Common purpose, common future: transforming finance for sustainable development to combat the COVID-19 and climate crises
The Sustainable Development Goals (SDGs) and the Paris climate commitments are ambitious but vital. They will require sustained investment. While a significant portion will be provided by the private sector, a major share will also have to come from the public sector.
The COVID-19 pandemic is hitting developed and developing countries hard, and its economic impact will be severe. With less than a decade to go to achieve the Sustainable Development Goals (SDGs) which aim to eradicate extreme poverty, progress will stall – and in many cases reverse – when faced with the dual crises of COVID-19 and climate change, unless urgent action is taken.
Domestic resources account for the majority of money that developing countries invest in sustainable development to end poverty – in sectors such as water and sanitation, health for all, environment and education. With countries in recession and taking measures to contain COVID-19, tax revenue has plummeted, and governments are having to spend stretched resources on the emergency response, taking funds from longer-term development work
In this research, commissioned by WaterAid and End Water Poverty from the Overseas Development Institute, we examine publicly available data from the IMF and Development Finance International’s Government Spending Watch to understand the scale of the impact that the COVID-19 crisis will have on reducing the public finance available for developing countries. We seek to identify ways in which domestic and international public financing could be increased to meet the challenge.