The OECD organized its 8th edition of the Global Forum on Development in Paris, which this year was devoted to the Sustainable Development Goals (SDGs). Mario Pezzini, Director of the OECD Development Centre & Acting Director of the OECD Development Co-operation Directorate, draws conclusions from the event.
In your opinion, what lessons can be learnt from the Forum on Development held in Paris on 31 March 2016?
Three important points were addressed. First, financing for development. This is essential and raises the issue of figuring out how to maximise the response that governments provide to finance multifaceted issues, with a diverse range of instruments. The most important resources come from national taxes. The general framework has improved in recent years, but there are still countries where the fiscal capacity is too weak. Subsequently, there is foreign investment (USD 189.6bn in 2014), migrant remittances (USD 373.7bn in 2014), Official Development Assistance (ODA) (USD 137.2bn in 2014) and philanthropy. It is important to determine the synergies and trade-offs between these different resources.
The second point is that while we are discussing the universality of the SDGs, the national and continental dimensions of their implementation are really important. Different contexts need to be taken into account to adapt these strategies and actually implement them.
The third point is that progress in achieving the SDGs cannot only be sectoral. It is necessary to coordinate the various interventions, especially in developing countries.
Are the countries with low tax resources mainly in Africa?
There are contrasting situations in Africa, as is the case in Southeast Asia and Latin America, a region where some countries are able to mobilise tax resources equivalent to 30% of GDP (Argentina, Brazil and Uruguay, for example), which is a level comparable to OECD countries. However, the average in Latin America for the mobilisation of tax resources stands at 21.7% of GDP, and certain countries, like Guatemala and Mexico, still fall well short with 12% or 13% of GDP. The same applies to Africa, where countries such as Morocco have increased their fiscal capacity: between 2000 and 2014, Morocco’s tax/GDP ratio rose from 23.6% to 28.5%, whereas it remains low in other countries, like Cameroon and Rwanda.
Do the SDGs raise the issue of the coherence of public policies?
The mechanisms for public intervention have been operating on a sectoral basis for decades, in both OECD countries and other countries. Today, we often wonder what type of approach the public sector should take. With development programs, it is clearly preferable to start with the problems, which are not necessarily organised sector by sector. When we mention the informal sector, poverty or gender, we are talking about crosscutting issues that call for a multidimensional response and action. With regard to public policies, the synergies and complementarities are clearly apparent. Consider investments in infrastructure, which need to be coordinated. The construction of a school, for example, requires coordination in terms of transport and telecommunication connections.
How can we get out of the sectoral approach?
The OECD is doing its part.During the last four years, we have been applying Multi-dimensional Country Reviews in such countries as Côte d’Ivoire, Myanmar and Uruguay. This new methodology entails talking about not only growth, but also well-being and the best possible combination of policies likely to bring down the barriers to well-being. Strategies need to be defined, and not only sectoral policies for health or education, for example
Are the problems of coherence also to be found between national policies and the priorities of donors?
We first of all need to highlight the problems of coherence within donor countries themselves. ODA policies and national policies in developed countries are not always along the same lines. As a result, we can help developing countries while creating barriers to their development. A well-known example is that we allocate aid to develop rural areas in Africa, but we can create barriers that prevent African products from having access to our markets.
Second, there are also problems of coherence in developing countries, which sometimes focus on bureaucratic approaches and not on the bottlenecks that hamper development. For example, when we want to develop a region in a country, we deal only with agricultural policies, without taking into account a rural economy that may well not be strictly agricultural. Operations are consequently limited.
Third, there is the issue of coordinating the public policies of developing countries and ODA. A lot of efforts are made with different impacts. Available negotiation forums to discuss this are not implemented fully.
Is it possible to be under an International Monetary Fund (IMF) program and have social policies that make it possible to achieve the SDGs?
It all depends on the constraints of the agreement defined with the IMF. It is true that there has been rigidity in the past. The reason for this is that the same solutions were considered for all countries, without taking into account the specific trajectories of national economies. Things have changed today. International institutions are reflecting about the need to learn from past mistakes.
In developing countries, is the intention to become self-financed increasing?
No one likes to depend on financing from an international institution and external conditionalities. It is often a case of need. Countries, of course, want to be financially autonomous, so that they need to call on international aid only in exceptional circumstances. Certain efforts have made international organisations more functional. The African Union (AU) and many regional institutions are trying to help their members move in this direction. It is possible: over the past 20 years, many countries have benefited from the economic growth of China and India, which have become important partners and have gained more fiscal autonomy from this. I have both Chile and Morocco in mind in this regard.
Do the SDGs err by being overambitious?
The SDGs define a roadmap. The problem lies in knowing how it will be used by different countries. It seems utopian to believe that developing countries will be able to make progress at the same pace on all 169 goals. Countries are said to be “developing” precisely because they do not have the capacity to fight on all fronts at the same time. The crucial point concerns the implementation of the SDGs and the definition of strategies setting out priorities and timetables. The SDGs give direction, and the pace of the journey towards these goals must be clearly defined by each country.
What main development themes are being discussed currently?
As we have said, these themes include focusing on financing, but also on ongoing demographic trends, particularly in Africa. The African continent’s population increase will be unprecedented on a global scale, with consequences that will affect not only Africa, but also the whole world.
Another important issue is how to strengthen the middle classes and ensure that they no longer are vulnerable, as they are in Africa, where they can still fall back into poverty. This is a risk that carries tension. It raises the question of confidence in governments and public administrations. These are fundamental issues that lead to the broader question of governance.
The opinions expressed on this blog are those of the authors and do not necessarily reflect the official position of their institutions or of AFD.