Financing the SDGs is everyone’s business: Experiences from Asia-Pacific

Many countries have a growing and increasingly diverse portfolio of financing that can contribute to achievement of development results – though the makeup of these resources is significantly different between countries. Rapid growth in domestic public and private finance is driving resources availability across the Asia-Pacific region, yet the mix at play in a given country varies widely, with different types of resources better able to achieve particular sustainable development results.

But it’s not just government’s business to think about strengthening enabling environments for increased domestic resource mobilization and quality private investment. It is everyone’s business – it’s for all stakeholders to think about integrated approaches to financing the 2030 Agenda.

The key message from the 2016 Asia-Pacific Development Effectiveness Facility (AP-DEF) consultations was clear: countries want to ensure that financing doesn’t just increase, but becomes more effective through country ownership and multi-stakeholder partnerships.

In response, at the 2017 2nd Annual Regional Knowledge Exchange on the Sustainable Development Goals, countries in the Asia-Pacific region shared experiences on strengthening integrated national financing frameworks and financing innovations at country level.  A few main takeaways emerged:

  • Country-level actions and reforms are and will be the driver for financing development toward 2030. It is well recognized that there is strong collective commitment on Agenda 2030 and Financing for Development at the global level. At the country level, innovations are taking place, producing lessons that could be useful across regions and contexts. The connection between the global and country level agendas could be further strengthened to prevent countries having to reinvent the wheel and to bring these lessons to global dialogue.
  • Financing for development in the region goes beyond ODA. However, in some contexts, ODA still provides important volumes of financing which is crucial to poverty reduction efforts and can also play a catalytic role. It was agreed that the development effectiveness principles of ownership, a focus on results, inclusive partnerships and transparency and accountability have indeed demonstrated their relevance for development finance, beyond ODA.
  • The private sector is not merely a funding source, but a key partner without which the SDGs will not be achieved. The private sector has their own initiatives and comparative advantages to address development challenges. Given this, there is huge demand for dialogue at the nexus of the public and private sector silos to strengthen alignment and integrated solutions for development results.

As we embark on 2018, partners in the Asia-Pacific region are using ongoing analysis and these regional  discussions as a basis for action, including through:

  • Country-level dialogue designed to make financing SDGs everyone’s business: AP-DEF is building on experiences with UNDP’s Development Finance Assessment to bring together key policymakers in an evidence-based discussion about how to address the most pressing challenges and opportunities for financing the SDGs across public and private actors;
  • South-South sharing initiatives: To support countries in learning from emerging financing innovations, regional platforms like AP-DEF can facilitate exchange on priorities identified at the consultations, such as measuring private sector impact for the SDGs, harnessing remittances for results, social/green impact investment and Islamic finance opportunities;
  • Synthesizing lessons learned and feeding into global dialogue: Funnelling evidence from country examples that utilize an integrated approach to financing and consider how countries are reshaping their thinking about financing the SDGs into international for such as FFD, HLPF and the GPEDC. 

 

15 - Global Partnership for Effective Development Cooperation
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Links:

Follow the ongoing Financing SDGs work of the AP-DEF Secretariat at UNDP Bangkok Regional Hub at @apdefplatform @emilyraedavis

More on Asia-Pacific Development Effectiveness Facility (AP-DEF) here

More on the 2017 SDG Regional Knowledge Exchange here, including presentations and photos

 

The 2017 2nd Annual Regional Knowledge Exchange on the Sustainable Development Goals and AP-DEF consultations were generously supported by the European Commission, the Department of Foreign Affairs and Trade of Australia and the Asian Development Bank.

Inputs of the 2017 Asia-Pacific Regional Knowledge Exchange to the Global Partnership for Effective Development Co-operation are available here.

Poverty is not falling quickly enough to end by 2030 – time to make development co-operation more effective

Every year the ECOSOC Forum on Financing for Development (FfD) Follow-up reviews the Addis Ababa Action Agenda (AAAA) – a 15-year, intergovernmental deal on financing for development adopted by United Nations Member States in 2015, which aims to help the world achieve the Sustainable Development Goals (SDGs) and end poverty by 2030.

The 2017 report of the Inter-Agency Task Force on Financing for Development (IATF) informed this year’s forum, which was held last month in New York. The IATF stressed that, while poverty fell worldwide last year, the international community is not on track to eradicate it by 2030. A cocktail of country-specific and global economic headwinds, natural disasters, climate change-related problems and humanitarian crises slowed efforts. Continued slow growth will mean 6.5% of the world’s population remains in extreme poverty in 2030. The report calls for more money, better spent.

Crucially, the IATF appealed for action to increase long-term and high-quality investment for sustainable development, complemented by measures to address economic vulnerabilities. This requires greater adherence to internationally-agreed principles on development co-operation: country ownership, a focus on results, inclusive partnerships and transparency and mutual accountability. These principles continue to guide the work of the Global Partnership for Effective Development Co-operation (Global Partnership).

The 2017 FfD Forum’s intergovernmentally agreed Outcome Document welcomed continued efforts to improve the quality, impact and effectiveness of development co-operation across all types of partnerships and took note of the Global Partnership’s Second High-Level Meeting, which took place in Nairobi in late 2016.

