Gender Equality and the Sustainable Development Goals

NAECMonika Queisser, Senior Counsellor, OECD Directorate for Employment, Labour and Social Affairs

The push for policies to improve gender equality at the global level is getting new impetus through the Sustainable Development Goals. SDG No. 5 is devoted to gender equality and aims to “achieve gender equality and empower all women and girls”. The goal’s detailed targets refer to a range of challenges, such as discrimination of women, violence against women, reproductive health, ownership rights and technology. Global progress in reaching these targets has been uneven. Despite impressive progress in enrolling girls in primary education, for example, gender equality in many other domains is still in far reach in the developing world.

This does not mean, however, that advanced economies can lean back and close the file. No single OECD country can claim to have achieved full gender equality.  Women are now as well or even better educated than men in most countries and their participation in the labour market has increased, but they still spend fewer hours in paid work per week than their partners. And even the most advanced countries, such as the Nordics, where women are well integrated in the labour markets, are faced with stubbornly high gender wage gaps and a continued lack of women in senior management positions, for example.

The consensus is growing that traditional gender stereotypes and roles are standing in the way of further progress in closing the gender gaps. In literally all countries for which data exist women do more unpaid work than men. As a result they have less time for paid work and fewer opportunities to develop their careers. Policy makers are thus starting to focus more on a better sharing of caring responsibilities and domestic work. This new policy direction is also reflected in one of the targets under SDG 5 which calls upon governments to “recognize and value unpaid care and domestic work through the provision of public services, infrastructure and social protection policies and the promotion of shared responsibility within the household and the family as nationally appropriate.”

New evidence from the OECD shows that countries with the smallest gender gaps in caring responsibilities also have the smallest gender gaps in employment rates. On average, female partners spend twice as much time in unpaid work at home than their partners. Couples where women participate more in the labour market, also appear to have a better gender balance in their cooking, caring and cleaning chores. But sadly this is not due to men doing more at home. The reason is that partnered women and dual-earner couples overall do less unpaid work.

Parenthood marks a turning point in the way couples share household and caring tasks.  When a child arrives couples often revert to more traditional gender roles. Mothers may spend more time with their children than fathers, but fathers spend a larger proportion of their childcare time with “quality” interactive activities such as reading, playing and talking with the child than mothers.

The reasons why women do more unpaid work are manifold; some women prefer fewer hours in paid work or to not work in a paid job at all, particularly when they have young children. But many other women would like to be in paid work and/or work more hours. But they struggle to reconcile work and family life due to constraints such as limited access to affordable and good quality child care or flexible working hours. OECD analysis has also revealed several other factors that may influence the sharing of unpaid work among partners, such as family size, education and/or the relative earnings potential of partners. Gender inequality in the public sphere, societal attitudes, and policies, in particular parental leave arrangements, are also associated with different levels of sharing across countries.

In 2014, G20 leaders adopted a common goal of reducing the gender gap in labour force participation by 25% by 2025. Better sharing of unpaid and paid work will be an important element of any strategy to reach this ambitious target. But change will not happen if gender equality is only pushed by women and for women. Men need to be champions as well if barriers and gender stereotypes are to be broken down. And there is a lot in it for men too. They will be able to spend more time with their family without harming their careers, if this becomes more of a shared norm. There will be more freedom to choose one’s role in society and less pressure for men to be the sole or main breadwinner of the family. Having more income from women’s work will provide greater financial security for their households and reduce overall income inequality. Men, like women, will benefit equally from broader effects of more gender equality, such as stronger economic growth, higher productivity, and improved sustainability of social protection systems. And children will not only be happier to spend more time with both of their parents, but as they grow up, they will find it normal for fathers to spend more time at home and mothers to spend more time at work. More gender equality is thus a win-win proposition, everyone has to gain from it.

Useful links

OECD work on gender equality

Women Deliver (WD) 4th Global Conference, 16-19 May, Copenhagen. The WD gender equality site is here

A Policy Pathfinder for the Sustainable Development Goals

NAECRon Gass, founding Director of the OECD Directorate of Social Affairs, Manpower and Education and the OECD Centre for Educational Research and Education (CERI)

At one time, I might have said that sustainable development is in the OECD’s blood, but biological metaphors have made enormous progress over the past few years and now I’d say it’s in the Organisation’s DNA. The OECD Convention, signed in December 1960, talks about the signatory countries’ determination to “promote the highest sustainable growth of their economies and improve the economic and social well-being of their peoples”. This commitment has been reaffirmed regularly, in 2013 for example when the strategic role of the OECD was defined as helping to achieve a resilient economy, inclusive society, and sustainable environment.

