The Trillions Challenge – Creating the Decision Base for Financing the 17 UN Goals

When the 17 United Nations Sustainable Development Goals (UN SDGs) have been launched in 2015, most of the amazed supporting donor countries from the OECD believed that the Goals were about increasing a bit their Official Development Assistance (ODA) – and as well the capital for the Development Banks. Even a UN Sustainable Development Fund has been launched – with the disruptive size of $ 70 million (not bn!) when we created the chart presented here in early 2018.

For many countries and IGO SDG Goal 18 is the most important one: Zero Action

For quite a lot rich countries to financing the Global SDGs isn’t any issue. They regard the 17 UN Goals as something to implement in their National politics and started initiatives to meeting the SDGs in their country such as our own country Switzerland. And so the rich countries go to protecting their biodiversity and clean water, claim Gender justice and support campaigns to avoiding waste. In Switzerland of course.

Other countries, take Germany, see their contribution by calling others for action: https://sdgactioncampaign.org/de/. The German Bertelsmann Foundation and the US billionaire Ted Turner successfully launched an Index to measuring the progress of the SDGs and established a private SDGs network, headed by Jeffrey Sachs. They call this private network UNSDSN. Many people believe it to being part of the UN community. Unfortunately this network provides zero funding to any of the SDGs but sends a message to the poor countries: ‚Go increasing your GDP! We show you how: by free trade.‘

How comes? Well, the Bertelsmann Index creators used indicators that all depend entirely on GDP, as we can see in the Global Index Benchmark, that compares the rankings of countries in the SDG Index with their ranking by GDP.

Lots of lyrics from Washington and New York – zero figures, zero execution

In late 2017 the United Nations started the Inter Agency Task Force (IATF) on Financing for Development, an initiative to improve both the knowledge as well as the funding of Development in general, of the 17 SDGs in special.

In early 2018 the first report on Financing for Development has been released. It is mostly based on the annual ‚Global Outlook‘ lyrics of the World Bank, the IMF, UNCTAD, UNDP and WTO, the so called ‚five stakeholders‘ of this new working group. When we had the last meeting of the IATF on October 29th in New York, several delegates from countries criticized the lack of figures and country samples. But if you read the statement of the United States of America delegate to the 2018 report, Mrs. Stefanie Amadeo, you will quickly understand why the report doesn’t mention any countries or figures. Quote:

‚The United States rejects any attempt to interpret the language in Paragraph 5 to promote state ownership in the economy, or to suggest that governments may deprive private interests of wealth or resources without compensation in accordance with international law or otherwise fail to observe a State’s legal obligations.‘

This is quite funny, because with public expenditures of $ 790 billion per year for military, the United States are the biggest governmental spender in the economy worldwide. It’s also funny that Mrs. Amadeo refers to ‚international law‘. As far as we can say in October 2018, none of any of the international laws is respected by the United States of America.

But the document shows, how difficult it is for the IATF on Financing for Development to release any position featuring the size, the sources and of course the governance to implementing the Finance for Development.

Lessons from the HFCs case in 1987 – Global commitments can work

So we – the Basel Institute is part of the Civil Society activities within the IATF on Financing for Development  see: https://developmentfinance.un.org/iatf-2018-report-preparatory-materials – have to find ways to creating a decision base on Financing for Development.

That decision base may have three central points of evidence:

  • The Global costs of the 17 UN SDGs including the consideration of their interlinkage(s)
  • The Global sources to financing these costs including transaction costs such as for interests, pollution, war and military
  • The existing or non-existing Global mechanisms to provide the Financing for Development

It’s a bit like with the Global HFCs case that has been successfully resolved in the Montreal Protocol in 1987:  we may know from experts what do to, but doing it is a different thing. By chance in the HFC case it happened and even the US and China abolished the HFCs.

