how much financing is needed, how it should be mobilized, and how it will be used. While the SDGs motivate action and have a reasonable prospect of being met in middle-income developing countries, achieving the SDGs in low-income countries (LICs), which have further to travel and more binding resource and institutional constraints, will be harder. The challenge will be most acute in Africa, where pockets of absolute poverty are increasingly concentrated and environmental degradation and conflict add to state fragility.
Economist Stephany Griffith-Jones on the role development banks can play in innovation, how they should interact with private actors and governments, and what new institutions can learn from their predecessors.