The Road to the SDGs

T H E R O A D T O T H E S D G s | P R O G R E S S A N D A C H I E V E M E N T S In reading the initiatives, the reader, especially if not specialised in the same field, might wonder about many things. For instance, why did IsDB develop a new business model? What is in switching to the new business model for our MCs? What would have happened had we not switched to the new business model? What is the link between IsDB's new business model and the pressing issues of development, such as climate change, external debt, refugees, protectionism, poverty, unemployment, innovation, etc? That is why I found it best to present those issues in Q&A form to enhance readability and facilitate better comprehension of the initiatives. QUESTION: In October 2016, IsDB entered a new stage when its new President assumed office. A hundred days later, in January 2017, the P5P and the new business model were announced. What are their main features? Why were they developed and what are their contemplated results? ANSWER: When I assumed office as President of IsDB in 2016, I made a deep reading of the existing economic regional and global landscape and future economic projections. My aim was to identify the optimum business model for IsDB to help its MCs build strong, diverse and viable economies capable of creating jobs, attracting domestic and foreign investment and fulfilling their commitments to achieve the SDGs, the Paris Agreement (on climate change) and IsDB’s Articles of Agreement. To put this into perspective, let us take a look at the economic and social map of the 57 MCs. We will find them in four continents: Asia, Africa, Europe and South America, with the vast majority being developing countries, along with a number of least developed countries (LDCs). Their economies all depend on exporting raw materials, and hence jobs, to industrialised countries. However, the prices of raw materials are subject to global factors beyond the control of their exporting countries, which affects the implementation of their national development plans or even disrupts it at times, when export prices suffer sharp drops. In these countries, the public sector plays a pivotal role in managing and controlling the economy, while the private sector’s contribution is minor and virtually insignificant. The role of the tertiary non-profit sector is extremely modest, or even inexistent in some cases. This situation caused unemployment to increase and debt to worsen, widened the funding gap and perpetuated balance of payments deficit. The number of new job seekers in the 57 MCs is estimated at about 10 million young people a year. By 2030, this figure would reach 90 million people. As such, failure to provide jobs has economic, social and security implications. Moreover, MCs need about US$ 1 trillion annually to implement the SDGs, while aggregate developmental funding from multilateral development banks (MDBs), including IsDB, ranges from 160 to US$ 170 billion annually. A leap from billion to trillion figures is thus required. These challenges are exacerbated by the steady increase in MC population, expected to rise from 1.7 billion in 2015 to 2.2 billion by 2030. Added to the rapid and successive changes around the world, all indicators point to an emerging new world order featuring economic, financial and social decentralisation and accelerated protectionism. Such an order is driven by unprecedented technological progress embodied in the various Industry 4.0 applications and their direct and indirect impact on the way countries and public and private institutions are managed, and on the patterns of financing, production, consumption and investment. This new order has lucidly manifested its features during the COVID-19 pandemic. In the near past, discussions on such developments were more like speculation and science fiction. However, today such fiction has become reality on the ground with the developments in robotics, artificial intelligence, the Internet of Things, big data, drones and blockchain technology. Such technological and digital advances have an impact on the survival of industries in which our MCs enjoy comparative advantages as well as on their competitiveness, because innovation is the main driver of growth and competitiveness. Adding the unprecedented repercussions of the COVID-19 pandemic to the aforementioned global economic landscape, we clearly realize the importance of building economies that can weather unpredictable events, especially the repercussions of climate change (for which we established a dedicated IsDB “Resilience and Social Development” department in 2018). These changes can only be addressed by thinking outside the box. IsDB needs a new work programme and business model that can absorb these changes towards helping MCs build viable economies consistent with the new world order. Accordingly, the P5P came out as an action plan that includes initiatives and programmes aimed at helping MCs build and develop viable and resilient economies and meet their commitments to achieve the SDGs, the Paris Agreement, IsDB's Articles of Agreement and the Global Development Agenda. To implement the P5P, a new business model was designed under the theme “Making Markets Work for Development: 1/5/10”. [ 3 ]