Download to read offline
Uploaded bySDGsPlus
Financing the Post-2015 Development Framework
$7.2 million - Homeless International - Government of India - Government of India - Private sector partners - Private sector partners - Community contributions - Community contributions Built over 10,000 toilets and bathing facilities Built over 10,000 toilets and bathing facilities
More Related Content
![Official Development Assistance (ODA) and Aid for Trade Brief [English]](https://cdn.slidesharecdn.com/ss_thumbnails/odaen-210419072654-thumbnail.jpg?width=640&height=640&fit=bounds)
Similar to Financing the Post-2015 Development Framework
Financing the Post-2015 Development Framework
- 1. FINANCING THE POST-2015 DEVELOPMENTFRAMEWORK World Bank Roundtable on Post-2015 Development Agenda in China Beijing – July 23, 2013 The World Bank
- 2. Lessons from theexisting MDGs framework • The original MDGs were articulated independently of a financing framework (Monterrey 2002). • In a context of fiscal consolidation, discussion of post-2015 goals must be integrated with consideration of supporting financing. • No quantity of financing, whether grant, concessional, or non- concessional, can achieve the development goals without supporting policies and a credible commitment to combating poverty. • Costing MDGs requires too many assumptions (WDR 2004), and is not the objective of this exercise. 2
- 3. 3 China’s MDGs andIndicators Progress Goal 1: Eradicate Extreme Poverty and Hunger A: Halve, between the proportion of people whose income is less than one dollar a day B: Achieve full and productive employment and decent work for all, including women and young people C: Halve the proportion of people who suffer from hunger Already met Potentially Already met Goal 2: Achieve Universal Primary Education Children everywhere, boys and girls alike, will be able to complete a full course of primary schooling Already met Goal 3: Promote Gender Equality and Empower Women Eliminate gender disparity in primary and secondary education, preferably by 2005, and in all levels of education no later than 2015 Likely Goal 4: Reduce Child Mortality Reduce by two-thirds the under five mortality rate Already met Goal 5: Improve Maternal Health A: Reduce by three quarters the maternal mortality ratio B: Achieve universal access to reproductive health Likely Potentially Goal 6: Combat HIV/AIDS, Malaria and Other Diseases A: Have halted by 2015 and begun to reverse the spread of HIV/AIDS B: Achieve, by 2010, universal access to treatment for HIV/AIDS for all those who need it C: Have halted by 2015 and begun to reverse the incidence of malaria and other major diseases Likely Potentially Likely Goal 7: Ensure Environmental Sustainability A: Integrate the principles of sustainable development into country policies and programmes and reverse the loss of environmental resources B: Reduce biodiversity loss, achieving, by 2010, a significant reduction in the rate of loss C: Halve the proportion of people without sustainable access to safe drinking water and basic sanitation D: By 2020, to have achieved a significant improvement in the lives of at least 100 million slum dwellers. Likely Potentially Likely Likely Goal 8: Develop a global partnership for development On-going Source of Information: Millennium Development Goal Report 2010
- 4. A two-pronged approachto supporting a post-2015 development framework Increase impact of available resources Leverage additional resources Good policies and credible institutions enhance the impact of available resources and leverage additional resources from both domestic and foreign sources. Good policies and credible institutions to: 4
- 5. Parameters to considerin the post-2015 financing framework What can developing countries do? What can the international community do? • Design targeted, evidence- based policies and support sound institutions • Generate more revenues • Ensure efficient public spending • Promote financial deepening and inclusion • Maximize the impact of ODA • Support new development partners • Leverage the private sector • Tap into new sources of finance • Deliver global public goods 5
- 6. Generate more revenues Taxationcapacity improving in MICs, progress needed in LICs 21.2 28.4 28.4 29.3 18.8 17.1 19 19.3 11.3 10 10.5 13.6 0 5 10 15 20 25 30 35 1994 1998 2003 2009 High Income Middle Income Low Income Tax Revenue (in % of GDP) by Income Groups, 1994-2009 Source: World Development Indicators
- 7. Ensure efficient publicspending Fossil fuel subsidies do not target the poor Source: World Energy Outlook, IEA, 2011 Subsidies are an inefficient means of assisting the poor: only 8% of the $409 billion spent on fossil-fuel subsidies in 2010 went to the poorest 20% of the population. Fossil fuel consumption subsidies measure what developing countries spend to provide below- cost fuel to their citizens. High-income countries offer support to energy production in the form of tax credits or loan guarantees, which are not included in these calculations since they are directed towards production rather than consumption of the fuel. 7