How to relate economic growth to the other goals is more than an analytical question, since it lays bare the burning political issues of the day: threats to the biosphere; growing inequality leading to a threat to democracy; and a new technological revolution. Above all, there is a loss of trust in the capacity of governments across the world to advance towards obviously desirable goals.

None of these issues can be tackled in isolation, but the economic, social, and environmental systems have different logics, so systems analysis is back in vogue. Trade-offs and synergies can be demonstrated by analysis, but politicians have to arbitrate between different goals. The disaggregation of policy frameworks is part of that movement, which has several thrusts: the importance of relating a reduced range of indicators to the political goals of individual countries; “around the table” discussions in the country review process to nail down the real policy options; the preponderant role of metropolitan areas in growth; and the fact that national strategies may simply not work at the regional level.

Can the economic, social and environmental systems be reformed to take account of this more complex and more realistic view of what makes human beings tick? Can rational self-interest be balanced by altruism, power by individual autonomy, greed by solidarity? These questions take the OECD growth paradigm to, and perhaps beyond, its limits. They challenge the behavioural assumptions about economic man and woman on which the dominant macro-economic theory is built. On the theoretical side, behavioural economics is beginning to provide new insights concerning individual and collective rationality. On the policy side, alternative concepts such as the collaborative economy are coming under debate.

The long OECD quest for fair (income distribution) and open (equality of opportunity) societies is now faced by a new challenge: how to inter-relate the two. OECD analyses have shown that income disparities are widening and that the meritocratic social ladder is blocked. But there is no clear strategy for the redistribution of opportunities, involving both education and the labour market. The redistribution of life-long learning opportunities could be an answer, since it would help individuals to renew their human capital at several points in the life-cycle.

Behind this lurks the most serious threat to inclusive society – profound inter-generational inequalities. When I asked the OECD’s New Approaches to Economic Challenges (NAEC) Seminar on the New Growth Narrative if inclusive growth includes the non-active population, the affirmative “yes” in reply puzzled me, since I had the opposite impression. Obviously, inclusive growth includes the non-active population insofar as household income and health care are concerned, but the problem of social exclusion involves the redistribution of opportunities as well as incomes. Hence the recent creation of the OECD Centre for Opportunity and Equality (COPE).

As is the case of the feminist movement, the status of youth in society is more than an economic issue. As stated in the OECD/EU Youth Inclusion Project of the Development Centre: “young people are agents of change. They live in a fast-growing world and have heightened expectations”. The costs of blocking youth from accession to adulthood, as citizens as well as workers, will be very high. The response lies in “A Society Fit for Future Generations”, a question already raised in the OECD Global Strategy Group. The future is now and it has to be invented, so say the strategic foresighters. Yes, but it has to be built on the foundations of the past.

I am struck by the reality that the past and the future are colliding. Both growth and de-growth are in the nature of things: the seed in the pod flowers, dies and is reborn. What humankind has added is the idea of progress: the act of moving forward towards chosen goals.

But the relationship between collective goals and individual autonomy is the central problem of democracy, and it pervades contemporary philosophical, political and economic debate. Human rights, empowerment, and universal human needs are embedded in the UN’s Sustainable Development Goals (SDGs) and the OECD’s “Better Lives” approach. How can this reality find expression in the efforts of OECD and other countries to chart their future?

The systemic interdependencies between the economy, society and nature cannot in all circumstances be handled by market solutions. A new humanism, centred on fundamental human needs rather than runaway consumerism, is needed to combat the threat of trans-humanism. Innovative creativity across the policy arena, piloted by strategic foresight and with human progress as its goal, is the order of the day.

The goal of reconciling nature, the economy and society requires a world view. In the absence of a world government, a sort of coalition of multinational agencies, serving the political leadership in the UN, G20, G7 frameworks, is emerging. There are many examples of OECD bilateral co-operation with other international agencies such as the WTO, ILO, and Unesco, but the most striking phenomenon is a common effort to achieve the SDGs.

In this “coalition” of international agencies, the OECD role is that of policy pathfinder and standard setter, based on soft-power, rather than legal or financial power as is the case of the IMF, ILO and WTO. Professionalism, political neutrality, and intellectual independence are essential for that role to be exercised and accepted.

Useful links

This article is a summary of a longer paper, “The Story of Four OECD Seminars” (OECD and the Crisis of Progress; Inclusive Society; The Hegemony of Growth; The Future of Growth). You can download the paper here.

OECD work on the Sustainable Development Goals

Learning from the Millennium Development Goals: How Can the Global Alliance for Resilience Contribute to the Achievement of the Sustainable Development Goals?

