Barbados might be in line to access half-a-trillion US dollars in International Monetary Fund finance for its sustainable development goals (SDGs), IMF Managing Director Christine Legarde announced this afternoon.
While not mentioning Barbados by name, Legarde said that 49 low income developing states (LIDS) are in line to get US$520 billion per year to help finance their SDGs by the year 2030.
Lagarde was speaking at a High-Level Meeting on Financing the 2030 Agenda for Sustainable Development at the United Nations New York headquarters, in the presence of Prime Minister Mia Mottley.
The Sustainable Development Goals (SDGs) are a series of 17 global goals set by the United Nations General Assembly, as part of a resolution laying out an agenda for sustainable development.
It was unclear whether Barbados, which has just entered an IMF staff-level agreement for financing its balance of payments, would be able to access these funds. Barbados is regarded as a medium-income developing nation that rests at the pinnacle of human development – making the island often ineligible for low-cost development finance.
But the IMF boss stressed that the 49 countries must meet certain conditions as part of the funding in five critical areas of growth such as education, health, water and sanitation, roads and electricity.
“As a necessary first step, low income developing states must own the responsibility for achieving the SDGs. Nobody else is going to do it for them, they have to own it themselves. You should now focus on strengthening macroeconomic management, enhancing tax capacity, tackling spending inefficiencies, addressing the corruption that undermines inclusive growth and fostering business environment so that the private sector can actually come in invest and thrive,” Legarde said.
The IMF will work closely with all of the countries to ensure this is the set of objectives against which they can develop their actions, the IMF managing director said.
But the IMF chief also zeroed in on policies the multilateral lending agency would like to see introduced in these poorest developing nations, including raising taxes. The IMF is to use its annual bilateral relations with these states to guide them through the process, Legarde said.
“Countries have substantial scope to raise tax revenues. An ambitious, but reasonable target for many countries is to increase their tax ratio by five percentage point of GDP [gross domestic product]. This will require strong administrative and policy reforms where the IMF and other development agencies can play your key supporting roles,” she revealed, adding that it also requires some medium-term policies.
But boosting tax revenues by this
amount might not be sufficient for the low income developing states – or LIDS, Legarde mused.
LIDS, in addition to using existing resources better, would require efforts from other sources such as bilateral agencies, philanthropists, international institutions and private investors, she argued.