 

So here we get a first overview on the estimated annual costs. The general costs in any case start at $ 2.5 trillion per year (UNCTAD). That sounds a lot, but is e.g. the GDP of Germany only.
Due to the interlinkages, the single SDGs are hard to estimate. The World Bank’s study on achieving clean water all over the World (SDG 6) claims $ 150 billion per year needed. That’s not a lot when we compare it with transaction costs such as the $ 1.69 trillion for military according to Stockholm’s SIPRI.
To overcoming poverty (SDG 1) may be resolved by a basic income for the remaining 600 million really poor, that the Basel Institute calculated wit 132 billion Dollars per year. That means: 220 Dollar per head and year. A similar approach has been taken by the WHO: they estimated $ 58 per head and year to achieving SDG 3 (Health and Well-Being). If we take a target group of two billion people in need of this help, we reach $ 1.16 trillion per year.

So we may not know enough on the costs, but as we learn in the following chart, the instruments to financing the costs such as ODA and Development Banks are not made for such a Global issue:

 

The most surprising figure here – even and especially for experts – may be the 10.5 trillion new debt per year the OECD countries pick up. This figure appears when we divide the total debt of $ 63 billion by a maturity of six years. Of course neither the OECD, nor the countries, nor World Bank and IMF feature this reality of raising sovereign debt year by year (Rank 1).
Nevertheless the OECD considers what they call ’new debt‘, which is only the increase of the total debt (Rank 3). As well rank four rarely appears in official statistics: the $ 429 billion expats send to their families in developing countries every year.
The ODA, that still is regarded as the major source to achieving the SDGs, is only 1.4 per cent of the new sovereign debt. The Development Banks as well deliver quite few to the 17 Goals – especially when we consider their focus on big infrastructure projects such as roads, harbors and airports, that may create transaction costs for pollution, interests and security, that are at the same size than the investment.
When it comes to the NGOs, that drive the public picture of Financing Development through images of poor children in rural areas, we see how small their contribution is. The Bill and Melinda Gates Foundation accounts for $ 4bn a year, but how much of this money goes to vaccination and pharmaceutic products, consultancy and marketing for vaccination programs?
The poorest source to Financing for Development unfortunately is the UN Sustainable Development Fund with $ 70 million ‚invested‘ the end of 2017.

 

What to do instead of complaining: a $ 10 billion SDGs Fund

So what is Basel Institute doing to better the situation then instead of complaining? As you can read in the article of Germany’s Handelsblatt, Basel Institute has talked to quite a lot institutional investors that currently do not allocate in any of the countries in need. As a result we started to developing a $ 10 billion fund that invests in the SDGs. The knowledge base comes from our worldwide Social Capital Assessment, that for the first time assesses the three indicators on co-financing public goods and to investing in local small enterprises and cooperatives. So the fund will focus on these three indicators and provide capital at a very low interest rate, that allows local companies and cooperatives to invest in a mid-term perspective.

Which obstacles do we have to overcome if we’d like to directly fund on the SDGs?

  • NGO fear that they lose control over their ODA projects and refuse to collaborate and of course fear any calculation of their transaction costs, e.g. for administration and security
  • Development Banks fear to losing the political control they implement with their projects through bilateral and multilateral agreements on e.g. ‚free trade‘, ‚governance‘ and ‚rule of law‘. Further they have to follow the political agenda of their owner countries that will not consider the SDGs 1, 10 and 16.
  • Development ministries delegate Financing for Development to their collaborating Development Banks and the NGOs that execute the local projects. Some of the SDGs – especially SDG 1, 10 and 16 – are not in their agenda or a regarded as a duty for ‚private‘ actors. So they launch conferences on PPP for Financing Development instead of dramatically increasing their own budget.
  • UN agencies fear the review and assessment of their small funds and of course a confrontation with the major donors of the UN which are the OECD countries, that are called to sharing their access to capital.
  • Governments fear to losing the political control that is connected with ODA and Development Credits while the projects have to apply for funding at governmental agencies.

So Basel Institute will provide the figures for the three new indicators in the beginning of 2019, continue to fundraising the SDGs Social Capital Fund and of course to contribute to the IATF on Financing for Development.