Ousman Tall, Sahel and West Africa Club (SWAC) Secretariat

The Millennium Development Goals (MDGs) were globally attained but while Sub-Saharan Africa reduced poverty levels from 56.5% in 1990 to 48.4% in 2010, it did not achieve the target of reducing the poverty rate in half – to 28.25 % – by 2015. The region is faced with numerous problems that have resulted in high levels of insecurity and instability. The ecology is fragile due to climate shocks and environmental disasters, such as recurrent droughts, floods, locust threats and desertification. This has greatly affected pastoralist and agro-pastoralist activities and resulted in low production and productivity. Armed conflicts in the region have displaced a large number of the population and increased vulnerability. Crisis is persistent and inevitable, especially within the poorest areas of the region. While these challenges might seem enormous, they are by no means insurmountable. This is evident in the many policies, programmes and projects being implemented in the region and in the success stories of the Food Crisis Prevention Network (RPCA).

The development plans of most countries in the region address these persistent crises in a manner consistent with global development frameworks that do not adequately consider the local perspective and understanding of the nature and scope of the problems such countries are confronting. Efforts should be made to target the most vulnerable segments of the population within the context of resilience building, as countries in the region are faced with situations in which they have to adapt, plan and continuously adjust their responses to the realities at hand.  At the same time, they also have to transform and undertake a new development trajectory as and when necessary. This is the focus of the Global Alliance for Resilience (AGIR) which views resilience as a defining characteristic of sustainability and is based on a shared understanding of what the term ‘resilience’ means:

“The capacity of vulnerable households, families, communities and systems to face uncertainty and the risk of shocks, to withstand and respond effectively to shocks, as well as to recover and adapt in a sustainable manner”.

Priorities are defined based on the shared understanding of the major issues and through a participatory and inclusive process. Using a forward-looking approach, the AGIR Regional Roadmap seeks to complement the SDGs through the development of National Resilience Priorities (NRPs), which translate the objectives of AGIR into processes for building resilience at the national level.

AGIR builds on the following four pillars to achieve its overall objective of eradicating hunger and malnutrition in the Sahel and West Africa within twenty years:

  • Improve social protection for the most vulnerable households and communities.
  • Strengthen the nutrition of vulnerable households.
  • Sustainably improve agricultural & food production, the incomes of vulnerable households and their access to food.
  • Strengthen the governance of food and nutritional security.

Each individual country process seeks to align its resilience priorities with other national objectives that are consistent with the SDGs and other frameworks. The phenomenon of climate change is integrated in the NRPs. The requisite national policies and regulations, the structure for implementation and the institutional arrangements and modalities for support are being put in place. By promoting an intersectoral co-ordination approach, AGIR can better influence the effectiveness of interventions and help the implementation of the post-2015 Development Agenda.

During the implementation of the MDGs, most countries in the Sahel and West Africa lacked the basic information and capacity to conduct the analysis required to monitor and report on its progress. This issue was even more prevalent in Sub-Saharan Africa where 61% of the countries lacked the means to monitor poverty, which is one of the main goals of the MDGs.  The SDGs implementation process is designed to correct this shortfall, especially during this early period of the implementation process. AGIR is also mindful of the need to properly measure and report on indicators. For example, in the implementation of its Regional Roadmap, AGIR is ensuring that the sophistication, complementarity, combination and harmonisation of tools are addressed at all levels in measuring resilience and that the tools are usable and affordable within national and local contexts.

The political will to support the AGIR process has been demonstrated by leaders in the region. Under the political leadership of ECOWAS and UEMOA, the AGIR Regional Roadmap is being translated into NRPs for the 17 countries in the Sahel and West Africa. These national inclusive processes for defining the NRPs are at different stages of implementation.

RPCA

As these countries move towards the completion of the NRPs, other regional initiatives will have to be accelerated in support of their implementation. The harmonisation of tools for measuring resilience and the framework for monitoring resilience interventions, which are already on-going, need to be accelerated. There is also a need to strengthen the convergence, co-ordination and synergy among actors working on resilience in the region, under the common framework offered by AGIR. The Food Crisis Prevention Network (RPCA) has appealed for such actions at almost all of its last meetings. When Network members meet at the RPCA Meeting from 13-15 April at the OECD in Paris, it is hoped that this call will be reiterated with additional support for the implementation of the Regional Roadmap and for countries that have developed their NRPs.

There is a positive correlation between the implementation of the AGIR Regional Roadmap and the achievement of some of the SDGs – especially goals 1 & 2 (ending poverty and hunger respectively) – in the Sahel and West Africa, and support for the implementation of AGIR in any form is either direct or indirect support for the implementation of the SDGs.

