Multilaterals’ financial pledge for SDGs earmarks nothing for cities
In the run-up to last week’s Financing for Development conference in Addis Ababa, the six major multilateral development banks and the International Monetary Fund collectively pledged USD 400 billion in loans and other assistance to help the world’s nations meet their obligations under the new Sustainable Development Goals (SDGs).
Much of the discussion in Addis focused on how to finance the estimated multi-trillion-dollar price tag of the SDGs, with a particular focus on trying to figure out a new role for the private sector in this financing. Yet the geographic scope and deep pockets of these multilateral institutions will continue to make a significant impact in making a dent in that ambitious figure.
Jim Yong Kim, the president of the World Bank Group, acknowledged the high cost as well as some of the expected tangible outcomes of what’s called the Post-2015 Development Agenda. “It’s about creating opportunity for all, giving people an equal chance to succeed in life, and preparing the world to deal with the challenges of climate change and the next pandemic,” he said in published comments.
“We need trillions, not billions, of dollars to accomplish these goals, and the money will come from many sources: developing countries, private sector investment, donors and international financial institutions,” Kim continued. “By working together, we can help people build better lives with good education, quality health care, clean water and proper sanitation.”
Kim suggested that such investments “will help end extreme poverty in just 15 years”.
While willing to speculate on some of the focus areas of this new financial commitment, the World Bank stopped short of announcing specific earmarks for urban development, such as housing or transit infrastructure. This despite the fact that many of the broad development categories will inevitably affect people living in cities — and that any goal to end extreme poverty, as is a newly announced central goal of the World Bank, will inevitably need to focus particularly on urban areas.
Nonetheless, such investments could be on the horizon.
“We expect that the confirmation of a new ‘Sustainable cities and human settlements’ SDG” — a reference to proposed Goal 11, the urban SDG — “will provide more impetus to our efforts to support this area,” a World Bank spokesperson said, “given the further attention that the new SDG will attract among government, the private and non-governmental sector, and international development agencies.”
The SDGs are slated to be finalized at a major summit in New York in September. All indications suggest that Goal 11 will be included in the final outcome.
As at the bank, a spokesperson for the Asian Development Bank (ADB) said the ADB’s funds for the SDGs are not earmarked for any specific purpose but emphasized the institution’s broader commitments to urban issues.
At the Rio+20 conference in 2012, multilateral development banks, including the ADB, “did announce a joint funding commitment of USD 175 billion over the next 10 years for transport,” an ADB spokesperson said. “This is not specifically urban, but ADB’s focus is clearly on sustainable urban transport. We provide around USD 3 billion annually on transport and this is expected to continue.”
(Spokespeople for the African Development Bank, European Investment Bank, European Bank for Reconstruction and Development, and Inter-American Development Bank did not return requests for comment.)
The World Bank does have a robust urban track record. The spokesperson reported that World Bank lending explicitly tagged to urban development almost doubled from the four years ahead of 2008 to the four years ahead of 2013, and for 2013-15. Today, it stands at an average of 9.3 percent of the bank’s portfolio.
“The bank is an active participant in the global discussions in preparation for the Paris COP [climate negotiations], Habitat III and the new SDGs,” spokesperson said, “and this represents additional effort devoted to this important topic.”
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