G20 Foreign Affairs Ministers’ Meeting: Foreign and Development Joint Ministerial Session - Ahmed Saeed
Speech | 29 June 2021
Remarks by Ahmed M. Saeed, ADB Vice-President, Operations 2, at the G20 Development Ministerial Session, 29 June 2021, Matera, Italy
Marina, thank you very much.
A number of topics have already been covered so I will restrict myself to three key points from the perspective of the Asian Development Bank.
If there is one thing we've learned from the COVID-19 pandemic, it is that the quality of government matters greatly. Governments must be adequately funded if they are to be capable of providing services and responding to unexpected events. Domestic resource mobilization must therefore become an urgent priority to create the fiscal space needed to fund sustainable development and other critical priorities.
In ADB's region of responsibility, increased expenses and decreasing revenues due to the COVID-19 pandemic have made a difficult fiscal situation worse. Even before the crisis, developing Asia's tax yields on average were about 7% lower than those of OECD countries. In Southeast Asia, one of the world's most dynamic regions, tax-to-GDP ratios are less than 15%, generally considered the minimum level needed to support sustainable development.
ADB recognizes that governments must expand the tax base to fulfill their responsibilities and make progress toward the SDGs. That is why we are elevating domestic resource mobilization and international tax cooperation to the forefront of the development agenda. We have established a new regional tax hub and are in the process of mainstreaming DRM into our development operations.
But what about those things that governments cannot accomplish on its own? This brings me to my second point: the public sector must change how it works if it is to address the gaps that hinder our ability to achieve the SDGs. That is because more money will be needed than governments can provide, and also because money is not enough: as we all know, the SDGs can for example only be achieved through new ways of doing things and scalable innovation.1
The good news is that the world has changed greatly since the original Millennium Declaration 21 years ago, in ways that open new avenues of international cooperation. Today developing countries are much more integrated into the global trading and financial systems. A new class of global philanthropy is bringing capital and innovative solutions to the fore. And the private sector has begun to awaken to the full extent of its societal responsibilities, resulting in the injection of fresh thinking on global problems.
There is great potential in these developments for advancing the SDGs. But far less will be accomplished than what is possible - and what must be achieved - if official sector actors, both governments and international organizations alike, do not change how we do business. Developing countries and development agencies must pivot from seeing themselves exclusively as solution providers to becoming more outward oriented and more proactive as facilitators of others. We need to develop a culture of innovative, proactive, dynamic engagement and collaboration; to understand the importance of learning by doing through trial and error; and to shift to an open architecture mindset on public policy issues. This is a long journey, but it has begun at ADB.
This brings me to my third and most important point. We are at the precipice of a historic civilizational challenge. But because climate change is a matter of collective success or collective failure, it also represents an unprecedented opportunity for us to work together to mobilize capital and ideas to support parts of the world that have historically received less than their share. The G20 has a role to play in helping developing countries understand the unique opportunity they will soon have to access resources and improve the lives of their citizens. In the coming years, we will learn that decarbonization is development.