U.N.’s Interim Report on Harnessing Digitalization in Financing of Sustainable Development Goals
“The digital revolution in financial technology (fintech) offers major opportunities to accelerate financing of the Sustainable Development Goals (SDGs)” – Progress report to the UN Secretary-General
On November 29, 2018, the Secretary-General constituted a 17-member task force on Digital Financing of Sustainable Development Goals to recommend and catalyze ways to harness digitalization for SDGs and acceleration of their financing.
SDGs address the global challenges, including those related to poverty, inequality, climate, environmental degradation, prosperity, and peace and justice. These are targeted to be achieved by 2030.
Data the ‘new oil’ of the global economy
90% of available data today was produced in the last two years. Moreover, its application (digitalization) is reinventing modern products and services through innovations in financial technology (FinTech)
- Digitalization for SDGs can channel citizens’ savings and financial assets towards the financing of SDGs. Digitalization can help overcome roadblocks in the flow of these resources to their SDG destination.
- One example is the issue of half a trillion dollars worth of green and sustainable development bonds.
- Other examples include
- Use of satellite data for evaluating climate risks
- Digital tax collection by governments
- Financial inclusion through digital ID, big data and AI
- Digitally financed solar energy units
- Future opportunities include increased mobilization of funds and their better utilization through digital means
- Digitalization for SDGs could be a catalyst for disruption through financial empowerment of citizens, disintermediation of traditional finance, and collective action by citizens on their finances
- However, digitalization must be available to all through digital infrastructure. Where it’s already available, there should be adequate checks and balances for unintended consequences. Example: “Digital currencies could take away countries’ ability to manage their own monetary and economic affairs, just as easily as they could smoothen and cheapen payments.”
- There should be rigorous governance to ensure that the fruits of digitalization do in fact reach the SDG.
“As the digital revolution accelerates, it becomes harder even to define what is ‘a bank’ much less to regulate it,” said co-chair Maria Ramos. “The need for smart financial policies, regulations, and standards has never been greater.”
Future focus areas of the Task Force: Digitalization for SDGs
The task force now intends to identify digital thrust areas for channeling finance to support the achievement of digitalization for SDGs. These areas include boosting the supply and collection of resources, as well as routing to a specific SDG.
Other focus areas include governance innovations, building international fintech collaborations, and measuring the digital financing of the SDGs.
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