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Achieving SDGs Requires Governments To Carefully Monitor Domestic Budgets For Efficiencies

Devex: Opinion: Achieving the SDGs will require more than domestic resource mobilization
Sanjeev Gupta, senior fellow at the Center for Global Development

“According to a recent IMF analysis, [low-income developing countries (LIDCs)] will need resources equal to 14.4 percent of their gross domestic product on average to meet the Sustainable Development Goals in five areas: education, electricity, health, roads, and water. One way to bridge this gap is by strengthening the domestic tax capacity of LIDCs, which could mobilize roughly 40 percent of the needed resources, or five percent of GDP … However, generating additional revenue equal to five percent of GDP in LIDCs will be challenging … This makes it imperative for policymakers to improve the efficiency of existing spending, which could potentially generate as much incremental resources as domestic taxation. … Countries should periodically review their spending programs … to identify inefficiencies. Further, assistance from international institutions and donor countries should extend beyond strengthening tax systems to enhancing the efficiency of spending programs. How countries spend their revenues should be a central part of this support. By focusing on both sides of the budget, rather than just increasing taxation, countries can generate more resources domestically and make faster progress on achieving the SDGs. And, perhaps most importantly, generating financing internally rather than from external sources is more sustainable and puts LIDCs in control of their own destinies over the long term” (10/12).