“As Prepared for Delivery”
I thank Minister Annamuhammedov and Ms. Elena Panova for their kind invitation to participate in this conference. It is not accidental that this conference is taking place in Ashgabat. Turkmenistan was one of the first countries to have formally accepted all Sustainable Development Goals developed by the United Nations and has been integrating these goals into its national plans for socio-economic development.
Achieving SDGs is an important priority for emerging markets and developing countries. Significant progress has already been made in the Caucasus and Central Asia region in this area. Yet there is still a lot more to be done. The COVID-19 pandemic has made the task of achieving SDGs even more urgent and challenging.
Before the COVID pandemic, we knew that financing the required scale-up of spending for reaching the SDGs was a challenge. An IMF study showed that the additional spending required for meaningful progress in the areas of health, education, and selected infrastructure was quite large. For emerging market economies, the additional annual spending reached an estimated 4 percentage points of their combined GDP in 2030, compared to 15 percentage points of GDP for low-income developing countries. Looking specifically at the CCA region, our estimates indicate that the additional annual spending required for countries represented here reach about 10 percentage points of their GDP in 2030. Substantial external resources are needed when domestic efforts—for instance, mobilizing tax revenues and enhancing spending efficiency—are not enough for financing the SDGs.
The human and economic impact of COVID 19 pandemic makes spending needs larger and SDG financing more challenging. The crisis risks setting back previous achievements in human and social developments such as equality and poverty reduction. Health and social spending needs increase as countries respond to the emergency. With revenue losses and higher debt in many countries, fiscal space is shrinking. The crisis also highlights underlying structural shortcomings in some cases such as limited social safety net to adequately protect those at a higher risk of falling into poverty and uneven access to quality public services by different groups in the population.
The COVID recovery presents opportunities to accelerate the necessary reforms for achieving SDGs. Under the current difficult circumstances, increasing the efficiency of public spending to achieve savings and ensure spending is allocated to areas where it is most needed, including health, education and infrastructure, is of crucial importance. To spend efficiently, countries must develop political and societal consensus, work on building strong institutions, and instill principles like transparency, accountability, and responsiveness. Business friendly environment must be created to engage the private sector.
The IMF, with its expertise in macroeconomic and financial issues and its global membership, supports the development efforts of its member countries and promotes global economic and financial stability. The IMF has launched a number of initiatives to support countries’ response to COVID while continuing support to member countries as they pursue the SDGs. These include increased financial support for low-income developing countries—as of May 20, we have provided more than 16 billion of SDRs via emergency financing facilities to 59 countries; bolstering support to fragile and conflict states to address their unique challenges; and enhanced policy advice and capacity building on measures to promote inclusion and sustainable macroeconomic environment.
Financing for SDG also calls for global and regional cooperation. While countries must own the responsibility for achieving the SDGs, the private sector, official development assistance, philanthropists, and international financing institutions can help accelerate the efforts to close the remaining gap.
This conference is focusing on crucial issues and is taking place at a difficult juncture. I wish the organizers and participants every success in this event.
Compliments of the IMF.