Walking toward the channeling funds for SDGs projects

By: Andrea Herrera Guaman* (aherrera@eafit.edu.co)
Administration Managament Professional

We live in a world surrounded by the words “change”, “green”, “sustainable” and many others alluding the searching of tools that tend for the preservation of the environment. Nonetheless, are really few the institutions that take these words seriously and even fewer those with an authentic interest of making that people, governments and companies start to believe that work and investment in favor of SDG projects are extremely beneficial at all kind of levels.

With that goal in mind, the UNCTAD publishes the World Investment Report 2014, in which the main approach is the need or rather the urge of generating an adjustment in the way how both, the public and the private sector of developing countries are making investments. This call is made in order to save those economies from an estimated of 2,5 billion dollars deficit, because even though the public sector contributions are indispensable to face this deficit, they are not enough , and it is now the moment for private sector to begin to channel its efforts and resources in achieving more SDG (UNCTAD, 2014).

The key point in this issue is try to obtain either the entry or the augmentation in the participation of private sector in the SDGs projects as there are varied the constraints that made this sector does not want to strengthen its interest in this field. To name a few of this constraints the UNTACD listed for example the entry barriers, Inadequate risk –return ratios for SDG investment and lack of expertise as one of the principal hurdles for channeling funds into SDGs (UNCTAD 2014).

These constraints can be addressed with some policy options like; creating an enabling policy environment for investment in sustainable development that finally leads to an alleviation in entry barriers, while safeguarding legitimate public interests, or expanding the use of risk –sharing and mitigation mechanisms for SDG investments. For instance, Public and donor sector funds as base capital or junior debt, to share risks or improve risk-return profile for private sector funders or, Stablishing partnerships between home and host- country investment promotions agencies when lack of expertise is the case (UNCTAD 2014).

In addition to those policy options it is also essential a reorientation of investment incentives since the traditional economic growth oriented investment incentives such as; Focus on short and medium term economic gains, cost - benefit analysis in favor of economic gains or lowering of regulatory standards considered as a policy options are still captivating the interests of several sectors that look down on those Investment incentives that take into account sustainable development considerations like long- term implications of investment for sustainable development considered and additionally a focus on SDG sectors. The key here is not to become those investment incentives in a permanent option but a self- sustainable choice trough years, building experience and confidence in SDGs activities. (UNCTAD, 2014)

References

Unctad.org, (2014). unctad.org | Los países en desarrollo afrontan 2,5 billones de dólares de déficit de inversión anual en sectores fundamentales del desarrollo sostenible, según estimaciones de un informe de la UNCTAD. [online] Available at: http://unctad.org/es/paginas/PressRelease.aspx?OriginalVersionID=194 [Accessed 25 Aug. 2014].

Unctad.org, (2014). unctad.org | World Investment Report 2014. [online] Available at: http://unctad.org/en/pages/PublicationWebflyer.aspx?publicationid=937 [Accessed 26 Aug. 2014].