This document discusses potential sources of financing for sustainable development goals (SDGs) in Middle-Income Europe and Central Asia. It finds that domestic public finance, particularly national budgets, are critical sources of funding. Commercial flows like foreign direct investment and bank loans also contribute significantly in some countries. However, more work is needed to systematically track how national budget expenditures align with SDGs. Official development assistance remains important for some countries highly reliant on remittances. Overall, the analysis finds that a combination of public, private and international sources will be needed to achieve the SDGs in the region.
1 of 29
Download to read offline
More Related Content
2018 DRR Financing 6.1 Ben Slay
1. Financing the SDGs in Middle-
Income Europe and Central Asia
Ben Slay
Senior advisor
UNDP Regional Bureau
for Europe and CIS
4 October 2018
3. Potential finance for the
SDGs, Sendai implementation
• Key questions:
– Finance demand: How much will this cost?
– Finance supply:
• How much money is out there?
• How much of “development finance” can be treated as “potential
SDG (or Sendai) finance”?
• Key problems:
– These questions are usually answered via global estimates
. . . What about national estimates?
– Demand side: Until SDGs, Sendai are “nationalized”, they
can’t really be costed
• Supply side: Potential funding/financing availability
can be estimated
4. “Traditional” finance for
development approaches
Global finance for development flows
Source: <<Opening Doors: Financing the UN Development System>>, p. 55
5. Problems with such approaches
• Financing development is not only about net transfers of
capital from developed to developing countries
– It’s also about boosting development potential, competitiveness
• Not all developing economies are net recipients of
international capital flows (current-account deficits)
– Azerbaijan, Kazakhstan, Turkmenistan, Uzbekistan are net
international capital suppliers (current-account surpluses)
• SDG, DRR finance is not only external
– Domestic financial flows (e.g., government budget) matter—but
are not captured
• Financial services also matter—but are not captured
– Particularly relevant for insurance ☺
• Who are the national stakeholders, partners?
6. To address these weaknesses,
we need a narrative that can:
• Help finance national achievement of SDGs,
implementation of national Sendai DRR
strategies
• Be supported by national data
• Include public finance data
• Be understandable to non-specialists
This presentation seeks to build such a narrative
7. Methodological challenges—
and some answers
Questions (challenges) Answers
Combining international (BoP)
and national (fiscal) data
issues of:
• Comparing/blending “apples
and oranges”
• Avoiding double counting
Double counting avoided by:
• Not counting domestic investment
• Measuring government by budget revenues
(not expenditures)
International (BoP) data: Gross
or net?
• Why?
Gross financing data used, because:
• The numbers are much “better behaved”
• UNDP: closer to inflows than outflows
Which flows do (not) contribute
to sustainable development?
• Especially important for
government budget finance
“Albanian rule of thumb”
• Finance Ministry consultants estimated that
60% of Albania’s multi-year 2015-2017
budget can be linked to specific SDGs
• 60% of government budget = “SDG finance”
8. Data sources
• National balance of payments statistics:
– International capital flow data
– International financial service transactions data
• (Re)insurance
– Remittances • OECD-DAC: ODA data
• IMF-World Economic
Indicators data base:
Domestic public finance
data
Exclusive reliance on
publicly available data
9. Albania
Shares of potential SDG finance from all sources (annual averages, 2008-2016)
17%
1%
6% 1%
12%
6%
58%
FDI Stocks and bonds Bank loans Financial services
Remittances ODA State budget
10. Armenia
Shares of potential SDG finance from all sources (annual averages, 2008-2016)
