Towards the 2030 Agenda: Mobilizing Innovative and Social Finance
JAKARTA, 18 JANUARY 2018 – The United Nations Development Programme (UNDP), together with the Forum Kajian Pembangunan (FKP) hosts a discussion forum entitled “Towards the 2030 Agenda: Mobilizing Innovative and Social Finance” which discusses the role of innovative and social finance to achieve the Sustainable Development Goals (SDGs).
UNDP has been supporting the Government of Indonesia in implementing the SDGs. The recent Presidential Decree No.59 Year 2017 gave the much-needed institutional framework, roles and responsibilities to achieve SDGs. But the challenge remains huge as the country will be implementing the ambitious goals in a context of low government revenues, significant decreases of Overseas Development Assistance (ODA), and lagging international private financial flows.
Moreover, as acknowledged in the 2015 Addis Ababa Action Plan, public sector finance will not be sufficient. It is estimated that globally, between $3 - 4.5 trillion is needed in the developing world to deliver the SDGs. Current investment in healthcare, education, sanitation, access to energy and all the sectors covered under the SDGs is around $1.4 trillion, creating an average investment gap of about $2.5 trillion.
An important part of the solution to help the development financing is innovative and social financing - the use of financing mechanisms to mobilize capital investment, which delivers social benefits in addition to financial returns. These forms of financing work at the intersection of finance and international development, de-risking and mobilizing private capital for development impact.
“We know that there is an abundance of financing available and the challenge from a development perspective is to find ways to channel those resources to where it is needed most. This also means seeing development financing not simply as donations that do good. It challenges us to show that development is an attractive investment that brings profits as well,” said Francine Pickup, Deputy Country Director of UNDP Indonesia.
The forum also showcases a number of UNDP’s ground-breaking initiatives including crowdfunding campaigns to build a solar-powered water pump in one of the country’s driest region of East Sumba in partnership with Kitabisa.com; engaging in an agro-linkages SDG Impact Fund to channel financing to social enterprises in partnership with Angel Investment Network Indonesia (ANGIN); and zakat for SDGs in partnership with Badan Amil Zakat Nasional (BAZNAS) which resulted in the development of a micro hydro power plant in Sumatra island’s Jambi province and the establishment of Innovative Financing Lab.
Specifically on Islamic Finance, the forum discusses the potential alignment between zakat and the SDGs, given their aligned principles on alleviating poverty and hunger and reducing inequality by redistributing wealth. Other forms of Islamic finance, including waqf, microfinance, and sukuk can help achieve the SDGs. With the size of global Islamic finance assets projected to increase by 72% between 2016 and 2022, Indonesia is now an up and coming force in Islamic finance.
SDGs, are a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity. These 17 Goals build on the successes of the Millennium Development Goals, while including new areas such as climate change, economic inequality, innovation, sustainable consumption, peace and justice, among other priorities. UNDP Indonesia together with government, academe, private sector, civil society and citizens are committed to achieve the goals by 2030.
For more information please contact:
Andri Suryo (Head of Communications Unit UNDP)
Mohamad Ikhsan Modjo (Technical Advisor UNDP)