The United Nations was founded on the noble ideas of promoting world peace and common humanity. For decades, these ideas have made the UN, established in 1945, a melting pot of “good intentions” and actions on how to make the world a better place. However, the UN’s broad remit and inclusivity have also led to its tendency to create omnibus global agendas, which, in order to accommodate different interests, are often unwieldy, ambitious and even utopian. These words, I would argue, describe the Sustainable Development Goals (SDGs), which were adopted by world leaders at the UN on September 26. The SDGs are loaded with good intentions, from ending poverty to saving life below water!
The SDGs replace the Millennium Development Goals (MDGs), which came into existence in 2000 and lasted until September this year. But the MDGs had a modest ambition, captured in just eight goals and 21 targets. The SDGs, on the other hand, are far more ambitious, with 17 goals and 169 targets! Think of any social, economic or environmental issue, it is covered in the SDGs: poverty, inequalities, water and sanitation, energy, urbanisation, infrastructure, climate change, peace, and many more!
Although not all the goals were achieved, the MDGs had a decent record, particularly with respect to the central goal of halving extreme poverty by 2015. So, why do we need another set of goals? Well, the answer, according to supporters of the SDGs, is that the MDGs were too narrow. They argued, for instance, that while the central goal of the MDGs was to reduce poverty, its root causes were not addressed. As Amar Bhattacharya, Senior Fellow at the Global Economy and Development Programme at Brookings Institute, put it, “It is inconceivable to think today about ending poverty without simultaneously achieving peace, dealing with natural disasters, connecting people to a market economy via better access to infrastructure or reducing the impact of climate change”. So, the new agenda represents a more broad-based and integrated approach to ending poverty, which is the overarching goal of the SDGs.
However, for critics of the bloated SDG framework, while poverty and its causes should be tackled holistically, you do not need 19 development goals and 169 related targets to do that. One of the strongest critics of the SDGs was The Economist magazine, which, in one article, described the goals as “unsustainable”, and argued that they “would be worse than useless”. For The Economist, the SDGs “are a distraction” from the central goals of ending poverty and dealing with issues relating to education and health.
Both proponents and critics of a broad SDG agenda did their best during the drafting of the goals to influence the outcome. The Economist called for a reduction from 17 to 10 goals, “aimed squarely at” reducing poverty, boosting education and improving health. Some governments also favoured a smaller list of goals. For instance, British Prime Minister David Cameron said that he wanted “12 goals at the most, preferably 10”. But all attempts to cut down the list failed. Indeed, according to Nigeria’s Amina Muhammed, the UN secretary general’s special adviser on post-2015 development planning, it was a hard fight to get the number of goals to 17.
So, then, the world community and individual countries are stuck with the 17 MDGs and 169 targets. But how achievable are they? Well, what must be said unequivocally is that most of the SDGs cannot be achieved without public money. The Economist estimated, for instance, that meeting the goals would cost “$2 trillion-3 trillion a year of public and private money over 15 years”. Yet, despite the worldwide excitement about the adoption of the SDGs, there is little clarity on how the goals will be financed. What is obvious, however, is that there will be no huge development aid from Western countries to finance the goals. Many of these countries have not even fulfilled their promise, made several years ago, to provide 0.7 percent of their GDP in aid. But even if they all fulfil the promise, the estimated $135 billion in annual overseas aid is a drop in the ocean compared to the trillions of dollar required to fund the SDGs.
At the UN International Conference on Finance for Development held in Addis Ababa, Ethiopia in July, the participants stressed the fundamental importance of “domestic resource mobilisation” as the main means of financing the SDGs. In other words, it would largely fall to each country to meet the SDGs from its own resources. Of course, this would pose severe challenges for most developing countries. For instance, at a time that Nigeria is facing a serious economic crisis, with dwindling oil revenues, there must be serious questions about whether it can afford the costs of funding most of the SDGs. The Commonwealth Deputy Secretary-General for Economic and Social Development, Deodat Maharaj, made the same point recently in respect of most Commonwealth countries.
Yet the heart of the problem is economic growth. As most experts now accept, the success of the SDGs depends crucially on sustained economic growth. In November last year, 18 leading economists from Harvard, Oxford, Princeton and the London School of Economics wrote to the UN to make precisely this point. The economists, including Paul Collier, Tim Besley, Larry Summers and Dani Rodrik, argued that “Without sustained economic growth, the resources required for effective public action to meet the SDGs will be limited”.
It is, of course, an economic truism that tackling poverty and inequalities requires strong and sustainable growth. Indeed, the modest success of the MDGs in halving the number of people globally in extreme poverty (i.e., living on under $1.25 a day), which was 36 percent in 1990, was largely attributed to China’s economic growth. For instance, China reduced the proportion of its people living in extreme poverty from 60 percent in 1990 to 12 percent in 2010. Sub-Saharan Africa managed to bring its own down from 56 percent to 48 percent.