11%
2%
14%
0%
37%
7%
29%
FDI Stocks and bonds Bank loans Financial services
Remittances ODA State budget
11. Azerbaijan
Shares of potential SDG finance from all sources (annual averages, 2008-2016)
15% 3%
19%
1%
6%
1%
56%
FDI Stocks and bonds Bank loans Financial services
Remittances ODA State budget
12. Belarus
Shares of potential SDG finance from all sources (annual averages, 2008-2016)
12%
1%
15%
1%
6%
1%
64%
FDI Stocks and bonds Bank loans Financial services
Remittances ODA State budget
13. Georgia
Shares of potential SDG finance from all sources (annual averages, 2008-2016)
17%
3%
0%
2%
15%
9%
54%
FDI Stocks and bonds Bank loans Financial services
Remittances ODA State budget
14. Kazakhstan
Shares of potential SDG finance from all sources (annual averages, 2008-2016)
32%
4%
-1%
1%
0%0%
63%
FDI Stocks and bonds Bank loans Financial services
Remittances ODA State budget
15. Kosovo*
Shares of potential SDG finance from all sources (annual averages, 2008-2016)
(* as per UNSCR 1244 (1999))
10% 5%
5% 1%
20%
15%
43%
FDI Stocks and bonds Bank loans Financial services
Remittances ODA State budget
16. Kyrgyzstan
Shares of potential SDG finance from all sources (annual averages, 2008-2016)
12%
0%
5% 0%
40%12%
30%
FDI Stocks and bonds Bank loans Financial services
Remittances ODA State budget
17. Macedonia, fYR
Shares of potential SDG finance from all sources (annual averages, 2008-2016)
11% 4%
9%
1%
12%
6%
57%
FDI Stocks and bonds Bank loans Financial services
Remittances ODA State budget
18. Moldova
Shares of potential SDG finance from all sources (annual averages, 2008-2016)
4%
0%
19%
0%
35%
8%
32%
FDI Stocks and bonds Bank loans Financial services
Remittances ODA State budget
19. Montenegro
Shares of potential SDG finance from all sources (annual averages, 2008-2016)
21%
3%
4%
2%
12%
3%
56%
FDI Stocks and bonds Bank loans Financial services
Remittances ODA State budget
20. Serbia
Shares of potential SDG finance from all sources (annual averages, 2008-2016)
10%
3% 2%
1%
12%
3%
69%
FDI Stocks and bonds Bank loans Financial services
Remittances ODA State budget
21. Turkey
Shares of potential SDG finance from all sources (annual averages, 2008-2016)
4% 4%
6%
1%
1% 1%
84%
FDI Stocks and bonds Bank loans Financial services
Remittances ODA State budget
22. Ukraine
Shares of potential SDG finance from all sources (annual averages, 2008-2016)
9%
2%
6% 2%
15%
2%
64%
FDI Stocks and bonds Bank loans Financial services
Remittances ODA State budget
23. By source of finance: State budget
(* as per UNSCR 1244 (1999))
Annual averages (2008-
2016), shares of total
finance (from all sources)
84%
69%
64% 64% 63%
58% 57% 56% 56% 54%
43%
32% 30% 29%
24. By source of SDG finance: Remittances
Annual averages (2008-
2016), shares of total
finance (from all sources)
(* as per UNSCR 1244 (1999))
40%
37%
35%
20%
15% 15%
12% 12% 12%
6% 6%
3%
1% 0%
25. By source of finance: ODA
Annual averages (2008-
2016), shares of total
finance (from all sources)
(* as per UNSCR 1244 (1999))
15%
12%
9%
8%
7%
6% 6%
3% 3%
2%
1% 1% 1% 0%
27. Critical next step: Unpacking
domestic public finance
15%
13% 13% 13%
11%
9%
9%
7%
5%
4%
• Albanian example:
– 2015-2017 budget
reviewed
– 61% of budget lines
could be linked to
individual SDGs
Source: Albania <<MAPS>> report, p. 87
• Could/should
something similar be
done in your
country?
• Should a similar
exercise be
attempted for
commercial flows?
28. Some take-aways
• State budget finance is critical
– More sophisticated treatment of fiscal data needed
• ODA still matters in some places
– Especially for global leaders in remittance inflows
(Kyrgyzstan, Armenia, Moldova, Kosovo, Georgia)
• This underscores the importance of “blending”
remittances with ODA, budget finance
• On commercial flows:
– FDI, bank loans are larger than flows associated with stocks
and bonds, financial services
– In economies with largest commercial flows (Azerbaijan,
Kazakhstan), most of this goes to the extractive sector