11 June 2018
SDG Knowledge Weekly: Finance, Development Cooperation, Data and Innovative Technology
Photo by IISD/ENB | Kiara Worth
story highlights

Oxfam and the Overseas Development Institute (ODI) examine domestic resource mobilization (DRM) and blended finance, respectively.

The German Development Institute (DIE) published a brief recommending common data standards in development cooperation, while an EU paper looked at development cooperation vis-à-vis decent work and employment.

The “Investing in a Just Transition” project released its first output, and the Global Impact Investing Network (GIIN) published the results of its annual survey.

The international community weighed in on science, technology and innovation (STI) around last week’s STI Forum at the UN, while UNCTAD’s ‘Technology and Innovation Report 2018’ reviews new developments in the STI space.

As a high-level meeting of the UN General Assembly on breaking the bottlenecks to SDG investment convenes in New York, this brief explores a wide range of sources for SDG financing, as well as some challenges associated with their advancement. Data and technology continue to feature strongly in such conversations, and are also highlighted in the items below.

Oxfam released a briefing note looking at domestic resource mobilization (DRM). The paper reviews donor countries’ “track records” on their reported grants to facilitate DRM since making commitments to support the Addis Tax Initiative (ATI), as part of the Addis Ababa Action Agenda adopted at the third UN conference on Financing for Development (FfD) in 2015. The note finds that, despite a 5% increase in funds, donors are currently not on track to meet their goal of doubling support for DRM. Oxfam also flags low country ownership, and that multiple facets of equity (including gender) are neglected.

On blended finance, the Overseas Development Institute’s (ODI’s) Samantha Attridge authored a blog examining the risks and benefits of the strategy, which has been promoted by multilateral development banks as a means of enabling SDG investment in poor countries. Attridge notes that MDB portfolios risk being skewed towards more stable markets in middle-income countries (MICs), thus potentially leaving the poorest behind. She calls for de-risking mechanisms and channeling aid into programs similar to the Addis Tax Initiative.

On public finance, the Center for Global Development’s Owen Barder examines the idea of development cooperation as a win-win for donors and recipients, in a blog posted to the organization’s website. He describes two camps of thinking: some believe that “aid should never be spent in the national interest” whereas others are of the mind that “all development cooperation should be directly win-win.” Barder argues for a middle ground. Graphing the relationship between the level of altruism in development cooperation and the extent to which a policy tackles the causes, rather than the symptoms, of poverty, he explains that it may be difficult to make highly altruistic forms of development cooperation serve national interests without decreasing their impact on the ground. However, the resulting increases in stability or prosperity in the recipient country is still good for the donor country, he notes.

An EU publication presents current thinking on how to use development cooperation to promote one specific SDG – that on employment and decent work (SDG 8). The document seeks to facilitate policymakers’ understanding of barriers to decent jobs and the instruments available to boost employment levels. It notes employment constraints (i.e. imbalances of labor supply and demand), and highlights data sources on labor statistics at national and global level. The paper is part of a ‘Tools and Methods Series’ that collates and structures thematic units’ knowledge products to enhance the delivery and implementation of European aid.

On investment and a “just transition” that achieves the goals of the Paris Agreement on climate change while creating decent jobs in line with SDG 8, a research paper released earlier this month explains “Why investors need to integrate a social dimension into their climate strategies and how they could take action.” The discussion paper, authored by Nick Robins (Grantham Research Institute at the London School of Economics), Vonda Brunsting and David Wood (both at the Harvard Kennedy School’s Initiative on Responsible Investment), and published in partnership with the Principles for Responsible Investment (PRI) and International Trade Union Confederation (ITUC), offers early insights from the ‘Investing in a Just Transition’ project.

The authors note an analytical gap and lack of guidance on how investors can play a role in decarbonizing the global economy. They find that although investors are taking action to respond to climate change, most have yet to incorporate a social dimension, implying negative impacts on workers and communities. The paper identifies actions in investment strategy, investment engagement, capital allocation and policy dialogue. It offers six reasons to invest and take action on a just transition, alongside ten strategic dimensions for investors to consider, in the areas of: management; geographic, economic and sectoral scope; and political and social context.

A separate SDG Knowledge Hub policy brief summarizes additional papers on a just transition and thought leadership in the international climate policy space. An in-depth SDG Knowledge Hub update on institutional finance and technology, particularly as they can inform climate investments, is also available.

Also on investment, the UN and the World Bank Group signed a Strategic Partnership Framework to implement the 2030 Agenda for Sustainable Development through scaled up joint investments to build human capital (including on recent topics such as health), as well as improving national statistical systems and data analysis capacity.

