A sustained effort is needed to make it work – Kiran Dhanapala

Achieving the UN’s Sustainable Development Goals (SDGs) is important for a better future for all on this planet. Unfortunately, the pandemic has had a devastating impact on realising our SDG commitments by 2030.

The UN’s Sustainable Development Report (SDR) 2022 notes that there’s been no progress for the second consecutive year on the SDGs, mainly owing to the pandemic and slow or non-existent recovery.

Its monitoring process finds that among G20 nations, the US, Brazil and the Russian Federation have shown the least support for the SDGs when compared to others such as the Scandinavian countries, Argentina, Japan and Mexico.

The SDR calls for a global plan to finance the SDGs of low and middle income countries (LMICs), which lack market access to capital. As a major priority for 2022, UN Secretary-General António Guterres says: “We must go into emergency mode to reform global finance.”

Social investment, which is capital that aims to create or scale up positive impacts on society in addition to potential financial returns, will power SDG achievements. This is to come from various sources – philanthropists, corporations, financial institutions, impact funds, nonprofit organisations and social enterprises.

The report calls for five actions regarding this investment.

First, the G20 should commit to financing developing countries to meet their SDG targets.

Second, the Group of Twenty must increase its lending capacity and aid through microfinance institutions (MFIs) with greater capital to these MFIs, and better leverage of their balance sheets.

Third, this intergovernmental forum of 19 countries and the EU needs to support additional measures such as increased official development assistance, scaled up philanthropy, and refinancing debts due for SDG finance by LMICs.

Fourth, the IMF and credit rating agencies must redesign assessments of debt sustainability accounting for developing countries’ growth potential, and their need for larger capital accumulation.

Lastly, developing countries together with the International Monetary Fund and MFIs should strengthen their debt management and creditworthi­ness by fusing their borrowing strategies with tax and export policies, and liquidity management – to prevent future liquidity crises.

For example, the Asia-Pacific region has 60 percent of the global population. But only around 6.8 percent of the total energy consumed by the region is from renewable sources des­pite ambitious targets. Who will finance these targets?

Sri Lanka’s sustainability data show that it has some remaining challenges on nine SDGs with four stagnating.

At the indicator level, down­ward trends are seen in good health and wellbeing, gender equality, decent work, sustaina­ble cities and communities (satis­faction with public transport), life on land (red list index of species survival), peace, justice and strong institutions, and partnerships for goals.

Former central banker and economist Dr. Anila Dias Ban­daranaike’s recent presentation on vulnerabilities and social safety nets describes the country as having long been on a “champagne diet with a kassipu income.”

Poor revenue collection for decades, a large and inefficient public sector – especially state owned enterprises, and increasing over expenditure are the causes of the current economic crises. The government borrows to meet recurrent expenditure now, and debt servicing costs are higher than revenue.

We also have poor households indebted and living beyond their means. The Household Income and Expenditure Survey – 2019 found that 10 percent of households were poor and 60 percent of the same were in debt. Further, there was low labour force participation due to migration and high public sector employment.

A welfare economy with high aid delivery costs provides meagre handouts – such as in the case of Samurdhi. Rethinking social safety nets, reducing the administration costs of the same and donor dependency are imperative for the future.

Dias Bandaranaike argues that Sri Lanka needs urgent and challenging reforms including the removal of all subsidies, cost based pricing, rationalising a bloated public sector, linking wages to productivity, increasing direct taxes and boosting wages above the poverty line.

There also needs to be a change in mindset. The poorest 10-15 percent must get well targeted support with donor assistance in the short term only through the Grama Niladharis, and the public health and school systems.

This means that non-state actors need to provide social safety nets in the long term.

Programmes that target the vulnerable – such as the provision of nutrition for schoolchildren; community based food security; implementation of measures like crèches, paternity leave and elder care so that female labour force participation will increase; community level income generating projects to give women more employment options; and skills in IT and English – are imperative.

Corporate sustainability initiatives need to be better planned, monitored for impact and coordinated towards achieving our lagging SDGs.