The IMF and the UN Sustainable Development Goals
The International Monetary Fund (IMF) is engaged in supporting the global effort to achieve the United Nations Sustainable Development Goals (SDG) by 2030. The IMF is involved with the SDGs wherever they affect economic stability or sustainable and inclusive growth. The IMF advises and assists member countries in implementing economic and financial policies that promote stability, reduce vulnerability to crisis, and encourage sustained growth and higher living standards. It also promotes dialogue among member countries about regional and international consequences of their economic and financial policies, and reviews global economic trends and developments that affect the international monetary and financial system.
The IMF stresses the importance of maintaining high levels of employment as a key driver of social inclusion. Recent IMF research shows that high levels of income inequality are associated with lower and less durable economic growth and greater financial instability. The IMF has also produced evidence that reducing gender gaps boosts economic productivity, growth, and resilience. The IMF has been exploring how fiscal policy can be deployed to reduce inequality through spending on health, education, and social protection and ensuring the progressivity of tax systems. The IMF is also focusing on efforts to boost women’s economic participation, especially through the design of tax and spending policies.
Boosting growth, especially in low-income countries, is a vital precondition for SDG success. The IMF is focusing on creating fiscal space for growth-enhancing and poverty-reducing investments in health, education, infrastructure, and agricultural productivity, as well as policies to promote economic diversification. It is also exploring policies to address the challenges related to the future of decent work in the context of disruptions due to the impact of technological changes. The IMF is also stressing social spending as a vital tool for reducing poverty and making economic growth more sustainable.
Few global challenges are more urgent and complex than the need to tackle climate change by moving to a zero-carbon energy system over the next three decades in accordance with the Paris Agreement. An essential condition for this energy policy transition is to ensure that energy prices reflect health and environmental costs, in terms of both carbon emissions and air pollution. The IMF is providing technical assistance with pricing carbon emissions and removing energy subsidies. It has also introduced a new process of Climate Change Policy Assessments to help highly-vulnerable countries prepare for the effects of climate disruption, as well as providing a means for disbursing emergency funding to countries hit by severe climatic shocks.
Strong institutions founded on good governance are the backbone of peaceful and inclusive societies, and a foundation upon which other SDGs are built; the IMF is accordingly increasing its emphasis on this area of activity. The IMF has promulgated a new framework that seeks a more systematic, even-handed, effective, and candid engagement with member countries, since its evidence supports the view that corruption and weak governance frameworks are associated with significantly lower growth, foreign direct investment, and the production of tax revenues. The IMF is also increasing its efforts to build capacity and strengthen institutions within member countries, especially for fragile and conflict-afflicted states where SDG implementation faces unique challenges.
Financing the SDGs will require significant increases in public spending in many countries. Accordingly, the IMF is developing a broad framework for assessing spending needs in several countries in support of achieving the SDGs, particularly in health, education and infrastructure development. These initiatives are being undertaken in collaboration with the World Bank and various UN agencies. Strengthening tax capacity is critical to these efforts, since rising debt levels in low-income countries are complicating SDG progress. However, domestic revenue sources may not be adequate to meet the financing gap that would be required to achieve the SDGs, consequently some increases in official aid and private financing options are necessary.
The 2030 Agenda for Sustainable Development provides a global blueprint for dignity, peace and prosperity for people and the planet in the future. Three years into the implementation of the fifteen-year plan, many countries are translating this shared vision into national development plans and strategies. More than a hundred countries have now established sustainable consumption and production policies and initiatives. The latest UN Report on progress with the SDGs highlights progress being made in many areas of the 2030 Agenda. However, the report also indicates that, in some areas, progress is insufficient to meet the Agenda’s targets by 2030, especially for the most disadvantaged and marginalized groups of people around the world. According to a statement from the UN Secretary-General, it is essential to inject a sense of urgency to meeting the 2030 deadline for the SDGs, requiring immediate and accelerated actions by countries, along with collaborative partnerships among governments and stakeholders at all levels.
Sources: International Monetary Fund and United Nations.