“There needs to be a dramatic change in strategy if we are to fulfil the Sustainable Development Goals by 2030”, according to His Excellency, Dr. Bandar Hajjar, President of the Islamic Development Bank (IsDB).
His Excellency set out his new vision for how the world can meet the 2030 targets at the World Economic Forum Annual Meeting this week. His visit to Davos will be followed by the release of a new book, written by His Excellency, which explains his plan for a new business model to achieve the SDGs in full.
The President estimates that the finance gap between available government budgets and funds needed for development is over US$ 200 trillion. If Multilateral Development Banks (MDBs) can mobilise only 1% of global market capital, trillions of idle and risk-averse dollars can be made to work for development.
Whilst there has been good momentum since 2015 with many sectors and leaders embracing them, evidence shows that at the current rate of progress, the Goals will not be achieved in time, and in many areas there is a risk of reversing the progress made to date.
Speaking at an event to champion Public Private Partnerships for the Global Goals in Davos, co-hosted by SDG Advocate Richard Curtis, the Islamic Development Bank and P4G, Dr. Hajjar said:
“The needs of developing countries feels a long way from Davos. But this is the real world where people are in desperate need of solutions. This year’s Davos theme is “Globalization 4.0: Shaping a Global Architecture in the Age of the Fourth Industrial Revolution.” So, I encourage us all to think carefully about how we can harness the power of innovation in this era of unprecedented progress and change, for the benefit of the world’s poorest.”
“We must look beyond all the talking and warm words, and keep these people front of mind as we strive to find better solutions to development and work towards the SDGs. Never has the need for cooperation and partnership been of such paramount importance as it is today.”
In his book, Dr. Hajjar will outline that the SDGs represent a new era, raising the level of development finance required from the order of billions to that of trillions and that the sheer magnitude of these challenges is beyond the capacity of any individual institution.
The IsDB is responding to this new era by putting forward a new business model that focuses resources on enhancing countries’ competitiveness in strategic sectors in which they have, and can build, a global comparative advantage.
The core pillars of the President’s new business model focuses on:
- Meeting the SDG funding gap:
- The Sustainable Development Goals (SDGs) represent a new era, raising the level of development finance required from the order of billions to that of trillions.
- Upscaling the value chain:
- Given the rate of change, sustainable development can only be achieved by focusing resources on enhancing countries’ competitiveness in strategic sectors in which they have, and can build, a global comparative advantage.
- Focus on STI:
- To enhance competitiveness, we need to harness the powers of science, technology and innovation. The IsDB $500m Transform Fund is already supporting local innovators and entrepreneurs in their quest to solve the SDGs. The IsDB has also recently launched a new crowdfunding platform – IsDB Innovate – which allows the bank to bring even more people’s ideas and innovations to life. The platform is supporting projects in 9 member countries.
- Tapping global markets:
- New sources of finance need to be tapped, such as the global capital markets. This, however, requires new types of development projects that operate at the nexus of financial viability and development impact.
- Countries need to build fourth generation capacity through public, private, philanthropic, and people sectors at home.
- Development Banks must act as catalysts, building a global resilient network of developers through innovative Islamic finance products and services.
- Potential of Islamic Finance to unlock growth
- The Islamic Finance industry is worth US$2 trillion. We should direct its funds to unlock growth by upskilling local economies.