LITTLE FUNDING

Time to rethink the delivery of the SDGs

In Summary
  • As eerily exemplified by the scramble for vaccines, nationalism is alive and well. International cooperation is at best a shiny, unattainable mirage
  • The enthusiasm for funding global development will remain tepid for the foreseeable future, jeopardising the SDGs

There is a new word; 'Coronaversary'. The word denotes the first anniversary of the Covid-19 pandemic. It has been a year like no other, at least in my lifetime. It is a very different world.

The economic devastation of the Covid-19 pandemic is evident everywhere you care to look. Sectors like hospitality, aviation, education, transportation have been hit the hardest in the past year. In the aviation and hospitality sector, for example, uncertainty persists. Airlines and hotels remain cash-starved and on the brink. Hundreds of millions of people are still out of work and tens and hundreds of millions more must live with painful pay cuts.

Governments across the world, especially in the developing world, are crushing under the weight of debt amidst catastrophic revenue contraction. According to the African Development Bank, the average debt-to-GDP ratio for Africa will rise to 10 to 15 percentage points in the short to medium term. Moreover, Africa’s GDP contracted by about 2.1 per cent in 2020. Kenya’s projected growth of 5.7 per cent was revised to just one per cent owing to the impact of Covid-19 lockdown measures.

On aggregate, the impact of Covid-19 will be felt through wellbeing and livelihood outcomes. According to Overseas Development Institute, the pandemic has wiped out years of progress in eradicating extreme poverty. The World Bank estimates that Covid-19 will push an additional 88 million to 115 million people into extreme poverty in 2020, with the total increasing to 150 million by 2021. It could take 10 years of sustained economic growth to bring poverty to pre-Covid-19 levels.

The intersection of the Covid-19 pandemic with other stressors such as climate change will put all 17 Sustainable Development Goals beyond reach without swift and decisive global action. According to the OECD, developing countries are faced with a staggering $1.7 trillion shortfall in financing needed to keep on track for the 2030 SDGs. The $1.7 trillion adds to an existing gap of $2.5 trillion in annual financing.

Undoubtedly, the pandemic has imperilled the SDGs. There is need for global introspection and perhaps a rethink of the financing architecture for global development. Saddled with external and domestic debt, and near collapse of major economic sectors, it is unlikely that developing countries will make new commitments or increase domestic funding to improve health, education, water and sanitation, gender equality, climate change or biodiversity.

We need a global rescue plan to get developing countries back on track on critical human development outcomes; health, education and income security. At the same time, the global community must have a tough and honest conversation about the viability and even relevance of the SDGs as currently constructed. The two critical assumptions that underpin the SDGs, rising economic growth and international cooperation, have been assailed by the pandemic.

As eerily exemplified by the scramble for vaccines, nationalism is alive and well. International cooperation is at best a shiny, unattainable mirage. The enthusiasm for funding global development will remain tepid for the foreseeable future, jeopardising the SDGs. 

Vice Provost at Aga Khan University. The views expressed are the writer’s