FROM COMMITMENT TO DELIVERY Catalyzing Resources for Development UNITAR Learning Conference 2 March, 2017
GLOBAL FRAMEWORKS FOR DEVELOPMENT: FROM MDGS TO SDGS MDGs (2000-2015) SDGs (2016-2030) Goals 8 17 Targets 21 169 Indicators 60 ~231 Priority Areas Human Development Holistic: Economic, Social, Environmental Scope Developing Countries Universal The global development agendas serve as a compass and guide for countries to determine their national development path 1
GLOBAL CONTEXT Unprecedented challenges Heightened global ambitions Commitments to scale up WBG Forward Look Slowdown in global growth Climate change Crises and pandemics Infrastructure finance gap End of super cycle on commodities Sustainable Development Goals COP21 Agreement Sendai Framework 2 Addis Ababa Action Agenda/Financing for Development Billions to Trillions MIGA/IFC/IBRD-IDA integrated approaches in country and sector strategies, especially infrastructure A better and stronger Bank able to respond to challenges at the country and regional levels, by: Providing crisis response mechanisms Delivering global public goods Mobilizing additional resources
12 GLOBAL ECONOMY: MUDDLING THROUGH GDP Growth (Percent) World Advanced Economies Emerging and Developing Economies 8 4 0-4 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Source: World Bank, June 2016. 3
FINANCING, CONFLICTS, CLIMATE CHANGE, DATA ARE THE MOST FREQUENTLY IDENTIFIED CHALLENGES capa -city of data CC Environment Conflicts of capacity of financing Conflicts Climate change Climate change Trade restrictions Clim. change data Conflicts of financing Pop. displacement of capacity Enviro nment data Conflicts violence fin. Violence Violence/ extremism of capacity Climate change Climate change capa -city data of fin 4
CRITICAL COMPONENTS OF FINANCING FOR DEVELOPMENT 1. National public resources: Improving domestic resource mobilization (DRM) 2. Global public resources: Better and smarter aid 3. National and global private resources: Unlocking private investment for development, Attracting FDI, Remittances, Philanthropic finance The World Economic Forum estimated that annual demand for infrastructure finance alone is $3.7 trillion. With annual investment currently around $2.7 trillion, this leaves a gap of $1 trillion per year. According to the Global Commission on the Economy and Climate, incorporating climate considerations raises the financing gap even further, to $2-3 trillion per year.
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1. DOMESTIC RESOURCES ARE THE LARGEST RESOURCE AVAILABLE FOR DEVELOPMENT A country s ability to mobilize domestic resources (DRM) and spend them effectively at the national, subnational and municipal levels lies at the crux of financing for development. Strengthening the capacity of local governments, including to raise their own revenues, to manage expenditures and service delivery, and to borrow and manage debt prudently is critical; Developing inter-government fiscal transfer arrangements that consider the needs of sub-national governments and equalize fiscal capacity and expenditure is also critical. 0.25 0.2 0.15 0.1 0.05 0 Median tax revenue as a percent of GDP by Income grouping, 1990-2014 (Tax/ GDP Ratio) High income Lower middle income Upper middle income Low income 6
2. OFFICIAL DEVELOPMENT ASSISTANCE As development challenges at the global and national levels increase, so too should the resource envelope available to meet these needs.oda flows are simply not enough. 1200000 Developing countries' total resource receipts 1000000 800000 600000 400000 200000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 ODA Non-ODA Personal remittances ODA: Official Development Assistance. ODA in the chart includes bilateral ODA and multilateral concessional flows. Non-ODA flows include: other official developmental flows, officially-supported export credits, FDI, other private flows at market terms and private grants. Adjusted gross disbursements, three-year moving average, USD million, 2012 constant prices. Sources. Remittances, World Bank. Other resource flows, DAC statistics. NB: Data on flows to MADCTs 7 are only available up to 2010.
3. MOBILIZING PRIVATE RESOURCES FOR DEVELOPMENT As development challenges at the global and national levels increase, so too should the resource envelope available to meet these needs. Aggregate assets held by ten largest MDBs: $1.3 trillion Making the Billions to Trillions pledge a reality requires expanding the pool of development capital beyond the multilateral development banks (MDBs) and official agencies. Private funds: o $2 trillion of assets held by the world s ten largest pension funds o $4.5 trillion of assets held by the world s ten largest insurance companies o $5 trillion in assets held by the world s ten largest sovereign wealth funds o $100 trillion global bond market The global community looks to the World Bank Group to lead on the Billions to Trillions initiative - a call to greatly increase the financial capacity that can be deployed to meet the Sustainable Development Goals. 8
Data as of June 30 2014 THE FINANCING FOR DEVELOPMENT AGENDA The need to mobilize new resources is further emphasized by the Financing for Development (FFD) agenda, as part of the joint UN-MDB Billions to Trillions (B2T) effort. 1,2 The IMF and MDBs (AfDB, AsDB, EBRD, EIB, IaDB and WBG) presented a joint vision, Billions to Trillions (B2T), at the Third international Conference on Financing for Development held in Addis Ababa on July 13-16, 2015. Emphasized the need to use the billions of dollars generated in ODA to unleash trillions in private, public, international and domestic finance to fund the 2030 Development Agenda. The MDBs reaffirmed their role as the main engines of development finance we not only provide direct financial assistance, but also mobilize, catalyze, and crowd-in public and private sources of development finance. 9
MDB LEVERAGING AND MOBILIZING MODEL Data as of June 30 2014 1,2 10
WBG INSTRUMENTS The WBG has a spectrum of instruments spanning the public-private sectors to help mobilize capital. Public Projects PPP/Private Sector Projects Private Projects* IBRD/IDA Loans, Credits, Grants Loan Guarantees Payment Guarantees for Cross-Border Projects Advisory Services: Investment Environment Loan Guarantees Payment Guarantees Loans/Credits for Govt. Contributions to a PPP project IFC Loan to sub-sovereign, public, creditworthy entities Advisory Services: Investment Environment Project Structuring IFC A and B Loans Equity Credit Guarantee for Private Sponsors MCPP IFC A Loan Equity Credit Guarantee for Private Sponsors MIGA Non Honoring of Sovereign Financial Obligation (NHSFO) Non Honoring of Sub- Sovereign Financial Obligations Non Honoring of SOE Obligations Political Risk Insurance Transfer restriction and inconvertibility Expropriation Breach of Contract War and Civil Disturbance Political Risk Insurance (PRI) * No government contribution or intervention 11
THANK YOU