Legal identity and informality - keys to achieving the SDGs?

Around 2 billion people globally do not have identification, including hundreds of millions of children who do not have a birth certificate. This undocumented status poses a major hurdle to achieving the U.N.'s 2030 Development Agenda and a majority of the SDGs, which rely on measuring people within countries and their development status. You cannot have continual improvement of government policy for the poor or provision of public services if you cannot count your population. Indeed, the mantra of the UN's 2030 Agenda for Sustainable Development is to "leave no one behind," and the those without legal identity are among the most vulnerable and most likely to be left behind.

Fortunately, the SDG process has identified the need to address the challenges of legal identity and informality in multiple places. In Goal 16, Target 16.9 calls on governments to "provide legal identity for all, including birth registration." In addition, Goal 8 calls on governments to "encourage the formalization and growth of micro, small- and medium-sized enterprises," including through access to financial services.

Already in the first months of implementation, this foundational issue is getting the attention it deserves:  the Center for Global Development recently hosted an event on this important topic, entitled How Finding the Missing Millions Can Help Achieve the SDGs, which featured US Special Coordinator for Post-2015 Development Agenda, Tony Pipa, and World Bank Corporate Secretary and President's Special Envoy on the Post-2015 Process, Mahmoud Mohieldin, among others.

The discussion centered on how legal identity must be achieved in order to ensure broader success on many of the SDGs. Identification is key to addressing issues such as gender equality, land rights, and reduction of corruption and inequality - and many of the other goals and targets. The need to formalize economies and economic relationships between employers and the state and between employers and employees has also recently gained attention at the International Labor Organization, which adopted a Recommendation on the topic of informality at its last Conference in June 2015. The Recommendation was featured in an informal dialogue at the UN in September among various stakeholders, including USCIB's Vice President for Labor Affairs, Corporate Responsibility and Governance, Ariel Meyerstein. An enlarged tax base from an expanded formal sector is one of the main sources for the domestic resource mobilization, which will be key to funding other governmental efforts to achieve the SDGs. USCIB also sponsored a session on various approaches to improving working conditions and informality in SMEs at the UN Forum on Business in Human Rights in Geneva in mid-November.

The capacity to capture new forms of legal identity and thus more accurately count populations will also be a major component of the 'data revolution' inspired by the SDGs. This will no doubt be the focus of the new Global Partnership for Sustainable Development Data, which will have its secretariat at the United Nations Foundation.

In sum, legal identity and informality will be two issues to watch as the UN 2030 Agenda unfolds.

The newest Nobel Laureate Angus Deaton on foreign aid, measuring poverty and the need for a data revolution

The most newly-minted Nobel laureate in economics - Professor Angus Deaton - wrote controversially against the utility of foreign aid just two years ago in the concluding chapter of his then just-released “The Great Escape: Health, Wealth, and the Origins of Inequality” (2013). Deaton controversially argued against ODA, blaming it for undermining local democratic governance, the development of stable institutions and for being deeply politicized. Deaton wrote then:

If poverty is not a result of lack of resources or opportunities, but of poor institutions, poor government, and toxic politics, giving money to poor countries — particularly giving money to the governments of poor countries — is likely to perpetuate and prolong poverty, not eliminate it. 

Now that Deaton has won the Nobel for his work on consumption and consumer pricing, poverty and welfare it's perhaps useful to recall this controversy, which also played itself out over the course of the last two years as the UN Member States debated the role of Official Development Assistance (ODA) in the now finalized Sustainable Development Goals and Financing for Development processes, which collectively will frame the UN 2030 Sustainable Development Agenda. Developing countries were keen to keep developed countries to their promises in the Monterrey Consensus on ODA, which has stagnated after hitting a high-water mark in 2013. 

A few things are highly relevant about Deaton's life work to the new sustainable development era.  As economist Dani Rodrik noted to the NY Times, “Suppose you wanted to understand the effect of a subsidy on rice on the well-being of farmers. He has produced an approach that you can actually use with household data to trace through the effect of something like this on the well-being of different farmers.”

