In a little more than one month negotiations to finalise the framework of the Sustainable Development Goals (SDGs) for eradicating poverty will begin. For this to be a meaningful process, the goals have to be credible and to focus on those priorities which can make a difference to the lives of those who reside in poor countries around the world. The current proposals to replace the Millennium Development Goals (MDGs) list a wide variety of noble ambitions including ending hunger, improving health and education, and making cities more sustainable. Yet, poor attainment in these areas is in large measure a consequence of poverty and which in turn is due to a lack of economic growth.
This is why the International Growth Centre (IGC), along with over 18 world-leading economists have today published an open letter to United Nations Secretary-General Ban Ki-Moon, calling on the UN to champion the cause of economic growth as the foundation for achieving long term poverty reduction.
No country has succeeded in significantly reducing poverty without sustained economic growth. Strong growth boosts employment opportunities, increases incentives for parents to invest in their children's health and education, fosters entrepreneurship and innovation, and generates pressure for investment in essential infrastructure and for improved governance.
There is a risk that presenting the SDGs as if they could be directly delivered by public action inadvertently casts ordinary people in the passive role of recipients of government or NGO largesse. Without sustained economic growth and a buoyant revenue base, the resources required for effective public action will be limited.
We therefore need to shift from addressing the those factors which ameliorate the lives of the poor towards tackling the origins of poverty and the factors that prevent people from generating a decent income from their own efforts. Economic growth has been the single biggest factor driving poverty reduction around the world. Putting growth at the centre of the development agenda creates a stronger focus on the role of non-state actors, notably businesses and entrepreneurs. Achieving any meaningful SDG targets will not be possible unless there is adequate attention paid to what makes individuals active generators of their own income, lifting themselves out of poverty. This agenda is progressive and has the potential to reduce global inequality.
Delivering on this requires a more nuanced vision of development. Spurred by the MDGs, total official development assistance increased from $81bn in 2000 to a record high of $135bn by 2013. But this increase in foreign aid has sometimes encouraged a view of the goals as ends in themselves, rather than as a means towards building the kind of economies that make improvements in living standards sustainable and affordable for developing countries in the long run. This was not the primary objective when the goals were first agreed. Looking back at the Millennium Development Goals, it is clear that they were created to be a means of measuring a given country's success in raising the living standards of its poor, not the focal points for spending foreign aid that they became. An analysis of OECD data shows that the proportion of aid invested in the productive sector in developing economies has fallen, whilst the proportion going to the social sector has risen. If the Sustainable Development Goals are to work then policymakers and those in the development finance community must address the economic causes that lie at the root of poverty.
There is no single big answer to delivering growth, but there are a number of small answers - it requires an effective state, fostering private sector enterprise, enabling functioning cities, and promoting access to energy. The agenda needs to be research-led but in a way that feeds into a policy agenda which is locally owned to maximize the potential for change. The policy community in poor countries can be empowered to find their own solutions to a range of policy challenges and to put pressure on their governments to deliver. The innovative demand-led policy advice model of the International Growth Centre (IGC) shows that helping societies to achieve sustainable economic growth is best achieved by empowering them to create their own solutions.
The Sustainable Development Goals provide a golden opportunity for mobilising international co-operation and to focus the minds of the global policy community. If the SDGs are to be successful in their central target of eradicating global poverty then a clear commitment to strong, sustainable economic growth needs to be at the forefront of the post-2015 development agenda.