Can we still Achieve the Millennium Development Goals? From Cost to Policies
"Can we still Achieve the Millennium Development Goals? From Cost to Policies (link below) is part of a series of OECD Development Centre Studies.
This study contributes to the current debate on achieving the Millennium Development Goals (MDGs), their relevance and what can be done after 2015, by looking at estimates of the cost of reaching the goals in 2015. In particular, it sizes the additional resources needed in developing countries to attain the goals.
The aim of the study was to:
a) revisit the cost estimations of the Millennium Development Goals to which development agencies contributed during the early 2000s and
b) provide an assessment of developing countries’ own capacity to fund additional development investment through domestic resources (taxes in particular) and external resources such as FDI, remittances, private donations and aid.
This means moving away from a donor-centric approach and focusing more on each country’s individual resources and capacities to achieve the MDGs.
The study highlighted the following policy implications:
1. The financial cost of meeting the MDGs related to poverty, education and health is in the order of USD 120 billion. This would imply a tripling of the current level of country programmable aid, i.e. the portion of aid that actually goes from OECD countries to partner countries.
2. As Aid is unlikely to rise to meet this funding gap by 2015, countries will need to find new sources of funding and make better use of existing ones. Therefore, the quality of public policies and institutions are important to meet the MDGs. Tax collection, public expenditure and the investment climate must continue to improve in developing countries. But to succeed, we need the political will and also we need policy coherence and aid effectiveness.
3. One size does not fit all to fund the MDGs. The challenges countries face, and their capacity to meet them, vary considerably. In upper middle-income countries with annual income above USD 4 000 per person, tax potential estimates show that there is enough room to stimulate tax collection to achieve the MDGs.
4. Middle-income countries have to look more at inequality than the lack of resources. The goals are affordable domestically using targeted cash transfers and spending on poverty, education and health.
5. In other developing countries, as institutional reforms take years to bear fruit, tax revenue mobilisation is not a short-term solution.
6. Official Development Assistance is expected to remain at current levels for the future. And that is the best-case scenario. More than ever, aid will need to be complemented by private capital, development cooperation among countries of the South, remittances from migrants and private donations.
7. The main challenge is to ensure that all these resources contribute to sustainable, inclusive growth and to social development.
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