New Approaches to Scaling Private Sector Funding for Sustainable Development

By Sonja Gibbs, Managing Director & Head of Sustainable Finance, IIF


This blog is part of the
OECD Private Finance for Sustainable Development Conference


Development-Finance-shutterstock_524218915Welcome to 2020–the “Decade of Delivery” for the 2030 Sustainable Development Goals (SDGs). While the international development community remains hard at work on solutions, success over the next decade will require addressing an “SDG financing gap” of $5-7 trillion per year, with emerging markets making up $2.5-3 trillion of that.  This will create tremendous opportunities for the private sector across the spectrum of investment vehicles—including foreign direct investment, listed and unlisted equity and private equity, in addition to the wide variety of debt instruments.  Indeed, given the massive buildup of debt over the past two decades—to over 320% of global GDP, from around 230% in 1999—a shift towards more non-debt financing could be a more sustainable approach to closing the gap.

With fewer than 10 years left to achieve the SDGs, many low-income countries remain very far off-target. At slightly above 50, the low-income countries median on the composite SDG index—which measures country-level performance in achieving the SDGs—remains well below that of either mature or emerging markets (though there is substantial variance among low-income countries). Continue reading

Least developed countries can become authors of their technological revolution

By Ratnakar Adhikari, Executive Director of the Enhanced Integrated Framework Executive Secretariat, World Trade Organization and Fabrice Lehmann, Associate, Enhanced Integrated Framework (EIF)

SIGI-Digital-Human-RightsThe fourth industrial revolution is charting a new and uncertain course for the world economy. Least developed countries must prepare for the opportunities and risks that it brings. It is characterised by the confluence of new technologies, fusing the digital, physical and biological spheres.

Rapid technological change is expected to have a profound impact on economic and social development in countries at all levels of income. Opportunities include harnessing the possibilities of digitalisation for sustainable development and social empowerment. Risks involve marginalisation and a widening chasm between poor nations and their emerging and industrialised partners.

Can countries in the early stages of development reap the benefits and become authors of their technological revolution? Continue reading

Time for bold initiatives to tackle inequalities and climate change

By Filippos Pierros, Minister-Counsellor, Vice-Chair of the Development Assistance Committee and the Development Centre Governing Board [i]

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With the resounding failure of the UN COPs to mobilize a strong international response to climate change and inequality, concerned citizens around the world are rightly beginning to show frustration and even anger. And yet, at long last on the final year before the turn of the decade, a major high-income donor of international aid publicly proclaimed it would step up to the plate and propose radical change.

The new EU Commission promised to bring to the floor a “European Green Deal” that will drastically transform the very foundations of the EU economy. The green deal has clear implications for fighting inequalities, as well as for development. The “EU can use its influence, expertise and financial resources to mobilize its neighbors and partners to join it on a sustainable path.” The EU announces a strong “green deal diplomacy” focused on supporting sustainable development globally, engaging countries to end fossil fuel subsidies, phasing out fossil-fuel based infrastructure, investing in climate finance and climate resilience, promoting green regulations, and creating an international carbon market to provide reform incentives. Continue reading

Where are Men in the Drive to End Violence Against Women?

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By Gary Barker, President and CEO, Promundo-US


This blog is a part of the upcoming OECD High-Level Conference on Ending Violence Against Women, that will take place on 5-6 of February 2020


violence-women-stop#MeToo has led to an unprecedented global calling out of men’s use of violence against women — whether harassment, sexual assault or intimate partner violence. In addition, the last 10 years have seen advances in legal protections for survivors of violence and a massive expansion of research on what works, and what does not, to prevent gender-based violence. With all of this, men’s voices and actions, as allies, actors, and as partners in preventing gender-based violence are often either missing or silent. First, we should start by saying what we mean by gender-based violence (GBV). The phrase, while useful and necessary, often leads us to overlook the fact that we are mostly talking about men’s violence against women – harassment, sexual assault, physical, sexual, economic intimate partner violence in the home by male partners against female partners, and sexual exploitation, among others.

