150 Days to Development Finance Success

As of today, February 13, only 150 days remain until the major U.N. Financing for Development (FfD) conference in Addis Ababa, Ethiopia. Starting on July 13, government leaders from around the world will convene to set ground rules for investing in the world’s sustainable development goals (SDG) to 2030, which heads of state and governments will confirm this September in New York. Since Addis will look, in part, to define new approaches to infrastructure financing, it will also frame terms for a new climate accord due by December in Paris. Both practically and politically, all roads pass through Addis in 2015.

The FfD timetable implies 21 weeks to forge agreements that shift global sustainable development from its business-as-usual trajectory. The agenda is multi-faceted. On the government side, it ranges from thematic issues like financing secondary education and ocean preservation to geography-specific issues like official development assistance for least developed countries and small-island developing states. It includes complex multilateral issues like how to ramp up non-concessional lending to emerging middle-income economies.

Crucially, the agenda extends beyond governments too. Private companies will provide a large share of the resources, technology, and employment that will underpin overarching success. Therefore one of the Addis meeting’s greatest tasks is to identify incentives for private investment in priority areas, alongside ground rules for public-private partnerships. Augmented corporate reporting standards, for example, are needed to ensure fair play.

These issues can only be tackled if the world’s finance, foreign, and development ministries work with line ministries and private sector counterparts to craft financial instruments and policies capable of tackling SDG problems at scale. The last major pre-Addis convening of finance ministers takes place at the World Bank/IMF Spring Meetings, starting on April 17. Since this is the key juncture for those ministers to sign off on proposals, it implies only 63 days actually remain to lock in the key ingredients for Addis.

When considering this year’s challenge, the early history of the Millennium Development Goals (MDGs) is instructive. The March 2002 Monterrey FfD conference is well-known to have been instrumental in launching the MDGs. Much less appreciated are the complementary breakthroughs that took shape around the same time and shifted the entire terrain for global development: the heavily indebted poor countries (HIPC) agreement in 1999, the WHO Commission on Macroeconomics and Health in 2000-2001, the launch of the Global Alliance for Vaccines and Immunizations (now GAVI Alliance) in 2000, and the launch of the Global Fund to Fight AIDS, TB, and Malaria in 2002.

Each of these initiatives played a crucial role in launching the MDGs too. HIPC laid the groundwork for scaled-up social sector investments in low-income countries. The Commission on Macroeconomics and Health established a Monterrey-equivalent consensus for the health sector alone. It defined the essential requirements for health systems that formed arguably the greatest gap in international development efforts during the 1990s. Meanwhile, GAVI and the Global Fund launched a new form of results-oriented multilateralism that bridged public, private, scientific, and non-profit sectors at all levels. On the ground, as developing countries started to register breakthrough results, especially in health, global debates gathered steam on how to achieve all the MDGs.

The implication is that, with such a short window remaining until the Spring Meetings, policymakers need to focus on more than setting new rules for sustainable development financing. They also need to confirm specific, high-impact policies and initiatives that can kick-start immediate action. Analytically, negotiators need to have in mind the sources and uses of investment most essential to SDG success, so that high-level political efforts can focus on solving the problems of greatest consequence. As starting suggestions, Homi Kharas and I have described 9 priority commitments for both public and private actors.

Policymakers also need to recognize that they face two distinct buckets of problems. One includes those that can be solved in time for Addis. The other includes problems that still need to be resolved, but simply require more time to work out over the coming 18-24 months. For the latter bucket, success requires that Addis does not simply punt the issues down the road through loose agreements of intent. Instead, Addis needs to set clear deadlines and points of accountability that can be tracked in the months to come.

The good news is that a growing number of the world’s policy, business, and civil society leaders are eager to make progress. Last month I had the privilege to attend the World Economic Forum’s annual meeting in Davos, Switzerland. One bellwether aspect of the conference was the exceptional range of CEOs from around the world who spoke with clarity and sincerity about the challenge and importance of launching bold SDGs in 2015. This came directly on the heels of the launch of Action/2015, an unprecedented civil society collaboration spanning dozens of countries around the world.

Successful outcomes in Addis—and later New York and Paris—will hinge on active engagement spanning business, government, and civil society alike. In Davos, the challenge was elegantly captured during the closing plenary session by Katherine Garrett-Cox, the CEO of Alliance Trust and long-time leader in the field of sustainable investment. Sharing a stage with the likes of the World Bank President Jim Yong Kim and Oxfam International Executive Director Winnie Byanyima, Garrett-Cox issued a poignant call to action by stressing that “2015 is going to be the ultimate test as to whether public private partnerships actually work.” While stressing the time sensitivity of this year’s policy debates, she also emphasized the role of personal leadership: “We all have a responsibility to say, do you actually want to be part of shaping history or do you want to be consigned to it?” 

The Addis Ababa FfD conference will mark a pivotal juncture on the world’s efforts to achieve sustainable development. The coming 150 days offer a rare window to shape the course for the better.