About the authors: Indermit Gill is the World Bank’s chief economist and senior vice president. M. Ayhan Kose is the Bank’s deputy chief economist and director of the Prospects Group.
Then things started to go awry. The global financial crisis was followed by a decade of slowing growth—a trend intensified by a series of unprecedented shocks starting with the Covid-19 pandemic. Today, despondency has set in. Policy makers today confront a mutually aggravating cluster of challenges: climate change, food insecurity, and poverty. The price tag for achieving the Sustainable Development Goals by 2030 has soared, to $4 trillion a year—up nearly two-thirds from 2015.
The implications are obvious: without a concerted effort to ramp up investment and trade, the global goals will be unattainable. So far, policy makers have not been able to mobilize the two strongest mechanisms to generate the outcomes they seek with respect to poverty, prosperity, climate, and other key development goals. The appetite for multilateral cooperation has diminished: major economies today are resorting to measures that are fragmenting trade and investment networks.
But developing economies alone cannot promote trade and investment while also making meaningful progress on broader challenges of climate change and other development goals. They will need help from abroad to mobilize the necessary public and private capital. International financial institutions can play a major role here—not only by providing financing but also by delivering policy advice that helps them achieve national as well as global development goals.