–Unlocking Private Finance and Investment in EMDEs with Sir Suma Chakrabarti
MDBs it in a large in terms of the SDGs really the thing we’ve got to do is make sure we deliver them part of that’s my money about finance of course the part that is just about being much more creative more innovative. So we actually created a momentum for delivering these SDGs by twenty thirty. That’s a big task IBRD can contribute in a big way and the old MDGs and I’m a fan of the MDGs. Build MDGs really spoke about social outcomes development in the social sphere health education stone but it didn’t really tackle the economic development outcomes infrastructure and energy issues also such as inclusion would really covered by the old MDGs and SDGs the great thing about them is they cover those areas.
We’ve got a real chance now helping the cheesy SDGs through investments in infrastructure and energy security and efficiency. Also doing things like trying to help to get entrepreneurs get through to access to finance which have been denied in the past. It’s really important for us and other mustache of back to show the public services are being delivered even better for citizens in developing countries. So municipal services and municipal infrastructure is gonna big thing for IBRDs well going forward. Just note it out private finance is going to play a very big role in delivering the SDGs.
The old MDGs were very dependent on the grant aid now we still need grant aid I don’t let but actual turns off the hook on that because it’s fundamentally important for us to be to be able to do things in a rather poor countries in the social sectors but also to blend with the MDB. Financing as well but for us I think we have to really try to get more private financing into the financing of the SDGs. Let me give you some examples we anybody I mean typically for every euro that we invest on average we tracked another two and a half euros in from private sector financiers into a much less on average in the sustainable energy era that leverage is even higher much better but we can do more we can help I think by bringing better projects to private sector financiers between the infrastructure center with many projects all very well put together.
So infrastructure project preparation facilities are really important. Risk mitigation measures are gonna be important pulling a risk and guarantees all those sorts of things can be fundamentally important for the private sector put more money in. We have to develop local currency in capital markets there’s a lot of companies in the poor countries. We don’t we need a foreign exchange risk they shouldn’t have to carry that. So we should really try to finance those things the local currency financing and of course the big task is a long term capital into equity financing in poor countries. That’s a sovereign world funds pension funds income really important as a way of attracting funding into the SDGs. Finally I think you know if your private sector financier you also want to look at the government you want to say this is a country I want to invest in does this country have good policies does it have better institutions an average other institutions improving economic and political institutions. It should have right leadership.
Leadership that will really push for change and what she helped answer invest in high is a part of finance you want to make and finally all private financiers look for consistency in the policy framework. what the account stand is policies changing every other year perhaps because of little cycle for some other reason they need consistency in policy and that is something very important too. Well I think the fundamental things with countries with governments is to improve their investment climate and they’ve got a number of things to do said they could start by looking with all at their position on the lead table in the doing business survey lead table for example the World Bank puts out or in business enterprise studies that we in the World Bank do together with the ability to do that or in transparency international indices if you look at each of these indices it gives you a pretty good idea of how you as a country are perceived by the private markets by often private sector investors who may be shy unless ou do something to improve your league position.
So for example it could be actually about getting better electricity supplies into the economy is making electricity supply more regular for its own. But could also be things like making sure electricity tariffs reflect cost so then actually investments in the power sector will be viable. So there’s a whole heap of things in the investment climate and governance area that I think investors look for from countries before they want to invest in the SDGs.
MDBs and EBRDs part of MDB’s kind of course the more we have to do more for the billions or trillions of gender is that we signed up to it we are going to scale up we in the MDB and so the other MDBs too we recognize the need to do more but we also need to recognize they need to do better not just more but better be even more effective that means doing things to improve the way we work together the way the whole multilateral development system works and so that we can actually cooperate better across boundaries. We took out our internal processes we need to look at what we can do to really make us more efficient faster because one of the criticisms of course many developing countries have of the MDBs is that we tend to be too slow to respond to what they need on the ground.
So we need to respond much faster than we currently do. That requires us to take a good hard look at ourselves maybe on our own but also I said I would help you take a look at ourselves together as a group. The SDGs will be delivered because we cannot afford to fail. This agenda sets out the complexity of development in all its characteristics. Yeah there are seventeen goals a hundred sixty nine targets. I would argue that those goals now show development in its entirety and if we all we need to make a really strong push to fight poverty to fight depreciation to help countries transition to a better economic and social future we cannot afford to fail we must succeed