The new report of Basel Institute will hopefully be ready and published by the end of November 2018. Of course you can directly contact me in case of questions or offers to collaborate. Your Alexander Dill, Director, mail: dill(ad)commons.ch, phone: 0041 61 261 35 21

 

 

 

 

 

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admin am Oktober 31st 2018 in Allgemein

The UN Peace bodies need support, not destruction

On April 14th 2018 three members of the UN Security Council decided to conduct a missile assault in the midst of the populous area of the city of Damascus. The rationale for this act can be found in the press release of the French President Emmanuel Macron:

„There is no doubt as to the facts and to the responsibility of the Syrian regime. The red line declared by France in May 2017 has been crossed. Tonight, I have therefore ordered the French armed forces to intervene, as part of an international operation conducted in coalition with the United States of America and the United Kingdom against the clandestine chemical weapons arsenal of the Syrian regime. Our response has been limited to the Syrian regime’s facilities enabling the production and employment of chemical weapons.“

Beside the fact that there is serious doubt that the event happened – if the governments of the US, the UK and France had evidence for the existence of a ‚clandestine chemical weapons arsenal‘ to attacking these arsenals with missiles may cause thousands of deaths and an environmental disaster.
Picture: United Nations

The Basel Institute of Commons and Economics. a member of the UN stakeholdership to achieving the common UN Goals – especially Goal 16 Peace – therefore released information from the ground in Douma that raise questions on the chemical weapons attack.
Further the Basel Institute condemned the assault on Syria, that since seven years now suffers from a proxy war causing millions of refugees and around 700’000 death up to now.
Attacking this country again without considering the Charta of the United Nations weakens the bodies of the UN such as the Security Council, the General Assembly, OHCHR but as well UNDESA and UNESCO that work for peaceful relations and solidarity between the countries.

The release of the Basel Institute has been published by the Austrian News Agency APA in the context of the UN’s activity concerning the alleged attack with chemical weapons and appeared in Austria’s ORF on April 22nd 2019.
The Basel Institute of Commons calls to all governments and Civil Society to supporting the bodies of the United Nations. Only respect for the community of the United Nations and its General Secretary António Guterres can prevent further violations in the future.

 

 

 

 

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admin am April 23rd 2018 in Allgemein

Interactions between Common Global Goals – make your choice

Imagine a group of people discussing and agreeing on 17 common goals. In general they will sort of voting on the goals with the most support across the group. So their goals are in fact a chart on what they favor. But one thing they never do is to thinking on the dependencies and interactions between the goals. You can see that in every local administration budget where measures and limits on spending are confronted with the projects they want to fund. One of the two doesn’t fit at the end. Goals collide.
Now imagine 193 countries agreeing on the 17 Global Goals, called the Sustainable Development Goals. Let’s have a look at them:

Of course none of us would find any of them irrelevant or useless. But after two years within the process to promoting these goals – let’s call them the Global Goals – some goals achieve much more support and funding than others. The reasons for that choice are different, but two motivations can be mentioned:
1) Choosing Global Goals that a government or an organization can easily meet and achieve without any extra intellectual, political or financial efforts, e.g. of course the crops industry feels to ‚fighting hunger‘ (Goal 2). Rich OECD countries implement compliance and governance to achieving goals 3, 4, 5, 6, 7, 13, 14 and 15.
2) Choosing Global Goals were you can attend funding from donors. This choice quickly leads to a couple of goals such as 3, 4, 5, 6, 7, 11, 12, 13, 14 and 15.
As we can see, both motivations lead to the choice of the same goals. But unfortunately the 17 Global Goals as well have an interaction between them. ‚Zero Hunger‘ (Goal 2) is even a goal that requires to eliminating poverty (Goal 1) and social inequality (Goal 10) before and as well to achieving peace (Goal 16) of course. On top Goal 17 is about financing all the Global Goals. To achieving any of them without any extra funding is out of reach.
To better understanding these interactions we created the first UN Goals Impact Matrix, that you can download here.


Even if you won’t share all of the estimates lying behind this matrix you will being inspired by playing a bit with it.
We therefore provide a MS Word version here so that you fill it out by yourself.
The paradox thing is, that the Global Goals with the highest impact are the ones with the lowest support. So the funding and support moves to the low impact, which we explained before by the motivation.

