Financing sustainable development: resources are available locally - let’s unlock them!

By Philippe Orliange, Huffington Post, 16 September 2016.

"In the SDGs (Sustainable Development Goals), the key word is sustainable. Indeed, the word “development” already appeared in the MDGs (Millenium Development Goals). So why has the notion of sustainability been so dismally overseen for half a century of development cooperation ?

Our view is that we have been misled by the theory (or maybe we have misinterpreted the theory) that development is about capital accumulation and requires transfers of capital to developing countries. It is time to accept that capital is already there, in the South, and needs no transfer. Obvious enough for natural capital, this is also true for human capital, for social capital and, in some way, even for physical capital. No capital can be sustainably developed, accumulated, if not home grown, if not created by the people and for the people most concerned with the primary interest of improving their own living conditions.

Development cooperation is an ambitious and complex endeavor. Whatever its successes and its failures, we believe it has contributed, albeit at its level and within its limits, to economic, environmental and social progress. In a number of countries, we must also acknowledge that these limits have hindered progress on the path to development. Overcoming these limits is what the MDGs, and now the SDGs, are out to address. Today, the challenge may be summarized in four urgent transitions.

1. The need for an environmental transition has become compelling as we see the effect of the unregulated growth and consumption of the prosperous minority, an increasing threat to the planet’s biodiversity, atmosphere, groundwater and oceans. Humanity’s livelihood is now at stake.

2. The social transition has hit the headlines more recently with the discovery of gaping international and domestic inequalities. In a noted encyclical, Pope Francis has eloquently argued that social issues are but the flip side of environmental issues. We thus realize that the French Republic’s virtue of fraternity —“social cohesion” in modern jargon— has been neglected.

3. The territorial transition may seem less obvious in our era of globalization. Yet, here and now, we are witnessing the drama of massive flows of people risking their lives to escape the misery of their territories. The territorial transition is about creating hope, sustainable employment and economic opportunities within the territories where populations originate. It is about preventing the marginalization of large portions of a given territory and their population. Marginalization, combined with lack of development and failed institutions, breeds terrorism.

4. Finally, political transition: development must be recognized essentially as a political process, a process grounded in institutional development, creating, nurturing and supporting institutions that are fit for purpose. The issue of the commons, forcefully brought forth by the work of Nobel prize Elinor Ostrom, needs to be fully considered in this context.

All this brings us to recognize that donors and financial institutions need to work more closely with the local population and local institutions. “Country ownership” of development policies was the apex principle of the 2005 Paris agenda to improve the effectiveness of international aid. What may have been insufficiently grasped was that country ownership was not just about the government and the central administration of a country. It was about ownership at all levels of responsibility, from local government and civil society initiatives to regional and world institutions.

No small challenge: establishing this type of ownership in a multi-polar world is the essence of the global partnership proclaimed in SDG nr. 17. Development institutions have anticipated this partnership with the creation of the International Development Finance Club (IDFC), designed to bring together development finance institutions from Europe, Asia, Africa and Latin America to share experiences and address the issues at all levels more effectively.

First and foremost, however, the challenge is in the field. The French Development Agency is working to develop better means of supporting local institutions and of thereby mobilizing the local but idle resources that have never been properly put to work. This involves appropriate financial tools to address the complex variety of specific situations, such as, to mention but a few: soft finance and non-grant tools (guarantees, equity...) for least developed countries, lines of credit and technical assistance to strengthen the local financial sector and local financial markets, and budget support and capacity building to favor governance reform.

This post is part of a series produced by The Huffington Post to mark the occasion of the one-year anniversary of the adoption of the Sustainable Development Goals (SDGs, or, officially, “Transforming Our World: the 2030 Agenda for Sustainable Development”). The SDGs represent an historic agreement — a wide-ranging roadmap to sustainability covering 17 goals and 169 targets — but stakeholders must also be held accountable for their commitments. To see all the posts in the series, visit here."

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