U.N.’s New SDGs Are Driving the Global Development Agenda

The Sustainable Development Goals set a wide range of targets on incomes, education and climate change and seek to enlist private investment as well as public aid in the campaign.

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Flags fly outside the the United Nations (UN) headquarters in New York, U.S., on Wednesday, Aug. 5, 2015. The 70th UN General Assembly is scheduled to open in New York on Sept. 15. Photographer: Michael Nagle/Bloomberg

Michael Nagle/Bloomberg

From the Pope to Beyoncé to Chinese President Xi Jinping, global leaders, activists and celebrities descended on New York this past week to endorse the most ambitious development agenda the world has ever seen. Now comes the hard part: turning it into reality.

The Sustainable Development Goals formed the centerpiece of the annual meeting of the United Nations General Assembly, which Pope Francis addressed on September 25. The product of three years of global negotiations involving governments, business and civil society organizations, the goals commit governments to achieving by 2030 such far-reaching objectives as eradicating extreme poverty, providing lifelong educational opportunities for all and tackling climate change.

Nelson Muffuh, an official in the office of Secretary General Ban Ki-moon, says talks on the SDGs, as they are known, were unprecedented in their inclusion of leaders and business groups from more than 100 countries, and even drew on the opinions of more than seven million children from around the world who responded to a U.N. online survey called “The World Children Want.”

The SDGs are designed to build on the progress of the Millennium Development Goals, which U.N. members adopted in 2000 with the aim of achieving concrete targets by 2015 in eight areas, such as reducing the number of people living on less than $1.25 a day, slashing child mortality rates and increasing the enrollment of girls in schools. The sustainable goals are more numerous and ambitious than their millennium predecessors, though. There are 17 broad goals overall, with 169 specific targets that are anything but modest: They aim to end poverty in all its forms everywhere; abolish hunger; combat climate change; reduce maternal and child mortality; ensure universal education and gender equality; achieve universal access to safe water, energy and jobs; improve migration policies; and build desperately needed infrastructure.

Some development experts say the sheer number of goals, which are not legally binding, threatens to diminish the impact of the program. They also warn that many of the individual targets will be difficult, if not impossible, to achieve.

“Some of the SDG targets are probably implausible, at least for some countries,” says Charles Kenny, a senior fellow at the Center for Global Development, a Washington think tank. “For example, for all countries to get down their child mortality as suggested would take rates of progress that are historically unprecedented.” The goal specifies cutting the worldwide mortality rate for children under five to 25 per 1,000 live births. The rate currently stands at 43 deaths per 1,000 live births, down from 90 in 1990.

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Slower global economic growth is a further hurdle, considering that China’s breakneck pace over the past 15 years was the biggest reason why the number of people living in extreme poverty fell dramatically. The chief of the International Monetary Fund, Christine Lagarde, warned recently that the global economy was likely to expand this year by less than the 3.3 percent predicted in July, compared with 3.4 percent last year. Speaking September 22 at the Brookings Institution in Washington, Lagarde said risks to global growth from lower commodity prices and the slowdown in China have increased. “The downside risks are greater than they were,” she said.

In an indication of how hard it would be to achieve the SDGs, a report this month from the Overseas Development Institute, a London-based think tank, said many goals will need a “revolution” to succeed. The group examined 17 specific targets — one from each of the broader goals — and said that five of them, including cutting income inequality and combating climate change, would need a reversal of current trends to have a chance of being reached by 2030. An additional nine targets, including ending hunger and reducing maternal mortality, would need progress to accelerate to several times current rates to be achieved. Countries might get halfway to meeting three other goals, including ending extreme poverty, but they will need to pursue deeper reforms to get there. If current trends continue, “the world will not meet any of the goals by 2030,” the report said.

The SDG on combating climate change remains vague in advance of a U.N. climate change summit in Paris in December. There, global leaders aim to reach an accord to reduce carbon emissions and to fulfill a six-year-old pledge for rich countries to pay $100 billion a year to help developing nations cope with climate change.

Supporters of the SDGs say those costs are a bargain for what they would deliver. “The precise value of the peace, poverty reduction and environmental cooperation made possible by the U.N. is incalculable,” Jeffrey Sachs, an economist who heads Columbia University’s Earth Institute in New York and advises the U.N., wrote in August. “If we were to put it in monetary terms, however, we might estimate their value at trillions of dollars per year — at least a few percent of the world economy’s annual GDP of $100 trillion.”

