Challenges over achievement of SDGs

Dhaka,  Fri,  18 August 2017
Published : 10 Aug 2017, 20:59:39 | Updated : 10 Aug 2017, 21:01:21
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Challenges over achievement of SDGs

Challenges over achievement of SDGs
Bazlul H. Khondker
The Sustainable Development Goals (SDGs), which include 17 goals and 169 targets, are global and applicable to all countries. It covers every aspect of a society and leaves no one behind. All of them are to be attained in the next 13 years. Achieving all SGDs within the deadline is challenging for any developing country like Bangladesh.

The Bangladesh government recently published a report on 'SGDs Need Assessment and Financing Strategy: Bangladesh Perspective' (General Economics Division, Bangladesh Planning Commission, June 2017). It is a plan where cost requirement for achieving 17 SDGs has been estimated for the 13-year period, starting from 2017. The plan also explores financing strategies and sources.  SDG costs reported in the document are additional to the existing or current budget. For instance, if the SDG needs assessment for 2018 are 10 per cent of 2018 gross domestioc product (GDP) and estimated budget for 2018 is 17 per cent of GDP, it is an addition to that 17 per cent, meaning that total budget would have to be 27 per cent for 2018. 

The report has rightly made a distinction between two types of additional SDG costs - (i) synchronised cost and (ii) unsynchroniced cost. The SGDs are interconnected implying that realisation of one goal would also help attain another one. SDGs need assessment in isolation (i.e. disregarding interdependence) as the cost requirement could surely be overestimated.  

According to the SDG needs assessment (figure 1), Bangladesh will need additional resources in the range of 10 per cent to 24 per cent of its GDP over the next 13 years under a high GDP growth scenario (i.e. GDP growth climbing to around 9 per cent by 2030). Assuming a budget size of 17 per cent of GDP under a business-as-usual case, the size of Bangladesh's budgets in coming years need to be be between 27 per cent in 2018 and 40 per cent in 2030. 

THREE CHALLENGES: In this writer's view, there are three key challenges to SDG implementation in Bangladesh: mobilising additional resources, improving the budget implementation capacity and motivating the private sector to play a greater role in development.  

Traditionally, Bangladesh is a low resource country judged by its low revenue-GDP ratio of 10 per cent for a considerable long time (i.e. last decade or so). Reasons for low revenue are well known - narrow tax bases (both for direct and indirect taxes), lack of automation and tax loopholes, etc. Despite the recent setback on VAT reform, the report suggested several sources for mobilising resources including higher tax efforts. The prescribed strategies and sources to raise resources have been summarised in Table I. The table suggests that 80 per cent of resource may be mobilised from conventional sources, such as private sector (with an average contribution of 45 per cent) and public sector (with an average contribution of 35 per cent).

Contribution from less conventional source has been estimated at 20 per cent. The main sources in this category are external financing (foreign direct investment and climate funds) with average contribution of 10 per cent. The average contributions of other two less conventional sources are 7.0 per cent for public-private partnership and 3.0 per cent for NGOs. Compared to the current trends, the required numbers are high under all the sources and hence SDG financing will be a big challenge for Bangladesh.  

Bangladesh needs to enhance its implementation capacity tremendously. The country has been struggling to implement even a budget size of around 16 per cent of GDP (one of the lowest in the world). In fiscal year (FY) FY 16, the latest available budget data reveal unsatisfactory implementation rate of 83 per cent even at the low level of budget (i.e. around 16-17 per cent of GDP).

As shown above, the size of budget (with the inclusion of SDGs) will jump to 27 per cent  to 40 per cent within the span of a decade. This is a huge challenge. Continued capacity development, re-adjustment in procurement policies, strict monitoring and provision of reward for good performers may help enhance the implementation capacity to a satisfactory level.  

Successful implementation of SDGs depends on  participation as well as performance of the private sector. The private sector (which includes formal and informal enterprises, un-incorporated household-based activities) has historically been playing an important role in economic development in Bangladesh. Almost all past medium-term development plans have relied on private participation and finance to implement the plans. In the Seventh Five Year Plan, private sector is expected to finance 77.3 per cent of the total outlays (Figure 3). However, since scopes and coverage of SDGs are larger than those of the Five Year Plan, the private sector would need to bear between 40 per cent and 50 per cent of the total SDG costs over the next 13 years. 

However, given that the private investment has remained stagnant over the last few years, there are concerns with regard to their expected participation in SDGs in particular and overall development in general. Improvement in infrastructure and ease and reduced cost of doing business may go a long way to enhance their participation. 

Bangladesh's achievement so far has been very impressive. Social and economic development since independence and attainment of the Millennium Development Goals (MDGs) during the last decade have surprised many experts and forced them to refer us as 'development puzzle'. Bangladesh withstood various shocks and has been able to move ahead against odds with people's initiatives and state support. 

Despite the fact that attaining SDGs within 13 years will be a major challenge, the expectation is that bold reforms and appropriate strategies at the right time by the policymakers will help realise our national developmental goals which are aligned with SDGs. 

The writer is a Professor of Economics, University of Dhaka. 

bazlul.khondker@gmail.com


 
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