SDGs: financing gap is $94b

Bangladesh requires an additional investment of up to $93.9 billion annually to achieve the sustainable development goals (SDGs), said a World Bank economist yesterday.

Currently, the annual investment stands at $59.5 billion against the estimated requirement of $109.4 billion to $153.4 billion to attain the 17 SDGs by 2030, according to Zahid Hussain, lead economist of the WB's Dhaka office. The estimate for financing need is based on an approximation that $5 trillion to $7 trillion of additional investment will be needed per year to attain the SDGs in all countries.

The financing challenge will remain even after the seventh five-year plan, which would run from fiscal 2015-16 through fiscal 2019-20, said Hussain at a dialogue -- SDGs: Challenges for Bangladesh.

The International Chamber of Commerce (ICC)-Bangladesh organised the event at the capital's Sonargaon hotel.

“Assuming that the targets outlined in the plan are achieved, even that would not be enough to meet the financing gap. So the question is how do we cope with the financing challenge? The first thing to do is prioritisation.”

For prioritisation, some objectives like investing in education can serve multiple purposes. But inevitably, tough choices will need to be made.  “Do we build roads or schools, or do we subsidise renewable energy or fossil fuel? All these trade-offs will have to be addressed.”

He said the goals will need to be integrated into national planning and policies to deliver the integrated vision embedded in the SDGs.

He called for engaging all sectors of the society and making stakeholders accountable to attain the targets.

He also cited the challenges of data in monitoring the progress with the SDGs.

Set in 2015, the SDGs aim to end poverty, fight inequality and injustice as well as protect the Earth.

Some 169 targets and over 300 indicators have been laid out under the SDGs.

Hussain said Bangladesh has achieved four of the eight millennium development goals. “Bangladesh should proceed with the SDG agenda based on that confidence,” he added.

Economist Wahiduddin Mahmud said one of the reasons behind Bangladesh's success in attaining the MDGs was the adoption of low-cost solutions.

However, the solutions to attaining the SDGs will not be that economical.

Mahmud said 10 out of the 17 SDGs focus on sustainability, which is a challenge for Bangladesh.

Mustafizur Rahman, executive director of the Centre for Policy Dialogue, said Bangladesh performed well in MDGs because the national policies were aligned with them.

Bangladesh can meet part of its financing need for the SDGs by curbing the illegal outflow of funds through various channels including trade misinvoicing.

About $9 billion flew out of the country through illegal channels in 2013, he said, citing an estimate of the Global Financial Integrity. “We should look into that and plug in the loopholes to curb the outflow,” he added.

The role of the private sector is critical as many of the goals outlined in the SDGs are directly linked to it, said M Masrur Reaz, a program manager of the International Finance Corporation.

Mir Nasir Hossain, managing director of Mir Akhter Hussain Ltd, said industries are not getting gas connections properly, while other infrastructure deficits also remain.

Private investment has been stuck at a certain percentage of the gross domestic product for the last several years, he said.

“If we cannot have industrialisation, we cannot reduce poverty,” he said, while urging the government to address the issues of the industries to achieve the SDGs.

Corruption is one of the discouraging factors for investment, said AB Mirza Azizul Islam, former finance adviser to the caretaker government.

Citing the $20 billion of foreign aid in the pipeline, he said institutional and administrative capacity building is important to ensure faster implementation of projects.

Commerce Minister Tofail Ahmed said Bangladesh is moving towards positive economic development.

He said the economy will advance if there is political stability in the country.

Nasim Manzur, president of the Metropolitan Chamber of Commerce and Industry, said Bangladesh needs to set out its national priorities for development. He also stressed the need for skills development.

Mahbubur Rahman, president of the ICC Bangladesh, said a more realistic approach should be taken in devising the specific goals, taking into consideration the learning from the MDGs -- both the progress and the lacking.

Out of the 17 SDGs, only eight are better integrated into the existing national prioritisation process.

Bangladesh has successfully come out of the least developed country bracket and entered the lower middle income group.

However, in order to be categorised as a middle income country, Bangladesh has to maintain the status for the next six years, he said.

But without a solid industrial base, it will be difficult to sustain the present growth rate or even achieve higher growth, he said.

“If we want to do justice to the SDGs, we have to come out of the usual approach,” said Mustafa K Mujeri, executive director of the Institute of Inclusive Finance and Development.

Speakers at the dialogue also called for improved governance for achieving the SDGs by 2030.