Useful links

OECD work on the Sustainable Development Goals

A New Paradigm for Rural Development

Rural paradigmCarl Dahlman, Special Advisor to the Director of the OECD Development Centre

Three billion people in developing countries live in rural areas. They include the majority of the world’s poor, and their number will continue to grow for the next decade and a half  until 2030. Conditions for them are worse than for their urban counterparts when measured by almost any development indicator, from extreme poverty, to child mortality and access to electricity and sanitation. And the gulf is widening, contributing to large-scale migration to urban areas. They are constrained by a lack of productive employment opportunities, poor education and infrastructure, and limited access to markets and services. This situation exists despite half a century of rural development theories and approaches, and despite the global momentum built around the Millennium Development Goals between 2000 and 2015. Without a new framework for rural development in developing countries, it is unlikely that the new Sustainable Development Goals will be met.

Rural areas versus urban areas multidimensional poverty index (MPI) late 2000s

Fig 2
Note: MPI ranges from 0 to 1 with 1 as the highest level of multidimensional poverty. The MPI reflects poverty in three dimensions (education, health and living standards)
using 10 indicators: nutrition, child mortality, years of schooling, school attendance, cooking fuel, sanitation, water, electricity, floor and assets.
Source: Oxford Poverty and Human Development Initiative (2015), Global MPI Data Tables for 2015, database.

Although building on the experience of early developers is useful, rural regions in less developed parts of the world today face new challenges and opportunities that developed countries did not face before. Challenges include a more demanding competitive international environment, rapidly growing rural populations, increased pressure on limited environmental resources and climate change. Opportunities include advances in information and communications, agricultural, energy, and health technologies that can help address some of these challenges.

A new paradigm for rural development is needed to move forward. It needs to incorporate the lessons of past experience but also needs to meet the challenges and harness the opportunities of the 21st century – including climate change, demographic shifts, international competition and fast-moving technological change.

Based on the lessons drawn from previous approaches and theories on rural development, the experience of OECD countries and lessons from case studies of developing countries adapted to the reality of developing countries, the OECD Development Centre proposes a new rural development paradigm (NRDP) for developing countries in the 21st Century

The NRDP is founded on eight components that need to be included for successful rural development strategies.

  1. Governance. A consistent and robust strategy is not enough if implementation capacity is weak. It is thus important for an effective strategy to build governance capacity and integrity at all levels.
  2. Multiple sectors. Although agriculture remains a fundamental sector in developing countries and should be targeted by rural policy, rural development strategies should also promote off-farm activities and employment generation in the industrial and service sectors.
  3. Infrastructure. Improving both soft and hard infrastructure to reduce transaction costs, strengthen rural-urban linkages, and build capability is a key part of any strategy in developing countries. It includes improvements in connectivity across rural areas and with secondary cities, as well as in access to education and health services.
  4. Urban-rural linkages. Rural livelihoods are highly dependent on the performance of urban centres for their labour markets; access to goods, services and new technologies; as well as exposure to new ideas. Successful rural development strategies do not treat rural areas as isolated entities, but rather as part of a system made up of both rural and urban areas.
  5. Inclusiveness. Rural development strategies should not only aim at tackling poverty and inequality, but also account for the importance of facilitating the demographic transition.
  6. Gender. Improving rural livelihoods should take into account the critical role of women in rural development, including their property rights and their ability to control and deploy resources.
  7. Demography. High fertility rates and rapidly ageing populations are two of the most relevant challenges faced by rural areas in developing countries today. Although the policy implications of these two issues are different, addressing these challenges will imply good co-ordination across education, health and social protection policies, as well as family planning.
  8. Sustainability. Taking into account environmental sustainability in rural development strategies should not be limited to addressing the high dependence of rural populations on natural resources for livelihoods and growth, but also their vulnerability to climate change and threats from energy, food and water scarcity.

The Sustainable Development Goals (SDGs) are closely linked to addressing the new challenges for rural areas, such as demographic pressure, ecological side-effects and climate change, and poor governance, along with negative consequences imposed by lagging rural areas such as polarised regional development and rural migration into urban slums. Since the SDGs and rural development are closely interconnected, investment in both areas will have mutually beneficial impacts. Thus rural development should be put at the heart of national development strategies in all countries at all development stages to ensure equal, inclusive and sustainable development

The challenge is that urban areas in most developing economies with fast growing populations are not able to productively absorb their growing urban populations, let alone migrants from rural areas. The result is an increase in urban slums, informal employment, underemployment, falling labour force participation rates and persistent poor livelihoods in rural areas. Furthermore, with the slowdown of China’s growth and its changing economic structure toward services, the fall in commodity prices is not a cyclical but a structural change. Combined with the expected rise in global interest rates there is likely to lead to slower economic growth in developing countries which will further complicate prospects for rural development.

