International Chambers of Commerce Bangladesh (ICCB) organised a dialogue on Sustainable Development Goals (SDGs) on 20 March 2016 at Pan Pacific Sonargaon hotel at Dhaka. CPD Executive Director Professor Mustafizur Rahman attended the dialogue as a discussant.
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Published in The Daily Star on Monday, 21 March 2016
SDGs: financing gap is $94b
WB economist says at ICCB dialogue
Star Business Report
Bangladesh requires an additional investment of up to $93.9 billion annually to achieve the sustainable development goals (SDGs), said a World Bank economist yesterday.
Currently, the annual investment stands at $59.5 billion against the estimated requirement of $109.4 billion to $153.4 billion to attain the 17 SDGs by 2030, according to Zahid Hussain, lead economist of the WB’s Dhaka office. The estimate for financing need is based on an approximation that $5 trillion to $7 trillion of additional investment will be needed per year to attain the SDGs in all countries.
The financing challenge will remain even after the seventh five-year plan, which would run from fiscal 2015-16 through fiscal 2019-20, said Hussain at a dialogue — SDGs: Challenges for Bangladesh.
The International Chamber of Commerce (ICC)-Bangladesh organised the event at the capital’s Sonargaon hotel.
“Assuming that the targets outlined in the plan are achieved, even that would not be enough to meet the financing gap. So the question is how do we cope with the financing challenge? The first thing to do is prioritisation.”
For prioritisation, some objectives like investing in education can serve multiple purposes. But inevitably, tough choices will need to be made. “Do we build roads or schools, or do we subsidise renewable energy or fossil fuel? All these trade-offs will have to be addressed.”
He said the goals will need to be integrated into national planning and policies to deliver the integrated vision embedded in the SDGs.
He called for engaging all sectors of the society and making stakeholders accountable to attain the targets.
He also cited the challenges of data in monitoring the progress with the SDGs.
Set in 2015, the SDGs aim to end poverty, fight inequality and injustice as well as protect the Earth.
Some 169 targets and over 300 indicators have been laid out under the SDGs.
Hussain said Bangladesh has achieved four of the eight millennium development goals. “Bangladesh should proceed with the SDG agenda based on that confidence,” he added.
Economist Wahiduddin Mahmud said one of the reasons behind Bangladesh’s success in attaining the MDGs was the adoption of low-cost solutions.
However, the solutions to attaining the SDGs will not be that economical.
Mahmud said 10 out of the 17 SDGs focus on sustainability, which is a challenge for Bangladesh.
Mustafizur Rahman, executive director of the Centre for Policy Dialogue, said Bangladesh performed well in MDGs because the national policies were aligned with them.
Bangladesh can meet part of its financing need for the SDGs by curbing the illegal outflow of funds through various channels including trade misinvoicing.
About $9 billion flew out of the country through illegal channels in 2013, he said, citing an estimate of the Global Financial Integrity. “We should look into that and plug in the loopholes to curb the outflow,” he added.
The role of the private sector is critical as many of the goals outlined in the SDGs are directly linked to it, said M Masrur Reaz, a program manager of the International Finance Corporation.
Mir Nasir Hossain, managing director of Mir Akhter Hussain Ltd, said industries are not getting gas connections properly, while other infrastructure deficits also remain.
Private investment has been stuck at a certain percentage of the gross domestic product for the last several years, he said.
“If we cannot have industrialisation, we cannot reduce poverty,” he said, while urging the government to address the issues of the industries to achieve the SDGs.
Corruption is one of the discouraging factors for investment, said AB Mirza Azizul Islam, former finance adviser to the caretaker government.
Citing the $20 billion of foreign aid in the pipeline, he said institutional and administrative capacity building is important to ensure faster implementation of projects.
Commerce Minister Tofail Ahmed said Bangladesh is moving towards positive economic development.
He said the economy will advance if there is political stability in the country.
Nasim Manzur, president of the Metropolitan Chamber of Commerce and Industry, said Bangladesh needs to set out its national priorities for development. He also stressed the need for skills development.
Mahbubur Rahman, president of the ICC Bangladesh, said a more realistic approach should be taken in devising the specific goals, taking into consideration the learning from the MDGs — both the progress and the lacking.
Out of the 17 SDGs, only eight are better integrated into the existing national prioritisation process.
Bangladesh has successfully come out of the least developed country bracket and entered the lower middle income group.
However, in order to be categorised as a middle income country, Bangladesh has to maintain the status for the next six years, he said.
But without a solid industrial base, it will be difficult to sustain the present growth rate or even achieve higher growth, he said.
“If we want to do justice to the SDGs, we have to come out of the usual approach,” said Mustafa K Mujeri, executive director of the Institute of Inclusive Finance and Development.
Speakers at the dialogue also called for improved governance for achieving the SDGs by 2030.
Published in The Financial Express on Monday, 21 March 2016
Experts seek public-private coordination to attain SDGs
Speakers at a roundtable titled “Sustainable Development Goals (SDGs): Challenges for Bangladesh” on Sunday stressed the need for more coordination among public and private sectors as well as donors’ participation to attain the SDGs.
