a small article about Financing for Development

1. Financing for Development
Firstly, there are several key words I’d like to make some
explanation according to the courses.
 What is finance
Finance, as a noun, is the whole discipline, art, and science of
managing money. In this case, it means the whole of financial
management. But what about the verb? Finance also means providing
money. If you make a contribution to educate girls in a developing
country, for example, you are financing that effort. When we talk about
financing for development, it's good to keep both the noun, the financial
management piece, and the verb, money flowing, financing in mind.
 What is development?
Development means both for the world and for the individual human
being. Development is a life in peace. Development is a life without
poverty and without inequalities. Development is respect of human

2. rights, and the belief in governance and in good and strong institutions.
So in this world, there is no peace without development. There is no
development without peace, and none of the above without respect of
human rights. we have a common agenda across peace, development,
and human rights. And if we attach ourselves to that philosophy then we
can make a difference.
 What is financing for development?
What is financing for development? This story begins 15 years ago in
2000 when the eight millennium development goals, or MDGs, were
adopted. Countries and development institutions and NGOs increased
the focus of their efforts on reaching the MDGs, and part of the
financing for development response was then that the world created a
number of MDG specific funds for education, for the environment,
especially for health. Three of the MDGs relate to health.
The financing for development approach that we want to take is that
we need to focus both on more financing and on effective financing. It's
more money and smarter money to reach the SDGs.
Financing for development ultimately is money that comes from you
and me and billions of others who in turn entrust it to others who invest
it and deploy it. In the end, we are all stakeholders in the finance for
development agenda.

3.  What is SDGs
The SDGs (Sustainable Development Goals )is a comprehensive
group of goals for the entire world to achieve. Financing for
development is needed in each country. It's needed globally. It's needed
for the public sector. It's needed for private investment. The Sustainable
Development Goals is a reflection of the situation in the world today.
They reflect that we need peace, they reflect that we need
development, they reflect that we need respect of human rights and
rule of law. We need the SDGs even more than we needed the
Millennium Development Goals, the MDGs. we need to, today, marry
the international perspective with the regional and national, even local
perspective. We must understand that development would only be
possible if it builds on some basic principles. Namely shared
responsibilities. I would say shared solidarity.
Secondly, the public sector and private investment are so

4. important for financing for development.
While domestic resource mobilization really involves all the resources
that a country is able to raise itself and the most part that is taxation,
but it also includes non-tax revenue. In developing countries is that the
amount of tax, for instance, that's raised is around 17% of GDP on
average. Whereas in OECD countries, the average is around 35%. So that
difference between 17% and 35% in a sense represents a massive
opportunity for developing countries to access more resources from
their own people and apply those resources to development objectives.
It far, far outweighs the amount of development assistance that can be
provided from donor partners. Public expenditure efficiency is really
about the conversion of all those resources into development results on
the ground. Now what really matters for that is doing the right things
and then doing the right things well. So that's got an allocative aspect
and then it has a sort of technical or productive aspect. The world right
now could use some estimates as much as six trillion dollars a year in
infrastructure investment, yet, we're only investing somewhere around
three trillion a year in infrastructure. But worst than that, the private
sector component in an age of budget challenges of government balance
sheets is only about 400 billion. So the rest is done on the back of pure
public sector without the cooperation, support, and financial capability
of the private sector. So the paradox is that we have governments all

5. over the world that need growth capital, and they need to grow their
economies faster, and infrastructure is a key component to it, and there
are concept papers and ideas all over the world to get more done, and
yet not enough is happening.
When we look at initiatives like Power Africa and banks' struggle with
bankable deals in the Power Africa initiative, the paradox is really how
do we get this done. And one of the most important complexities to this
is the new regulatory environment. So, Basel III, with the purity of its
objective to prevent another financial crisis, is not infrastructure friendly
and it makes it more difficult for the banks actually to finance on their
balance sheets long duration, weaker-credit, project finance structures.
And that means we have to turn to the capital markets. We have to turn
to pension funds and insurance communities that may not have the
expertise that the bank market particularly in Europe had in the
structuring and the taking of risk.
Thirdly, there are some challenges and suggestions for the financing.

6. Development financing should become more varied in future,
moving beyond aid from governments to include private investment and
creative new ways to finance developing economies .The European
Union should play its full part when it comes to ODA (Official
Development Assistance) .At the same time, we want to be a leading
voice in raising the global level of ambition – and encourage others to
step up their contributions. Emerging economies and upper-middle
income countries are increasingly supporting development through
South-South cooperation.
Quality of growth is fundamentally important.Growth can widen
disparities in a country, and one of the biggest threats is environmental
destruction at global level. Development should foster social
inclusiveness, environmental sustainability and resilience to events such
as natural disasters, which can wipe out achievements in a few minutes.
Despite the new thinking on development financing, donors must not
lose sight of basic priorities or of the continuing importance of ODA,
Goal number one is ending poverty. Inequality, climate change, capacity
development – all of these have to do with this goal number one.

7. Development financing should become more varied in future,
moving beyond aid from governments to include private investment and
creative new ways to finance developing economies .The European
Union should play its full part when it comes to ODA (Official
Development Assistance) .At the same time, we want to be a leading
voice in raising the global level of ambition – and encourage others to
step up their contributions. Emerging economies and upper-middle
income countries are increasingly supporting development through
South-South cooperation.
Quality of growth is fundamentally important.Growth can widen
disparities in a country, and one of the biggest threats is environmental
destruction at global level. Development should foster social
inclusiveness, environmental sustainability and resilience to events such
as natural disasters, which can wipe out achievements in a few minutes.
Despite the new thinking on development financing, donors must not
lose sight of basic priorities or of the continuing importance of ODA,
Goal number one is ending poverty. Inequality, climate change, capacity
development – all of these have to do with this goal number one.