Financing the Sustainable Development Goals will require a shift from simply providing aid to leveraging a diverse range of funding sources, according to ADB Vice-President Stephen Groff. Government leaders will gather with the private sector, civil society and others at the Third International Conference on Financing for Development in Addis Ababa, Ethiopia to discuss the best strategies for moving forward.
Title: How Will We Pay for the World's New Development Goals?
Description: Financing the Sustainable Development Goals will require a shift from simply providing aid to leveraging a diverse range of funding sources, according to ADB Vice-President Stephen Groff. Government leaders will gather with the private sector, civil society and others at the Third International Conference on Financing for Development in Addis Ababa, Ethiopia to discuss the best strategies for moving forward.
Vice-President (Operations 2)
Asian Development Bank
Q: Why is the Third International Conference on Financing for Development in Addis Ababa so significant in the global fight against poverty?
A: There’s a number of reasons why this is a significant event and a significant conference. First, the UN is making the transition and the world is making the transition from the Millennium Development Goals to the Sustainable Development Goals. The Sustainable Development Goals would be approved by the UN in New York in September and this is an opportunity for governments, for the private sectors, for civil society to meet, to discuss, and to agree on how we are going to finance those goals and not just finance the critically important movement and progress on addressing poverty and deprivation but also how do we make that movement and that trajectory sustainable in the long run.
Q: What will be ADB’s contribution to the Addis conference?
A: ADB’s role is really three-fold. First, we’re making a number of contributions on knowledge products, working with partners across the MDB world but also working with UN partners on knowledge products; of course contributing towards a variety of different seminars and a variety of different regional summits have led up to Addis.
But most importantly, there’s a number of different areas at ADB focused here internally that are going to make significant contributions to finance across Asia and the Pacific. First, of course is a change that we’ve recently made that’s been approved by our Board of Governors to combine our concessional window with our ordinary capital resources that’s going to resolve in the coming years for us to build increase lending by about 50% from 14 billion dollars a year now, so that’s quite significant. But there’s a couple of areas that we’re working on that are going to help crowd in private investment into infrastructure financing across the region. The first is the Asia and the Pacific project prepatory facility, the second is our Office of Public-Private Partnership. Those two things together are going to help our institution leverage private investment into infrastructure in Asia and the Pacific. And finally, there’s a number of different internal reforms that are underway coming out of the midterm review of our long term strategic framework that are going to make this institution better, stronger, and faster and allow us to support the development objectives of Asia and the Pacific much more efficiently and effectively.
Q: What would need to be decided at Addis for you to come away on 16 July branding the conference a success?
A: I think success is an agreement on how we can shift the orientation away from one that has been sort of aid-centric and official development system centric to one that’s more development finance centric more broadly. If you look at Asia alone aid or official development system in Asia and the Pacific is about 26 billion dollars a year if you look at other flows of finance across the region that is a tiny amount, domestic revenue, tax or non-tax revenues is about 8 trillion dollars a year, private savings across Asia and the Pacific about 6 trillion dollars, sovereign wealth funds, pension funds in the region 3 and half triillion dollars a year, and of course FDI, foreign direct investment is a half trillion dollar a year, remittances is another 250 billion dollars a year. These are huge sums, so what we need to come out of Addis with is an agreement on how do you leverage, how do you use your official development assitance to leverage great space to more effectively investing those other flows in sustainable development in the long run.