Aregashe Addis in the water utility store where she works in Debre Tabor, South Gondar, Amhara, Ethiopia. WaterAid and the UK’s Yorkshire Water utility have provided funding and training to improve the capacity and operations of the Debre Tabor Water Utility, ensuring the community’s poorest and most vulnerable people now have access to water. Credit: WaterAid/Behailu Shiferaw

By John Garrett and Kathryn Tobin
LONDON / NEW YORK, Nov 5 2018 (IPS)

There was a much-needed focus on financing the Sustainable Development Goals (SDGs) at the September 2018 opening of the United Nations General Assembly (UNGA).

Three years on from the watershed 2015 conferences in Addis Ababa, New York and Paris, the UN Secretary General Antonio Guterres has released a new Strategy for Financing the 2030 Agenda, covering the period of 2018-2021.

Whilst welcoming the UN Secretary-General’s new ideas and reaffirmation of core Addis Ababa Action Agenda (AAAA) priorities, the UN’s 193 member states need to show stronger resolve and political will to break from today’s business-as-usual financing trajectories.

Willing the end, but not the means

With one-fifth of the time available to deliver the 2030 Agenda already gone, a serious disconnect between the ambition of the SDGs and the means of their implementation is opening up. Intending to set the international community on a course to achieve the SDGs, Guterres’s strategy aims to align global financing and economic policies with the 2030 Agenda and enhance sustainable financing strategies and investments at regional and national level whileseizing the potential of financial innovations, technologies and digitalisation.

Discussions around the strategy’s launch revealed plenty of evidence recognising the urgency of transforming economic and financial systems to advance sustainable development. Research by the Overseas Development Institute (ODI), launched on the morning of the Secretary-General’s High-Level Meeting, points to alarming trends in several of the SDGs.

Four hundred million people are likely to be living in extreme poverty in 2030; there is slow progress in reducing inequalities in wealth, income or gender; world hunger is on the rise; and access to safe water and sanitation is actually in decline in some countries.

These human development challenges combine with unsustainable pressures on the environment, reflected in the increasing threats of climate change, rising sea levels, biodiversity loss and degradation of fresh water resources.

UNGA discussions also provided a clearer picture of the costs of achieving key SDGs. New estimates from the International Monetary Fund (IMF) of the costs for achieving the SDGs in the sectors of health, education, water and sanitation, energy and transport infrastructure found that US$520 billion a year is required in low-income developing countries (LIDCs).

A central role for raising revenue at home

The SG’s strategy emphasises how important domestic public finance is for sustainable development, and we agree that national ownership should be at the heart of financing solutions. The IMF estimates scope for developing countries to raise tax rates by on average 5% of Gross Domestic Product (GDP) from current levels.

WaterAid research on public finance and the extractive industries (a dominant sector in many LIDCs) finds that weak tax regimes or corruption are undermining domestic resource mobilisation and the provision of essential services to people.

In Madagascar, the Government received only 6% of the production value of its minerals in 2015, and in Zambia, forensic audits of copper producers released hundreds of millions of dollars to the exchequer in unpaid tax.

But it’s clear that countries’ efforts to raise revenue at home won’t on their own be enough to reach the ambition of the SDGs. To meet this financing gap, the UN has emphasised the role of private finance, including public-private partnerships and blended finance.

As the latest encapsulation of this trend, the Secretary-General’s strategy drew criticism from the Civil Society Financing for Development (FfD) Group for its over-reliance on mobilising private finance. While private finance is an important part of the financing solution, it is no panacea.

In New York, lenders and investors highlighted some of the obstacles to prioritising private finance in low-income contexts: insufficient data, information gaps and unviable risk premiums. Debt vulnerabilities preclude significant volumes of external non-concessional finance in many LIDCs’ contexts – particularly concerning since 40 percent of LIDCs are now in or approaching a state of debt distress.

Aligning investment and lending decisions with environmental, social and governance concerns, as South Africa and the European Union are seeking to do, is essential. The Secretary-General’s strategy sends a clear message that progress is too slow in aligning markets with sustainable development imperatives.

Recent forecasts of the Organisation of Petroleum Exporting Countries (OPEC) that oil and coal consumption will reach record levels over coming years is one example of the misalignment of public policies and financial markets with Agenda 2030 and the transition to a low- or zero-carbon economy.

