Viewpoint: To Solve the World’s Problems, the Global Development Community Turns Towards the Private Sector
By Joan Larrea and Justice Johnson
What’s the price tag for a world that is economically prosperous, environmentally secure and socially fair? The United Nations estimates it’s around US$4-trillion a year.
The UN Sustainable Development Goals (SDGs) provide a road map to such a world. However, to achieve the SDGs in developing countries by 2030, almost US$4-trillion per annum is needed – much more than the current aggregate SDG-focused funding of US$1.5-trillion annually from domestic and international sources, including official development assistance from governments and philanthropic donations. The financing gap is particularly acute in the least developed countries (LDCs), which exhibit the lowest indicators of socio-economic development.
To close this funding gap, the global development community has been exploring ways to leverage the expertise and resources of the private sector. The private sector has long played an integral role in economic development and poverty reduction. It is responsible for creating almost 90 per cent of jobs in the developing world, as well as facilitating important technological innovation and the distribution of goods and services. Global capital markets hold more than $200-trillion in assets, and an allocation of just 1 per cent of these assets toward the SDGs would go a long way.