So how can we create any motivation to considering Goals 10, 11, 16 and 17 as well? If we don’t, the Global Goals will fail.

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admin am Februar 23rd 2018 in Allgemein

Financing Development: Where is the Market Price for Peace?

While most of the countries and their statistical offices still believe that the 17 UN Goals are an audit for the year 2030 only – and therefore enhance their capacity building to delivering their right figures – the single Goals such as Goal 1 (Overcoming poverty), 13 (Stopping Global Warming) or Goal 16 (Peace) according to the estimates need funding up to $ 5tn per year.
The recently launched UN Inter Agency Task Force (IATF) on Financing Development now published a first report for 2018 – including the figures presented by the Basel Institute of Commons and Economics: https://developmentfinance.un.org/iatf-2018-report . While reading the figures we learn that the annual World development assistance is around $ 140bn per year and the World Bank reaches out credits of $ 47bn.
But unfortunately only the OECD countries raise new sovereign debt at the size of $ 14tn per year. According to the Swedish SIPRI, the military expenses reached $ 1.69tn in 2016. The good thing is: both, the military expenses as well as the sovereign debt is money controlled and raised by the governments. Governmental money is a public good.
So if the governments had the will to reaching some of the more expensive SDGs such as 1, 13 and 16, they have the opportunity to shift their allocation: instead of dedicating public money to defense, weapons, war and conflict ($ 1.69tn per year) they may investing in peace.

Finally an Inter-Agency Task Force for Financing Development. The Basel Institute supports this attempt and contributes to the challenge of financing up to $5tn per year to reaching the SDG. Visit their website: https://developmentfinance.un.org/

Instead of providing zero-interest-credits only to financing their own debt ($ 14tn per year), they may starting to provide zo-interest-credits to the regions of conflict and crises where they are hardly needed to rebuilding the countries such as in the Middle East, in Ukraine, in Afghanistan and Pakistan. in Brazil, Mexico and Venezuela and of course in almost the entire Africa.
If we had a market price for peace: why not expecting governmental and private investors to paying it? The peace bond is not on the market yet. After World War II many European regions have been entirely damaged. It took only ten years – from 1948 to 1958 – to establishing common prosperity by peace in most of the European countries. That peace lasted up to our year, the year 2018. Now we have to repeating this success story for countries and regions still in conflict.

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admin am Januar 11th 2018 in Allgemein

Highly topical in 2018: the five principles of peaceful coexistence

It was 63 years ago, exactly on April 29th 1954, when India’s first prime minister Jawaharlal Nehru, and China’s first premier, Zhou Enlai, signed a treaty that has been since recommended as the Panchsheel Treaty. It contained a few mutual and common rules that are called the five principles of peaceful coexistence. At the time the Charter of the United Nations (link to the original version)  that is supposed to containing the same principles had become effective for nine years yet. But within this period the American and French wars in Korea and Vietnam questioned the UN Charter.

Still agreeing on peaceful co-existence: China’s Xi Jinping and India’s Narendra Modi (AP photo from Hindustantimes)

So when the Chinese President Xi Jinping and his colleague Prime Minister Narendra Modi met in September 2017 on the occasion of the BRICS meeting in China’s Xiamen, remembering the Panchsheel Treaty was a rare sample of successful bilateral agreements that have never been broken or put in question.
And these are the five principles:

  1. Mutual respect for each other’s territorial integrity and sovereignty.
  2. Mutual non-aggression.
  3. Mutual non-interference in each other’s internal affairs.
  4. Equality and cooperation for mutual benefit.
  5. Peaceful co-existence

    Understanding the paradox of rules: Lao-Tzu

    While other international agreements, beside the UN Charter from 1945 e.g. the Helsinki Act from 1975 or the Minsk Protocol from 2015 failed to bringing enduring peace, the five principles appear astonishing highly topical. The Basel Institute of Commons and Economics therefore started to adopt them as a base for other bilateral agreements on peace and reconciliation.
    In a broadcast from May 1954 Nehru said: ‚If these principles were recognized in the mutual relations of all countries, then indeed there would hardly be any conflict and certainly no war.‘ In any case they shift the issue of peace from entirely complicated rules that cause endless violations to a couple of clear basic rules.
    It was the Chinese philosopher Lao-Tzu (6th century B.C.) who discovered the paradox of law and rules long before Immanuel Kant’s (1724-1804) Categorical Imperative when he considered:
    The more rules and regulations,
    The more thieves and robbers.
    Today’s peacemakers may being inspired by such thoughts.

