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U.S. Consulate doles out $453,568 to 45 Nigeria CSOs - ITREALMS

ITREALMS : In the last 10 months and 19 days of 2018, the  United States Consulate General in Lagos has awarded $453, 568 to 45 indivi...

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ICT4D Week 2018

Tuesday, April 17, 2018

Short-termism impedes progress of million people

A major report released in advance of the G20 and World Bank/IMF Spring Meetings has revealed that short-termism impedes progress of hundreds of millions of people, reports ITRealms.
According to the reports, the prospects of around 800 million of the world’s poorest people remain dire.
The global economy, the UN report hinted, is experiencing a moderate upturn, and momentum around sustainable investing is growing.
But the vast majority of investment is still short-term oriented and commitments by the international community to create sustainable economies are not being met.
ITRealms gathered that there is an increasing interest in socially responsible investing, but that is no substitute for a broader transformation in the financial system.
Just as the report states that the current system rewards investors, financiers and project managers that prioritize short-term profits. Similarly, policy makers are excessively focused on short-term considerations. But there is a price to pay. Infrastructure projects are shelved in favour of short term priorities. Small businesses and women remain excluded from the financial system.
LIU Zhenmin, Under-Secretary-General for the United Nations Department of Economic and Social Affairs said, “The good economic news in some regions masks the very real risk that the poorest will be left behind, There is no room for complacency.”
“If we don’t invest in infrastructure projects like bridges, roads and sewage systems, if the poorest and women are cut off from access to credit and other financial services, we have little prospect of achieving our global goals,” he added.
Per capita growth remains negative or insignificant in many countries where the poverty rate is already high, entrenching inequality.
Overcoming the short-term outlook of many investors is a complex but urgent issue, according to “Financing for Development: Progress and Prospects,” the 2018 comprehensive annual progress report on how to finance the Sustainable Development Goals. 
Pension funds, insurance companies and other institutional investors hold around $80 trillion in assets. But the majority of their resources are invested in liquid assets, such as listed equities and bonds in developed countries.  Investment in infrastructure still represents less than 3 per cent of pension fund assets, with investment in sustainable infrastructure in developing countries even lower.
The lack of long-term investment horizons also means that major risks, such as those from climate change, are not incorporated into decision-making.
According to the report, the solution lies in a multifaceted approach. It includes changing payment practices: the compensation of financial advisors and portfolio managers is too often linked to short term results. More transparency also helps: some countries now require all listed companies to disclose financial risks they face from climate change.
Short-sighted policies also result in a lack of access to finance for countries in urgent need. Support for countries affected by disasters is often too little, too late. Innovative financial instruments exist that provide quicker access to funding. Countries can set up insurance-like mechanisms, and the international community can support those that can’t afford premiums. Loans can be set up to reduce repayments automatically during crises. But so far, major funders have not taken up these promising tools.
“We have to reach beyond the quick fix if we are going to create a world that can sustain all of us,” said Navid Hanif, Director of Financing for Sustainable Development Office. “Political leadership and public policies are indispensable.”
It takes leadership to overcome short-term political cycles, devise and enforce rules which have widespread benefits but may face resistance by powerful groups, for example tax reforms and stopping illicit financial flows, the report notes.
The report emphasizes that in donor countries, political leaders must do more to meet their commitment to provide financial assistance to the world’s most vulnerable countries. 

Chuks Egbune/GEE

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