So, the inescapable truth is that there must be strong and continued economic growth in order to generate the prosperity needed to tackle poverty and inequality and meet all the other SDGs, such as securing food, heath, education and energy. Even in terms of Western aid, leaving aside the question of the willingness of some Western countries to give aid, their ability to do so in respect of the SDGs would depend on their economies continuing to grow. That is why it is important to look beyond the euphoria around the SDGs and think more seriously about how to increase economic growth. And, for me, trade has a critical role to play in this.
Earlier this year, the World Bank and the World Trade Organisation (WTO) produced a joint publication titled “The Role of Trade in Ending Poverty”. Poverty reduction is, of course, the World Bank’s raison d’etre. Indeed, in 2013, the World Bank adopted two overarching goals to guide its work. The first is ending extreme poverty by 2030; the second is boosting shared prosperity by increasing the average incomes of the bottom 40 percent of the population in each country. These two goals are, of course, central to the SDGs. But in that publication, both the World Bank and the WTO argued that it would be near impossible to achieve the goals of tackling poverty and inequality and, indeed, the wider SDGs without continued economic growth, and they highlighted the critical role of trade in achieving the goals. They are right!
To be sure, the expansion of international trade has been essential to development and poverty reduction. Africa clearly needs to trade more with the rest of the world to generate growth and reduce poverty. For instance, an estimated 75 percent of the extreme poor in Africa live in rural areas. Clearly, agricultural development is critical to reducing rural poverty. Yet, agriculture in Africa suffers from three problems: low productivity, low value-addition and poor access to world markets.
Each of these problems is largely linked to trade. For instance, trade openness is needed to increase agricultural productivity by allowing farmers to gain better access to new technologies as well as to reduced price and greater variety of inputs. This is really important because, as the World Bank has estimated, just 1 percent rise in agricultural GDP would result in a 6 percent increase in income growth for the poorest 10 percent of the population. So, trade opportunities must be exploited to improve the productivity and sustainability of the agricultural sector. Increased productivity and innovation are also necessary to achieve higher value-addition. At the moment, little value is added to agricultural produce and, indeed, natural resources, in Africa, which is limiting the continent’s ability to diversify its export base.
Of course, as I wrote recently, one the main challenges facing the food and agro-based sector in Africa, particularly Nigeria, is the poor access to markets and the costs of compliance with standards set by large export markets, such as the US and the EU, which make it difficult for agricultural producers to reach such markets. There are also distortions to international agricultural trade, including product-related subsidies in the developed countries, which contribute to poverty in developing countries. For instance, a recent study indicates that the removal of agricultural distortions could reduce the number of extreme poor by 2.7 percent.
Surely, if ending extreme poverty is the overarching goal of the SDGs and market access barriers and other distortions to international agricultural trade are a major cause of poverty in Africa, then it follows that this problem must be tackled in order to increase the chance of success in achieving the SDG central goal of ending extreme poverty. For Africa, this means making a strong case for the liberalisation of the international agricultural trade, which must be linked to the attainment of the SDGs. They should argue that, in addition to whatever aid the West may wish to give, Africa needs to trade and export more in order to generate the economic growth necessary to meet the SDGs. Of course, trade expansion must be complemented by other domestic measures to ensure the benefits of economic growth reach the poor. But it is certainly the case that Africa needs to achieve the level of growth that would generate the needed resources to meet the SDGs. And trade can play a significant role in fostering such growth, for instance, because it can drive economic and export diversification.
But in addition to economic growth, African countries also need to invest in social capital in order to achieve the SDGs. The key elements of social capital, according to the 2015 World Happiness Report, are good governance, absence of corruption and generosity. Some of the SDGs, such as gender equality, promotion of wellbeing as well as peace and justice, require behavioural change more than public money. As Jeffrey Sachs argued in the World Happiness Report, societies with high social capital, such as good governance and low level of corruption, tend to outperform those with low social capital in terms of subjective well-being and economic development, which are included in the SDGs.
Then, take generosity. The contributions of Bill Gates and his wife, Melinda, to the attainment of the MDGs, through their foundation, were very significant in terms of reducing diseases, such as malaria and polio, and even tackling poverty. The Gates are the world’s richest couple, but they are also the world’s biggest philanthropists, having given away more than $30.7 billion. Clearly, the SDGs are also more likely to succeed if rich people in Africa can be great philanthropists and social entrepreneurs. Of course, in this regard, Nigeria’s own Tony Elumelu deserves commendation for his contribution to the MDGs through the activities of his foundation. But African billionaires and even millionaires should do more to support social progress. They should be good capitalists and adopt John Wesley’s famous maxim: “earn as much as you can, save as much as you can, give away as much as you can”!
To be clear, the SDGs are noble and full of good intentions. But good intentions are not enough. Primarily, there must be strong and sustained economic growth to ensure the success of the goals. This should be complemented by greater investment in social capital. The truth is that unless the SDGs are underpinned by strong economic growth and high social capital, they could, as The Economist said, be “worse than useless”. The hard task facing supporters of the SDGs is to ensure that this sad fate doesn’t befall the global goals!
Olu Fasan
