SDGs implementation: ‘WB says developing states need $1trn financing annually’

ISLAMABAD: Planning Commission Deputy Chairman Dr Mohammad Jehanzeb Khan has said that the World Bank in its 2018 Business Compass Report estimated that the financing requirement for developing countries to implement SDGs is at least $1 trillion annually.

Deputy Chairman Planning Commission Dr Mohammad Jehanzeb Khan delivered his statement in virtual mode on the theme topic, “Accelerating Infrastructure for a Sustainable and Resilient Recovery and Restoring trade” organised by the United Nations Economic and Social Council (ECOSOC) Forum, in Islamabad on Wednesday.

The forum discussed in detail the progress of promoting and sharing concrete national, regional, and global experiences and initiatives on financing the SDGs in a rapidly evolving context. The forum will build on the work of various processes, including the high-level initiative on financing for development in the era of COVID-19 and beyond. The deputy chairman Planning Commission said it is estimated that the building of sustainable infrastructure will require investments in the range of $100-120 trillion to ensure zero carbon emissions by 2050.

He said that the shortfall in infrastructure investments is estimated at $22.6 trillion, which rises to $26.2 trillion, when the additional cost of implementing SDGs and the “greening” of infrastructure is taken into account, and according to the AIIB, the total value of private transactions in Asian infrastructure declined by about 10 percent from $218 billion in 2018 to $196 billion in 2019.

While discussing post-COVID-19 prospects for sustainable infrastructure investment, the deputy chairman said that the global economic environment, sustainable infrastructure investment in developing countries by the private sector already faced major challenges associated with the complexity of projects, the uncertainty of returns, risk-sharing arrangements, and a wide variety of macroeconomic uncertainties.

He further said that the COVID-19 pandemic deeply affected the real economy; in particular, the consumer demand, financial sector activities, supply chain management, technology resilience, workforce employment, lives, and livelihood.

He said that the DSSI debt servicing relief provided much-needed fiscal space to developing countries, including Pakistan, to support their population cope with the deeply damaging health and livelihood consequences of the COVID-19 pandemic.

As a result, authorities in developing countries were able to expand and strengthen the public health system as well as assist their people by launching specific programs in support of protecting lives and livelihood.

Despite repeated efforts and calls by the G20 leaders, the private sector creditors could not participate in the DSSI.

The much-needed relief on comparable terms from them could, therefore, not be provided to the developing countries.

The same was the case with the Multilateral Development Banks (MDBs).

The Government of Pakistan is fully committed to supporting all international initiatives to help stem the illicit financial flows and in the recovery of stolen assets. If the international efforts under SDG target 16.4 do indeed yield results, then such recoveries can be used to address the funding gap in support of sustainable infrastructure investments in the developing countries.

He highlighted that the projects struggle at the early stages due to upstream challenges, including inadequate preparation, governance issues, and access to finance Country risk and project development; therefore, we urged this forum to look at the possibilities of devising new innovative instruments for financing Infrastructure needs by leveraging more private sector and Multilateral Development Banks in the form of blending financing in which private sector risk is mitigating and instruments should be designed as to help them invest in developing economies.

He stated that the UN-led efforts can coordinate the multitude of policies, facilities, and platforms to help developing countries access globe finance and investment for infrastructure projects.

Particular attention required for quality project development, risk management, and support in execution and operations.

While thanking the ECOSOC forum Deputy Chairman Planning Commission Dr Khan complemented the president and the team of the Economic and Social Council for hosting this timely discussion on an important topic during the extraordinary COVID-19 pandemic.

Copyright Business Recorder, 2021