- 8. Financial sector developmentfor growth A thriving private sector creates opportunities for entrepreneurship and job creation How do financial institutions contribute to economic growth? Lower the cost of financial and nonfinancial transactions Facilitate efforts to reduce and trade risks 8
- 9. Financial Inclusion Access tofinance is a major constraint to growth for entrepreneurs in LICs 21 9 3 10 #Total MSMEs (formal andinformal) #with Checking account #with Loan/Overdraft #Unserved+ Underserved 52 25 13 27 # Total MSMEs (formal and informal) # with Checking account # with Loan/Overdraft # Unserved + Underserved 20 12 6 10 #Total MSMEs (formal andinformal) #with Checking account #with Loan/Overdraft #Unserved+ Underserved 188 62 23 92 # Total MSMEs (formal and informal) # with Checking account # with Loan/Overdraft # Unserved + Underserved 78 34 11 36 #Total MSMEs (formal andinformal) #with Checking account #with Loan/Overdraft #Unserved+ Underserved 40 18 4 22 # Total MSMEs (formal andinformal) # with Checking account # with Loan/Overdraft # Unserved+ Underserved LAC MNA ECA EAP SAR AFR # of MSMEs (in Mn) # Total MSMEs (formal and informal) # with Checking account # with Loan/Overdraft # Unserved + Underserved Source: Two trillion and counting, IFC & McKinsey, 2010
- 10. Source: MDG GapTaskforce Report, 2012 and OECD IDS 2012 Maximize the impact of ODA Total net ODA, already short of Monterrey targets, has declined by 4% in 2012 10 0.00 0.20 0.40 0.60 0.80 1.00 1.20 United States Germany United Kingdom France Japan Netherlands Sweden Canada Australia Norway DAC Members' Official Development Assistance as a percentage of GNI, 2000-2012 2000-2001 2007 2009 2011 2012 UN Target: 0.7% of GNI
- 11. Collaborate with newdevelopment partners Emerging donors, led by China, provide relatively limited aid as defined by the OECD, but contribute to development through other external flows and in-kind assistance Source: World Bank CFP Working Paper No. 8, Finance for Development 11 For the purpose of comparison, in 2009, net ODA from DAC members was 119.8 bn USD. 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 2003 2004 2005 2006 2007 2008 2009 Estimated aid from BRICS, 2003-2009 (USD billion) China India Russia Brazil South Africa
- 12. Chinese Financing Commitmentin African Infrastructure, 2001-2010 (million USD) 12 Source: Chen Chuan, 2013 based on World Bank-PPIAF Chinese Projects Database
- 13. International flows todeveloping countries International capital flows to developing countries dominated by foreign direct investment Total capital inflows in 2012: USD 1,007 billion 13 Remittances, which are not part of capital inflows but are an important source of foreign currency for developing countries, were an estimated USD 399 bn in 2012. Inflows refer to flows from non-residents to developing countries. FDI inflows are net of disinvestments by non-residents. Debt inflows are debt disbursements net of repayments. Official flows include bilateral and multilateral lending and are not equivalent to ODA. Data on official capital inflows are “debt enhancing official assistance” and, thus, not the same as ODA, which is concessional in character with a grant element. Source: Long-term financing for growth and development. G20 Umbrella Paper, Feb. 2013 and Global Economic Prospects 2013, World Bank. FDI inflows, 600.1, 60% Portfolio equity inflows, 44.4, 4% Bonds, 143.3, 14% Banks, 71.5, 7% Short-term debt flows, 126.7, 13% Other private, 7.1, 1% Official (World Bank, IMF, and other), 14.1, 1%
- 14. ODA and remittancesare especially critical for fragile states 14 Foreign direct investment 505.7, 40% Portfolio investment 128.4, 10% Long-term debt (private) 155.8, 12% ODA grants 89, 7% Long-term debt (official) 69.2, 5% Worker remittances 319, 25% Net financial flows to developing countries, 2010 Total: USD 1,267 billion Foreign direct investment 27.59, 22% ODA 50.04, 40% Worker remittances 47.38, 38% Gross financial flows to fragile states, 2010 Total: USD 125 billion Source: World Bank CFP Working Paper No. 8, Finance for Development Source: Fragile States 2013, OECD NB: Based on OECD definition of fragile states
- 15. The official sectorhas a particularly important role to play in LICs and fragile states 15 0.9 6.4 7.8 Net official capital flows and transfers, 2012 (% of GDP) Emerging market countries Low-income countries Fragile states Source: Global Monitoring Report 2013, World Bank The classification of countries is the one used in the IMF‘s World Economic Outlook. Emerging market and developing countries are those countries that are not designated as advanced countries. Countries that are eligible for financial assistance under the IMF‘s Poverty Reduction and Growth Trust constitute a subset of emerging market and developing countries; these countries are denoted low-income countries although eligibility is based on other considerations in addition to income levels. Emerging market and developing countries that are not eligible for financial assistance under the Poverty Reduction and Growth Trust are designated as emerging market countries. Fragile states are countries included in the World Bank‘s list of Fragile and Conflict-Affected States as of early 2013.