The Global Impact Investing Network (GIIN) found significant growth in its annual investor survey report. The report notes that over three-quarters of investors are either tracking their investment performance to the SDGs or plan to do so in the future. However, it finds high variance by market type, noting that emerging market investors track their performance against the SDGs at a higher rate (roughly two-thirds) than those focused on developed markets (41%). Separately, a Bloomberg article notes that a Danish investment fund is aligning its practices with the SDGs. More good news also came out of Denmark, where six pension funds joined with the Investment Fund for Developing Countries to establish a ‘Danish SDG Investment Fund.’

Turning from finance to technology, another key area in SDG means of implementation, the Technology Bank for Least Developed Countries (LDCs) was inaugurated last week in Gebze, Turkey. Specifically on innovations on financial technology (fintech), an article on Nasdaq’s website identifies blockchain’s ability to enable identity and transparency as critical to underscoring and supporting SDG implementation. These types of advancements were discussed and displayed last week at the third annual Multi-stakeholder Forum on Science, Technology and Innovation for the SDGs (STI Forum), held at UN Headquarters in New York. IISD Reporting Services coverage of the STI Forum is available here, and coverage of a Global Science, Technology & Innovation Conference (G-STIC) special event is here.

Technological change and innovation need to be inclusive, lest they entrench inequality and continue to marginalize poor and vulnerable populations.

“Frontier technologies” are those that democratize scientific innovation, and generally revolve around artificial intelligence (AI), the internet of things, blockchain, augmented virtual reality, biotech, 3D printing and other advanced materials. Identifying distinguishing features of – and harnessing – these technologies and innovations is the subject of a report released by the UN Conference on Trade and Development (UNCTAD). It notes that technological change and innovation need to be inclusive, lest they entrench inequality and continue to marginalize poor and vulnerable populations. The publication cautions that AI can both create and destroy jobs, and unpacks other frontier technologies’ relationships to productivity, growth, privacy, security and development indicators. It also examines the gender implications, as initiatives to close the “digital gender gap” note the benefits for both women and economies.

UNCTAD’s ‘Technology and Innovation Report 2018’ also proposes strategies that build on experiences in the STI space, noting the increasing importance of education as an enabler of development. It highlights platforms supported by UNCTAD and the UN Commission for Science and Technology for Development, which convene dialogues and enable knowledge sharing. The report follows two publications on technologies for the SDGs released by UN Secretary-General Antonio Guterres last month in support of the upcoming UN Economic and Social Council’s (ECOSOC) 2018 High-level Segment in July.

Also on technology and inclusion, writing on the World Economic Forum (WEF) blog, Gudela Grote and Thomas Kochan, of ETH Zurich, and MIT, respectively, call for engineers and scientists to engage more directly with users and consumers of products, noting that new, proactive models of worker representation are needed in order to make the link.

Finally, thought leaders in the international community continued to advance recommendations on data, to measure progress, bridge knowledge gaps and enable more effective development cooperation. Donor governments must support data collection and analysis for the SDGs, and this should be a growing focus of the development community, argue the authors of a German Development Institute (DIE) briefing paper. However, data has “received little attention in the organisations of German development cooperation and their projects,” they write. The paper titled, ‘An Agenda for German Development Cooperation,’ offering recommendations to the Government of Germany, calls for common data standards, and urges the German Federal Ministry of Economic Cooperation and Development (BMZ) to work with other development actors (i.e. ministries, international organizations) to harmonize data sources, types and principles. The authors flag that there are insufficient data in partner countries to report on all official SDG indicators, and thus that the German government should also scale up funding for and investment in data gathering and statistical systems.

More broadly, Isabelle Gerretsen, Thomson Reuters Foundation, asks, “Are the global goals doomed to fail without better open data?” Her article flags that data are lacking to track targets under SDG 5, and that basic data about demographics and birth rates do not exist in upwards of 15% of sub-Saharan African countries. Echoing DIE’s paper, Gerretsen states that the sheer number of SDG indicators “has placed serious pressure on national statistical systems.”

The 4th Data Gaps Initiative Meeting (DGI) was held from 30-31 May 2018, in Basel, Switzerland, under the framework of the 2018 G20 Leaders’ Summit. The meeting, organized by the International Monetary Fund (IMF) and the Financial Stability Board (FSB) Secretariat, reviewed DGI progress to date as well as outcomes of previous DGI workshops. It considered users’ perspectives and “the policy relevance of data emerging” from prior DGI recommendations. The gathering also laid out next steps on a work plan for 2019.

Additional issues of the SDG Knowledge Weekly can be found here.

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