Mount­ing debt threat­ens Sus­tain­able De­vel­op­ment Goals

Financial Nigeria Magazine - - Contents - A sem­i­nar on IMF’s Fis­cal Mon­i­tor at the 2018 Spring Meet­ings of the IMF/World Bank in Wash­ing­ton D.C.

In 2015, 193 countries adopted the 17 Sus­tain­able De­vel­op­ment Goals (SDGs) as an over­ar­ch­ing pol­icy roadmap through 2030. These goals are pred­i­cated on the idea that for a sus­tain­able fu­ture, eco­nomic growth must go hand-in-hand with so­cial in­clu­sion and pro­tec­tion of the en­vi­ron­ment.

Our re­spec­tive in­sti­tu­tions, the United Na­tions De­part­ment of Eco­nomic and So­cial Af­fairs (UNDESA) and the International Mone­tary Fund (IMF), fully sup­port these goals. From the UN per­spec­tive, they rep­re­sent a down pay­ment on a more peace­ful, pros­per­ous, and co­op­er­a­tive world, es­pe­cially in in­creas­ingly per­ilous times. For the IMF, they help un­der­pin eco­nomic sta­bil­ity and sus­tain­able and in­clu­sive eco­nomic growth.

In 2017, most types of de­vel­op­ment fi­nanc­ing flows in­creased, helped by an up­turn in the world econ­omy, in­creased in­vest­ment, and sup­port­ive fi­nan­cial mar­ket con­di­tions. Yet less than three years af­ter adop­tion, the im­ple­men­ta­tion of the SDGs is run­ning into a ma­jor hur­dle – ris­ing pub­lic debt in some de­vel­op­ing countries. This is the sober­ing mes­sage of a new re­port on fi­nanc­ing for de­vel­op­ment is­sued by the UN, in col­lab­o­ra­tion with the IMF and al­most 60 other agen­cies.

Here's the prob­lem: as noted re­cently by IMF Deputy Man­ag­ing Di­rec­tor Tao Zhang, 40 per­cent of low­in­come countries face high risk of debt dis­tress or are un­able to ser­vice their debt fully – this is up from 21 per­cent just five years ago. On top of this, sev­eral de­vel­op­ing countries are also fall­ing be­hind in terms of per capita in­come, in­duced by such fac­tors as fragility and con­flict – these in­clude vul­ner­a­ble countries like Haiti, D.R. Congo, and Chad.

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