- 16. Leverage the privatesector: partnerships Well-structured initiatives with a diverse range of partners help governments raise the large sums of capital required to meet infrastructure needs and consequently spur development 16 Maharashtra & Tamil Nadu, India CLIFF COMMUNITY SANITATION PROJECT Total initial investment: $7.2 million - Homeless International - SPARC (NGO in India) - Community-based Organizations Kenya PRIVATE SECTOR POWER GENERATION PROJECT Total initial investment: $623 million - Kenya Power and Lighting Company - IFC - MIGA - Commercial Banks Sao Paulo, Brazil METRO LINE 4 Total initial investment: $450 million - Companhia do Metropolitano de Sao Paolo - 5 Equity Sponsors - IDB - Commercial Banks Lake Kivu, Rwanda KIVU WATT Total initial investment: $142.25 million - ContourGlobal - Energy Authority of Rwanda - MIGA - Emerging Africa Infrastructure Fund - FMO - AfDB - Belgian Development Bank Source: Emerging Partnerships, IFC, 2013 and World Bank, Africa Region. Emerging Partnerships
- 17. 4% 29% 25% 13% 22% 41% 6% 14% 23% 8% 21% 24% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 1 to 5years 5 to 10 years 10+ years Percent of international syndications to the private sector in developing countries where an IFI participated, by income level and maturity, 2007-2010 Lower Lower middle Upper middle BRICT Leverage the private sector: syndications IFI participation in syndications contributes to extending maturities of private flows to developing countries and therefore financing long-term productive investments Source: International Finance Institutions and Development through the Private Sector, IFC, 2011 17
- 18. Key Messages • Promotetargeted policies and support accountable, efficient institutions • Mobilize domestic resources for development through: ▫ Broader tax coverage ▫ Increased taxation capacity ▫ Greater accountability ▫ Efficient public spending ▫ Natural resource revenue ▫ Deeper domestic financial sector ▫ A more vibrant private sector • The international community must use ODA and other resources to: ▫ Leverage more private resources ▫ Deliver global public goods ▫ Draw on emerging and innovative sources of finance • Financial instruments have different properties and comparative advantages. Selecting the right combination of instruments to meet a given goal, in a given country context, might be one of the most important tasks ahead to enable full implementation of the next development framework post-2015. 18
- 19. 19 Mahmoud Mohieldin President’s SpecialEnvoy The World Bank mmohieldin@worldbank.org
- 20. China Financed “Bottleneck-releasing”Hydropower Projects in Africa • Particular focus on hydropower generation, roads, ports, and railways • 50% of all Chinese infrastructure commitments in SSA between 2001 and 2010 were on electricity 20
Editor's Notes
- #4 China has done very well in progress towards reaching the MDGs The MDG 1a target would not have globally been met if it weren’t for the impressive work done by China However, we are also conscious that this does not mean that everybody (whether in China or globally) is addressed, particularly the most impoverished and marginalized
- #7 .
- #13 China is also helping developing countries reach some of their development goals, especially “eradicating extreme poverty and promoting shared prosperity”. Economists, including your own Justin Lin, tells us that building infrastructure provides a clear path to development as it facilitates addressing other developmental issues, such as reaching marginalized people and providing access to basic services and markets China’s focus has been on Sub-Saharan Africa and has now emerged as the largest financer of infrastructure in Sub-Saharan Africa, followed by three multilateral organizations: IDA, EC, and AfDF China alone accounts for 34% of total official financing for infrastructure in SSA, but only 3% of the number of aid projects, indicating that Chinese funded projects are much larger than projects funded from other sources