By Sebastian Nieto Parra, Head of Latin America and the Caribbean Unit, OECD Development Centre, Mario Pezzini, Director of the OECD Development Centre and special Advisor to the OECD Secretary General on Development, and Joseph Stead, Senior Policy Analyst, OECD Centre for Tax Policy and Administration
The “Decade of Delivery” for the 2030 Sustainable Development Goals (SDGs) calls for finding sustainable ways to finance development. Closing the financing gap by 2030 will require between USD5 and USD7 trillion annually, and between USD2.5 and USD3 trillion of that amount for developing countries alone. There are several approaches to financing the SDGs in low-income countries. External private financing and official development assistance both have a role to play but these are not the only options. We must take an in depth-look at all options, including taxes, local financing through domestic private banks or national development banks, and local public-private partnerships. Due to the colossal amount needed to finance the SDGs, they must all be taken into consideration. But some can be particularly costly. Experiences of public-private partnerships in developing and emerging economies for example, have often resulted in high fiscal costs and a high rate of renegotiations after only a few years of operation.