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Financing for development1
The document discusses financing for development, emphasizing the importance of peace, human rights, and achieving the Sustainable Development Goals (SDGs). It outlines strategies for raising domestic resources, the role of private finance and institutional investors, and the necessity of combining public and private sector efforts to address a substantial funding shortfall of $3 trillion for infrastructure investment. Additionally, it highlights the need for smart resource allocation and innovative financial models to improve global development outcomes.
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Financing for development1
- 1.
- 2. The first three wordsof UN charter ‘We the people’.
- 3. What is Development? Developmentis life in peace Development is a life without poverty Development is life without inequalities Development is respect of human rights
- 4. Peace Development There isno development without peace and they will not be achieved without respect of human rights.
- 5. Sectors previously seenas domestic or national now become international such as: Agriculture Transportation Energy issues Global warming
- 7. The sustainable development Goals(SDGs) are a new, universal set of goals, targets and indicators that UN member states will be expected to use to frame their agendas and political policies over the next 15 years.
- 8. These goals reflectthat we need: Peace Development Respect of human rights
- 10. Sustainable Development Goalsis the vision that will guide us to take the right steps. These steps have to taken by Nations Communities
- 11. These Goals haveto be understood and fought for by the people affected by them
- 12. Issues achieving inthese goals: •Transfer of technology •Migration •Urbanization •Industrialization
- 13. Sustainability and Universality cometogether: •Clean Energy •Sustainable cities and communities •Responsible consumption •Protect the Earth •Life below Water •Life on Land
- 14. We are nowall in the same boat, we either sink or swim together.
- 15.
- 16. In terms offinancial management, we need to use every last dollar, available as affectively as we can.
- 17.
- 18. • Low incomecountries fragile • Conflict affected countries Grants/Concessi onal Loans • Middle Income Counties Regular Loans
- 19. Trillions of dollarsevery year across the world, Depending upon the needs of each nation. The goals are interrelated , Goals affect each other.
- 20. Smart spending oneducation, will also help the health goals because educated girls will find ways to have their own kids and each other be more healthy as they grown up.
- 21.
- 22. ‘The generation ofSavings from domestic resources and their allocation to economically and socially productive investments’. •50 %– 80% Finance to support SDGs will come from Domestic resources. •These resources must be used optimally.
- 23. What are theconstraints in mobilizing domestic resources? • Issues with tax administration • Weak capacity for implementation • Obtaining effective and efficient tax policy • Non involvement of Substantial govt. • Fiscal Centralization
- 24. How can weincrease the Domestic Public Resources? • Cutting Subsidies (like on fuels), and used this money on other infrastructure projects like Indonesia. • Instead of applying more resources in order to achieve SGGs we can raise funds through • Better Spending and Better Policy • Involvement of citizens about resource allocation their awareness is also be required. • Cash Transfer • Co-operation of Technology and its application
- 25. Taking maximum benefitsfrom Cash Transfer 1) Relax regulations for small remittances. Government should recognize that small remittances are not money laundering 2) Abolish exclusive partnership with post office. Instead Govt. should promote competition so remittance cost will go down. 3) Create a large non – profit remittance platform by philanthropic organization. 4) Illegal recruitment fees a huge drain on remittance flows. 5) Harness the power through investing in project bonds like Bullet Train, Schools, Hospitals.
- 26. ODA is definedas government aid designed to promote the economic development and welfare of developing countries. Loans and credits for military purposes are excluded. Aid may be provided bilaterally, from donor to recipient, or channeled through a multilateral development agency such as the United Nations or the World Bank. Aid includes grants, concessional loans and the provision of technical assistance. Source: OECD-ilibrary.org
- 27. •About 135billion$ intotal ODA is going to Developing countries. •We also need to look how IDA is distributed among developing countries.
- 28. Smarter use ofODA will lead to: 1)As a stimulate source of finance makes direct impact on health and education. 2)Serves as a pool to attract private sector. 3)As a means of mitigating risk in certain environments. If is used in very creative fashion way.
- 29.
- 30. 1. Tax evasion 2.Exporting capital illegally
- 31. • Promote E-taxfiling • Develop an automation system of cross- verifications that can help reduce incidence of tax fraud, cleansing and updating the databases through use of third-party data. • Limit the amount accepted as Cash transfer by countries giving grants. • Speed up the process of Tax filing and registration process. • Speed up the audit timing.
- 32. 1) Maintain astable Macro economic environment climate. 2) Reduce hindrances to doing business like speed up the process of acquisition of shares, land, bonds etc.
- 33. • Simplify registration •Improve tax administration • To try and speed up acquisition of asset processes. • Stable Law and order situations
- 34. Role of PrivateFinance in financing for Development • Estimated shortfall of funding the SDGs is 3 trillion dollars. • So, The involvement of Private Sector is necessary in this matter
- 35. We need tothink that financial returns and social returns can co- exist.
- 37. Public Sector Private Sector Private sectors cancome up with new models, innovation in finance
- 38. 1. Infrastructure isa key component for growing economies faster 2. The private sector is contributing only 400 billion$ in the shortage of 3trillion$ investment in infrastructure. 6 trillion$ investment needed annually 3 trillion@ investment actually made
- 40. Blended finance isa mixing of Public sector social returns objectives + private sector financial return objectives. Public sector mitigates risk in way that allows Private sector to participate in infrastructure projects
- 41.
- 42. MIGA (Multilateral Investment GuaranteeAgency) •MIGA is one of the largest single components of blended finance solutions in the world. •It brings ODA into Private sector funded structures.
- 43. We have tomobilize capital as the end objective. Smaller amount of riskier capital can catalyze multiples of capital. Smaller amount of riskier capital Mobilized capital
- 44. A construction projectneed 100Million$. Development Bank will contribute 20M$ while Private sector will contribute 80M$. Development Bank Private Sector 20Million$ 80Million$
- 45. Who are institutionalinvestors? 1.Large Pension Funds 2.Sovereign wealth funds 3.University and Foundation endowments
- 46. Equity Markets 17trillion$ Bond markets 14 trillion$ Excess money And theneed is only 3trillion$ in infrastructure.
- 47. Why are institutionalinvestors interested in emerging markets? 1) High returns 2) Diversification
- 48. •They have aneed to have return •High return (6 – 10% range) in emerging marks •Emerging markets have: High Growth + High inefficiency
- 49. •Uncorrelated assets •Sometimes emerging marketsmoves along with other equity markets, and sometimes it does not move along.
- 50. 1.Rule of Law 2.Fairtreatment and equal access 3.Assessment of economic, political and social risks
- 51.
- 52. 1) Closed economies– inhibits the free movement of people or money. 2) Trust on Court system – government intervenes in court’s decision 3) Ability to convert local currency into foreign currency. 4) Frequent changes in government - leads to inconsistency. 5) Limitations on Exchange controls
- 53. Exchange controls Getting currency out of thecountry Limitations Often prohibit Limit that Inhibit from happening refers to
- 54. •Some form ofunit must be available, as a regulator within the government to implement the plan, to monitor it. •Accountability component. •Stable Legal and Regulatory environment.
- 55. To be Transparentas possible to general public about what they are doing. Why our decisions are so important?
- 57. To make adifference through relatively small but risk relevant resources..
- 58. Take risk withnew technologies Bet on new approaches to well known problems that unlocks • new solutions or something different
- 60.
- 61.
- 62. So, Private philanthropy dono get any profit, They plow anything that is made in the form of loan or equity participation.
- 63. Cost of Loan= 2Million$ Loan = 25Million$
- 64. Cost of Loan (2M$) Buydown by Private philanthropy If govt. will meet down the expected targets Loan (25$)