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  • Making Money Work

    Towards a Roadmap for Re-orienting Development Finance for the 2030 Sustainable Development Agenda


    Asian Development Bank 10 November 2015, Bangkok


    • The challenge

    • ADB gets prepared

    • Future directions


    • The challenge

    • How is ADB getting prepared

    • Future directions


    From Deprivations to All People and the Planet

    Millennium Development Goals Sustainable Development Goals

    UN-led dialogues Country-led, ambition has ballooned

    8 Goals; 18 Targets; 48 Indicators

    Focus: Deprivations, poor countries

    Environment, inequality only partially addressed

    17 Goals; 169 Targets!

    (Indicators to come)

    Focus: Sustainable development, all countries

    3 equal pillars: economic prosperity, social equity

    and environmental responsibility

    Incremental progress Transformational and long-term durable gains

    Global partnership – Goal weakly formulated,

    partially monitored (MDG 8)

    Stronger partnerships – implementation under each

    Goal & SDG 17

    Demands on official statistical systems recognized

    late; not matched by resources

    This challenge will continue and escalate; better


    Development finance =

    largely ODA

    Financing for development =

    All moneys

    SDGs poised to influence national action and

    development cooperation for the next 15 years

  • • Asia drives global progress by sheer size

    – Population more than 50%; GDP share around 40%

    • Even though share of extreme poverty has come down, size also means large absolute numbers of deprived people

    • Diverse economies require recognition of complexity and SDG customization in the responses

    – Upper middle income countries

    – Lower middle income countries

    – Low income, fragile and conflict affected

    – Structural bottlenecks and capacity deficits are varied

    The region’s progress matters to global progress

  • Getting the diagnosis and entry points right is critical …

    Multiple actions are called for; and yet… • Money is a distinct enough … and • an important enough bottleneck to need

    dedicated attention


    • The challenge

    • ADB gets prepared

    • Future directions

  • ADB is engaged in the SDG and FfD


    • Collaborates with UN partners to support sustainable development in Asia and the Pacific

    • Joins other MDBs globally to identify expanded funding opportunities for countries

    • Explores concrete ways to expand finance for SD: to inject more & attract more $$

  • What sums are we talking of?

    Approx $1 trillion annual to eradicate poverty and bridge

    MDG and infrastructure gaps (rough cost estimates)

    Whatever be the specific numbers, it is clear that the sums

    are large

    $ billion

    Source: ADB, 2015. Making Money Work: Financing a Sustainable Future in Asia and the Pacific. Manila

  • Where is the money? Private flows far outstrip public finance in Asia and Pacific

    $ billion, annual

    • Asia is a region of savers…but invests elsewhere

    • Bulk of funds are in private hands, dispersed, not programmable

    • Domestic fiscal funds inadequate – greater potential

    • Long term funds – yet to be fully unlocked

    • Plugging leaks > ODA

    (2 0 1 2 -2

    0 1 4 e

    st im

    a te


  • ADB will support through two streams

    (i) Investments in human needs,

    infrastructure and cross-border public goods

    (i) Promote access to wider

    financing for development, including private sources and climate finance

    Customized to country conditions, based on

    ADB’s comparative advantage.

    Strategy 2030: ADB has already started work on a new long term strategy to respond better to the greater ambitions, evolving development landscape, and a changing Asia and Pacific.

  • Advance Actions

    • Enhanced financial capacity – To $20 billion, which is 50% higher than the

    current level (with the ADF and OCR combination effective Jan 2017)

    – Support to poor countries to increase by up to 70%

    – Climate financing to double from $3 to $6 billion annual by 2020

    • Renewed focus on poorest countries - ADF grant replenishment ongoing

  • Collaborations and Capacities • Maximize the leverage potential of ADB

    resources by strengthened co-financing, PPPs, lower risk: each ADB dollar results in more than a dollar of investment

    • Improve absorptive capacity of countries by strengthening PSM/governance, fiscal space, and TA for project development and PPPs

    • Strengthen knowledge partnerships and



    • The challenge

    • ADB gets prepared

    • Future directions – for a regional roadmap

  • 1. Widen domestic fiscal space with country-specific actions o MDBs and partners can help - subsidy prioritization, procurement,

    apart from raising revenues o Cooperate across borders on stemming leaks o Operationalise options like NRM, SWF, Haj funds, other

    2. Use public sources to draw-in more of Asia’s

    savings and funds towards SD o Lower risks, extend tenor, match time-horizons better o Engage more systematically with pvt sector (e.g., CEO-led

    initiative like the WBCSD)

    Expand Public Sources and Leverage Better

  • – Focus on widening subnational fiscal space through increasing own-source revenues (tax and nontax), predictable devolution

    – Nurture options for municipal finance through muni bonds, national development banks, and other subnational and multi-country options

    Harness Sub-national Opportunities in FfD

    3. Asia’s rapid urbanization needs city-level SD investments, counter serious infrastructure deficits

    Dhaka, Karachi, Manila, Mumbai, Shanghai, Jakarta…

    The region has half the world’s megacities…facing serious economic and ecological stress

  • − Asian Development Fund is considering establishing additional grant fund for cross-border public goods and disaster risk reduction

    4. Such investments tend to be underfunded from domestic resources due to high regional/external spill- over effects and have global benefits

    Incentivize financing of cross-border public goods

    through international concessional finance

  • − Collaborate on knowledge gaps for definitional clarity and track additionality of climate finance over ODA

    − Address capacity gaps in project development to promote climate resilient public and private investments

    − Incentivise clean energy investments and energy efficiency

    − Tailor climate finance to the type of exposure, e.g. the ocean- based economies of the Pacific to sea-level rise, or the mountainous countries of South Asia to potential Himalayan glacial melt.

    5. Address the bottlenecks of definitions, additionality, access, capacity, customization

    Incorporate Climate Finance in a FfD Framework

  • 6. Assess investments, both public and private, based on contribution to SD

    o Develop agreement on updated indicators for results

    o Development effectiveness can include metrics on private finance, e.g., pvt funds mobilized per dollar of official funds

    o Dialogue with businesses and financial markets to forge agreements w.r.t contribution of private sector – extent to which pvt funds are SDG-promoting

    Count and Account Each Dollar Better

  • Every dollar has an impact, + or –

    Every dollar needs to count towards SD

  • Thank you all!

    “The only development worth having is sustainable development”

    Let us contribute to making money work…