Making Money Work - UN ESCAP 5...Making Money Work Towards a Roadmap for Re-orienting Development...
Transcript of Making Money Work - UN ESCAP 5...Making Money Work Towards a Roadmap for Re-orienting Development...
Making Money Work
Towards a Roadmap for Re-orienting Development Finance for the 2030 Sustainable Development Agenda
ANURADHA RAJIVAN
Asian Development Bank 10 November 2015, Bangkok
OUTLINE
• The challenge
• ADB gets prepared
• Future directions
OUTLINE
• The challenge
• How is ADB getting prepared
• Future directions
ESCALATED AMBITIONS
From Deprivations to All People and the Planet
Millennium Development Goals Sustainable Development Goals
UN-led dialogues Country-led, ambition has ballooned
8 Goals; 18 Targets; 48 Indicators
Focus: Deprivations, poor countries
Environment, inequality only partially addressed
17 Goals; 169 Targets!
(Indicators to come)
Focus: Sustainable development, all countries
3 equal pillars: economic prosperity, social equity
and environmental responsibility
Incremental progress Transformational and long-term durable gains
Global partnership – Goal weakly formulated,
partially monitored (MDG 8)
Stronger partnerships – implementation under each
Goal & SDG 17
Demands on official statistical systems recognized
late; not matched by resources
This challenge will continue and escalate; better
recognized
Development finance =
largely ODA
Financing for development =
All moneys
SDGs poised to influence national action and
development cooperation for the next 15 years
• Asia drives global progress by sheer size
– Population more than 50%; GDP share around 40%
• Even though share of extreme poverty has come down, size also means large absolute numbers of deprived people
• Diverse economies require recognition of complexity and SDG customization in the responses
– Upper middle income countries
– Lower middle income countries
– Low income, fragile and conflict affected
– Structural bottlenecks and capacity deficits are varied
The region’s progress matters to global progress
Getting the diagnosis and entry points right is critical …
Multiple actions are called for; and yet… • Money is a distinct enough … and • an important enough bottleneck to need
dedicated attention
OUTLINE
• The challenge
• ADB gets prepared
• Future directions
ADB is engaged in the SDG and FfD
dialogues
• Collaborates with UN partners to support sustainable development in Asia and the Pacific
• Joins other MDBs globally to identify expanded funding opportunities for countries
• Explores concrete ways to expand finance for SD: to inject more & attract more $$
What sums are we talking of?
Approx $1 trillion annual to eradicate poverty and bridge
MDG and infrastructure gaps (rough cost estimates)
Whatever be the specific numbers, it is clear that the sums
are large
$ billion
Source: ADB, 2015. Making Money Work: Financing a Sustainable Future in Asia and the Pacific. Manila
Where is the money? Private flows far outstrip public finance in Asia and Pacific
$ billion, annual
• Asia is a region of savers…but invests elsewhere
• Bulk of funds are in private hands, dispersed, not programmable
• Domestic fiscal funds inadequate – greater potential
• Long term funds – yet to be fully unlocked
• Plugging leaks > ODA
(2012-2
014 e
stim
ate
s)
ADB will support through two streams
(i) Investments in human needs,
infrastructure and cross-border public goods
(i) Promote access to wider
financing for development, including private sources and climate finance
Customized to country conditions, based on
ADB’s comparative advantage.
Strategy 2030: ADB has already started work on a
new long term strategy to respond better to the greater ambitions, evolving development landscape, and a changing Asia and Pacific.
Advance Actions
• Enhanced financial capacity – To $20 billion, which is 50% higher than the
current level (with the ADF and OCR combination effective Jan 2017)
– Support to poor countries to increase by up to 70%
– Climate financing to double from $3 to $6 billion annual by 2020
• Renewed focus on poorest countries - ADF grant replenishment ongoing
Collaborations and Capacities • Maximize the leverage potential of ADB
resources by strengthened co-financing, PPPs, lower risk: each ADB dollar results in more than a dollar of investment
• Improve absorptive capacity of countries by strengthening PSM/governance, fiscal space, and TA for project development and PPPs
• Strengthen knowledge partnerships and
diagnostics.
OUTLINE
• The challenge
• ADB gets prepared
• Future directions – for a regional roadmap
1. Widen domestic fiscal space with country-specific actions o MDBs and partners can help - subsidy prioritization, procurement,
apart from raising revenues o Cooperate across borders on stemming leaks o Operationalise options like NRM, SWF, Haj funds, other
2. Use public sources to draw-in more of Asia’s
savings and funds towards SD o Lower risks, extend tenor, match time-horizons better o Engage more systematically with pvt sector (e.g., CEO-led
initiative like the WBCSD)
Expand Public Sources and Leverage Better
– Focus on widening subnational fiscal space through increasing own-source revenues (tax and nontax), predictable devolution
– Nurture options for municipal finance through muni bonds, national development banks, and other subnational and multi-country options
Harness Sub-national Opportunities in FfD
3. Asia’s rapid urbanization needs city-level SD investments, counter serious infrastructure deficits
Dhaka, Karachi, Manila, Mumbai, Shanghai, Jakarta…
The region has half the world’s megacities…facing serious economic and ecological stress
− Asian Development Fund is considering establishing additional grant fund for cross-border public goods and disaster risk reduction
4. Such investments tend to be underfunded from domestic resources due to high regional/external spill-over effects and have global benefits
Incentivize financing of cross-border public goods
through international concessional finance
− Collaborate on knowledge gaps for definitional clarity and track additionality of climate finance over ODA
− Address capacity gaps in project development to promote climate resilient public and private investments
− Incentivise clean energy investments and energy efficiency
− Tailor climate finance to the type of exposure, e.g. the ocean-based economies of the Pacific to sea-level rise, or the mountainous countries of South Asia to potential Himalayan glacial melt.
5. Address the bottlenecks of definitions, additionality, access, capacity, customization
Incorporate Climate Finance in a FfD Framework
6. Assess investments, both public and private, based on contribution to SD
o Develop agreement on updated indicators for results
o Development effectiveness can include metrics on private finance, e.g., pvt funds mobilized per dollar of official funds
o Dialogue with businesses and financial markets to forge agreements w.r.t contribution of private sector – extent to which pvt funds are SDG-promoting
Count and Account Each Dollar Better
Every dollar has an impact, + or –
Every dollar needs to count towards SD
Thank you all!
“The only development worth having is sustainable development”
Let us contribute to making money work…