Even if rich countries increase their aid, the bulk of money for achieving the SDGs will have to come from elsewhere. “Aid simply isn’t going to increase that much — let’s say, optimistically, it reaches $200 billion in a few years,” says Kenny. “The big sources of cash for funding development progress will be taxes in developing countries, followed some distance behind by the private sector.” The world’s richest countries provided $135 billion in development aid in 2013 — about 0.3 percent of their combined gross national income — but all of that wasn’t devoted to meeting the Millennium Goals. The IMF has said it plans to help developing countries boost their tax revenues — currently ranging mostly from 15 to 20 percent of GDP, compared with more than 30 percent in advanced countries — to generate additional resources. The Fund estimates that total government revenues in developing countries will hit $9.3 trillion this year and rise to $10.9 trillion in 2019.

To achieve the SDGs, developing countries will need to make massive investments in new roads, electric utilities, communications systems and other infrastructure. The World Bank has estimated that developing countries need to spend $1 trillion a year on infrastructure. Although institutional investors and sovereign wealth funds are increasing their appetite for infrastructure, such investment accounts for “considerably” less than 1 percent of their portfolios, says Kenny, who wrote a recent report on the topic.

Business groups are hoping policymakers will help pave the way for greater private sector involvement in the SDGs than in the Millennium Goals. “The business community needs to be mobilized in an unprecedented way, particularly in infrastructure investment,” says Andrew Wilson, director of global communications at the Paris-based International Chamber of Commerce. “The big question around the goals is, How do we get businesses to invest in clean energy in Africa, or how do we get them to invest in infrastructure in Asia?”

Kenny cites General Electric Co. as one of the companies making desperately needed infrastructure investments. Those include selling its technologies to help build 140 locomotives in South Africa, creating a manufacturing facility in Nigeria that will serve as a regional hub for its oil and gas business and supplying turbines for a wind farm in Kenya. In an indication of what’s to come, GE’s order backlog for developing countries now stands at $143 billion, up from $80 billion in 2010.

Despite its rising business in such markets, financing “is a key challenge,” says Karan Bhatia, senior counsel for international law and policy at GE and a former deputy U.S. trade representative in the administration of George W. Bush. “Since the financial crisis, a lot of the institutions that have been involved in financing infrastructure projects in developing markets have backed away from that sector,” he says. “The result has been that people have been struggling to find new forms of capital to finance infrastructure projects.”

To overcome such hurdles, GE works with export credit agencies, multilateral development banks and in some cases puts in its own funds to finance projects, he adds. “The issue is not bankable projects — there are good projects with strong prospects — but these are markets that Western capital continues to be quite distant from in many cases,” Bhatia says.

Other multinational corporations regard the U.N. goals as a helpful spur for them to make their production processes more sustainable, which can cut costs and bolster revenues.

Consumer goods giant Unilever, whose chief executive, Paul Polman, served on a panel advising Secretary General Ban on the SDGs and attended the U.N. summit, aims to halve the greenhouse gas emissions by 2020 in areas like manufacturing. The company also stopped sending waste to landfills from more than 240 of its factories in 67 countries, in some cases turning the waste into low-cost building materials, composting it to grow crops or using it to make bricks and paving material. Unilever says the effort cut costs by €200 million ($220 million) and created hundreds of jobs. IKEA, the world’s largest furniture chain, has installed 700,000 solar panels on its buildings worldwide and operates 224 wind turbines.

Institutional investors are also jumping on the SDG bandwagon. Mark Wilson, CEO of British insurer Aviva, said he came to New York to promote the U.N. goals out of “enlightened self-interest.” The insurer’s liabilities, which can extend for 50 years or more, demand that governments and companies address long-term risks like climate change and extend prosperity to the world’s poorest countries, he said. “The SDGs just make sense for where we are as a business,” he explained.

Such corporate efforts spur optimism among development specialists that the SDGs will drive a shift in thinking about development. “There’s value in the global community saying, ‘We want to see massive progress in different areas,’” says Kenny. “Some of the things they asked for are going to be a real stretch. But it doesn’t mean it’s just a public relations exercise. It’s a way to frame development discussions going forward. Discussions about how we would like to see the world go.”

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