The challenge is particularly large for South Asia and Sub-Saharan Africa because their populations are largely rural and they also have high population growth rates (Figure 3) and the lack of productive jobs to absorb the rapid increase in the labour force. There is already vast growth of urban slums and the informal labour force, underemployment in rural areas, and falling labour force participation rates. While most other developing regions have already had the demographic transition and seen their population growth rates fall starting in the 1980s, in Sub-Saharan Africa population growth rates have been around 2.8 % per year for the last 35 years. They are only now starting to decline, but are more than twice the average for the world. They are expected to remain about 1.5 percentage points higher per year than the world average for the next three decades (Figure 3). The increase in the labour force (population 15-64 year olds) by 2030 from people that have already been born is 300 million workers, which is roughly the current labour force of the EU. In addition many Sub-Saharan countries are fragile states and many are also very environmentally fragile. As a result there are likely to be large humanitarian challenges as well as increased pressure for people to migrate out of Africa to Europe and other regions.

Unless effective rural development policies can be put in place it will not be possible to meet the SDG because rural areas tend to be left behind. Addressing the challenge of rural development is going to require innovative approaches at the local, national and international level. These include developing multi-sectoral and multi-level and multi-agent strategies that further economic and social development and are also environmentally sustainable. Innovative approaches to urbanization and the development of intermediary cities that are economically and environmentally sustainable will be needed, which will require bringing to bear the best global knowledge on how to achieve this in a cost-effective way and also addressing the difficult governance and financial challenges for achieving this.

In addition the challenges are not only at the country or regional level but at the global level because in our currently very interconnected world lack of productive jobs, increasing inequality and population pressures in the developing world can lead to social unrest, political instability, conflict and increased migration flows which will impact other parts of the world as we are seeing with the spread of global terrorism and the refugee crisis.

Useful links

GFD

The 2016 OECD Global Forum on Development on 31 March in Paris will discuss how national policies and strategies for achieving the SDGs can be optimised. It will also look at approaches to scale up rural initiatives and leverage the data revolution to track progress toward achieving the SDGs and maximising resources through innovative partnerships.

  • How will global trends, including migration, affect the implementation of the SDGs?
  • Why is rural development still critical and how can rural strategies be strengthened in international and national agendas to further support the SDGs?
  • How can a smarter use of data better prioritise and facilitate SDG implementation?
  • Is it possible to secure adequate and predictable financing in support of developing and emerging countries’ development strategies?
  • How can policy dialogue and peer learning be further leveraged to support the implementation of the 2030 Agenda?

The Sustainable Development Goals: A Duty and an Opportunity

NAECGabriela Ramos, Special Counsellor to the OECD Secretary-General, Chief of Staff and G20 Sherpa

The Sustainable Development Goals (SDGs) are universal, multi-dimensional, and ambitious. To achieve them we need an integrated framework that promotes a growth path that respects the environment, and whose benefits are shared by all, not only by the privileged few. The concept of sustainable development challenges us to rethink how we relate to the world around us and how we expect governments to make policies that support that world view.

First, there is the realisation that economic growth alone is not enough: the economic, social and environmental aspects of any action are interconnected. Considering only one of these at a time leads to errors in judgment and unsustainable outcomes. The growth accounting that we have relied on has fallen short, by not raising the alarm regarding the accumulated imbalances that brought the worst crisis in our lifetime in 2008, and regarding natural resource depletion and high inequalities of income and outcomes for people.

Next, the interconnected nature of sustainable development calls for going beyond geographical or institutional borders, in order to co-ordinate strategies and make good decisions. Problems are rarely easy to contain within predefined jurisdictions such as one government agency or a single neighbourhood, and intelligent solutions require co-operation as part of the decision-making process. Our policy decisions should keep in mind that our decisions and actions will have impacts elsewhere, will influence the future, and be bound by national circumstances, institutional settings, and the historical and cultural traits that define our societies.

Most of all, we need a growth path that puts people’s well-being at the core of policy efforts, and where GDP per capita and income are key elements of course, but not the only ones. In a highly interconnected global economy, the linkages between our economies, societies and environment should be central, and our policy choices should be informed by this high level of complexity.

The SDG’s therefore are a healthy reminder that, to deliver, we should change the way we operate and update the tools that we use to understand the world. Indeed, realize that GDP is a means to an end, and not an end in itself.