They also called for identifying the priority goals, integration of the goals in national planning process, and strengthening the government institutions with good governance to achieve the development targets.
International Chamber of Commerce (ICC), Bangladesh organised the dialogue at a city hotel. A number of chamber leaders, economists, policymakers, entrepreneurs and representatives from the international organisations attended the programme.
World Bank, Dhaka Office Lead Economist Dr. Zahid Hussain, who presented the keynote paper in the programme, identified five major challenges.
The challenges included, among others, mobilization of global and local financing, identification of priority areas, and implementation.
Speakers at the dialogue also identified areas like corruption and political uncertainty, which need to be addressed immediately to achieve the development goals.
According to the WB economist, achieving the SDGs in all countries will require additional global investment in the range of $5-7 trillion per year.
The developing countries will need between $3.3-4.5 trillion a year to finance basic infrastructure, food security, climate change mitigation and adaptation, and health and education.
But at the current level of public and private investment, there will be an annual financing gap of $2.5 trillion, or 3.4 per cent of the world GDP.
He, however, pointed out that cross-border flow of global proceeds from criminal activities, corruption and tax evasion is estimated between $1.0-1.6 trillion per year.
To achieve the goal, Dr Zahid said Bangladesh also needs to invest $109.4-153.4 billion per annum as against the current investment level of $59.5 billion.
The WB lead economist said the funding issue will be a key challenge for Bangladesh, as it is already facing deficiency in spending on social security, education and healthcare.
The country’s private sector investment remains stagnant at around 22 per cent of the GDP for the last three years.
He, however, said a significant amount of illicit financial outflow, equivalent to 1.2 per cent of the GDP, takes place in Bangladesh every year. Dr Zahid further said building up confidence to tackle the challenges of SDGs is needed.
Citing a latest survey, CPD Executive Director Prof Mustafizur Rahman pointed out that the capital outflow from the country amounted to $9.0 billion, which is about 6.0 per cent of the country’s GDP.
He also called for aligning the country’s plans and policies with the SDGs.
Former finance adviser to caretaker government Dr Mirza Azizul Islam identified institutional and administrative weaknesses, corruption and lack of quality as well as reliable data as some major roadblocks on the way of development.
Data produced by Bangladesh Bureau of Statistics (BBS) are not dependable, he opined.
Dr Islam pointed out that some $20 billion official development assistance is in the pipeline, but the country failed to utilise those due to lack institutional capacity.
Inadequate land, corruption and lack of infrastructure are also hindering foreign investment, he added.
Eminent economist Prof Wahiduddin Mahmud said prioritisation is needed to achieve the SDGs.
He emphasised health and education sectors for investment, and opined that not only investment but environment-friendly investment is needed.
He also mentioned that urbanisation will be a key issue for sustainable development. In achieving the MDGs the solution was low cost, but for the SDGs the solution will be high cost, which will be challenging for Bangladesh.
Commerce Minister Tofail Ahmed, who attended the programme as the chief guest, said the country had successfully attained the MDGs, and hoped to achieve the same success in case of the SDGs.
“Bangladesh, as part of its national preparation, has already aligned its Seventh Five-Year Plan (7FYP) with the new global agenda. If the plan is properly implemented, it will help us a lot to achieve the SDGs, and the country’s export will reach US$60 billion then,” he added.
ICC Bangladesh President Mahbubur Rahman moderated the programme. In welcome address he said the country has successfully come out from the group of LDC and emerged as a lower middle income country.
However, in order to be categorized as a middle income country by 2021, Bangladesh has to consistently maintain the status for the next six years.
But without solid industrial base, enhanced public and private investment, adequate infrastructure, uninterrupted power supply, exploration of natural resources, and skilled workforce etc, it will be difficult to sustain the present growth rate and achieve higher growth, he noted.
IFC, World Bank Group Program Manager Dr. M. Masrur Reaz said for attaining the SDGs public and private sectors should work together with very specific strategies.
Former FBCCI president Mir Nasir Hossain mentioned that private sector investment must reach 35 per cent of the GDP, as without investment employment opportunities will not be created. Subsequently the country will face major challenges to achieve some of the key SDGs.
MCCI President Syed Nasim Manzur emphasized more investment in skill development and education sectors. He also mentioned that domestic priorities are very important.
BUILD Chairman Asif Ibrahim said the country’s SMEs can play an important role to achieve the SDGs.
European Union (EU) Ambassador Pierre Mayaudon called for creating a more FDI-friendly environment in Bangladesh.
He opined that good governance and transparency will be the keys to success for Bangladesh.
Former AmCham Chairman Aftab ul Islam emphasized the need for institution building, particularly in IT sector, in view of the country’s moving towards digitalisation.
Speakers at the programme also suggested exploring alternative revenue collection sources, utilising foreign assistance properly, and raising investment for employment generation to implement the SDGs.
