The wider debate on a new post-2015 development agenda is in danger of missing two fundamental changes inherent in the Sustainable Development Goals (SDGs) which, if confirmed, will mean that we are witnessing a real paradigm shift in the way we think about international development. 2015 is the target year for the achievement of the MDGs, which now need to be replaced by a new settlement. Recognising this, the EU has chosen to mark it by declaring this the European Year for Development, but how many of us really grasp the nature and significance of the changes the planned SDGs involve?
The first key change brought about by the SDGs will be a major shift from an agenda specific to a group of countries to one that is universal. The Millennium Development Goals focused on poverty reduction in developing countries. They were cast in a classic North-South model dependent on donor-recipient relationships. The SDGs constitute a much broader agenda which, in addition to social development, also seeks to address the other two pillars of sustainable development: the economic and the environmental. Even more crucially, they are universal in aspiration and are intended to apply to all countries. In other words, Europe and other high-income countries will be expected to meet them as well.
This change is evident from a quick look at the content of the SDGs. The first half dozen goals cover the familiar social development territory of the MDGs, then Goals 7 to 9 address economic development. Goals 12 to 15 are environmental and include climate change, consumption and production, oceans and territorial ecosystems. The remaining four goals cover a variety of key overarching issues: inequality (SDG10), cities (SDG11), peace, justice and inclusive institutions (SDG16) and the global partnership and resources required to achieve the agenda (SDG17). The agenda is thus comprehensive and in effect adds up to the first attempt by the international community to agree on a full programme for global development.
“The EU needs to contribute to achieving a binding agreement on climate change, which in turn will provide a conducive international environment for development”
Some voices have called for greater simplicity and a reduction in the number of goals and targets, but the programme is interdependent and concentrating on just a few goals would undermine the achievement of the others. The MDG experience has taught us that pursuing social development goals on their own is not enough without also promoting economic growth or ensuring environmental sustainability. Real development will only come with the complete package.
The second shift we need to acknowledge is the way we think about the EU’s contribution to international development. As Europeans we are fond of saying that the EU is the largest donor in the world, and we believe that EU aid in the form of Official Development Assistance (ODA) is of good quality. But both these views hide a number of less comfortable truths.
First, European aid is heavily fragmented, which reduces its effectiveness. Second, the EU has still not met its commitment to achieve the UN target ODA/GNI ratio of 0.7% by 2015. So far, collective EU aid is only at 0.43%. EU governments are likely to recommit to this target for a new date into the future, but this still leaves the European countries in a weaker position to persuade their partners at the UN’s upcoming 3rd Conference on Financing for Development (FfD3) in Addis Ababa this July that this is a serious commitment. Third, in focusing on aid we have a tendency to conflate aid with development finance, whereas in reality aid is a very limited component of the financing that goes into development, as the 2015 European Report on Development makes clear.
As the study shows, the vast bulk of the funds for development in developing countries comes first and foremost from their own domestic tax revenue and then domestic private finance. External inputs from private sources are the third principal source and international public finance, or ‘aid’, comes last. A clear illustration of this is that the global success in meeting MDG1 (halving global poverty by 2015) was very largely due to Chinese efforts to reduce poverty at home. This was financed by domestic public funds and private capital, not by aid.
Of course aid is a very flexible source of finance for development and can be carefully targeted. It is also needed more in some countries than in others, but even there it cannot be seen as a long-term solution. So ODA needs to be used well, and ideally in a catalytic manner that encourages the mobilisation of other sources of finance – for example it may be better to use ODA to upgrade the national tax administration than pay for running ongoing health service provision.
In sum, although the EU’s aid efforts are certainly valuable and necessary, they are smaller than promised, less effective than they could be and are only a minor proportion of the resources that go into the development of countries. Acknowledging this openly in the European Year of Development is important.
Moreover, aid is not the only contribution the EU makes to international development. As the European Report on Development stresses, ‘policy also matters’. This includes policies about the use of aid and the way it is delivered, but also policies that help set the global conditions for development. If the Sustainable Development Goals to be agreed at the UN in September are indeed going to encompass a holistic programme for global development that tackles a variety of global challenges and not just poverty on its own, then we need to rethink the way we finance and support it.
Just talking about ODA is not enough. This is recognised in the draft text for FfD3, which underlines the fundamental role of mobilising domestic resources and strengthening tax systems. But it also stresses the importance of external support for this effort by strengthening international cooperation to combat illicit financial flows, tax evasion and corruption.
The EU needs to contribute to achieving a binding agreement on climate change, which in turn will provide a conducive international environment for development. In other words, the right policies need to be combined with strategic use of finance. The EU can contribute on both fronts by promoting the coherence of its policies so they support such efforts and by working with partner countries to ensure its ODA is used in an effective and catalytic manner.
The SDGs are ushering in a new era for development. The EU has declared its support, but it is questionable whether Europeans really recognise some of the key changes that underpin this agenda and the paradigm shift they constitute. In particular, we need to recognise two fundamental changes. Firstly, the SDG agenda is universal and the EU will be expected to achieve its various goals at home in Europe. Secondly, the EU contribution to this international effort is not just about aid but it is also far more importantly about how European policies contribute to the wider international cooperation that tackles global challenges such as climate change, trade or global financial stability. For this we need allies and partners and not just developing countries to whom we send aid.
The real paradigm shift inherent in the Sustainable Development Goals is that we should stop thinking about the world in terms of ‘North’ and ‘South’. We should instead think of it as a global community of nations that all contribute in different ways to tackling the universal global challenges that affect us all.
Image Credit: CC / FLICKR – European Commission DG ECHO