At the OECD we have been preparing for this in the last decade. We launched the New Approaches to Economic Challenges Initiative that makes a call to develop an agenda for sustainable and inclusive growth. We have also developed a hands-on agenda for green growth, and we have been working to address the slowdown of productivity growth with policy measures that will also have a positive impact on reducing inequalities of income and opportunities. That means changing the way we work, getting away from the “silo” approach, and trying to anticipate and shed light on the unintended consequences of the choices we make.

Our work on inclusive growth is a good illustration of this. Rising income inequality is often accompanied by greater polarisation in educational and health outcomes, perpetuating a vicious circle of exclusion and inequality. Moreover, inequalities impose costs on economic growth, particularly where inequality of opportunity locks in privilege and exclusion, undermining intergenerational social mobility. Accounting for the multidimensional nature of inequalities means evaluating the effects of policies on both income and non-income outcomes, as well as for different social groups.

Our analysis shows that “multidimensional living standards” – a measure that combines changes in household income, health and labour market outcomes – rose faster for more affluent social groups than for middle class or low-income households on average among OECD countries, and suggests that improvements in life expectancy and strong job creation during 1995-2007 did not compensate for widening income inequality.

A better understanding of the effects of policies on specific social groups allows policy makers to identify trade-offs and complementarities between growth and distributional objectives. For instance reducing regulatory barriers to domestic competition, trade and inward foreign direct investment can lift the incomes of the lower-middle class by more than it does GDP per capita. Conversely, a tightening of unemployment benefits for the long-term unemployed, if implemented without a strengthening of job-search support and other activation programmes, may lead to a decline in the income of the lower-middle class, even if it boosts average incomes.

These findings are reinforced by our work on the quality of jobs, defined as good pay, labour market security, and a decent working environment. There appear to be no major trade-offs between job quality and quantity but rather, potential synergies: countries that do relatively poorly with respect to job quality tend to have relatively low employment rates and vice versa.

In talking about jobs and equality, it is important to remember that the environment is not something you can think about later, once you have enough growth. Economic progress rests on ecological foundations. Natural capital – air, water, and other resources – is finite and has to be managed just as carefully as other forms of capital. More stringent environment policies, when well-designed, need not undermine productivity growth. Similarly, policies that make environmental sense can support economic growth and promote social inclusion too.

Designing a strategy to implement the SDGs comes down to answering three questions. What should economies be doing? How should they be doing it? And for whom? These questions are not new. Gro Brundtland’s answer in her 1987 report Our Common Future was economies promoting “growth that is forceful and at the same time socially and environmentally sustainable”. But after 20 years after Brundtland, we have still not managed to develop an integrated framework that combines the main objectives of well-being in a synergistic way. To do so we need to develop the best tools, but more importantly, to change habits –which is not easy- or to go against vested interests that benefit from the status quo. The political economy of reform is not going to be easy.

On the side of change, the SDGs give us not just the duty but the opportunity to advance our thinking. Let’s not waste it!

Useful links

OECD work on green growth and sustainable development

OECD work on inclusive growth

Challenges Facing Asia and Pacific in Terms of Sustainable Development

NAECStephen P. Groff, Vice President (South East Asia, East Asia and the Pacific), Asian Development Bank

Despite great strides in reducing the number of people in abject poverty, Asia and the Pacific remains home to more than half of the world’s extreme poor. With the global and regional economic outlook uncertain, the key challenge facing Asia is to sustain the growth needed to create jobs and reduce poverty.

Just as important is making sure that development efforts to address poverty tackle the multi-dimensional nature of the problem. The Sustainable Development Goals (SDGs) recognize that many challenges overlap in areas such as water, sanitation, education and health,—and demand an integrated approach. Balancing multiple components in a single project adds to complexity, so we need to take careful note of lessons learned from such past interventions. Doing so ensures that our efforts at a project level reinforce structural and macro-economic reforms to promote economic growth, and increase well-being.

In that regard, there is wide agreement that growth must be socially inclusive. Performance on many Millennium Development Goal (MDG) indicators demonstrates that economic growth and income poverty reduction alone have not reduced many forms of deprivation. While countries were generally able to meet the primary education-related MDG targets for enrolment and completion rates, the target for reducing the number of underweight children, child health and maternal mortality, will not be reached. Many were also off-track on access to basic sanitation, which is associated with poor health. While the MDG on gender parity in education is expected to be achieved, progress on women’s empowerment is lagging.

These persistent gaps are worrying, as rising disparities of income and access within and across countries and subregions can undermine social cohesion and erode development gains. Continuing gender disparities, for example, lead to loss of valuable productive human resources, which affects a country’s economic performance as well as the social fabric of its communities.

