Poorest countries need new ways to finance SDGs, UN report says

Fekitamoeloa Katoa ‘Utoikamanu, high representative for the United Nations Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States. Photo by: Kim Haughton / U.N.

The second-annual checkup on the Sustainable Development Goals wrapped up at the United Nations headquarters on Wednesday with a warning that growth and foreign assistance in the world’s poorest countries is not enough for them to collectively reach the poverty, health and environment targets, as experts called for the least developed countries and their donors to explore new financing options.

“While poverty has been declining in some [of the] least developed countries it is far from eradicated,” said Fekitamoeloa Katoa ‘Utoikamanu, the United Nations high representative for the least developed countries, landlocked developing countries and small island developing states, whose office is known as UN-OHRLLS. “The LDCs are among the most vulnerable countries in the world with large segments of their population living in extreme poverty with few prospects to improve their situation.”  

The average gross domestic product growth for the world’s 47 LDCs was 3.8 percent in 2015, the lowest rate seen in the past two decades. It is also well below the 7 percent target set by SDG 8, focused on decent jobs and economic growth, and the Istanbul Programme of Action, which established a development plan for LDCs in 2011.

Slow growth in poorest countries derails SDGs progress, finds UN report

The United Nations released results of its biannual checkup on the world economy and what it means for development. The study found overall global economic growth, but uneven progress that could jeopardize the Sustainable Development Goals.

‘Utoikamanu and Masud Bin Momen, Bangladesh’s ambassador to the U.N., presented their findings at the U.N. Wednesday afternoon, as part of UN-OHRLLS’ flagship annual report, “Financing the Sustainable Development Goals and the Istanbul Programme of Action in the Least Developed Countries.”

“These trends need to be reversed and donor countries need to fulfill their commitments to help these [LDCs] tap all possible sources of funding to fill the donor gaps,” Bin Momen told reporters during a press briefing.

They called for LDCs to seek all available financing opportunities and to look beyond traditional, yet unreliable forms of foreign development assistance. The world’s poorest countries could focus more, for example, on leveraging South-South partnerships and mobilizing domestic public finances, they said.

While foreign direct investments have, overall, increased in LDCs over the past few years, they have fluctuated widely year to year.

And official development assistance — the greatest source of external financing to LDCs — has declined in those countries from around 10 percent of GDP in 1990 to 4 percent in 2015. This continued drop — even as ODA has increased on a global scale — is a “major concern,” according to the report, given low levels of domestic resource mobilization. Recurrent risks such as natural disasters and health epidemics can also halt foreign investment, or warrant more development aid.

In order to reach an average GDP annual growth rate of 7 percent, investment growth in the LDCs would need to increase to 10 percent over the period 2016-2020.

The report is one of the latest indications from a U.N. agency or office that progress so far on the 17 SDGs is mixed, and that the world’s most vulnerable countries are off-track. Most recently, in another report on Tuesday, U.N. Secretary-General António Guterres called for accelerated action on the SDGs, with an eye on the 2030 deadline.

“Implementation has begun, but the clock is ticking,” Guterres said in a statement.

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About the author

  • Amy Lieberman

    Amy Lieberman is the U.N. Correspondent for Devex. She covers the United Nations and reports on global development and politics. Amy previously worked as a freelance reporter, covering the environment, human rights, immigration, and health across the U.S. and in more than 10 countries, including Colombia, Mexico, Nepal, and Cambodia. Her coverage has appeared in the Guardian, the Atlantic, Slate, and the Los Angeles Times. A native New Yorker, Amy received her master’s degree in politics and government from Columbia’s School of Journalism.