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SOURCES FOR
FUNDING
DEVELOPMENT
Valentina Lagos
Financing for Development MOOC
World Bank Group
Sustainable Development Goals
“17 Goals to end poverty, fight inequality and injustice, and tackle
climate change by 2030.” (UN)
How do we finance this?
• Public Funding
• Private Funding
• Technical Assessment
Public Funding
• Domestic or international funds provided by governments
• Money raised from taxes and savings from domestic resources
• Used to leverage investments and provide guarantees
Public Sources
• Domestic Resource Mobilization (DRM) $7.7 trillions/yr /50-80% of the money
needed to finance the SDGs
• Official Development Assistance (ODA)  $135 billions/yr
Private Funding
• Domestic or international funds provided by the private sector
• Investment is based on returns and risk
• Main drivers to invest in emerging markets:
• High returns (6-10% range)
• Diversification
Private Sources
• Remittances  $400 billion/yr
• Foreign Direct Investment $600 billion/yr
• Capital markets  $300 billion/yr
• Philantropy  $60-70 billion/yr
TechnicalAssessment
Multilateral Development Banks and the International Monetary Fund
Role: Support countries in achieving their goals by providing financial
support, technical assistance and policy advice.
Case Study: CHILE
• Chile is 4,000 km long country on the south Pacific coast of South America
• It has a GDP of US$258.1 billion and a population of 17.76 million
• Joined OECD in 2007
Next: Study performed by Bertelsmann Stiftung analyzing the feasibility and
challenges to accomplish the SDGs.
Source: Kroll, 2015
Biggest challenges
• GDP allocation in research and development
• Improve inequality (last place in income gap)
• Inclusive, equitable and quality of education
• High domestic material consumption
Source US$ 2011 2012 2013 2014
ODA 163,950,000 124,840,000 78,520,000
ODA per capita 9 7 4
Remittances 170,264,685 136,789,078 136,351,353
FDI 23,443,915,104 28,625,587,109 347,848,740,397
Source:World Bank Group
How do we tackle these challeges?
By Blended Finance:
Combining the public sector’s social return objectives and private sector’s financial return
objectives through risk mitigation by the public sector in a manner that induces the private
sector to participate. (Fin4dev MOOC)
In the case of Chile, FDI could be used for research and development to improve the
use of domestic materials, while remittances focus on reducing poverty and
inequality and Domestic funds invested on improving education.
Conclusions
Countries need to identify:
• Challenges to accomplish development and how to confront them
• Sources for financing development and what is their best use
• Strategy towards public private partnerships
Bibliography
World Bank Group. Data.worldbank.org/country/chile
Kroll, Dr. Christian. "Sustainable Development Goals: Are the Rich Countries Ready?" 2015.

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Valentina Lagos Final Project

  • 1. SOURCES FOR FUNDING DEVELOPMENT Valentina Lagos Financing for Development MOOC World Bank Group
  • 2. Sustainable Development Goals “17 Goals to end poverty, fight inequality and injustice, and tackle climate change by 2030.” (UN)
  • 3. How do we finance this? • Public Funding • Private Funding • Technical Assessment
  • 4. Public Funding • Domestic or international funds provided by governments • Money raised from taxes and savings from domestic resources • Used to leverage investments and provide guarantees
  • 5. Public Sources • Domestic Resource Mobilization (DRM) $7.7 trillions/yr /50-80% of the money needed to finance the SDGs • Official Development Assistance (ODA)  $135 billions/yr
  • 6. Private Funding • Domestic or international funds provided by the private sector • Investment is based on returns and risk • Main drivers to invest in emerging markets: • High returns (6-10% range) • Diversification
  • 7. Private Sources • Remittances  $400 billion/yr • Foreign Direct Investment $600 billion/yr • Capital markets  $300 billion/yr • Philantropy  $60-70 billion/yr
  • 8. TechnicalAssessment Multilateral Development Banks and the International Monetary Fund Role: Support countries in achieving their goals by providing financial support, technical assistance and policy advice.
  • 9. Case Study: CHILE • Chile is 4,000 km long country on the south Pacific coast of South America • It has a GDP of US$258.1 billion and a population of 17.76 million • Joined OECD in 2007 Next: Study performed by Bertelsmann Stiftung analyzing the feasibility and challenges to accomplish the SDGs.
  • 11. Biggest challenges • GDP allocation in research and development • Improve inequality (last place in income gap) • Inclusive, equitable and quality of education • High domestic material consumption
  • 12. Source US$ 2011 2012 2013 2014 ODA 163,950,000 124,840,000 78,520,000 ODA per capita 9 7 4 Remittances 170,264,685 136,789,078 136,351,353 FDI 23,443,915,104 28,625,587,109 347,848,740,397 Source:World Bank Group
  • 13. How do we tackle these challeges? By Blended Finance: Combining the public sector’s social return objectives and private sector’s financial return objectives through risk mitigation by the public sector in a manner that induces the private sector to participate. (Fin4dev MOOC) In the case of Chile, FDI could be used for research and development to improve the use of domestic materials, while remittances focus on reducing poverty and inequality and Domestic funds invested on improving education.
  • 14. Conclusions Countries need to identify: • Challenges to accomplish development and how to confront them • Sources for financing development and what is their best use • Strategy towards public private partnerships
  • 15. Bibliography World Bank Group. Data.worldbank.org/country/chile Kroll, Dr. Christian. "Sustainable Development Goals: Are the Rich Countries Ready?" 2015.