Funding Needs for UN’s 2030 Development Agenda Skyrocket – to Trillions of Dollars
By Shanta Rao
This article was first published at http://www.indepthnews.net/index.php/global-governance/un-insider/1170-funding-needs-for-un-s-2030-development-agenda-skyrocket-to-trillions-of-dollars. Used with permission.
UNITED NATIONS (IDN) – As the United Nations assesses the implementation of its 2030 Agenda for Development, including its 17 Sustainable Development Goals (SDGs), the estimated funding needs keep skyrocketing --- from the initial millions and billions to trillions of dollars annually.
The President of the General Assembly, Ambassador Peter Thomson of Fiji, said on April 18 that SDG financing, including the eradication of extreme poverty by 2030, is going to cost about $6 trillion annually -- and then to a hefty $30 trillion through 2030.
At the same time, the Addis Ababa Action Agenda (AAAA), which outlines the implementation of the 17 SDGs, points to an infrastructure gap of some $1 trillion to $1.5 trillion annually in developing countries, while estimates of the global gap generally range from $3 trillion to $5 trillion annually.
But the international community – and specifically the least developed and developing countries – is unlikely to succeed in raising the funds needed to achieve the UN’s ambitious goals, including lifting some 550 million people out of poverty.
Nor does the state of global economic growth augur well towards achieving all -- or most – of the 17 SDGs.
Speaking to reporters on May 22, Wu Hongbo, UN Under-Secretary-General for Economic and Social Affairs and chair of the Inter-Agency Task Force (IATF) on Financing for Development (FfD), said the challenging global environment in 2016 had significant impacts on national efforts to achieve sustainable development.
“The current global growth trajectory will not deliver the goal of eradicating extreme poverty by 2030,” he warned, pointing out that “despite expectations of improved growth in 2017 and 2018, the current global environment bodes poorly for the achievement of the SDGs,” said Wu, ahead of a May 22-25 Forum on FfD sponsored by the Economic and Social Council (ECOSOC).
In the fight against poverty, Wu also said universal social protection floors are a tried and tested way to reduce poverty. They economically empower poor people by raising productivity and growth, along with incomes. The same principles apply at the international level, with an effective and sufficiently financed safety net for poor countries, he noted.
Putting it in perspective, Wolfgang Obenland, Programme Coordinator at the Bonn-based Global Policy Form (GPF) told IDN that it is true, the implementation of the 2030 Agenda will require additional resources.
“However, the repeated citing of ever higher numbers in the billions, trillions and beyond, hides rather than illuminates what is actually needed.” He said the new 2017 IATF report, released May 22, offers an important, though not always consistent nor adequate, evidence-base for the policy discussions.
“Greater guidance by Member States for future reports will be needed on which issues they want to focus on, considering that tackling some may require longer preparatory process than others.” One problem with the report – and the outcome document of the Financing for Development Forum -- is an effect of the large sums cited, he noted.
Since it seems elusive that governments will be able to raise those amounts by themselves, there is a growing or rather over-reliance on the private sector and its potential contributions.
“What is especially worrying is that governments seem to be under the impression that they have to incentivize the private sector with the creation of 'enabling environments' – so-called 'de-risking' and other such instruments, sometimes collected under headlines like "public-private partnerships" or "blending finance" – that by and large are devoid of any environmental and or social safeguards, and as such are unlikely to be suitable to implement an agenda that is one of "sustainable development",” said Obeland, who participated in the four-day meeting.
Roberto Bissio, Coordinator of Social Watch and also a representative of an international network of citizen groups monitoring their government's commitments, was equally skeptical.
The World Bank, he told IDN, estimates the "poverty gap" (that is the amount of money that would be needed to lift everybody under $1.90 a day, to that amount at 60 billion dollars a year)... a fraction of a US recent arms deal with Saudi Arabia estimated at over $110 billion.
Bissio said the International Labour Organization (ILO) estimates that all but a few countries have the necessary resources domestically to offer a dignified social protection floor to everybody.
“Environmental damage in most cases requires countries to NOT take actions, rather than to spend more... where does the figure of "trillions" needed come from? It is only about infrastructure, which is of course necessary, but which also happens to be the most corrupt sector,” he added.
The ILO also says that social consequences of the economic growth trend delineated are profound.
The Geneva-based organization estimates that over 200 million people are expected to be unemployed in 2017, 3.4 million more than in 2016, with further increases expected in 2018, as more people come of age and join the global labour force.
“There is reason for concern about below-target economic growth and its social impact in the least developed countries in particular.”
Meanwhile, the report of the Task Force said the progress identified in all seven action areas of the Addis Agenda, included financing flows, namely domestic public resources, domestic and international private business and finance; and international development cooperation; trade, debt, systemic issue, and science, technology, innovation and capacity building.
Nevertheless, said the report, “many implementation gaps remain.”
The Task Force also warned there is particular worry for the poorest and most vulnerable countries and people – and that the 48 least developed countries (LDCs) will fall short of eradicating poverty by large margins under the current growth trajectory.
Unemployment is expected to grow in both 2017 and 2018. And sluggish international trade growth is both a symptom of, and a contributing factor to, low investment and the global economic slowdown.
“It is clear that changes in policies will be needed,” the Task Force said in its report.
Currently, there is much uncertainty about the direction of the economic, financial, social and environmental policies of major countries.
This contributes to the higher-than-normal level of risks in the global economy, said the report which drew on the expertise, analysis and data from over 50 international institutions, including the World Bank Group, the International Monetary Fund (IMF) and the World Trade Organisation (WTO), as well as UN agencies such as the UN Conference on Trade and Development (UNCTAD) and the UN Development Programme (UNDP).
Just ahead of the FfD Forum, UN Secretary-General António Guterres called on countries to take swift action on the implementation of the 2030 Development Agenda.
“Despite the huge strides in the fight against poverty, made possible by globalization and technological progress, inequality has increased markedly around the world. Conflicts are proliferating and other megatrends such as climate change, food security and water scarcity, are putting the progress of the last few decades at risk,” he declared.
Obenland said what is needed, are strong policy measures to regulate private sector activities and promote the realignment of corporate practices to the imperatives of sustainable development.
“Rather than regarding the private sector as a panacea, it is necessary to 'unpack' it by promoting virtuous and innovative models, such as agro-ecological approaches, circular economies and social solidarity frameworks.”
This kind of narrative on blended finance and public-private partnerships, he pointed out, is highly inconsistent with the AAAA’s (the agenda formulated to precisely achieve the means of implementation for the 2030 Agenda, among other things) commitment to developing principles and standards, in an inclusive and transparent manner, in order to safeguard the public interest;
One fundamental dimension of the FfD process since its inception, he said, was the overt attempt to strengthen the role of the United Nations – with its universal membership, inclusive nature and human rights foundations – in global economic governance. This would increase and rebalance the role of developing countries, promoting a more democratic global system.
To ensure international tax cooperation -- one of the most important priorities of developing countries--- the FfD outcome should therefore not include any encouragement for countries to invest in strengthening existing not-inclusive institutions as opposed to establishing institutions that are better fit for purpose, including an intergovernmental UN tax body with universal membership, Obenland said.
Similarly, the Global Infrastructure Forum should be clearly accountable to and guided by the FfD Follow-up process. Against this, the reference to “adequate voice of developing countries” is a regressive expression if compared to the AAAA commitment “to increasing the voice of developing countries” in the reform of international financial institutions (IFIs), he declared.
IDN is flagship agency of the International Press Syndicate.