Achieving the 17 newly adopted Sustainable Development Goals, which includes ending extreme poverty, will cost an additional $1.4 trillion per year, according to a new analysis, lower than previous estimates of between $1.9 trillion to $3.1 trillion. Relying solely on foreign aid, which accounts for roughly $161 billion a year, is not the answer.
“That doesn’t mean aid is irrelevant – it will remain vital to delivering on global public goods, and in helping some of the world’s most disadvantaged gain access to nutrition, infrastructure, health and education services,” wrote Charles Kenny, a fellow at the D.C. think tank the Center for Global Development, back in July. Still, even if aid were to rise dramatically, aid alone couldn’t fund the ambitious agenda. “The truth is that development is no longer mostly about aid. It hasn’t been for many years.”
Those shifts were evident in a July conference, held to figure out how to pay for the goals. Rather than focusing solely on foreign aid, it placed an emphasis on individual countries spending more and targeting money better. The role of the private sector has also grown in recent years, a change evident during the Ethiopia meetings. Alas, the opportunity was missed to reign in tax havens and contribute to the $1.4 trillion need.
A changing landscape brings other issues into focus, New York University researcher Alex Evans argues.
“As important as aid is, its development impact is far less than policy decisions on areas like migration, trade, intellectual property, arms sales or financial regulation. Campaigners will have plenty to keep them busy between now and 2030,” Evans told the Guardian.
Infrastructure and access to modern energy are the most expensive endeavors for the next 25 years. The two account for more than 60 percent of the total investment needs. Initiatives like the U.S.-led Power Africa reflect the changed landscape. The initiative would have its greatest impact by leveraging investments in power access by companies like General Electric and committing African governments to spend more money.
“[A]n increase in global investment is well within reach,” according to the report.
It is possible, the authors wrote, if steps are taken by governments, to scale up government services in areas such as education and health. The benefits from those areas, plus improved job opportunities and economic growth, they argue, could lead to enough money being spent to fill the major gap. In other words, investing in the kinds of things that spur development would help reach the new development goals.
The costs may end up being even higher in the end. The report acknowledges that it does not estimate how much it will cost for social protection programs, large-scale water supply and sanitation infrastructure, climate change mitigation and more. Each of those areas will require attention from donors and governments in order to meet each of the 17 goals.
All they have to do is find $1.4 trillion laying around to close the gap.