This session will highlight the urgent need for increased public finance for the Sustainable Development Goals (SDGs) in low-income countries. WaterAid propose new obligations on the international community to fund sustainable development. It believes a radical shift in global economic structures is required to ensure universal inclusion in WASH – water, sanitation and hygience – services by 2030, and to meaningfully imbue drivers of equality into international finance. Participants will discuss the best ways forward to finance the SDGs, with a focus on SDG6, and to ensure that essential services are targeted to women and girls and other marginalised groups. This session aims to start an open discussion on financing the SDGs and the role of EU aid.
Ending business as usual – a bold vision for closing Sustainable Development Goals' financing gaps
A step change in resourcing for Sustainable Development Goal 6 – Clean Water and Sanitation – and the 2030 Agenda for Sustainable Development
Wednesday, June 19, 2019
14:45 to 16:00
- The annual financing gap for the United Nations’ Sustainable Development Goals (SDGs) to be met in developing countries totals US$2.5 trillion.
- Governance, policy coherence and support for developing countries must be enhanced to address this financial gap.
- Other strategies include increasing tax revenue and government spending in developing countries.
- EU countries need to follow through on their long-time target of donating 0.7 % of Gross National Income to Official Development Assistance (ODA). Developing countries must be more accountable for how ODA is spent and improve governance
- Different financial tools, both grants and loans, should be adapted to each sector and socio-economic levels.
SynopsisThe US$2.5 trillion annual financing gap for the SDGs to be met in developing countries is daunting yet attainable. Strategies include increasing governance, tax revenue and government spending in developing countries, and boosting private financial flows. Strategies also include increases in tariffs and user fees, the blend of public and private finance, and the amount and effectiveness of ODA. ONE Campaign, a non-profit that fights extreme poverty and preventable disease in Africa and elsewhere, acknowledges that after four years into the SDGs, it is already off-track. The year 2015 was the first time the international community set such ambitious goals. At the current rate, water SDGs can only be met in the next century and gender equality will take 108 years. This signals the need for a more radical plan. Besides ODA, this should include a financial transaction tax, domestic revenues from governments in low-income countries and efforts to reduce corrupt financial flows. Taxing domestic resources has more potential than international investment. This is because for every dollar flowing in, US$2 flows out because of tax evasion and corruption, which is equivalent to about 5% to 10% of developing countries’ gross domestic product (GDP). Resources must be tapped within each country to meet basic needs such as sanitation and clean water. However, domestic resource mobilisation is not realistic in rural or poor areas. For example, one-third of Nepalese population is living below the poverty line. As a result, the country needs more ODA and outside investment to avoid transferring loans to the next generation. The universality of the SDG agenda, leaving no one behind, must be kept in mind. But ODA is not a silver bullet. It is important to look at the spending side and integrate financial frameworks. Developing countries must be more accountable for how ODA is spent with improved governance and EU countries need to clean house, not serving as tax shelters, and follow through on their long-time target of donating 0.7 % of GDP to ODA. On both sides, there must be strategies to crack down on illicit financial flows and invest in human capital for more productive financial sectors. More governance and policies to support financial investments are critical. This includes having different financial tools, both grants and loans, and adapting them to each sector and socio-economic level. For example, sanitation is less profitable than other sectors, so it requires more grants, as do the poorest households. Pricing should be adapted to each section of the population to make sure loans can be repaid. Demand for better governance should also come from civil society. SDGs are a global responsibility and countries need to follow through on their promises. The private sector offers many solutions to mobilise funding with best practices. But governments are ultimately responsible for putting these solutions into action as rapidly as possible.
We need to dream but let’s not sleepwalk, summarised the moderator. Time and climate change are not on our side.