“The Sustainable Development Goals are ambitious objectives; business as usual will not deliver them. Speaking on the recent International Day for the Eradication of Poverty, U.N. Secretary-General António Guterres acknowledged the need for new thinking. “The pledge to leave no one behind will require innovative approaches, partnerships, and solutions,” he said. But this new model will only come about if we radically reshape the national, regional, and global economies that lie behind many of the obstacles to achieving the SDGs. We must rethink the way we govern and manage the global financial and economic system.
In part, that means rethinking the current trend to treat private finance as the default option for development. Private finance is being heavily touted by the World Bank, the G20, and others as the solution to the SDG financing gap — for example, through their enthusiastic promotion of public-private partnerships. Yet international private capital has proven volatile and is often short term. In fact, since 2015, international private finance has been net negative for developing countries — more money has been flowing out than in. This volatility has led some developing countries to protect themselves from external shocks by building up massive reserves. This is a sensible strategy given the lack of faith those countries have in the IMF and other global institutions to protect them in times of crises. However, in practice they build reserves by buying safe assets from developed countries. In other words, the poorer countries are lending trillions of dollars to the richest countries, particularly the U.S., at very low rates of interest….” >>>>more
Author – Jesse Griffiths