Investments to end poverty

Investments to end poverty

The issue:

At the start of 2021, an estimated 698 million people were living in extreme poverty. Poverty had reduced significantly in the time before the Covid-19 pandemic but an estimated 50 million people fell into poverty due to the crisis. The effects of this global pandemic are pushing the world further off track from meeting all the Sustainable Development Goals (SDGs) – critically, SDG 1 on eliminating poverty and SDG 10 on tackling inequality. The challenge is even greater in poorer countries with less resilience to crises and shocks.

In this context, official development assistance (ODA) is a critical source of financing – it can uniquely target the people and places most at risk of being left behind. Beyond aid, we must also consider the wider financing that can – and should – be mobilised to support sustainable development and poverty eradication. This is critical when the funding gap for SDG delivery is estimated at up to US$3 trillion per year until 2030. Financing to end poverty cannot be provided through aid alone. All resources – public, private, local, national and international – and all the actors who control those resources must play a role.

It is a huge challenge to make sure the full resource mix is having a positive impact on poverty eradication and sustainable development. Nonetheless, it is critical we overcome it if we are to see an equitable recovery from the pandemic and invigorated, fairer progress towards meeting the ambitions of Agenda 2030. Intrinsic to that progress is the availability of a strong and clear evidence base. We need to know what finance is available, where it is coming from, how it is currently invested, and what needs to change if we are to deliver the global goal of poverty reduction.

The purpose of our work:

Our work aims to improve investments to end poverty and contribute to the delivery of the SDGs by providing data-driven evidence, policy research, and new ideas. Our data and analysis are timely, grounded in context, and designed to be relevant for policymakers. This helps a wide range of key stakeholders to make sense of the development financing landscape and the role they must play in it.

The recommendations and solutions we offer ensure that different actors understand what they need to do and how to do it. This means our work can be used to create tangible improvements in the use of development finance, particularly concessional public finance.

Our impact:

Over the last two years, our work has contributed new evidence on major global crises, including the invasion of Ukraine; the impacts of the Covid-19 crisis on ODA; and decisions about the financing response to the impacts of Covid-19. We have also been assessing and projecting the ongoing impacts of the pandemic on development finance, and investigating how it is affecting ambitions for sustainable development in the leadup to 2030.

We maintain a strong focus on Least Developed Countries and the importance of targeting aid to people and places in greatest need; engaging with key global fora to promote recommendations on effective targeting of resources. At a national level, we have recently published papers on aid flows in Kenya and Uganda during the Covid-19 pandemic; supporting engagement with CSOs and local organisations through DI’s Africa Hub.

We have also played a prominent role in the response to significant changes in UK aid since early 2020. We have provided regular input to International Development Committee enquiries (through oral and written submissions), and presented analysis and recommendations to NGOs and advocacy organisations based on our briefings on UK aid and the UK’s 2022 International Development Strategy.

This work is informing the strategies and decisions of governments and philanthropic institutions – as well as those seeking to influence them – to ensure their investments have the greatest possible impact.

What’s next?

We are at the forefront of innovation in the development finance space, in part due to our role in the Expert Working Group (EWG) on Global Public Investment (GPI): ‘A new approach to concessional international public finance for sustainable development. For everyone.’ In summer 2022, we presented at the launch of the GPI EWG’s final report and recommendations, and continue to promote the concept of GPI to a broader audience; discussing how its principles can shape the future of development finance.

Throughout 2022, we will continue to publish our annual range of factsheets and briefings on global aid spending. We will also keep updating our near-real-time international development finance data-tracking tool as the financing landscape changes in light of events like the Covid-19 pandemic and the war in Ukraine. Through briefings, webinars and roundtables, we will provide data-led evidence and recommendations to governments, global institutions and NGOs, among others. By providing information on the status of investments to end poverty, we aim to inform and shape policy on aid and other types of finance to maximise their impact.