We now have decades of research on what drives men’s use of violence against women. Cultural and social norms that permit and encourage violence (as part of men’s domination and control of women’s lives in some settings); childhood experiences of witnessing or experiencing violence and other adverse early childhood experiences; complicity of men in power (as police, judges, policymakers) when other men use violence against women; and men’s greater economic and social power over women in many settings, are all factors. Poverty, war, displacement and the weakness or unwillingness of governments in responding to human rights violations also contribute to violence against women. It is important to affirm that all of these drivers of gender-based violence are human-made. Men’s violence against women is not wired into our genes, nor is it inevitable. It is both preventable and unacceptable. Continue reading

Why should investors care about ocean health?

by Dennis Fritsch, PhD, Researcher, Responsible Investor


This blog is part of the
OECD Private Finance for Sustainable Development Conference


Ocean health

“The World’s Oceans Are in Trouble. And So Are Humans, Warns U.N. Report” – a blaring headline in Time Magazine just after the IPCC published their landmark report Oceans and the Cryosphere in September 2019. It highlights what scientists and NGOs have been shouting from the rooftops for years: human activity has put the global ocean in a dire state and by doing so is endangering planetary life as we know it. But how has it come this far? In addition to producing over half of the oxygen we breathe, being the largest carbon sink on the planet and a haven for biodiversity, a healthy ocean is a source of economic livelihoods for billions of people. The value of global ocean assets is estimated at over USD 24 trillion[1] making it the 7th largest economy in the world in GDP terms. Due to its integral role in the global financial and environmental ecosystems, the ocean is high on the international policy agenda[2] and its importance continues to grow. The global ‘Blue Economy’ is expected to expand at twice the rate of the mainstream economy until 2030[3], and already contributes USD 2.5 trillion a year in economic output. Continue reading

How Blended Finance Can Plug The SDG Financing Gap

By Jean-Philippe de Schrevel, Founder and Managing Partner of Bamboo Capital Partners


This blog is part of the
OECD Private Finance for Sustainable Development Conference


Greenlight planet - Shopkeeper

We now have just 10 years to achieve the Sustainable Development Goals (SDGs). To date, the SDGs have been underfinanced. The annual financing gap to achieve the SDGs by 2030 currently sits at USD 2.5 trillion. The current approach is not working. Historically, financial institutions have focused on financing one or two SDGs in isolation, and this funding is often directed towards relatively low-risk investments. Collectively, we need to reconsider how we can realistically finance the SDGs by 2030, and this is where blended finance impact investment vehicles have an opportunity to shine.

Continue reading

Can aid help countries avoid the middle-income trap?

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By Homi Kharas, Interim Vice President and Director – Global Economy and Development, Brookings Institution


This blog is part of an ongoing series evaluating various facets
of 
Development in Transition


Middle-income-trapMost aid agencies have tried to articulate a “middle-income” strategy for how to support client countries that are no longer poor. For example, see the Asian Development Bank Strategy 2030 and the World Bank’s approach to middle-income countries. In both cases, there is an emphasis on second-generation challenges, including those related to environmental, social and governance institutions. Failure to meet these challenges can trap countries in middle-income status.

The problem, however, is that there is no solid theoretical or empirical foundation on how to support growth in middle-income countries—the diversity of contexts and experiences is so large that robust policy conclusions are hard to draw, and useful interventions by aid agencies even harder to figure out.

Barro (2012) succinctly summarizes the limits of empirical work: “My view is that one has to accept the idea that pinpointing precisely which X variables matter for growth is impossible.” In a similar vein, Rodrik (2012) titled his paper “Why We Learn Nothing from Regressing Economic Growth on Policies.” Most researchers (see for example Jones (2016) and Kim and Park (2017)) find that middle-income growth is all about total factor productivity growth (TFP). TFP growth, in turn, is what is left over after accounting for the growth of all inputs. Jones breaks down TFP into two components: knowledge/ideas and M that he says stands for either misallocation or a measure of ignorance. Continue reading