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admin am Oktober 30th 2017 in Allgemein

How Ghana did the fastest social study ever been conducted and published some days later

While doing the first open access survey in history, the World Social Capital Monitor, finding partners in all countries creates amazing and inspiring stories. The most recent one is the one of Rachel Boadu, 20, from the town of Kumasi in Ghana where she studies Social Sciences at the University of Ghana. Only a week ago Rachel (who we contacted through Researchgate)  started to spreading our questionnaire among young people across Ghana via Smartphone.
She was that successful that after three days she had several hundreds of respondents from 50 Ghanaian cities and more than fifty qualitative statements.
So we decided to creating the fastest Social Capital Report ever being published today. Why that? If we are capable to achieving results that quick we have to share and spread them right now.
Social sciences are not for the drawers only.
So you can have a look at the amazing Social Capital of Ghana with a 837kb PDF file now.
Congrats Rachel to your great study and the passion and speed you’re spreading it!

 

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admin am September 2nd 2017 in Allgemein

Surprise: six NATO members among the most peaceful countries

Within the United Nations activities to Financing Development the Basel Institute of Commons and Economics recently provided a calculation of transactions costs such as credit/debt and expenditures on alleged ‚defence‘. On the occasion of the Munich Security Conference 2018, that in the Munich Security Report 2018 again pretends a ‚decline‘ of military costs within the NATO, the Basel Institute released a first ranking of 146 countries by their Export-Defence-Ratio (please click to download). Surprisingly we find six NATO member countries among the countries with the best ratio (see table).

These six NATO countries are in charge of only 1.33 per cent of the estimated $ 1.5 trillion NATO spendings on alleged ‚defence‘ every year. So in our view to achieving the common UN Goals of the 193 countries that agreed to them in 2015 to reducing the transaction costs for both capital and military opens space to financing the World’s public goods.
These $ 1.5 trillion include not only the official NATO expenditures but as well the expenditures and the damage NATO causes in other countries such as first in Russia and China, but as well in DPR Korea, Iran, Venezuela, Cuba, Ukraine, Donbass, European Union, Afghanistan, Pakistan and many more.
Of course this calculation may encourage as well NATO members to considering their transaction costs. To transforming NATO into a diplomatic civil initiative might be the thing to do 73 years after World War II and 27! years after the abolition of the Warszaw Treaty. Basel Institute will advocate this proposal on the Munich Security Conference 2018.
Unfortunately Basel Institute does hard to diminishing the threat imposed to the United States of America by it’s aggressive neighbors Canada, Mexico and Afghanistan; a threat longing for more than 500 years yet 🙂

 

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admin am Februar 11th 2018 in Allgemein

Palestine’s Social Capital is their key to peace – outcome of the presentation at the Palais des Nations

Organized by the UN SDG Lab on September 12th 2017, several international organizations and countries were invited to attend a presentation and discussion of the World Social Capital Monitor, the innovative set of indicators for the SDG, provided by the Basel Institute of Commons and Economics at the Palais des Nations of the UNOG. Among the contributors was Jos Verbeek, representant of the World Bank in Geneva, who introduced the entire history of the Social Capital Initiative of the Worldbank since 1992 yet. You can read Verbeek’s input to the social dimension of the SDG herehttp://blogs.worldbank.org/voices/forgotten-dimension-sdg-indicators-social-capital

H.E. Dr. Ibrahim Khraishi, Ambassador of the State of Palestine to the United Nations (right) with Christian Lonnqvist (left) and Alexander Dill (midst) at the Embassy of Palestine

