*This article was originally published in The Hill Times on February 2nd*
The Sustainable Development Goals (SDGs) were adopted by members of the United Nations in 2015 as a call to action aimed at eliminating poverty, fighting inequality and advancing economic growth while tackling climate change and broader environmental challenges. The 2016 Paris Agreement followed and put further emphasis on the need for urgent climate action.
Today, these goals are more relevant than ever. The challenges they are intended to help address remain significant – and in many areas are, unfortunately, growing. The COVID-19 pandemic, Russia’s invasion of Ukraine, the economic downturn, social unrest and growing climate stresses demonstrate that global development challenges increasingly overlap with one another. This creates more complexity and a greater need for sustained action, particularly in developing countries.
Developing countries face a USD 4 trillion annual SDG investment gap, according to the United Nations Conference on Trade and Development. While the case for international development is stronger than ever before, what is even more clear is that the path forward must include the private sector. With public budgets in both developed and developing countries coming under ever more strain given the multiplicity of crises at home and abroad, the private sector is critical to unlocking effective and sustainable paths toward development. The question is how best to harness this sector and direct its efforts in developing countries. I would argue that there are three areas with immense opportunity:
- Building low-carbon and climate-resilient economies, including through sustainable infrastructure;
- Developing markets to support quality job creation, capital markets and access to financing, products and services that raise standards of living and add value to local and regional economies; and
- Mainstreaming gender equality in investment activities to support women’s economic empowerment, reduce inequalities and drive business performance.
Recognizing the importance of the private sector, the Government of Canada established a bilateral Development Finance Institution (DFI) in 2018. The launch of FinDev Canada enabled Canada to complement its existing suite of international assistance tools and join its G7 partners in having a DFI supporting development through the private sector in developing countries.
DFIs, as public policy mechanisms, are an important part of global development architecture. DFIs provide financing and investment and blended finance solutions, as well as technical assistance to support sustainable and inclusive growth through the private sector in developing countries. Their efforts complement the array of grants and other aid instruments offered locally and internationally and enable public budgets to be leveraged by private finance in support of development goals.
Since 2021 I have had the privilege of serving as FinDev Canada’s CEO. Our team is focused on mobilizing private investment within and into developing countries with the aim of contributing to climate action, market development and women’s economic empowerment aligned with the SDGs and Paris Agreement commitments.
To date, we have been active in Sub-Saharan Africa, Latin America and the Caribbean. Now, with the recent launch of Canada’s new Indo-Pacific Strategy, we are expanding our efforts to this region, further bolstering Canada’s contribution toward building a more sustainable and inclusive world.
The government recognizes the importance of directing more effort toward mobilizing private investment within and into developing countries, and the additional capital being invested in FinDev Canada will enable us to further advance Canada’s international development agenda through the private sector at a time when it is needed more than ever.
The case for international development where the public and private sectors are working together to achieve the SDGs and commitments under the Paris Agreement has never been clearer. We have the roadmap for success and will follow it with purpose and commitment. The time is now.