When governments gather in New York later this month to sign off on the Sustainable Development Goals (SDGs), they will make a pledge to leave no-one behind. The most important element of this vision, in practice, is the goal of eradicating extreme poverty.
How? In sub-Saharan Africa and South Asia, the vast majority of the poorest 20 per cent of the population live without any sort of social safety net (such as some form of unemployment protection, income support or health cover).
They are being left behind. What’s going to change?
Hopefully, economic growth will be a rising tide to lift many boats, but it will not lift all – at least not by 2030, the target date for the SDGs. Even in rich countries, where relatively few are left behind, it is because vibrant economies are complemented by strong social protection programmes. What needs to change is the parlous state of social protection in many of today’s low income countries.
At the financing summit in Addis Ababa in July, the world’s governments committed to delivering social protection and essential public services for all, calling it a 'new social compact' (paragraph 12, pdf). Commitments to fund public services are not new and were made at the two previous global financing for development conferences, Doha and Monterrey (pdf). What’s new is the commitment to social protection for all.
This is not a commitment that poor countries can fulfil on their own. Our estimates show that even if the world’s poorest countries managed to raise taxes up to their economies’ capacities and spent half of their revenues (including existing aid flows) on a very stripped-down version of this social compact, their resources would still fall way short of what they need (pdf).
A lack of resources is exactly the sort of problem that international public finance is there to solve.
Around the time our report was published in April, we tried to get donors interested in an old idea (pdf): some sort of global financing facility to accelerate the introduction and expansion of social protection in countries that lack the resource to do so themselves.
The rationale for a multilateral approach lies in the long-term nature of a fiscal commitment to social protection: few countries would be willing to commit with only the support of bilateral donors.
But rich countries still need convincing
Our efforts to generate interest in this new financing facility, in the run up to July’s financing for development conference, was met with some resistance.
Some donors simply said that any new major financial commitments were out of the question. Other donors were receptive, but worried about the proliferation of vertical funds (pdf) that earmark money for pre-determined uses, like the Global Fund for Aids, Tuberculosis and Malaria.
Moreover, social protection is an intensely political domestic issue and experience teaches us that it cannot be foisted upon countries by donors. Schemes that have been perceived as donor-led have been abandoned. So any external financing mechanism must be there to support the development of fully domestically-owned programmes.
An unprecedented opportunity
But despite their fundamental lack of resources, many of the world’s poorest countries are now putting social protection strategies in place.
This presents donors with an unprecedented opportunity to throw their support behind them. When signing the Addis Ababa Action Agenda (pdf), governments promised to 'commit to strong international support for these efforts' and to explore new ways of mobilising and delivering the long-term financing that social protection calls for.
That’s not going to be easy, but if the words 'leave no one behind' are to mean anything, donors cannot turn away from the problem.