Across the event the Basel Institute could hold separate meetings with ten UN missions in order to following the motto of the SDG which is to leaving noone behind.
Since the expulsion of hundreds of thousands Palestinians in 1948, the so called Nakba, the occupied territories more than many countries only survived due to the solidarity, helpfulness and friendliness across their citizens and friends.
Palestine is literally built on Social Capital.
Of course this Social Capital can now being the asset to finally achieving peace and reconciliation.
Especially while experts do not expect less Social Capital on the other side of the wall that divides this beautiful region of Olive and Orange trees, herbs and calm atriums, bridging Social Capital will help to making the first steps.
The commitment of the World Social Capital Monitor to Goal No. 16 – which is peace – includes to starting where peace is needed most.

Salām – and hopefully as well Shalom – to all people in the Middle East!

 

 

 

 

 

 

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admin am September 22nd 2017 in Allgemein

Why discussions on what Social Capital is often end in the desert

Three Nobel laureates, Elinor Ostrom, Joseph Stiglitz and Amartya Sen contributed to the World Bank’s Social Capital Initative in 1999. Unfortunately the group has been „disbanded“ – that’s how Michael Woolcock, the head of the initiative, expressed it in an email to Alexander Dill of the Basel Institute in November 2015. Recently the World Bank on the occasion of the World Social Capital Monitor recovered the issue. In their report to the European Commission (p. 186) Stiglitz and Sen wrote 2009: „Bridging social capital is the most important under-measured form of social connections for many outcomes.“ But Joseph Stiglitz as well wrote: „Social capital is tacit knowledge“.

So why did it not happen? Why are so many organizations and Statistical Offices not interested in measuring and considering Social Capital?

Alexander Dill at South Asian Dean’s Conference in Phnom Penh 2016

The major reason is the reaction policy makers and officials have on what they suppose to being academic in any meaning: Let’s leave this to specialists and report in three years again.
So we try to explaining the definition, the meaning, the use and the outcome of Social Capital such as:

  • Violent conflicts can only be resolved by trust, helpfulness and friendliness.
  • Public goods such as security, health, education and climate care can only be funded if the citizens support them by taxes, contributions and voluntarism.
  • Sovereign debt can only be repaid by the willingness of citizens to accept austerity measures and an asset levy. For both trust and solidarity are required.
  • Affluence grows by people trusting and helping each other. Otherwise the transaction costs will be too high and will prohibit economical relations.

 

How can bridging Social Capital being measured then?
Logo_neuThe only eight questions of the Social Capital Assessment are available in several languages on www.trustyourplace, the survey portal of the Basel Institute of Commons and Economics. We offer a social media application to identify, to enhance, to protect and to recover core assets of Social Capital.
The participation is anonymous and we neither require registration nor do we collect any socio-demographic data such as on political, ethnic or religious bonding. Why?
Because in most of the conflict regions they are the reason of the conflict.

Issues cutting across

Social_Capital_Synonyms

Social Capital cuts across with various issues

Social Capital in our definition is the amount of core interpersonal perceptions among a community. In our Social Capital Assessment we are now able to quantify and to compare the Social Capital of around 150  countries today.
Of course Social Capital cuts across with a bundle of issues such as social cohesion, voluntarism, public goods and civil society.

The practical impact of Social Capital on society

While studying the literature on Social Capital you can easily get the impression that discussing ‚The concepts of Social Capital‘ is a theoretical egghead issue only. In the following interview Professor Pahlaj Moolio from the Pannasastra University of Cambodia gives examples for where Social Capital is created and required: first in the family, then in rural development, banking and tourism. The example of the newborn child he gives, sounds convincing: the baby brings friendliness as a gift into the family. This friendliness causes and inspires trust, solidarity and helpfulness. So the development of the child to becoming a valuable member of the community is built on non-material assets beyond GDP and GNP:

If we you want to learn more on Social Capital, it’s history and contributors, our recent introduction „Why Social Capital 2016?“ might be an easy way to access. The major references are linked in the article so that you can make your own picture of the major sources.

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admin am November 14th 2009 in Allgemein