But now, it’s time to move from principles and commitments to evidence-based and co-ordinated action, including:

Funding nationally-designated priorities, using countries’ own systems. Because development resources have a greater impact when they respond to specific country needs, within the priorities set by countries themselves, the Addis Ababa Action Agenda underscored that cohesive, nationally-owned development strategies are crucial for achievement of the SDGs. According to the UN Development Co-operation Forum’s National Mutual Accountability survey, 90% of countries now have them in place. However, in countries surveyed by Global Partnership monitoring, while 85% of development partners’ new projects and programmes have objectives aligned to national priorities, only 52% of results are tracked using government’s own sources and systems. On use of national public financial management systems, the same monitoring process tells us that performance is mixed.

Improving public-private dialogue. The AAAA underscores the private sector’s potential role in helping to achieve the 2030 Agenda, and according to Global Partnership monitoring, partnerships for development are becoming more inclusive overall. Public and private officials are increasingly enthusiastic about co-operating, but more can be done to ensure that dialogue is more efficient and organised at the country level. Inclusive dialogue between government, the private sector and civil society can help manage risks and gear investment toward leaving no one behind.

More transparency for stronger accountability. Transparency between partners is essential for fostering strong accountability and is improving globally, with more information on development resources available than ever before. But predictability is important too. The Global Partnership’s 2016 monitoring shows that in surveyed countries, annual predictability of resources has not improved over the past five years, falling short of the Busan commitment. Development partners should make funding increasingly predictable and transparent.

Accelerating learning and adapting our approach. The IATF report indicates that partnerships are going beyond financial contributions and North-South technical assistance. Collaborative learning models to share forward-thinking, adaptable and cost-efficient solutions to address development challenges are founded on the principle of country ownership over the development process. South-South Co-operation and other innovative mechanisms for peer learning should be further leveraged to strengthen the means of implementation for the SDGs.

Consensus is necessary, but so is action. The Global Partnership for Effective Development Co-operation’s diversity and renewed purpose from Nairobi is ready to help improve the quality of development co-operation for achieving the SDGs and ending poverty by 2030.

Michael O’Neill represents UNDP/UNDG on the Global Partnership’s Steering Committee

Changing the conversation on aid and investment: Designing a new dialogue framework for Tanzania

The Government of Tanzania and its development partners (DPs) recognise that the development finance landscape is changing rapidly, both globally and nationally. In 2015, Tanzania renewed its focus on its transition to a middle income country and its ambition to become a semi-industrialized nation. For decades, aid accounted for half of the country’s budget. It now stands at slightly above 10%. With Tanzania no longer aid dependent, there is an opportunity and a need for new dialogue.

Tanzania first made use of an independent group of experts to assess challenges in its aid relationship in 1995, with an arrangement later formalised in a now-discontinued Independent Monitoring Group.

Last year, a facilitation team led by Donald Kaberuka, along with Jim Adams, Steve Kayizzi Mugerwa and Mugisha Kamugisha was commissioned to provide options for new avenues for an enhanced dialogue and to discuss, at the highest levels, how to strengthen trust and confidence between Tanzania and international authorities. This ‘dialogue facilitation’ exercise entailed a full review of the existing dialogue structures and relationships, seeking to make them fit for purpose.

The case for reform

All parties are hoping the outcome of the exercise will bring about innovation and fresh ideas to ensure the private sector and non-traditional partners are better involved in and part of development initiatives in Tanzania. New financing instruments are needed to respond to investment gaps in infrastructure and other productive sectors, and to sustain gains in the social sectors. The cost of the Five Year Development Plan II (2016-21) is equivalent to TZS 107 trillion (twice the amount for the FYDP I) and is expected to rely heavily on private sector financing.

Going forward, a renewed dialogue framework should respond to alignment, predictability and transparency concerns in the delivery of Official Development Assistance (ODA). An inclusive ‘development dialogue’ that looks beyond ODA, as articulated in the Addis Ababa Action Agenda on financing for development, is necessary.

At the first development dialogue workshop in 2016, Servacius Likwelile, then-Permanent Secretary of the Treasury in the Ministry of Finance and Planning, spoke of the Kaberuka Process as an opportunity to examine the broader strategic issues of the aid relationship, and to enable the Government and DPs to discuss and identify obstacles.

“We should not run away from addressing challenges,” then-Secretary Likwelile said.

During the second development dialogue workshop in March 2017, the Honorable Minister of Finance and Planning, Philip Mpango, invited partners to “prepare to invest in a stronger relationship.”

True, effective partnership should include professional, open and constructive dialogue about shared objectives and achievements. It should also prioritise mutual accountability for linking efforts to better results. The credibility of the renewed agenda will depend on the degree to which DPs can deliver on commitments to quality and quantity of development cooperation, and on the ability to scale up innovative approaches for the development of Tanzania.

The Kaberuka Report: recommendations and roadmap

The Kaberuka Final Report of April 2017 makes concrete recommendations for better managing sensitive issues in the aid relationship and establishing effective dialogue for a possible ‘Investment in Tanzania Week’. It identifies capacity development as one of the key priorities, based on a comprehensive review of existing and forthcoming planning and implementation requirements in the medium term.

Rebuilding the momentum of an open and effective dialogue that accommodates country-specific needs, while conforming to mutual accountability requirements, remains an important priority for the coming months.

The Kaberuka Report is creating new opportunities for open dialogue. Since May 2017, the Government of Tanzania and development partners have started to draw on past achievements and recommendations from the Final Report to propose a new Development Co-operation Framework to be endorsed in July 2017.

These efforts support Tanzania’s transition to middle income status, which necessitates a new approach to dialogue with development partners, with new tools, new stakeholders and new ways of attracting funding and driving development.