SDG financing

SDG financing

Financing for the attainment of Sustainable Development Goals (SDGs) has been perceived as a problem ever since the UN's roadmap for global development made it to academic as well as public discourse. Economists and think tanks in the country as well as elsewhere are not comfortable with the prospect of attaining the SDGs given the mammoth tasks involving huge financial resources.

The fact that attaining the SDGs is a daunting task for countries in the Third World like ours is now being increasingly felt by the political leaderships of these countries. This has been reflected in the Bangladesh Prime Minister's urging the development partners and international donors at the recently held meeting of the Bangladesh Development Forum (BDF) to support the government's efforts in undertaking programmes as a means to reaching the targets set by the SDGs. The BDF is a high level platform where the government and its development partners interact to explore partnerships to foster inclusive economic growth. Held every two years, it brings together multilateral, regional and bilateral development partners, government policymakers, think tanks, universities and civil society organisations to discuss how to foster partnerships for taking the national and international agendas forward.

The Prime Minister made it clear that ensuring the funding is the key challenge for Bangladesh to achieve the SDGs for which the country needs financial and technical assistance from donors and development partners. She also said Bangladesh needs global support in dealing with challenges posed by environmental and climate change, and the international community must give more attention to the impending problem.

The sense of uncertainty regarding funding of numerous development programmes in line with the SDGs was echoed more emphatically by the finance minister at a press briefing on the eve of the BDF meet when he termed it a 'serious problem'. However, he expressed optimism to go ahead with the country's own resources in the wake of the declining foreign aid.  "We will not get foreign assistance worth trillions of taka required for implementing the SDGs", he said. An estimate made by the External Resources Division (ERD) says that Bangladesh will require a staggering US$928 billion for financing the programmes and activities to achieve the SDGs by 2030. According to media reports, this includes 15 per cent overseas development assistance (ODA), 10 per cent foreign direct investment (FDI) and 9.0 per cent investment under public-private partnership (PPP).

The finance minister tried to tone down the 'seriousness' of the problem - as he had called it - by referring to government's efforts to boost FDI and mobilise domestic resources. Though the rate of FDI in the country is very slow, he said, there are good signs to improve the situation as domestic investors are also bringing foreign investors in the country. Domestic resource mobilisation has been increasing over the last five years while disbursement of foreign loans has been increasing, he added. In this context, he reminded that dependence on ODA has dropped as Bangladesh uses foreign assistance worth only 1.3 per cent of its Gross Domestic Product (GDP) in recent years.

One need not be too sceptical of what things are going to look like. Still there are some stark realities that may come in the way as potentially threatening obstacles. One cannot be oblivious of the fact that the country is almost set to graduate from the bottom rung of the category of countries called least developing countries (LDCs). The United Nations panel named Committee for Development Policy (CDP) is expected to put Bangladesh in its graduation list this year as the country has met all three criteria for graduation: Gross National Income (GNI) per capita, Human Assets Index (HAI) and Economic Vulnerability Index (EVI). The CDP will review Bangladesh's progress in 2021, and after a three-year transition period official graduation from the LDC category will take place. As an inevitable consequence of graduation, Bangladesh would face stiffer competition from rivals in international trade, especially in exporting, as graduation will gradually erode the preferential benefits that the country currently enjoys from well over forty countries - the EU being the largest provider accounting for around 54 per cent of the country's exports. This might cause the country a drastic slump in exports by 5.5 to 7.5 per cent due to preference erosion and exports becoming costlier, as estimated by the United Nations Conference on Trade and Development (UNCTAD). No doubt, preference erosion will thus have implications for export competitiveness and export earnings, and consequently, for GDP growth, employment generation and poverty alleviation. Besides, concessional borrowing meant mostly for the LDC from international agencies is another important area feared to be hit hard upon graduation.

So, the situation in the days ahead is not just challenging but 'serious' as rightly pointed out by the finance minister. All 17 SDGs are crucially pertinent to Bangladesh in that there is hardly any scope to prioritise one over the other as the innately intermingling nature of the goals makes them inseparably connected and well integrated.

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