This Forum, opened in Singapore by UNDP and Global Initiatives, aims to address a sea change in the nature of development funding by creating a new partnership for sustainable development.
Domestic public and private finance accounts for 89 percent of all financial flows in Asia-Pacific, according to a UNDP report launched last month. While foreign funding (Official Development Assistance) is still essential for the development system, it now accounts for 0.7 percent of total financial flows in Asia-Pacific (down from 13.5 % in 1990).
This trend in development funding is partly driven by the increase in the number of middle-income countries from 16 to 28 over the past decade. This requires a fresh approach to financing for development that mobilizes contributions from a wider range of sources, including the private sector. At the same time, there has never been a greater need for innovative ideas, new partnerships and funding as we gear up to achieve the SDGs.
“This new development era presents unprecedented challenges and calls for unprecedented solutions to ensure stability and sustainability,” said Haoliang Xu, UN Assistant Secretary-General and UNDP Director for Asia-Pacific. “Climate change, aging populations and explosions of popular discontent with the status quo are combining to present an existential threat to both people and planet. Everyone must join together to face this challenge.”
“Enlightened companies are facing headwinds with sustainable growth due to the nationalistic shift in global politics and the still subdued level of commodity prices,” said Mark Cliffe, Chief Economist of ING Group, who joined the UNDP press briefing. “Technology and new consumer propositions, such as sharing economy models, offer exciting new ways to deliver on the SGDs.”
September was the warmest month in modern temperature monitoring and 2016 is likely to be the hottest year on record. This global warming and the other effects of climate change are leading to an increase in natural disasters, for which Asia is already the most vulnerable region in the world with 1,600 disasters in the last decade and the loss of half a million lives.
Four-fifths of the population in Asia live in countries where inequality has increased over the last two decades, and the unequal distribution of resources – including access to water, farmland and economic opportunity – is a major driver of conflict in areas as diverse as Afghanistan, Myanmar, Thailand and the Philippines.
At the same time, accelerated ageing in many countries presents governments with an ever heavier burden on the public purse to provide pensions, healthcare and other basic services.
“All sectors of society – private and public, international and domestic – must collaborate to address challenges that affect the wellbeing of us all,” added Haoliang Xu. “Our role is to combine decades of experience with ideas and resources from new partners, including in developing countries where businesses account for 60 percent of GDP and 90 percent of jobs.”
For example, Bangladesh aims for private financing to fund 78 percent of its current Five-Year Plan.
“Domestic sources of finance have emerged as a driving force for sustainable development in Asia-Pacific,” said Haoliang Xu. “The new partnerships and funding allow us to provide tailored services in the areas such as development planning and budgeting, building the capacity of national institutions, piloting and scaling up innovative projects, and sharing knowledge among countries.”
As emphasized in UN Secretary-General Ban Ki-moon’s statement to the Responsible Business Forum, “Looking across the 17 interlinked SDGs, it is evident that business must play a central role in the transition to a sustainable future. Business is the change agent that will spur innovation, unleash low-carbon investments and power sustainable growth across the planet.”
New technologies promise to help catalyze the business contribution to the delivery on the SDGs. “An exciting array of new technologies is making the pursuit of the SDGs a commercial proposition across a range of sectors”, said Mark Cliffe, Chief Economist of ING Group. “A great example is the rapid advances in fintech, combining mobile and internet technology, cloud computing and blockchain technology, which will facilitate explosive growth in financial inclusion. Micro payments and micro credits will fuel growth in micro-enterprises and jobs. In turn this will help the delivery of many of the other SDGs.”
Governments also have an important role in facilitating and incentivizing business action. “A number of economies, not least in Asia, have made encouraging progress in liberalizing their economies and stimulating investment. Infrastructure development, both physical and digital, is vital, but governments can also help through smarter regulation and shifting the burden of taxes away from labor and towards resources” said Mark Cliffe.