Towards transformative financing and national ownership of the 2030 Agenda

How can the urgency expressed at UNGA lead to the actions required to break out from a business-as-usual financing trajectory? The answer lies in two sides of the same coin: increase money coming into, and reduce money coming out from, LIDCs. We suggest three vital areas for greater attention from the international community.

First, curbing tax evasion and avoidance, and stopping illicit financial flows are essential steps to enable the achievement of the 2030 Agenda. Reform and restructuring of the taxation paradigms around extractive industries and other corporate investment in developing countries is fundamental, to prevent the ‘race to the bottom’ and ensure countries have both policy space and public finance to pay for their development objectives.

Taking action on tax havens—estimated to store wealth equivalent to 10% of global GDP—addressing transfer mispricing by transnational corporations, and supporting improvements in governance and transparency to tackle corruption are prerequisites.

What prevents countries from allocating sufficient resources to water, sanitation and hygiene (WASH) and to sustainable development in general is just as important as what enables them to do so.

Second, achieving the 2030 Agenda requires a much stronger emphasis on international public assistance in grant form, both Official Development Assistance (ODA) and climate finance, targeted to the poorest countries. ODI’s report indicates that 48 of the poorest countries in the world cannot afford to fully fund the core sectors of education, health (including nutrition) and social protection – even if they maximise their tax effort.

And, while the 2030 Agenda may be voluntary, commitments under the Paris Agreement on climate change, once ratified, become binding. The same holds true for human rights commitments.

Industrialised countries, overwhelmingly responsible for global warming and climate change, must fulfil their climate finance commitments as an essential first step towards climate justice. Poor communities urgently need support to adapt to the impacts of climate change—compensation for a looming environmental crisis they have had least responsibility in creating.

We could even propose combining targets for ODA and climate finance into a new SDG target for high-income countries. Merging existing targets for ODA (0.7% of GNI) and climate funding ($100 billion a year by 2020) could promote coherence and consistency, and ensure additionality of climate funding.

It could become a mandatory grant-based contribution for sustainable development from high-income countries (as opposed to loans, which can push countries further into debt). An initial combined target of 1% of GNI could be set with a deadline of 2020, rising again in 2025 to 2.5% of GNI – essentially a new Marshall Plan for global sustainable development. Financial transaction taxes and carbon taxes can be important components of funding this increase, supporting financial stability and the transition to a zero-carbon economy.

Third, the international community needs to support institutional strengthening in LIDCs on a much greater scale. IMF research suggests that successful anti-corruption and capacity-building initiatives are built on institutional reforms that emphasise transparency and accountability: for example, shining a light on all aspects of the government budget to improve public financial management and efficient spending. In the water and sanitation sector we find that well-coordinated, accountable institutions with participatory planning processes are necessary to strengthen the sector to enable universal and sustainable access by 2030.

Time is running out

The discussions around financing the 2030 Agenda at UNGA 2018 reminded us that time is running out. The recent Intergovernmental Panel on Climate Change report on staying below 1.5 degrees temperature increase adds a new urgency.

Three years into the SDGs’ implementation, where are the ambitious multilateral financing commitments required to ensure that the 2030 Agenda including SDG6 become a reality for everyone across the globe? Fewer than 12 years remain to take urgent action nationally and globally to achieve the 2030 Agenda and ensure all the world’s inhabitants can live in dignity and see their human rights fulfilled.

Between now and next year’s High-Level Political Forum for heads of state in September 2019, the international community must generate the political momentum required for equitable and ambitious financing, to reach the shared commitments of the SDGs.

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Credit: UN Photo

By John Garrett
LONDON, Apr 13 2017 (IPS)

Eighteen months ago, UN member-states pledged a new set of goals on eradicating extreme poverty and creating a fairer, more sustainable planet by 2030. This week, we have alarming evidence that at least one of those goals – Sustainable Development Goal 6, to reach everyone everywhere with access to water and sanitation – is already in peril.

The UN Water Global Analysis and Assessment of Sanitation and Drinking-Water (GLAAS) report produced by the World Health Organisation (WHO) has revealed a huge gap in financing with over 80% of developing countries reporting that they have insufficient resources to meet their national targets.

