Development Community Should Continue To Ascertain Effectiveness Of Blended Finance For Achieving SDGs
Inter Press Service: Blending Finance Not SDG Financing Silver Bullet
Anis Chowdhury, professor at the University of New South Wales (UNSW) Sydney, and Jomo Kwame Sundaram, assistant secretary general for Economic Development at the U.N.
“After largely failing to provide 0.7 percent of their Gross National Income (GNI) in aid to developing countries for almost half a century since making the commitment, donor countries have recently promoted blended finance (BF) as a solution to the financing for development challenge. … It is unclear how public development funds, channeled through risky commercial financial services, will effectively mobilize private resources for sustainable development. … Many BF projects do not monitor development impacts, while the few evaluations made are rarely publicly available. The limited evidence available suggests a modest impact on poverty. … Despite much enthusiasm for using [overseas development aid (ODA)] or public funds to leverage private finance, many unanswered questions remain, suggesting BF is no silver bullet. Caution is needed as the development community ascertains the pros and cons of using public money to ‘leverage’ private finance…” (4/30).