October 19, 2021
Introduction
The COVID-19 pandemic will have long term consequences for the socio-economic environment. It will, in particular, offer significant hurdles to sustainable development, especially as the demand for development investment grows. Parliaments, as national legislatures, play a critical role in allowing, encouraging, and channelling investment in sustainable development and establishing suitable regulatory frameworks. This applies to a broad range of sectors and policy areas. Important considerations in this context include the need to guarantee that the implementation of nationally agreed upon sustainable development goals is adequately financed and meets the needs of the people and the necessity for effective legislative oversight of governance concerns, particularly those relating to investment regulation.
During this session, Parliamentarians participated in a multi-stakeholder conversation with corporate leaders, ministers, and heads of international organisations to explore and debate how legislators can assist build an enabling climate for sustained private investment in the post crisis era.
Issues addressed include:
- How to improve the interaction between parliaments, government leaders, and the private sector in order to better deliver on sustainable development,
- The main challenges for sustainable development investment at the national level and how this partnership contributes to overcoming them, and
- Global policy imperatives for sustainable financing for development in the post COVID19 context.
Session Highlights
The COVID-19 pandemic has significantly affected economies and stressed the need to move towards inclusive economic recovery. Discussions reflected on the necessity to have an even global recovery. The session covered statistics such as the UNCTAD estimate whereby between 5 trillion to 7 trillion USD per year were needed to implement the SDGs worldwide and developing countries face an annual investment gap of 2.5 trillion dollars. According to the most recent forecast by the Organisation for Economic Co-operation and Development (OECD), this gap has now widened by more than 50 percent, from US$2.5 trillion to US$4.1 trillion. In addition, according to UNCTADs world investment report, US$1 of direct public support spent under the right conditions mobilises US$10 of capital investment through public private financial schemes.
Panellists highlighted that under the right policy frameworks and with the right environment of cooperation among stakeholders, these investments can help close the gap the pandemic has created, produce an inclusive and sustainable recovery and achieve the SDGs by 2030.
Regarding the role of the Tripartite, panellists noted that
- Parliaments and governments have a role in ensuring an enabling environment that attracts investment in sectors that can support a fairer and greener recovery. This includes the growing area of for benefit and for purpose companies which require specific legislation that allows them to grow,
- Parliaments can play a role in stimulating the private sectors to do SDG investments in developing countries and ensuring that the investments take place responsibly. Parliamentarians can facilitate this by earmarking low reform priorities and drafting SDG oriented legislation,
- Parliamentarians have a critical role to provide overall oversight of SDG implementation efforts, they must guarantee that expenditures are efficient, accountable and impactful and that they meet the needs of the most vulnerable groups, and
- Parliamentarians are the interface between governments and the constituents.
The session outlined the importance of increased dialogue on how to combat the pandemic and overcome its devastating impact, provision of stimulus for our economies without further increasing burden of debt and ways to decrease inequalities and mitigate the inequalities that the pandemic has unearthed.
It was emphasised that through dialogue among those different segments of society, sustainable working solutions can be found and implemented and in order to be sustainable, the COVID19 recovery packages must be firmly grounded in the SDGs. Panellists emphasised on the role of parliamentarians stressing that parliaments have a critical instrumental role to play in turning the voluntary commitments to the SDGs into enforceable laws, approving budgets to support the implementations of the goals and to hold the government to account regarding policy choices and strategies.
Further, the private sector needs to be strongly engaged and enterprises need to invest more and better particularly in terms of labour and environmental standards and into all kinds of innovative programs that can increase the quality of people’s life and the environment. Panellists also stressed the need to “think global and act locally”, which involves increasing dialogues at national levels to foster development and recovery using a bottom-up approach.
Panellists discussed the need to have a system where parliamentarians, policymakers and business leaders should consider narrowing down their focus on three guiding principles:
- Developing a shared perspective as a foundation,
- Having regular consultations for common grounds, and
- Utilising regular and ad hoc platforms.
Discussions circled around the need to revise and reflect on existing rules regarding investment in sustainability whereby there is a need to invest in ways that will improve development in countries worldwide. In addition, the climate change challenge has to be taken into consideration and the commitment to have a green deal and to be climate neutral must be sped up. To ensure private sector participation, panellists outlined the need for companies to have due diligence in their supply chains to also stimulate possibility of economic development in other countries. Furthermore, private companies can look at how to provide technologies with purpose, engaging society particularly in sectors such as energy and water which could be used to develop communities.
The session covered the need to have an Agri-food value chain approach with increased investment in value chains and the need to have smart spending of money: both public and private. Panellists emphasised that governments and parliamentarians need to understand the private sector better to ensure that investments make a good business case to stimulate investment. Regarding the various challenges faced, panellists highlighted that the private sector overlap with public is a challenge. In addition, other challenges faced are high cost of capital, corruption and lack of clear governance. The session outlined the importance of increased financing into SDG projects during the crisis by involving the private sector to increase investment.
The Panellist provided insights regarding the role of parliamentarians. He outlined that the role of parliamentarians is to build awareness and capacity, which influences policy making. In addition, parliamentarians play an essential role as they are a connection between the government and the people providing a platform for listening and sharing information, ensuring the right kinds of projects are implemented in the regions, which is crucial in understanding and pushing forward essential developments. He also highlighted that we are facing a similar situation to the Second World War during the pandemic, whereby the Marshall plan was implemented post- World War second, as a reconstruction plan.
We now require a similar approach to recover from the pandemic. The pandemic has proven to be highly devastating, particularly in the developing world. A recommendation proposed for increasing investment in sustainable development goals is by encouraging foreign investments through imposing Tobin Tax structure, which implicates a flat 0.01 percent tax on all foreign inward investments, and additionally using an approach implemented in India whereby net profit of a company is above a certain threshold, 2 percent of this amount should be directed to Corporate Social Responsibility which will be directed in assisting various projects.
Opening
- Rebeca Grynspan, UNCTAD Secretary General
- Martin Changong, IPU Secretary General
- Arkebe Oqubay, Senior Minister and Special Adviser to the Prime Minister of Ethiopia
On the panel were:
- Saber H. Chowdhury, M.P Bangladesh, Honorary President of IPU
- Bernard Lange, Vice Chair, Group of the Progressive Alliance of Socialists and Democrats in the European Parliament
- Ms Sabine Dall’Omo, Chief Executive Officer at Siemens Southern and Eastern Africa
- Nicolas Moreau, CEO HSBC Global Asset Management
- Mr Fokko Wientjes, Vice President Nutrition in Emerging Markets and Food Systems, DSM
- Pradeep Mehta, Founder, Secretary General of CUTS International
- Mr Zhandos Temirgal, Managing Director of Investment Promotion and Marketing Division, “KAZAKH INVEST” National Company JSC, Kazakhstan
Moderator
Jacopo Dettoni, Editor at fDi Intelligence, Financial Times