Globally, the World Bank estimates that as much as £114 billion is required annually, around three times current levels – to meet the UN Global Goals’ ambitions to reach everyone, everywhere with safely-managed water and sanitation.

Some 663 million people in the world are without an ‘improved’ source of water and millions more are drinking water which may be contaminated after collection; nearly 2.4 billion people in the world are without access to decent sanitation, and the resulting health crises kill 315,000 young children each year.

Soberingly, new aid commitments from donors for water and sanitation have fallen by 21% since 2012, from US$ 10.4 billion to US$ 8.2 billion in 2015. Also of major concern is the continuing ineffective targeting of aid. GLAAS reported one country in Europe – Ukraine — received the equivalent of more than half of the aid commitment for water and sanitation to all of Sub-Saharan Africa in 2015.

Nearly 2.4 billion people in the world are without access to decent sanitation, and the resulting health crises kill 315,000 young children each year
Closing this financial gap will require increased levels of domestic and international finance for water, sanitation and hygiene (WASH), from both public and private sources.

However, given the scale of the financial challenge, there remains a strong need for international aid.

This is all the more important given the additional challenges faced by many developing countries from growing populations, rapid urbanisation, water scarcity and climate change.

Among other findings in this regular report card on water and sanitation financing:

• Sub-Saharan Africa is home to half of the world’s people living without access to clean water, yet they received only US$1.7 billion, or 20% of all water and sanitation aid, in 2015. This is down from 38% in 2012.

• Some 85% of the global population without access to improved sanitation or drinking-water from an improved source live in three regions: Central and Southern Asia, East and South-eastern Asia, and Sub-Saharan Africa. However, aid commitments to these three regions were only 48% of global overseas development aid for water and sanitation in 2015.

• Non-governmental projects and funding are greater than government spending on water and sanitation in many countries, demonstrating the critical need for continued international aid, as well as efforts to create greater domestic revenues and stronger government systems.

• Sanitation spending is still half that of spending on water, despite there being 2.4 billion people – or one in three of the world’s population – without access.

These are alarming trends. Water, sanitation and hygiene programmes are critical for good health, education and improved livelihoods, providing an essential building block for the eradication of poverty. For every £1 invested, an estimated £4 is returned through improved health and productivity.

Yet we see by the GLAAS report’s findings that the majority of developing countries do not have enough money to achieve their targets on water and sanitation access and that aid commitments are actually falling.

WaterAid has called for overseas development aid to water, sanitation and hygiene to at least double from current levels by 2020, with an emphasis on grant financing, and for it to be targeted to areas of greatest need.

We want to see the volume of development aid spent on water, sanitation and hygiene increased. But just as importantly, we want to see it spent well.

An essential component of aid is ensuring countries have support to plan for water and sanitation services today and in the long-term, with appropriate financing for maintenance and staff training. Without these changes, many countries will be seriously off track on SDG 6 even at this early stage.

The GLAAS report has been released ahead of the World Bank Spring Meetings in Washington D.C.

On 19-20 April, as part of the Spring Meetings, the Sanitation and Water for All partnership of more than 150 organisations will gather senior finance and water and sanitation ministers from around the world in high-level meetings, to monitor progress on delivering water and sanitation in their countries and call for further commitments.

The SWA partnership holds members accountable to delivering on four ‘collaborative behaviours’ required to successfully reach even a country’s poorest with sustainable access to water and sanitation: building sustainable financing strategies, strengthening country systems, enhancing government leadership, and using a common information and mutual accountability platform.

As a founding member of the Sanitation and Water for All partnership, WaterAid is calling on ministers from both developing and donor nations to join the High-Level Meeting and deliver on their promises to reach everyone, everywhere with clean water and sanitation by 2030.

Progress is possible: in 2000, around 18% of the world’s population, or one billion people, had no access to even a basic, improved source of water. By 2015, this number had fallen to below 10%, or 663 million.

But those still without access are often hardest to reach – marginalised by poverty, remote or rural locations, age, gender, ethnicity or ability. Going the last mile on water, and extending this progress to sanitation, requires high-level commitment, and the will to turn commitment into action.

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