IMF and the Sustainable Development Goals

February 16, 2021

The Sustainable Development Goals (SDGs) are a set of global development targets adopted by the member countries of the United Nations (UN) in September 2015. The SDGs will guide the global development agenda through 2030. The SDGs are universal and broader in scope than the Millennium Development Goals (MDGs) , reflecting the view that development needs to be economically, socially, and environmentally sustainable. The IMF, with its expertise in macroeconomic and financial issues and its global membership, supports the development efforts of its member countries and promotes global economic and financial stability, a crucial precondition for the success of development efforts.

The SDGs

The SDGs were officially adopted by UN member countries at the UN Summit in New York in September 2015, replacing the expiring MDGs. The 17 SDGs focus on five key elements: people, planet, peace, prosperity, and partnership. In July 2015, the Third UN Conference on Financing for Development in Ethiopia discussed how to mobilize the financing resources needed to meet the development goals and concluded with The Addis Ababa Action Agenda on a sustainable financing strategy. A global agreement on national CO2 emissions targets, aimed at addressing climate change, was reached at the UN Climate Summit in Paris in December 2015, which aligned with the SDGs’ emphasis on protecting the environment.


Achieving the SDGs

The SDGs are more ambitious than the earlier MDGs and are predicated on the view that development needs to economically, socially and environmentally sustainable. Achieving the SDGs—which has become even more challenging due to setbacks from the COVID-19 pandemic and its economic repercussions—will require action to address a broad range of issues at both the national and international levels.

At the national level, as countries take measures to support the recovery from the pandemic, governments should continue efforts to create a sound macroeconomic environment and robust, sustainable growth. These should focus on building strong institutions to foster investor confidence; strengthening public finances to maintain debt sustainability while ensuring public spending is efficient and well-targeted; investing in infrastructure and human capital; deepening financial markets and access while safeguarding financial stability, and promoting social inclusion and environmental sustainability. Governments should also identify their key development goals and sustainable ways of financing.

With elevated risks of spillovers in an increasingly interconnected world, national development also needs to be supported by macroeconomic resilience—with adequate fiscal and foreign reserve buffers—to handle external shocks.

At the international level, the immediate focus should be on ensuring adequate access to COVID-19 vaccines by developing economies. Over the medium term, global economic and financial stability, along with a predictable rules-based system covering trade flows, are crucial for countries’ development efforts to thrive. Countries must cooperate to ensure global coherence of national macroeconomic policies at the international level, and to ensure that financial regulations across major financial centers are appropriately configured, broadly aligned, and vigorously implemented. Cooperation is also needed to maintain a strong global financial safety net that provides confidence that countries’ unexpected liquidity needs can be met

The IMF and SDGs

The IMF is committed, within the scope of its mandate, to the global partnership for sustainable development. The IMF has launched a number of initiatives to enhance support for its member countries as they pursue the SDGs. Specifically, the IMF:

  • has expanded financial support for low-income developing countries, including: (i) a 50 percent increase in access norms and limits for all IMF concessional financing in 2015 and a further increase of one-third in 2019; (ii) zero percent interest on a permanent basis for IMF lending under the Rapid Credit Facility, (iii) an increase in access limits under the emergency financing instruments for countries hit by large natural disasters.  and (iv) an extension of the zero percent interest rate to all other IMF concessional loans.

  • has provided financial assistance to many developing low-income countries suffering the economic impact of the COVID-19 pandemic through its various lending facilities and debt service relief, and by working with bilateral and multilateral development partners. Specifically, emergency financing has been approved by the IMF’s Executive Board at record speed to almost half of the membership. The IMF has also extended debt service relief through the Catastrophe Containment and Relief Trust (CCRT) to its poorest and most vulnerable member countries on their IMF obligations;     

  • is supporting developing countries to assess the additional spending required to reach the SDGs in five key sectors (education, health, water and sanitation, roads, electricity). Building on this work, in-depth SDG cost assessments have been conducted for various developing countries, and a forthcoming Staff Discussion Note develops a  macroeconomic framework to help assess development strategies and financing options for meeting the SDGs;

  • is supporting developing countries seeking to boost domestic revenue mobilization, including by collaborating with other international organizations through the new Platform for Collaboration on Tax.

  • is providing support—through an Infrastructure Policy Support Initiative—to member countries seeking to increase public investment in infrastructure. The initiative seeks to deepen the IMF’s macroeconomic policy advice and capacity building work to help countries tackle large infrastructure gaps without endangering public debt sustainability. The IMF, with the World Bank, has introduced important refinements to its debt sustainability assessments for low-income developing countries to better guide their borrowing decisions and keep public debt on a sustainable path. Working with development partners, the IMF is supporting the “G20 Compact with Africa” to promote private investment, including for infrastructure, in Africa;

  • is bolstering its support to fragile and conflict states to address their unique challenges, and wide and persistent capacity building needs by supporting institution building goals, strengthening outcome monitoring, and enhancing coordination with other partners.

  • continues its analytical work agenda on measures to promote inclusion and environmental sustainability, where these are important to sustain macroeconomic stability.

    to deepen engagement with its member countries on key SDGs, the IMF is weaving lessons from policy-oriented research on a number of development issues into its operational work. Topics include:

    • better understanding the role of diversification and structural transformation in sustained growth in developing countries—and the polices needed to support change. Key policies include those to strengthen infrastructure in a cost-effective manner, support financial deepening, and boost agricultural productivity;
    • tackling income and gender inequality and promoting economic and financial inclusion by promoting job creation, enhancing the redistributive role of fiscal policy in an efficient manner, and boosting access to financial services while preserving financial stability; 
    • promoting environmental sustainability by reforming energy and carbon pricing and supporting countries to enhance their resilience to climate-related events. 

Other recent initiatives include a strategy for enhanced engagement on social spending, and greater engagement on governance and corruption to tackle a key impediment to inclusive growth.