Compounding these problems are environmental threats such as increasing greenhouse gas emissions, loss of biodiversity, and changing weather patterns leading to flooding and droughts, which harm the livelihoods of vulnerable people in particular. They also intensify pressures on natural resources, which are likely to worsen as Asia’s population grows.

Such realities highlight the inter-linked and multiple dimensions of challenges to be addressed under the SDGs.

What can we learn from the implementation of the MDGs?

In this context of overlapping challenges, well designed projects and programs can make a real difference to people’s lives. Our experience with multi-sector activities in the social sectors “pre-2015” offers useful insights for such programs going forward.

First, for international finance institutions, difficulties in achieving targets in multi sector projects can lead to low performance ratings and inadvertently create internal disincentives. In response, we have shifted our operational strategy by:

simplifying project design; a sector-specific approach with fewer components should be adopted if conditions don’t suit a multi-sector approach; assessing, and where needed, strengthening the capacity of the government in undertaking multi-sector operations e.g. for municipal services; creating incentives for citizens to access services through approaches such as conditional cash transfers; working with governments to engage alternative and efficient service providers, like NGOs, SOEs and the private sector, for service delivery and accountability; and modifying financing arrangements to better support large government-led programs, where these work well and are delivering outcomes reasonably well.

Second, while the MDGs were primarily viewed as goals for governments, their implementation has highlighted the importance of partnerships between governments, citizens, and the private sector if we are to deliver on the SDGs. While the understanding and commitment to the SDGs from all partners is strong, much more remains to be done at the country and regional levels to translate these international development goals into laws, regulations and operational policies adhered to by all parties.

Third, the implementation of the MDGs underscores the importance of data and knowledge to guide incremental improvements in operations. The advent of the SDGs is opportune as it coincides with technological advances in a more open and globalized world that will allow us to undertake operational research using new tools such as the web, satellites and mobile phones; communicate with stakeholders with powerful images and data on what is happening in our classrooms, to our forests, and within the oceans; and use social media to debate, inform policy priorities and fine tune government programs.

These lessons help to expand country ownership, sharpen the focus on development results, attract private sources of financing, and encourage innovation. They build on lessons from the MDGs and can be scaled up under the SDGs.

Role of International Financial Institutions (IFIs) in supporting the SDGs

The SDGs are ambitious and demand integrated agendas for action, providing new opportunities for IFIs to respond to the evolving needs of countries. Two particular areas deserve increased attention to enable integrated actions that deliver results: financing for development and sustainable development investment.

IFIs can play crucial roles in strengthening financial markets, catalyzing private sources of finance towards development, expanding domestic fiscal resources and, importantly, helping direct increasing resources for climate finance to countries where such investment is needed.

Asia’s diversity makes it critical that investments in sustainable development and other financing instruments are tailored to individual country conditions. ADB is expanding its financial capacity to provide significantly higher resources for lending operations, based on the differing needs of our member countries. We plan to boost annual lending, increasing from an average of $13.6 billion in 2012-2014 to at least $16.8 billion by 2018, and possibly reaching $20 billion by 2020.

Meeting the SDGs will be an operational challenge, but one that offers IFIs a chance to recalibrate their strategies for maximum impact. ADB has started work on a new long-term strategy for 2030 to respond more effectively to the region’s fast-changing needs. Meeting the SDGs in the region will be a core goal, and providing integrated, multi-sectoral assistance will be central to our success.

Useful links
Asian Development Bank VP Stephen Groff on development in Asia-Pacific

OECD work on the Sustainable Development Goals

From Analysis to Action – Multidimensional Country Reviews

NAECMario Pezzini, Director of the OECD Development Centre and Director ad interim of the OECD Development Co-operation Directorate, and Jan Rieländer, Head of Multidimensional Country Reviews at the OECD Development Centre

Multidimensional Country Reviews (MDCRs) support developing countries in designing development strategies that aim for high impact. These strategies address the binding constraints to development, defined as sustainable and equitable growth and well-being. A growing number of developing countries worldwide are implementing MDCRs. Many see the MDCR as a tool to implement the Sustainable Development Goals.

The OECD’s 2012 Strategy on Development put forward the MDCR as a response to a twofold challenge. First, all countries face challenges that are specific to their individual circumstances and their level of social, institutional, and economic development. Only mutual learning and the adaptation of expertise and policy advice to the inner workings and outer circumstances of a country can achieve better policies for better lives. Second, policy makers, especially from developing countries, shared feedback that while the OECD’s sector-specific policy expertise was excellent, little is offered to inform a comprehensive strategy and manage the trade-offs. Yet, key policymakers, especially at the centre of government, were seeking precisely this overarching analysis and where to prioritise efforts and in what sequence.

