The Sustainable Development Goals (SDGs) are likely to set very ambitious targets for universal water and sanitation coverage by 2030, and these targets are going to be very costly to achieve. So how is this going to be sustainably financed? On 29th April 2015, a group of experts gathered in the London office of The Guardian newspaper, to discuss this and related questions. Two members of the Public Finance for WASH team (Sophie Trémolet and Catarina Fonseca) took part in this roundtable debate, a report of which was published in The Guardian on 13th May 2015.
There was extensive discussion around the critical role of domestic taxation for achieving sustainable universal WASH, in line with the Public Finance for WASH vision. But a significant concern for some panellists was the limited capacity of the least-developed countries (LDCs) to collect enough taxes to support financing of universal water and sanitation coverage. John Garrett, Senior Policy Analyst at WaterAid, accepted the importance of domestic resource mobilisation (DRM), but pointed out that the revenue base is limited in countries where three-quarters of people live on less than $1 a day.
Lisa Wise, Policy Adviser at Save the Children, noted an increasing concern among low- and low-middle-income countries, who fear that the movement towards DRM conceals a desire by the rich countries to reduce aid flows. There is concern that the target for rich countries to allocate 0.7% of their GNP to aid (ODA) will be removed from the Financing for Development agreements. The Third International Conference on Financing for Development in Addis Ababa in July will be a crucial scenario for clarification of this issue.
Here at Public Finance for WASH, we very much share these concerns. Increased tax revenue generation and public spending efficiency is critical even in least-developed countries: but we should not expect very large sums of money to be raised in very poor countries, and these countries will certainly remain heavily dependent on foreign aid between now and 2030. Similarly, the movement towards increased domestic resource mobilisation (core to the Public Finance for WASH vision) should absolutely not be taken as justification for a reduction in ODA: we strongly support the 0.7% ODA target.