Although Deaton's work focused on individual's consumption habits, the larger questions here are squarely relevant to the debates about aid and private capital in the 2030 agenda because they have to do with how individuals make choices. As companies look for new ways to produce for and market to potential consumers at the bottom of the pyramid, what is the right amount of public subsidy to make private market pricing for various kinds of so-called 'public goods' and services (at the global and national levels) affordable and therefore sustainable over the long-term?

The other aspect of Deaton' work that is extremely significant to the sustainable development agenda is his focus on the need for better data to track poverty, particularly in developing countries. As Deaton noted in a lecture in 2010 (years before the current 'data revolution' and before the process of the SDGs got underway in Rio+20 and afterward), there are good reasons for "skepticism about our ability to make precise comparisons of living standards between widely different countries such as poor countries in Africa and rich countries in the OECD." This leads to a further reflection by Deaton:

In spite of the attention that they receive, global poverty and inequality measures are arguably of limited interest. Within nations, the procedures for calculating poverty are routinely debated by the public, the press, legislators, academics, and expert committees, and this democratic discussion legitimizes the use of the counts in support of programs of transfers and redistribution. Between nations where there is no supranational authority, poverty counts have no direct redistributive role, and there is little democratic debate by citizens, with discussion largely left to international organizations such as the United Nations and the World Bank, and to non-governmental organizations that focus on international poverty. These organizations regularly use the global counts as arguments for foreign aid and for their own activities, and the data have often been effective in mobilizing giving for poverty alleviation. They may also influence the global strategy of the World Bank, emphasizing some regions or countries as the expense of others. It is less clear that the counts have any direct relevance for those included in them, given that national policymaking and the country operations of the World Bank depend on local, not global poverty measures.

And here we see Deaton's two major strains of significant contributions merge together as we will watch in coming months how the UN Inter-Agency Task Force on Statistics will try to come up with measures both of poverty and inequality within countries and globally and continue the march to "leave no one behind." As the private sector begins to engage with the SDGs, the next fifteen years will also see new experiments in how the private sector can ever more meaningfully engage with the problem of poverty, including through partnerships between large global companies and social entrepreneurs, among other partners. Both the statistics effort and the partnerships will depend on the role of public institutions to create enabling environments and will also rely on more precise measurement to continue to fine-tune approaches. 

Deaton's skepticism about these statistics and the contributions of aid give pause, but as others have recently noted, his criticism does not convincingly rule out all forms of aid in every circumstance; the best response, then, is probably to make aid better, not simply get rid of it. This will include using aid increasingly for 'blended finance' and also to enhance our ability to measure. Exciting things to come.

By Ariel Meyerstein
Vice President, Labor Affairs, Corporate Responsibility & Corporate Governance
United States Council for International Business (www.uscib.org)

UPS: "Time for Business to Step Up"

Following the United Nations Sustainable Development Summit in New York from September 25-27, United Parcel Service (UPS) CEO David Abney called for business to “step up” in meeting the needs of today’s global society in a speech at the Detroit Economic Club on September 29.

UPS, a USCIB member company, posted a synopsis of Abney’s speech on its blog, UPS Longitudes, in which he noted that “[w]e simply cannot continue on our current unsustainable path.” The blog post addresses the changes to partnerships between governments, NGOs, business and the UN necessary to embark on the now adopted UN Sustainable Development Goals.

The importance of connecting business opportunity and societal need is demonstrated by UPS as well as contributors to the Business for 2030 portal. UPS sees one of the greatest opportunities for collaboration in fostering innovation as well as human well-being – in line with Goal 9: Build resilient infrastructure, promote inclusive & sustainable industrialization, and foster innovation among others of the Sustainable Development Goals.

According to Abney, “[b]usiness has the reach, resources and big-project management skills. It clearly has incentives to create a world that is strong enough, fair enough and healthy enough to support business growth. It is also the nexus for innovation.”

Company contributions to Goal 9 on Business for 2030 thus far include initiatives by Bechtel, PPL, DuPont, TTNet and Google.