Shortly before the 2012 Strategy on Development, the Arab Spring shook up a number of beliefs about development. Take Tunisia for example. It had very high marks on all indicators according to the Millennium Development Goals and standard macroeconomic guidance: 3% fiscal deficit, 5% average growth since 1990, 100% primary enrolment rate since 2008, 80% healthcare coverage for its population, and a good reformer in doing business. Although of little surprise in hindsight, the uprisings revealed the need for a broader understanding of what progress means for a country. Observers had completely overlooked the importance of social cohesion, the highly unequal regional distribution of opportunities, and the inability of the institutional and productive systems to adapt to changing circumstances.

MDCRs take the essential broader view. They understand development as strengthening a society’s capabilities to consistently translate monetary, human and natural resources into well-being outcomes. The definition of well-being is inspired by the OECD’s How’s Life? framework with its 11 dimensions and concepts of quality of life and material well-being. These include income and jobs as well as subjective well-being measures of social connections, civic engagement, environmental conditions, health and education, among others. To consistently create such well-being requires a large range of capabilities in the realms of innovation, production, governance, finance and social protection, to name a few.

Countries must transition to higher levels of functioning as internal and external circumstances change if they are to successfully pursue broad-based development. A stumbling block to further development occurs whenever a given combination of capabilities, resources, and the external environment impedes a country from optimising opportunities and addressing its most imminent social and economic challenges. In this context, traditional analysis has often concentrated on investment or productivity constraints. This correctly describes a need in most cases. However, social, environmental and governance challenges are equally important and often underlie the productivity trends. High inequality, for example, translates into highly unequal school systems that weaken human capital, which implies reduced economic capabilities and lower productivity. A high concentration of economic power reduces opportunities for new activities to surface and drive change by challenging less efficient incumbents. A misuse of natural resources may be a bottleneck to further development. Low levels of trust combined with non-transparent judicial and executive government systems often lead to a social contract of the smallest common denominator that cannot underpin a transition to new engines of progress.

MDCRs have been created as a continuously evolving tool to help countries identify the core constraints among their capabilities. The MDCR then provides national policymakers and their partners with the inputs needed for a country-owned and implemented development strategy.

Aided by the toolkits of strategic foresight and governmental learning, a multidisciplinary team works together across OECD directorates to identify a country’s most important shortcomings in terms of well-being outcomes and the capabilities to produce them. Some of the capabilities that have been identified as holding back development in the MDCRs currently underway in Cote d’Ivoire, Kazakhstan, Myanmar, Philippines, Peru, and Uruguay include:

  • The capability to sustain inclusive economic growth by continuously diversifying the economy to meet the changing demands of the global marketplace (this shows up in various forms at most levels of development).
  • The capability to channel sufficient financial resources to where they can be used most productively.
  • The capability to turn the country’s human resources into human capital by equipping citizens with the skills necessary to further develop the economic, social and institutional potential of the country, given the most likely set of opportunities.
  • The capability to adapt the institutional environment to the higher level of functioning required to transition, including more reliable judicial systems, less corruption, and stronger incentives for performance in the civil service.
  • The capability to manage environmental resources to maximise natural capital while at the same time providing incentives for increased productivity.
  • The capability to sustain a social contract that overcomes the divisions between the formal and informal economies and delivers well-being and revenue by including as many citizens as possible.

In a follow-on, OECD expertise is applied by the partner country to address these shortcomings and create a more sustainable system for delivering growth and well-being. In Cote d’Ivoire, sector experts from across the OECD worked together with a strong local team in the Prime Minister’s office to design a full government action plan which addresses the needs for economic modernisation, infrastructure, a more efficient and equitable tax system, developing skills that can sustain production transformation, and a financial sector that can deliver resources to where they can be most productive.

Analysis is only the very first step. Progress requires action. With this in mind, the OECD team works closely with a core group of national policymakers and analysts throughout the MDCR. This ensures that the recommendations are well adapted to a country’s circumstances and priorities and that the policymakers are in a position to make full use of the MDCR output. The preparation of the MDCR involves a spectrum of policymakers and researchers as well as public, private, and NGO actors. They reach beyond capital cities to encompass expertise across a country. Once the analysis and recommendations are done, MDCRs go beyond just delivering a report to engaging in a true dialogue around the recommendations that build on shared prioritisation. The result is a programme that, when implemented well and in supportive circumstances, can rapidly and positively transform national welfare.

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OECD work on development