We need to move forward—or backward—in what we expect development finance institutions (DFIs) to do in terms of financing private sector development in the world’s poorest countries.
CGD Policy Blogs
In 2002, negotiators from the world over met in Mexico to agree on the Monterrey Consensus of the International Conference on Financing for Development. As Simon Maxwell has pointed out, it is an international document on development cooperation that leads with the most vital financing issues and discusses what is needed to make them work better. And that should stand as a warning to those celebrating the Addis Ababa Action Agenda agreed last week.
Meeting the SDG targets for infrastructure in developing countries is going to cost around USD 1 trillion a year. With official development assistance at around $150 billion, other official flows at $27 billion, and investment in infrastructure with private involvement at about $181 billion, it is clear that the majority of infrastructure finance will have to come from domestic resource mobilization in developing countries (which comes to about $9.2 trillion per year).
I’ve been sitting in lots of meetings and covering paper with lots of ink recently about the Sustainable Development Goals and Financing for Development. And when the topic of aid comes up I nod sagaciously along with others in the room when someone says “well, of course, there won’t be any more aid coming out of the Addis financing conference, it is all about redistributing the pot.” Sometimes I’m the one to write or say it, then have a brief chat about that redistribution before switching to other topics like private finance or trade.
Tax day looms large for many Americans – April 15 was the last date for paying your tax bill, and the day on which the top one percent of Americans, who get 21.0 percent of total income, pay 21.6 percent of total state and federal taxes. So much for a progressive tax system.
On the 12th November, I’ll be attending an Overseas Development Institute conference in London on financing the Sustainable Development Goals.