Aid donors and governments must fill an annual $73 billion funding gap to meet health, education and social security targets that are outlined in the next set of global development goals, a new report says.
Targets to roll out universal healthcare, free primary and secondary education, and basic social security over the next 15 years are achievable, according to Financing for the Future, a report published on Monday by the Overseas Development Institute (ODI). But more aid spending, better tax collection and a greater focus on low-income countries will be needed, it says.
The report comes as donors meet in New York to revise a global framework for financing sustainable development ahead of the UN’s International Conference on Financing for Development in July, which will discuss how the sustainable development goals (SDGs) will be paid for.
“The world is currently coming out with all these new development ambitions, but if they’re not backed with new development financing [the goals will not be met],” says Paddy Carter, an ODI researcher and one of the report’s authors.
The big reduction in the number of impoverished people over the past 20 years will be difficult to replicate in the coming decades because “the poor are increasingly concentrated in conflict-prone states, mainly in sub-Saharan Africa”, the report warns.
If development strategies remain the same, the gap between rich and poor countries will widen, leaving an estimated 550 million people living on less than $1.25 a day, according to the ODI. Some of the poorest countries in the world — mainly in sub-Saharan Africa — are still 20 years away from achieving universal primary education.
The total cost of meeting the social sector ambitions of the SDGs will be $148bn, the report says. After adding current aid flows and estimating tax revenues, the authors say the world will fall $73bn short of the amount needed to reach the goals.
Meeting the target for basic universal healthcare will cost $74bn a year — about 0.15 per cent of the annual healthcare spending of the world’s richest countries — while providing social protection will require an additional $42billion every year, the report says. Donors and governments will need to find $32billionn to meet the target for free primary and secondary education in every country, the report adds.
The report used data on education spending from the UN Educational, Scientific and Cultural Organisation’s (Unesco) 2015 Education for All report and Chatham House estimates for heath spending.
Social sector spending Researchers selected 89 countries, taking into account only those with a population greater than 1 million and a poverty headcount above 1 per cent. They estimated the amount of revenue each country could generate through income tax and used existing aid flows to determine the funds available for implementing social sector programmes.
Governments in low-income countries, defined by the World Bank as those with a gross national income (GNI) per capita of $1,045 or less, must ramp up social sector spending and improve tax collection, the report says.
The ODI urges donors convening in Addis Ababa for the UN meeting in July to “set out concrete commitments to close this gap” and meet the UN’s long-standing target to spend 0.7 per cent of their gross national income on official development assistance.
“Aid isn’t the answer to eradicating poverty but it is an incredibly important part of the solution,” Carter says. “Without more aid delivered in the right way, in the right places, the goal of eradicating poverty will be out of reach.” But just five donors — Denmark, Luxembourg, Norway, Sweden and the U.K. — met this target last year and aid to the poorest countries fell by 16 per cent from the previous year, according to figures from the Organisation for Economic Co-operation and Development.
Romilly Greenhill, an ODI researcher and co-author of the report, says: “Aid is uniquely well placed to support poor countries in their efforts to reach the poorest, including by providing free healthcare and education, and cash for those living below the poverty line. But to do this effectively, the aid industry will need to change.”
© Guardian Newspapers Limited, 2015
