False solutions: don’t believe the hype

Dodging their responsibilities

We need smart solutions to the SDGs funding gap more urgently than ever, yet governments in high income countries are trying to fob us off with failed ideas.

Despite admitting that ‘public goods’ like health, education and social care for the most vulnerable are best funded by ‘public money’ back home, our politicians are refusing to extend the same logic to filling the SDGs funding gap.

Instead, they continue to insist that companies will voluntarily fill the SDGs funding gap with private money in their search for profits.

A trillion dollar lie

The current ‘solution’ is the so-called ‘Billions to Trillions’ approach. Supporters claim that if mega-rich private investors and huge global companies are offered profit guarantees from the aid budget, they will invest one trillion dollars into essential public services in low income countries.

But this has been called ‘mathematical gymnastics’ – experts estimate the maximum amount of private investment that can be generated in this way is just $200bn – leaving a huge gap. Worse, high income country governments have already started cutting aid budgets as they shrug off responsibility for the SDGs – global aid fell by $4bn in 2018.

A terrible deal

The ‘Billions to Trillions’ approach:

  • WASTES AID MONEY – as governments rush to sign up to profit guarantees, companies can get aid money for projects they would have done anyway
  • COULD INCREASE THE FUNDING GAP – once companies expect profit guarantees, they are less likely to invest without them, even if they would have done so before
  • LEAVES THOSE MOST IN NEED BEHIND – public services for the most vulnerable, which are unlikely to generate any profit, are the least attractive investment for companies
  • LEAVES COUNTRIES WORSE OFF – profit guarantees aimed at enticing companies have left many governments facing sky-high payments for decades to come

Click here to read our report exposing the ‘Billions to Trillions’ lie

‘One rule for us, another for them’

In 2018, the UK Chancellor Philip Hammond vowed not to sign another ‘Private Finance Initiative’ (PFI) deal for UK public services for this reason, and the French Court of Auditors recommended the strategy be abandoned for French services in 2017. But our governments still promote an approach in low income countries that, for example, led to payments for one Lesotho hospital taking up half the country’s entire health budget.

Worse, every day spent talking about ‘Billions to Trillions’ is a day wasted, when we could have been talking about real solutions.

It’s time for governments to step up to their responsibility for filling the SDGs funding gap, and focus on smart solutions that will actually work.

Check out our campaigns for the the Robin Hood Tax and the Climate Damages Tax for smart solutions to fill the SDGs funding gap