The Helen Alexander Lecture: The Case for the Sustainable Development Goals

IMF News, September 17, 2018

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Authors: Christine Lagarde
Published: September 17, 2018

Framing and purpose

Delivered by Christine Lagarde, Managing Director, International Monetary Fund, September 17, 2018.
Focus: overlap between the Sustainable Development Goals (SDGs) and the IMF mandate for global economic stability and inclusive, sustainable prosperity.
Four dimensions addressed: (i) economic (low-income countries), (ii) social (inclusion and equity), (iii) environmental (climate change), (iv) governance (strong institutions).

1. Economic dimension — meeting SDG needs in low-income countries

Findings and context

The SDGs were endorsed in 2015 as a policy roadmap through 2030.
Over a billion people have lifted themselves out of extreme poverty since 1990.
Almost 800 million people remain mired in extreme poverty today.
Child mortality has fallen by half since 1990, yet almost 6 million children still die each year before their fifth birthday.
In sub-Saharan Africa, about a fifth of primary age children are not attending school.
Across the world, 58 percent of students in primary and lower secondary school—617 million children—do not have basic proficiency in reading and mathematics.
According to UNESCO, world poverty would be cut in half if all completed secondary education.

IMF actions and analysis

IMF is estimating spending needs for five key sectors—education, health, water and sanitation, roads, and electricity—for both emerging markets and low-income countries, and is exploring financing solutions.
Meeting additional spending needs in low-income countries will require partnerships among countries, official donors, philanthropy, and private finance.

Risks and constraints

Debt in low-income countries is increasingly precarious: 40 percent of them now face high risk of debt distress or are unable to service their debt fully, up from 21 percent five years ago.
Low-income countries are borrowing more on non-concessional terms, increasing interest service costs.

Policy implications (bulleted)

Strengthen global partnerships and co-responsibility among stakeholders to finance SDG spending needs.
Mobilize a blend of official development assistance, philanthropic funds, and private finance while ensuring debt sustainability.
Prioritize public investment in human-capital-related sectors to enable long-term growth.

2. Social dimension — inclusion, inequality, and gender equity

Key findings

Since 1980, the top one percent globally has seen twice as much of the gains from growth as the bottom 50 percent.
Income inequality has risen in most advanced economies; inequality has fallen between countries but not necessarily within countries.
IMF research finds reducing inequality is associated with stronger and more sustainable growth.

Role of public policy and private sector

Public investment in health, education, and social protection systems plays an important role in reducing inequality.
The private sector should expand its economic and social responsibility, especially in the context of the Fourth Industrial Revolution.

Gender-specific findings and impacts

About 90 percent of countries have some legal restriction on women’s economic activity.
In the UK, eliminating gender gaps in labor force participation can boost GDP by 5 to 8 percent.
In sub-Saharan Africa, lowering gender inequality by 10 percentage points could boost growth by 2 percentage points over five years.
Adding one more woman in senior management or to a corporate board raises the return on assets by 8-13 basis points (cited study).
Across the globe, less than a fifth of bank board members and only two percent of bank CEOs are women.
The Hampton-Alexander Review recommended raising the share of women on executive committees of FTSE 100 companies to 33 percent by 2020, up from 26 percent.

Policy recommendations (bulleted)

Reduce gender gaps in health and education and support financial inclusion, infrastructure, and access to clean water and sanitation in low-income countries.
In advanced economies, implement policies such as parental leave and affordable, high-quality childcare to raise female labor force participation.
Promote female leadership in corporate governance to improve decision-making, financial resilience, and long-term sustainability.

3. Environmental dimension — climate change and the SDGs

Findings and context

Climate change is intensifying: more frequent and ferocious storms and habitual heatwaves threaten well-being, particularly for children.
The Paris Agreement commits nations to reduce carbon emissions with the goal of stopping global temperatures rising by more than 2 degrees Celsius over pre-industrial levels.
Moving toward a zero-carbon global economy over coming decades is necessary and challenging.

Policy tools and IMF role

The IMF advocates putting a price on carbon:
- Carbon pricing is administratively feasible by integrating carbon charges into fuel tax systems.
- Carbon taxes provide incentives for energy efficiency, shifting from fossil fuels, and electrification.
- Carbon taxes can reduce air pollution and raise revenue of about 1-2 percent of GDP a year, revenue that could be devoted to SDG priorities.
Even after China’s emissions trading system comes into force in 2020, 80 percent of global emissions will remain unpriced.
Adaptation measures needed in vulnerable countries include coastal protection, resilient infrastructure, resilient agriculture, regional pooling schemes, contingency funds, and catastrophe bonds.

IMF engagement

IMF Climate Change Policy Assessments have evaluated climate strategies in vulnerable countries, including Belize, Seychelles, and St. Lucia.
IMF provides fast and flexible emergency funding to countries hit by severe climatic shocks and supports building resilient policy frameworks.

4. Governance dimension — institutions, corruption, and tax issues

Findings and risks

SDG success depends on “effective, accountable and inclusive institutions at all levels.”
Corruption undermines trust, delegitimizes institutions, reduces tax compliance, and can divert spending toward low-social-value projects that generate kickbacks.
IMF research finds corruption and weak governance are associated with lower growth, investment, and tax revenue collection—and with high inequality and social exclusion.
One estimate cited: the wealth in offshore financial centers reaches 10 percent of global GDP, complicating efforts to finance SDG priorities.

Policy approach and IMF stance

Criminal enforcement against corruption is essential but insufficient on its own.
Successful anti-corruption initiatives are built on institutional reforms emphasizing transparency and accountability—for example, greater transparency across government budgets.
The IMF is stepping up engagement on governance and corruption, focusing on strong economic institutions, and will call out corruption when it is macroeconomic in magnitude.

Conclusion — legacy, generations, and the imperative

Success with the SDGs will define this generation’s legacy; the lecture invoked the image of planting seeds in a garden you never get to see.
Partnership, practicality, decency, and strong institutions are emphasized as essential to achieving the SDGs.
The lecture honored the memory and values of Dame Helen Alexander—her pragmatism, commitment to education, business leadership, and integrity—as a model for pursuing the SDGs.

By Christine Lagarde, Managing Director, International Monetary Fund. September 17, 2018.