They also stressed the need for more investment in education sector to reap the country’s demographic dividend.
The dialogue was also addressed, among others, by UNDP Deputy Country Manager Nick Beresford, eminent economist Dr. Mustafa K Mujeri, and ICCB Vice President Rokia Afzal Rahman.
Published in New Age on Monday, 21 March 2016
$50b more investment needed a year to meet SDGs
Says WB while economists suggest low-cost solutions
The country currently has at least US$ 49.9 billion investment deficit a year to finance the Sustainable Development Goals against the world investment projection at US$ 5 trillion for the same purpose, the World Bank said in a report on Sunday.
The report on Sustainable Development Goal : Challenges for Bangladesh was presented at a dialogue organised by International Chambers of Commerce at Pan Pacific Sonargaon hotel in the capital.
In a keynote paper, World Bank’s Bangladesh lead economist Zahid Hussain said that Bangladesh would require at least US$ 109.4 billion per annum and the current investment is only US$ 59.9 billion.
‘There is an investment gap of US$ 49.9 billion for SDGs,’ he said.
Zahid said that considering the world investment for SDGs at US$ 7 trillion, Bangladesh would require an annual investment of US$ 153.4 billion and in that case the current financing gap would increase to US$ 93.9 billion.
He said that at present national savings is 29.02 per cent of the gross domestic product, foreign direct investment is 0.9 per cent, net foreign aid 1.4 per cent and illicit financial outflow is 1.2 per cent.
‘By 2020 Bangladesh has plans to increase the national saving to 31.9 per cent of the GDP and FDI to 3 per cent while dropping the overseas grants to 0.4 per cent,’ he said.
‘This led to the prioritisation challenge which is crucial as we have tradeoffs for every investment. I think the guiding principle here should be Millennium Development Goals. We should build on MDG achievements and address gaps that remain unresolved,’ he said.
Zahid said monitoring the goals and tracking the actual progress is an important challenge.
‘Monitoring of 8 MDGs, 20 targets and 60 indicators posed serious challenges to us. Now we have 17 SGDs, 169 targets and over 300 indicators. Among the 300 indicators, data for about one third indicators are not available for Bangladesh. So we have a genuine data challenge,’ he said.
Centre for Policy Dialogue executive director Mustafizur Rahman said the illicit outflow from the country would be higher.
‘The figure would be around 6 per cent of the GDP, approximately US$ 9 billion. I think coherence is one thing we should really focus on. SDGs is a global matter and we need to go along with the world,’ he said.
In September 2015, 193 countries at the UN General Assembly adopted the 2030 Development Agenda titled Transforming our world : The 2030 Agenda for Sustainable Development.
The 17 agenda includes ending poverty, ending hunger, ensuring health, ensuring education and achieving gender equality.
Speaking on the occasion, economist Wahiduddin Mahmud said that for achieving the SDGs the country needs to adopt low cost solutions.
‘We have produced cheap oral saline to fight the health problem which is a great achievement. We also produced cheap contraceptives to tackle the population problem which was great success. So we need to adopt low cost solution for the SDGs,’ he said.
Former caretaker government advisor Mirza Azizul Islam said that financing gap is not the only issue rather there are also issues of effective use of the existing funds.
‘There is huge foreign aid waiting in the pipeline which we could not use only because of our shortcomings in administration and institutional management. Building those capacities is more important,’ he said.
He also said that corruption was another factor that discouraged the private investment.
Metropolitan Chamber of Commerce and Industry president Syed Nasim Manzur, however, said that Bangladesh needed its separate set of priority.
‘We should have a separate priority as we have demographic dividend. We can be the manufacturing power house,’ he said.
Taking an apparent dig at the UK’s latest decision to ban direct cargo transportation by air from Bangladesh and the US’s reluctance to restore GSP facilities, commerce minister Tofail Ahmed said that the rise of Bangladesh looks like a problem for many.
‘There was no problem with flights [cargo transportation to UK] but suddenly it was stopped. USA has only 7 per cent trade union in private sector but they are forcing us to have 100 per cent trade union. Actually, the concept of World Trade Organisation is distorted. Otherwise, why we are not getting duty or quota free access in different markets,’ he said.
Institute for Inclusive Finance and Development executive director Mustafa K Mujeri said to achieve SDGs restructuring the development agenda is very much needed and new innovative ideas have to developed.
Former FBCCI president Mir Nasir Hossain and Business Initiative Leading Development chairman Asif Ibrahim said SMEs can play an important role to achieve SDGs.
ICC Bangladesh president Mahbubur Rahman, European Union ambassador Pierre Mayaudon, Chinese ambassador MA Ming Qiang, former AmCham chairman Aftab ul Islam, ICCB vice president Rokia Afzal Rahman, BTMA president Tapan Chowdhury, IMF Resident Representative Stella Kaendera, PRI chairman Zaidi Sattar, former FBCCI president AK Azad, former BGMEA president Anwarul Alam Chowdhury and former BKMEA president M Fazlul Hoque were present.