Investments to end poverty

Investments to end poverty

The issue:

At the start of 2021, an estimated 698 million people were living in extreme poverty. Poverty had reduced significantly in the time before the Covid-19 pandemic, however an estimated 50 million people fell into poverty due to the crisis. The effects of the global pandemic are pushing the world further off track in meeting all the Sustainable Development Goals (SDGs) – critically SDG 1 on eliminating poverty and SDG 10 on tackling inequality. And the challenge is more acute in the poorest countries with the least resilience to crises and shocks.

In this context, official development assistance (ODA) is a critical source of financing. It can uniquely target the people and places most at risk of being left behind. Worrying trends, however, show a shift away from aid going to where it is needed most, and funding levels have been functionally stagnating.

Beyond aid, we must consider the wider financing that can and should be mobilised to support sustainable development and poverty eradication. This is critical when the funding gap for delivering the SDGs even before Covid-19 was estimated to be over US$3 trillion per year until 2030. Financing to end poverty cannot be provided through aid alone. All resources – public, private, local, national and international – and all the actors who control those resources can and should play a role.

It is a huge challenge to make sure the full resource mix is having a positive impact on poverty eradication and sustainable development and it is one that is critical to meet if we hope to see an equitable recovery from the pandemic and reinvigorated, fairer progress towards meeting the ambitions of Agenda 2030. A key part of that is being equipped with a strong and clear evidence base. We need to know what is available, where it is coming from, how it is currently invested, and what needs to change if we are to deliver the global goal of ending poverty.

The purpose of our work:

Our work to improve investments to end poverty provides data-driven evidence, policy research and new ideas to inform and improve the use of development finance to deliver the SDGs. Our data and analysis is timely, grounded in context and designed to be relevant for policymakers. This helps a wide range of key stakeholders to make sense of the development financing landscape and the role they must play in it.

The recommendations and solutions we offer ensure that different actors understand what they need to do and how to do it. This means our work can be used to create tangible improvements in the use of development finance, and concessional public finance in particular.

Our impact:

Our work on investments to end poverty in 2020 contributed new evidence about the impacts of the Covid-19 crisis on ODA. We also provided analysis to inform those advocating on and making decisions about the financing response to the impacts of Covid-19 and how it is impacting ambitions for sustainable development beyond the pandemic and towards 2030. We also produced analysis demonstrating how aid needs to change in the context of Covid-19 with recommendations for policymakers and financing institutions on where aid should be focused, what it should focus on, and how it should be delivered.

We informed global development finance debates by presenting research on the implications of coronavirus on financing for sustainable development collaboratively with the United Nations Foundation and Oxfam.

We presented and facilitated a series of events with Wilton Park to convene high-level stakeholders and thought leaders to discuss the challenges of the pandemic to global development and its implications for funding the SDGs.

We provided critical evidence at the UK International Development Select Committee and Foreign Affairs Committees about what is happening to UK aid in the context of global trends and how this should inform the UK government’s development and foreign policy strategy.

This work is informing the strategies and decisions of governments and philanthropic institutions, as well as those seeking to influence them, to ensure their investments have the best impact possible.

What’s next?

In addition to our annual range of factsheets and briefings on global aid spending, we are pushing forward with our data tool tracking international development finance in near real-time, because the financing landscape is changing rapidly in light of events such as the Covid-19 pandemic. Through briefings and webinars we will be providing this data-led evidence to governments, global institutions, NGOs and others, alongside recommendations based on what the data tells us about how investments to end poverty are faring. Our aim is to ensure we are maximising the impact of aid alongside other forms of finance.