Cihan Sultanoğlu at the High-level Political Forum 2017Jul 13, 2017
Speech at the Side Event on the Margins of the ECOSOC High-level Political Forum “Impact Investment and Innovation for SDGs”
I am delighted to welcome you to this Side Event, which is dedicated to Impact Investment and Innovation for Sustainable Development, and which UNDP is honoured to co-host with the Permanent Mission of Armenia to the United Nations.
The coming together of governments, international organizations, social entrepreneurs, and impact investors and promoters is avital part of making the 2030 Agenda come to life around the world. Hence the great importance attached to this event by UNDP. My thanks go to the partners from the SITRA Innovation Fund, SOCAP Capital Markets, INSEAD, and Stanford for joining us today.
Today’s event builds on the innovative Impact Investment for Development Summit that took place in Yerevan, Armenia in March, and brought together over two hundred experts, business leaders and practitioners from around the world.
We are all acutely aware of the financing gap facing countries seeking to achieve the 2030 Agenda.
The UN Conference on Trade and Development (UNCTAD) notes that globally health, education and infrastructure require some $3.9 trillion of investment globally per year every year until 2030. That leaves a $2.5 trillion annual shortfall relative to the current and forecast commitments. Put differently, the gap equals to nearly 20 times last year’s official international aid flows, which are already among the highest levels ever recorded. How do we address this financing gap?
The answer lies first in leveraging much more significant private capital flows to support development objectives. Over the last several years we have seen the growth of various forms of new financial mechanisms, groundbreaking in terms of market size, operations, and focus on developing countries.
In particular, equity-based crowdfunding and peer to peer (P2P) lending, alternative currencies, smart remittances, mobile money, payment for results, and, impact investment can complement traditional aid and provide a part of the solution to address a financing gap many governments are facing in providing basic services.
Second, beyond financing, there is a need to make innovation central to development.
UNDP is the only UN agency that has built innovation policy labs inside Governments in an effort to leverage new approaches and to support policy making that put citizens at the center.
In Moldova, Georgia, FYR of Macedonia and Armenia, policy labs have helped address some of the most intractable issues facing citizens and governments - from community policing and employment for women, to drug adherence of TB patients, equitable service provision for people with disabilities, sustainable farming, air pollution and support for SMEs- employing methods ranging from behavioral science, design thinking, new forms of innovative financing, speculative foresight, and new sources of data.
This year in November UNDP will co host a global gathering of policy labs from all around the world to compare the principles of what makes labs different in developing and developed context in order to be able to provide further support to Governments to pursue SDGs.
We will also hear more today about a joint initiative of the Government of Armenia, UNDP and Stanford University, that proposes joint work on identifying and designing solutions that will help Armenia leapfrog in its development. Being part of UNDP’s broader effort to systematically support innovation in public policy through dedicated Labs, this initiative will be a showcase for applying behavioral design and user-driven innovation in a country that is embarking on an ambitious reform agenda.
UNDP is well positioned to play a role as facilitator in this work, helping countries blend mainstream development work, innovation, and impact investment.
UNDP can act as an aggregator managing a pipeline of impact investment opportunities, leveraging its unrivalled presence in 170 countries, and its expertise in sectors including governance, sustainable development, resilience, and conflict prevention.
UNDP’s Alternative Finance Lab supported by the government of the Slovak Republic, has mobilized close to $40 for each $1 invested through new financial mechanisms. This includes an Outcome Buying Facility in Belarus in cooperation with the European Commission and a design of a social impact bond for youth unemployment in Serbia together with our partners from the Finish Sitra.
UNDP has also helped roll out a global Crowdfunding Academy which is supporting Governments, SMEs, and many other local sustainable development projects to leverage funding from less traditional sources.
Building on the innovation lab experience in Armenia which has now become a model for putting user-driven innovation at the heart of public policy, UNDP is now exploring the creation of a systematic Impact Investment for Development platform, which would cover several countries. The Platform will be an open partnership mechanism to create new service lines, engage with impact investors and help evolve the way UNDP does its business.
At UNDP we firmly believe that collaboration and dialogue are key to SDG implementation.
I am grateful to Ambassador Mnatsakanian for his suggestion to bring-up these topics to a highest level at HLPF and for jointly initiating today’s event. This is both a sign of our strong partnership and of Armenia’s leadership in innovation for SDGs, as will be highlighted by several cases later today. I look forward to the discussion.