Financing a Post-2015 Development Framework
Download as PPTX, PDF0 likes19 views
The document discusses the need for a financing framework to support the post-2015 development agenda, emphasizing that financing alone cannot achieve development goals without effective policies and commitment to combat poverty. It outlines a two-pronged approach that leverages existing resources and mobilizes additional funding, highlighting the role of emerging donors and innovative financial mechanisms. Key topics include the importance of strengthening domestic resource mobilization, enhancing institutional quality, and expanding financial sources to promote sustainable development.
Financing a Post-2015 Development Framework
- 1. Financing a Post-2015 Development Framework SIXTH MEETING OF THE CONTACT GROUP ON THE POST-2015 AGENDA New York, 11 March 2013 Mahmoud Mohieldin, World Bank President’s Special Envoy
- 2. Financing and the MDGs • The original MDGs were articulated independently of a financing framework (Monterrey 2002) • In a context of fiscal consolidation, discussion of post-2015 goals must be integrated with c0nsideration of supporting financing • No quantity of financing, whether grant, concessional, or non-concessional, can achieve the development goals without supporting policies and a credible commitment to combating poverty. 2
- 3. A two-pronged approach to supporting a post-2015 development framework Increase impact of available resources Leverage additional resources Good policies and credible institutions enhance the impact of available resources and leverage additional resources from both domestic and foreign sources Good policies and credible institutions to: 3
- 4. Not a costing exercise Why would it be so difficult to “cost” the post-2015 development goals? 4 What cost? Efficiency gains Interdependence & double counting Multiple determinants
- 5. Issues to consider • A framework for financing the post-2015 agenda… ▫ Better policies and institutions to enhance the impact of available resources ▫ Global public goods to support the achievement of development goals ▫ Strengthening domestic resource mobilization ▫ The evolving role for ODA ▫ Leveraging private finance ▫ Emerging and innovative sources of finance 5
- 6. 6
- 7. Source: MDG Gap Taskforce Report, 2012 0.00 0.20 0.40 0.60 0.80 1.00 1.20 United States Germany United Kingdom France Japan Netherlands Sweden Canada Australia Norway DAC Members' Official Development Assistance as a percentage of GNI, 2000-2011 2000-2001 2007 2009 2011 UN Target: 0.7% of GNI 7
- 8. Growing role of emerging donors, led by China 0 500 1000 1500 2000 2500 3000 3500 4000 4500 2003 2004 2005 2006 2007 2008 2009 Estimated aid from BRICS, 2003-2009 (USD million) China India Russia Brazil South Africa Source: World Bank CFP Working Paper No. 8, Finance for Development 8
- 9. Net private flows to LICs 2.5 6.2 7.7 14.7 15.3 13.7 17.9 -5 0 5 10 15 20 2000 2005 2006 2007 2008 2009 2010 Foreign direct investment Portfolio investment Long-term debt Source: Finance for Development - Trends and Opportunities in a Changing Landscape, CFP, 2011 9
- 10. Net private flows to MICs 171.3 492.9 646.6 940.2 788.2 565.9 772.1 -200 0 200 400 600 800 1000 2000 2005 2006 2007 2008 2009 2010 Foreign direct investment Portfolio investment Long-term debt Source: Finance for Development - Trends and Opportunities in a Changing Landscape, CFP, 2011 10
- 11. 39 34 32 31 27 34 32 31 17 43 44 42 54 46 29 44 45 63 18 22 26 15 27 38 23 24 20 3.6 0.6 0.8 1.6 1 0.6 0.4 0.3 3.8 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% United States United Kingdom France Japan Germany India Brazil Mexico China Long-term investment breakdown by sector Households Corporations Govermnment Developed markets Emerging markets Composition of total long-term investment, most recent data (2010 or 2011) Source: Long-Term Finance and Economic Growth, G30 Working Group, 2013 11
- 12. 5-10% 5-10% 0-4% 70-80% 60-70% 25-30% 20-25% 5-10% 30-33% 15-20% 5-10% 0-5% 60-65% 75-85% 25-30% 25-30% 20-30% 30-40% 45-50% 10-15% 70-75% 30-33% 1.6 1.8 3.5 1.4 2.1 0.8 11.2 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Residential real estate Commercial real estate Equipment and software Infrastructure Education Research and development 2011 LT investment for sample countries Financing by type Internal financing from households and corporations Government Equity Loans Bonds Estimates for a typical global project based on data from sample countries including Brazil, China, France, Germany, India, Japan, Mexico, the United Kingdom, and the United States, representing over 60% of world GDP in 2010 Financing by type Source: Long-Term Finance and Economic Growth, G30 Working Group, 2013 12
- 13. 13
- 14. Good policies and institutions are the basis for growth Real income per capita is closely correlated with institutional quality Source: World Economic Outlook, IMF, April 2003 14
- 15. Fossil fuel subsidies vs. targeted support to the poor Source: World Energy Outlook, IEA, 2011 Subsidies are an extremely inefficient means of assisting the poor: only 8% of the $409 billion spent on fossil-fuel subsidies in 2010 went to the poorest 20% of the population. 15
- 16. Progress in Implementing the Paris Declaration Making ODA work harder Source: MDG Gap Taskforce Report, 2012 16
- 17. Domestic resource mobilization is critical 10 11 12 13 14 15 16 17 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Tax revenue as a percentage of GDP, by income level High income Low income Middle incomeSource: World Bank WDI 17
- 18. 0 10 20 30 40 50 60 70 80 90 100 Account at a formal financial institution Account at a formal financial institution, female Account at a formal financial institution, income, bottom 40% Saved at a financial institution in the past year Loan from a financial institution in the past year Debit card Credit card Financial Inclusion by Country Income Group, 2012 Low income Lower middle income Upper middle income High income Improving access to financing key to shared prosperity Source: World Bank WDI 18
- 19. 4% 29% 25% 13% 22% 41% 6% 14% 23% 8% 21% 24% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 1 to 5 years 5 to 10 years 10+ years Percent of international syndications to the private sector in developing countries where an IFI participated, by income level and maturity, 2007- 2010 Lower Lower middle Upper middle BRICT Leveraging private resources: the role of IFIs Source: International Finance Institutions and Development through the Private Sector, IFC, 2011 19
- 20. Expanding sources of finance • Local Currency Bond Markets • Institutional investors • Mobilizing diasporas • Pooled financing arrangements, such as: ▫ Advance Market Commitments ▫ International Finance Facility for Immunization (IFFIm) • Innovative taxes, such as: ▫ Carbon taxes ▫ Financial transaction taxes 20
Editor's Notes
- #13: Internal financing here defined as financing from household income/wealth, corporations’ retained earning/cash holdings Loans for residential and commercial real estate as originate; depending on the country, a large portion of these loans could subsequently be securitized Typical commercial real estate investment (including in existing structures) used as a proxy for investment in new commercial structures Total debt and equity financing increase as a share of capital expenditure nonfinancial corporations across the sample of countries