18 September 2018: Ahead of the UN Secretary-General’s High-level Meeting on Financing the 2030 Agenda for Sustainable Development, the Overseas Development Institute (ODI) launched a report outlining recommendations to deliver on SDG target 1.1, to eradicate extreme poverty by 2030. The report finds that while the world is not currently on track, the target could be “within reach” if donors and partners focus aid efforts on the countries that are projected to need the most support, and on the sectors that are known to lift people out of poverty in the long term.

The report titled, ‘Financing the End of Extreme Poverty,’ assesses 140 countries and economies, including 34 low-income countries and economies (LICs), 103 middle-income countries and economies (MICs), and all 47 of the least developed countries (LDCs). It notes that despite the international target to increase aid to LDCs and repeated commitments, the share of aid has fallen over the past six years from 30% to 24%. While aid is not the only source of external finance available, it says, private sector investment and remittances cannot fund universal provision of public social services and benefit mainly the richer countries.

A typical MIC receives ten times more aid per person than a typical LIC.

According to the authors, current aid allocations are “so poorly” targeted at the poorest countries that they are regressive, with richer countries receiving more aid than the poorer. They indicate, for example, that a typical MIC receives ten times more aid per person in extreme poverty than a typical LIC.

The report also shows that among some of the poorest countries, there is a funding gap of US$125 billion every year for health, education and social protection, which are crucial for reducing poverty. It adds that while both education and health have inadequate funding, social protection is particularly underfunded, receiving only half the level of aid that education does, and a third of the aid that health does (relative to their respective financing gaps).

The report recommends to, inter alia:

• focus global aid on countries that are least able to finance their own public spending to end extreme poverty, and increase the share of aid to LDCs from 30% to 50% of all official development assistance (ODA) over the next five years;
• increase funding in these countries for core social sectors such as health (including nutrition), education and particularly social protection transfers; and
• increase global aid from the Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee (DAC) donors to 7% of gross national income (GNI) and the aid to LDCs to 0.35% of GNI, to ensure all countries can afford to end extreme poverty by 2030.

The UN Secretary-General’s High-level Meeting on Financing the 2030 Agenda will take place on 24 September 2018, immediately before the general debate of the UN General Assembly’s 73rd session (UNGA 73). [Publication: Financing the End of Extreme Poverty] [High-level Meeting webpage]