Transcript OECD DAC HLM presentation_Dirk Willem te Velde

European Report on
Development 2014/15
“Financing and other means of
implementation in the post-2015 context”
Emerging messages
Presentation at OECD DAC HLM
15 December 2014
Overview
• Unprecedented and exciting challenge is coming when the
UN agrees an ambitious post-2015 development agenda
• But means of implementation (finance and other) not fit for
purpose
• Moreover, lessons from MDGs suggest we need a different
approach towards financing for development
• Hence ERD2014/15 asks:
How can financial resources be most effectively mobilised
and channelled and how can they be combined with selected
non-financial means of implementation, in order to
effectively support a transformative post-2015 agenda?’
Lessons from implementation of MDGs
• Finance needs studies emphasised gaps to be
filled with aid, but the finance context has
changed (e.g. domestic resources grown)
• MDGs catalysed aid for social sectors, but it is
important to consider long term enablers for a
transformative context
• MDG mindset often ignored role of policy, which
is crucial
The ERD’s response
(1) Consider all financial resources
for sustainable development
6000
Trends in finance
($ billion, 2011 prices), 2002–2011
(developing countries)
Domestic public resources
5000
4000
3000
Domestic private resources
2000
International private resources
1000
International public resources
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
…the composition of
finance flows with level of
income (% GDP)
Sources: (See report) IMF, OECD, WDI, etc.
(2) Focus finance on (selected)
enablers of sustainable development
(local)
Governance
Natural
capital
(biodiversity)
(Green energy)
Technology
A transformative
post-2015 agenda
(Sustainable
development)
Infrastructure
Trade
Human
capital
(3) Consider policy and finance to enable
a transformative post-2015 agenda
Applying framework: key policy areas
Policies for
effective use
National:
• National capacities
• Standards,
transparency
• Regulatory
framework
• Policy coherence (e.g.
trade policy)
Policies to mobilise
Financial
flows
(public and private,
domestic and
international)
National:
• Regulatory
framework
• Financial sector
instruments
• Public sector capacity
(e.g. project
preparation)
International:
International:
• Global
rules/standards
• Donor co-ordination
and DFIs
Enablers for
sustainable
development
• Development finance
institutions / special
funds
• International policy
environment (trade,
tax, climate, finance)
Policy can
• Generate, attract and steer finance
– clear policy frameworks for transformation in (Mauritius )
• Unleash more public and private finance
– reductions in tax exemptions and public finance (Tanzania)
– weaknesses in energy regulatory framework and private finance
• Pull finance from unproductive to productive uses
– global tax rules and tax havens (e.g. Africa and transfer pricing)
• Achieve more results with the same amount of finance
– infrastructure project management
• Reduce the need for finance
– reduction in fossil fuel subsidies
Implications for financing discussions
• Policy matters: finance important but not
enough; essential to encourage appropriate
policies for effective use and mobilisation:
– Domestic policy and financial frameworks for
mobilising domestic resources and facilitating their
effective use for sustainable development (e.g. tax
capacity, regulating financial markets).
– A conducive global policy environment (e.g. global
rules on climate, trade, financial sector, tax)
• International public finance to be used in a more
focused and catalytic manner (e.g. for DFIs, tax
capacity, vulnerable groups in transformation)
• Need for a monitoring and accountability
framework
Thank you!
For further information please contact:
ERD2014 Project Manager – Gillian Hart [email protected]
ERD2014 Project Officer – Leah Worrall [email protected]
What to include in a post-2015 FFD
framework? (Tanzania workshop)
Finance
Aid
(ODA and concessional
finance)
Long-term concessional and
predictable finance for
infrastructure
Capacity building to prepare
bankable projects
Signal finance for infrastructure,
social health and clean energy
solutions (gender-sensitive
financing – solutions for rural
women)
Beyond finance (non-financial MOI)
Beyond aid
Address capital flight
Good governance
Sustainable financing: private sector
development of power project through
development and commercial banks
(with attractive terms to developers).
Reform of Tanesco, and need to split regulation /
generation production / and distribution supply
Support social enterprise in energy
sector through increased funds.
Legal framework for local investors for jointly
beneficial ventures (between local & foreign
investors)
Best practice PPPs
Support financial capital for off-grid
through PPP Act,
Increase efficiency of resource mobilisation – e.g.
long delays for initial response to applications
Involve pension funds
SME development
Local financial initiatives (mobilising
finance) to improve access.
Protection for local project developers
Local financial institutions to promote energy
initiatives in developing countries
Global rules (trade, tax and financial)