• News
  • Columns
  • Interviews
  • BW Communities
  • Events
  • BW TV
  • Subscribe to Print

Ajay Chhibber

The author is Chief Economic Advisor, FICCI. He is also the Visiting Scholar at the Institute of International Economic Policy, George Washington University

More From The Author >>
BW Businessworld

SDG's: A Sumptuous Banquet On Development

The developed world had earlier committed to provide climate finance - over and above the traditional ODA under the Copenhagen Consensus. But such a commitment appears also to be still unclear

Photo Credit : Bivash Banerjee


A distinguished gathering of world leaders at the UN in September 2015 - including PM Narendra Modi - signed onto the Sustainable Development Goals (SDG's). Going to the SDG's with 17 Goals and 169 targets to be achieved by 2030 from the Millennium Development Goals (MDG's) with 8 goals and 21 targets is like going from a poor man's dinner to a rich wedding banquet, with so much on offer. If you are not careful and try to eat everything you may end up with indigestion. 

The MDG's had a slow start and were a top down development agenda - but surprisingly ended quite successfully in bringing a renewed focus on development, with many countries achieving many of the MDGs. But because they were so few and focused they left out important bits of the development agenda - especially as they did not deal with growth, governance, conflict and paid only lip service to sustainability - an incomplete meal. In trying to bring all that was missing back in, the world seems to have gone overboard with an impossible task of managing an SDG agenda with 17 goals and 169 targets - a sumptuous feast.

Its all there now - conflict, governance, inequality, ecology and sustainability. But with no clear focus , there is the risk that nothing gets done at all. Even monitoring the 21 MDG targets was not easy and in many low income countries the data to track them was unavailable. Moving to 169 targets sounds like a statistician's nightmare. If progress is to be made it is better to focus on 60 Top priority targets , with another 40 targets as desirable. The remaining 69 targets could be a sort of wish list. Otherwise, there will be no focus and not enough financing to achieve any of them.

Another option is to let each country prioritize what it wants to focus on : using surveys of citizens to determine top priorities. The UNDP's My World survey tool kit allows one to do that. For the world as a whole My World survey results show that the top seven priorities are: health, education, jobs, crime and violence, clean government, water and sanitation and affordable food.

With such an ambitious agenda, how to finance the SDG's becomes a major issue. Even financing the more limited MDGs was not easy - as aid budgets declined after the global recession in 2008. Official Development Assistance (ODA) is only around $135 billion in 2015 - about 0.25 percent of GNI - as against a target of 0.7 % of GNI. Much of the MDG agenda after the Global crisis was achieved by raising domestic financing and by non- official capital flows. The Addis Ababa financing conference held last year to lay out a road map for financing the SDGs made this official by counting as Finance for Development (FfD) , all private flows, remittances and all of domestic investment - public and private. This widening of the definition of FfD risks diluting further the commitment of the developed world to support global development.

One way to make the scarce funds go further is to look for synergies across the goals. For example improved rural infrastructure- roads, electricity- helps farmers become more productive , reduces rural poverty, but also helps achieve important health and education goals by reducing infant and maternal mortality and providing better access to schools. A better business environment brings more investment - including FDI- creates jobs and helps young secondary school leavers greater motivation to complete their schooling.

But the SDG's also contain trade offs such as between faster growth and rising inequality and more carbon emissions. On the latter the Paris Climate Conference also held last December reached a global agreement - but it's details remain somewhat unclear. A global deal on the climate must entail three things a) the developed world create more carbon space for the developing world to grow b) the middle income countries must grow in a much cleaner manner with large reductions in carbon emissions per unit of GDP and c) the LDC's - which make up only 2 percent of total carbon emissions must be allowed to focus on growth and poverty eradication, but with help to exploit renewable energy sources where feasible.

The developed world had earlier committed to provide climate finance - over and above the traditional ODA under the Copenhagen Consensus. But such a commitment appears also to be still unclear. New financing mechanisms have been established such as the "Green Climate Fund" but are still seeing meager flows into them. A Technology Transfer mechanism is also being created. traditional ODA will still be needed to help countries - especially the least developed countries (LDCs) build the capacity to be able to raise the trillions of dollars available out there, as otherwise only a handful of countries will be able to access new innovative financing.

Voluntary country contributions will not solve the problem and leave the global problems under financed . Some more globalized financing mechanisms will be needed - such as a polluter tax on airline and shipping traffic ( akin to a Swatch Bharat cess), carbon taxation and even the issuance of SDR's to finance climate proof development. No global consensus exists on these mechanism as yet.

The MDG's were largely an intergovernmental agenda. What is interesting is that with the SDG's a much bigger role is envisaged for the private sector. But with this wider role for the private sector will also come greater scrutiny. Private investments will now be judged not only for their profitability and job creation but also shared corporate value in providing sustainable livelihoods in the communities in which they work. Even CSR will not be enough as the focus will be on sustainable value chains.

India was a somewhat reluctant participant in the MDG agenda - the Indian Five year plans were not even tracked onto MDG's until as late as 2010. But India is a very enthusiastic supporter of the SDGs. India will now need to prioritize and focus on this wide agenda and decide how best to allocate its resources to meet its objectives. It must also make intelligent choices and exploit the positive synergies across the SDG's while choosing how best to handle the trade offs. It can be a major player on green technologies if the government partners with the private sector. There is no time to waste as India will suffer the most from climate change.