The multilateral development banks (MDBs) and IMF have signaled plans to extend more than $400bn in financing over the next three years, IMF said in a statement on Friday in Washington. They vowed to work more closely with private and public sector partners to help mobilise the resources needed to meet the historic challenge of achieving Sustainable Development Goals (SDGs). The MDBs are referred to African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank and World Bank Group. The lending agencies announced their plans in the lead up to Third International Conference on Financing for Development in Addis Ababa on July 13-16. The SDGs are ambitious, demanding ‘billions’ of dollars in the current flows of official development assistance (ODA) and all available resources to attract, leverage and mobilize ‘trillions’ of dollars in investments of all kinds—public and private, national and global. The ODA, estimated to be $135bn per year, provides a fundamental source of financing, especially in the poorest and most fragile countries, but more is needed. Investment needs in infrastructure alone reach up to $1.5tn a year in emerging and developing countries. Meeting the staggering but achievable needs of SDG agenda requires everyone to make the best use of each dollar from every source, and draw in and increase public and private investment. MDBs development finance has grown from $50bn in 2001 to $127bn in 2015. For each dollar invested by its shareholders, MDBs are able to commit $2-$5 in new financing each year. Their own direct private sector investments have increased fourfold over this period. The multilateral financial agencies mobilise an additional $2-$5 in private investment for every dollar they invest directly in private sector operations. The vow to increase their contribution to more than $400bn over the next three years reflects in part efforts to make even better use of their balance sheets. Additional steps to leverage more resources include the development of new approaches and tools to help developing countries play a stronger role in harnessing national resources. MDBs and IMF are partnering with countries on, for example, the introduction of a new toolkit to assess and improve tax policies and expanding instruments such as e-procurement to achieve better government spending. Increasing external resource flows to developing countries for investment is essential to achieving the SDGs – but these flows can be expected to materialise only in circumstances where countries have coherent development strategies consistent with maintaining macroeconomic stability while also ensuring the delivery of key public sector services and a business environment supportive of growth. Through their policy advice and technical assistance, the financial agencies support the countries in designing economic policies to achieve their objectives through MDB policy support loans and IMF-supported programmes. These institutions provide general financial support towards meeting budgetary and balance of payment needs.
