Global partnership to finance new development goals

By Sanna Camara, just returned from Addis Ababa

The African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank, World Bank Group (referred to as the MDBs), and the International Monetary Fund  has already pledged $400 billion in financing the Sustainable Development Goals over the next three years.

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Rejoicing after a breakthrough Photo: UNFfD3

However, despite these pledges, developing countries are now being tasked to look inwards and mobilise resources necessary to finance their sustainable development needs, instead of relying on donour assistance.

This group, who together are termed ‘the multilateral development banks (MDBs)’, along with the IMF, vowed to work more closely with private and public sector partners “to help mobilize the resources needed to meet the historic challenge of achieving the Sustainable Development Goals (SDGs).”

A key difference between the new global partnership for development and the phased-out MDGs is that the MDGs had eight goals while the new sustainable development goals have 17 goals and 179 targets.

Relying on donour assistais no longer feasible

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Countries need to look inwards – conference secretary general Luo Hungbo

Speaking at a press conference on the sidelines of the International Conference for Financing Development in Addis Ababa, the conference secretary general Luo Hungbo said developing countries’ reliance on donour assistance is no longer feasible as a sustainable means to finance their development needs.

He said it was in this context that international consensus is being sought internationally to prepare a comprehensive framework for financing development, as the financing needs of the new sustainable development goals will be enormous.

“MDGS were drawn up by experts tasked by the UN for the purpose, while the new sustainable development goals (SDGs) have 193 countries involved in drawing them up. The SDGs have national government ownership while the MDGs did not,” Mr Hungbo, who is also the UN Under-Secretary General for Economic and Social Affairs, explained to assemble journalists.

The MDGs used to rely on national budgets to leverage the amounts needed for its financing, and they had no strong follow-up mechanisms. Without this, plans can hardly be carried out effectively, he pointed out.

The right agenda for the world…

Delegates gather for the opening of The Third International Conference on Financing for Development, held in Addis Ababa, Ethiopia Monday, July 13, 2015. According to the organizers, the conference which runs from July 13-16 is intended to gather world leaders to "launch a renewed and strengthened global partnership for financing people-centered sustainable development". (AP Photo/Mulugeta Ayene)
Delegates gather for the opening of The Third International Conference on Financing for Development, held in Addis Ababa, Ethiopia, launched a renewed and strengthened global partnership for financing people-centered sustainable development. (AP Photo/Mulugeta Ayene)

“There are those who say that sustainable development agenda goals are too ambitious or two broad. I am not one of them. This is the right agenda for a world needing transition…,” the prime minister of Ethiopia Hailemariam Desalegn Boshem said at the kick-off of the conference.

“It is the right agenda for the world that has the power, for the first time in history, to wipe poverty out entirely….,” Prime Minister Boshem maintained.

Chairing the summit which was hosted by Ethiopia, he expressed hope that the summit can truly deliver for Africa and the least developed countries (LDCs).

LDCs account for a quarter of the world countries, and nearly 15 per cent of its population but only two percent of the global GDP and one per cent of the global trading goods.

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Conference Chair, prime minister of Ethiopia Hailemariam Desalegn Boshem

Acording to PM Boshem, Africa wants to be self-reliant: “We want to finance our own development, and we want to catch up…

“Africa has made tremendous strides to address its development challenge, and more than ever before, began to act collectively…. It is my sincere believe that this summit will take into account Africa’s need and support these efforts,” he said.

A range of options for scaling up…

The SDGs are ambitious and demand equal ambition in using the “billions” of dollars in current flows of official development assistance (ODA) and all available resources to attract, leverage and mobilize “trillions” in investments of all kinds—public and private, national and global, analysts have said.

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The Addis Ababa Conference has to agree on a new framework for financing sustainable goals

A UN statement, issued in the run up to the summit said ODA, estimated at $135 billion a year, provides a fundamental source of financing, especially in the poorest and most fragile countries.

However, this in itself is not enough. More is needed: “Investment needs in infrastructure alone reach up to $1.5 trillion a year in emerging and developing countries. Meeting the staggering but achievable needs of the SDG agenda requires everyone to make the best use of each dollar from every source, and draw in and increase public and private investment.

“The MDBs—the engines of development finance—are looking to a range of options for scaling up,” the UN Statement added.

Reducing poverty, inequality; promoting economic growth, productivity

Donald Kaberuka, President of the Africa Development Bank said 2015 is a critical year in charting the development future of Africa: “the continent that still has the greatest development needs, and the continent that presents the greatest opportunity – for itself and for the world.”

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Conference Chair and UN Sec Gen shook hands after ‘a groundbreaking agreement reached’ Photo: UNFfD3

“Sharing technical and financial experience is crucial to successfully tackle climate change and ensure that sustainable development can benefit future generations,” Werner Hoyer, President, European Investment Bank has said.

“We all share the same goals, which include reducing poverty and inequality, promoting economic growth and productivity that creates well-paid jobs, improving social and physical infrastructure, pursuing sustainable energy policies, ensuring food security and protecting biodiversity, among other pressing challenges,” said Luis Alberto Moreno, President of the Islamic Development Bank.

Christine Lagarde, Managing Director, IMF said: “This year marks a once-in-a-generation opportunity for global development. The only way to seize it is through partnership. To go far, we must go together.”

“We must cast away the stereotypes of aid and think about development differently. It’s about creating opportunity for all, giving people an equal chance to succeed in life, and preparing the world to deal with the challenges of climate change and the next pandemic,” said Jim Yong Kim, President, World Bank Group.

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