Pri­vate cap­i­tal can help make a dif­fer­ence

China Daily (Canada) - - VIEWS -

At theWorld Eco­nomic Fo­rum An­nu­alMeet­ing in Davos, one key topic was the in­creas­ing im­por­tance of pri­vate rather than pub­lic cap­i­tal in solv­ing prob­lems that don’t re­spect na­tional bound­aries.

To re­ally make a dif­fer­ence, cap­i­tal needs to be in­vested on a mas­sive scale. TheUnit­edNa­tions’ Sus­tain­able Devel­op­men­tGoals are 17 chal­leng­ing global tar­gets for the year 2030 in ar­eas such as education, healthcare, and the en­vi­ron­ment. To meet them will re­quire as much as $5-7 tril­lion of an­nual in­vest­ment, ac­cord­ing to the Brook­ings In­sti­tute. This aim sounds al­most in­sur­mount­able un­less you con­sider that in 2015 house­holds glob­ally were worth $250 tril­lion, ac­cord­ing to Deutsche Bank es­ti­mates.

Pri­vate in­vest­ment alone can­not meet the Sus­tain­able Devel­op­men­tGoals— reg­u­la­tory change, phi­lan­thropy, and pub­lic in­vest­ment will also be re­quired— but it will be a cru­cial source of cap­i­tal.

And yet, our re­search shows that most ini­tia­tives around Sus­tain­able Devel­op­men­tGoals fund­ing gaps have not in­cluded a spe­cific fo­cus on pri­vate wealth. Ob­sta­cles to at­tract­ing pri­vate wealth in­clude: data around the Sus­tain­able Devel­op­men­tGoals fund­ing gaps, which must be im­proved, cen­tral­ized, and made more trans­par­ent; terms and dis­clo­sures on in­vest­ments re­lated to the Sus­tain­able Devel­op­men­tGoals, which have yet to be stan­dard­ized; a dearth of in­vest­ment net­works re­lated to the Sus­tain­able Devel­op­men­tGoals, which should be de­vel­oped to con­nect in­vestors with op­por­tu­ni­ties; and pro­jected fi­nan­cial re­turns, which need to be up­graded if they are to sus­tain pri­vate in­vestors’ in­ter­est.

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