Financing for the Sustainable Development Goals: Role of Fiscal Reforms, Revenue Management and Sovereign Wealth Funds in the Extractives Sector examined
Achieving the Sustainable Development Goals will require the mobilization of all available sources of financing (domestic, international, public and private). Among the financing options available, strengthening domestic resource mobilization (SDG Target 17.1) will be particularly important as it can create fiscal space for sustainable budget expenditures, improve the effectiveness of public spending, reduce aid dependency, leverage private investment and improve governance among others. The mobilization and effective use of domestic public resources is one of the core areas for action in the Addis Ababa Action Agenda on Financing for Development.
Fiscal reforms and other complementary measures in the extractives sector can help generate additional public revenues while reducing some of the negative environmental and social impacts from extractive activities. If these financial resources are effectively channeled through for example a well-governed sovereign wealth fund /natural resource fund, they can be invested to support delivery of the Sustainable Development Goals and other long-term objectives (e.g. to diversify the economy away from hydrocarbons, tap into burgeoning sectors such as clean technology, renewable energy and low-carbon transport) without compromising financial returns.
The Green Fiscal Policy Network (UN Environment, GIZ and IMF), in collaboration with the UNDP-UN Environment Poverty Environment Initiative Asia Pacific convened a regional workshop on 7-8 December 2016 in Bangkok. The workshop explored how to mobilize and effectively use revenues from the extractives industry while addressing negative environmental and social impacts through fiscal reforms and strategically designed fiscal frameworks and sovereign wealth funds/natural resource funds to support delivery of the Sustainable Development Goals.
The workshop took place in the framework of discussions to mobilize financing to implement the 2030 Agenda for Sustainable Development and will build on discussions at a South-South Exchange and Training Workshop on Extractive Industries and Sustainable Development organized by UNDP Regional Office and the UNDP-UN Environment Poverty Environment Initiative in Bangkok in October 2015.
Poverty-Environment Initiative Country Representatives from Lao People’s Democratic Republic, the Philippines and Mongolia shared their experiences on issues such as the role of local governments in benefit sharing, prioritizing community development and assessing impacts of the sector on local livelihoods.