Sattoriy Fayzullokh Abdijabbor ugli Essay

Sattoriy Fayzullokh Abdijabbor ugli

Essay

Our society, economy, and environment are inherently depend on each other. Problems in one area are invariably reflected in others. Huge environmental and socio-economic problems are increasingly threatening life and livelihoods around the world. The Sustainable Development Goals and the 2030 Agenda emphasized that need to address the major challenges of our time and find sustainable ways that will contribute to the long-term solution of these problems. Now a new generation of political innovations is aimed at ensuring that the financial system meets the needs of comprehensive, environmentally sustainable economic development.

However, the universality of goals does not only apply to their implementation in all countries, but also determines the responsibility of various countries for the implementation of problems requiring global action in areas such as financing. Implementation of this agenda gives to developing countries to expand their participation in financial processes at the global level as their influence grows, thereby this influence changes in governance of the country. Also, good governance allows private sector investors to have the same level of protection of property rights, allowing countries with strong human capital to prepare projects without relying on multilateral investors or their advisors (Sergei Guriev, 2016). States with good governance and the right skills will be ready and able to implement a reform program for development. Most of financial organizations provide with money to developing and low income countries for implementing SDGs. If developing countries have to find all of this money on their own for SDGs, especially in low-income countries, this money could be huge influence on the economy. Because, the foreign aid which is taken by international financial institutions are equivalent to about 15 per cent of GDP. Even in emerging market economies, these are be equal to 4 percent of GDP of the countries (Sergei Guriev, 2016).

Table 1. Initiatives for financing SDGs in national level

	Theme	Tool
Enhancing market practice	Financial responsibility	Fiduciary capability, Incentives
	Prudential regulation	Risk management, Stress tests, Capital requirements
	Disclosure and reporting by financial institutions	Policy, Performance, Accounting
	Disclosure and reporting by non-financial corporations	Standards and requirements, Accounting frameworks
	Financial market criteria	Equity analysis, Credit ratings, Green assets, Indexes
Harnessing the public balance sheet	Fiscal incentives	Targeted fiscal incentives, Review fiscal incentives,
	Public financial institutions	Sustainability mandates, Establishing new green institutions, Blended finance instruments
	Central Banks	Refinancing operations, Asset purchase programmes
Reforming legal and market structures	Directed investment and lending	Priority sector lending, Prohibitions
	Directed service provision	Directed provision, Mandatory purchase requirements
	Capital requirements	Adjust capital requirements
Encouraging cultural transformation in financial decision-making	Financial capacity building	Consumer education, Professional education, Regulator capacity building
	Financial behaviour	Remuneration regulation, Codes of conduct, Non-financial guidance
	Market Structure	Value-based financial institutions, Market diversity, Right sizing financial institutions

Source: The Inquiry: Design of a Sustainable Financial System (2015)

Financing Sustainable development goals can be achieved through the introduction of traditional approaches and individual innovations in the development of the financial system. The results of the learning further information on measures to develop financing Sustainable Development Goals, they can be developed in two ways: by national and by international investment and aids. Influencing international and national policy-making to create systemic linkages between policies to combat illicit financial flows and sustainable development.

Picture 1. Developing process a 21st Century Financial System

Source: The Inquiry: Design of a Sustainable Financial System (2015)

The impact of investment in financing SDGs is very huge. This requires a global infrastructure financing mechanisms, including with the participation of public and private sources, as well as multilateral development banks (MDBs). It will also require changes in the preparation, quality and structuring of projects. Based on the current level of investment in public and private resources, attaining the SDGs would require about $2.5 trillion per year, over the next 15 years (from 2015 to 2030). More than 70 percent of the planned to give to developing and low income countries (Business and Sustainable Development (2017).

Picture 2. Effects of increasing investment for sustainable infrastructure to achieve the SDGs



Source Business and Sustainable Development (2017)

Picture 2 shows the additional investment requirements for a sustainable infrastructure to achieve the SDGs. It describes the possible role of various financing providers - governments, the private sector, and foreign development assistance -in bridging the gap between $ 2–3 trillion of current annual investments and the required $ 6 trillion in investments.

In conclusion, improving national financing and role of governance is difficult and takes time. But progress in both areas is essential to unlocking the investment the world needs to achieve the SDGs.

References

Sergei Guriev (2016). How to afford the SDGs. https://www.jordantimes.com/opinion/sergei-guriev/how-afford-sdgs

The Inquiry: Design of a Sustainable Financial System (2015). http://unepinquiry.org/wp-content/uploads/2015/11/The_Financial_System_We_Need_EN.pdf

Business and Sustainable Development (2017). http://s3.amazonaws.com/aws-bsdc/BSDC_SustainableFinanceSystem.pdf