Better Global Policies Could Reduce USD 120 billion MDGs Cost Significantly

The financial cost of meeting the Millennium Development Goals (MDGs) related to poverty, education and health is of the order of USD 120 billion, but achieving the MDGs is at least as much about policies as about financing, according to a new study by the OECD Development Centre. Can we still Achieve the Millennium Development Goals?

Undertaken with generous support from the Bill & Melinda Gates Foundation, the study officially launched today at the OECD Development Assistance Committee Development Debate, says that MDGs can be achieved.

Gargee Ghosh, Director of Policy Analysis & Financing, at the Gates Foundation said, "It is remarkable that the world has reached the poverty reduction MDG seven years ahead of schedule and despite the global economic recession  – progress is possible. As this study shows, to maintain and expand on that progress will require more financing as well as policy changes aimed at improving the effectiveness of public and private investments in development".

"If aid alone could address the MDGs, it would have to triple. But as aid is unlikely to increase that much, the question really is how to boost other sources of funding and make better use of existing ones", added Jean-Philippe Stijns the author of the study and economist at the OECD Development Centre. "Better policies could reduce the bill significantly", he concluded.

If the needs of the poorest citizens in the poorest countries are to be met, all sources of finance are to be considered  – domestic taxes, private capital from traditional and emerging partners, private contributions, remittances and of course aid. For example, upper middle-income countries could mobilise enough domestic resources to meet the poverty, education and health goals, while aid will remain an important source of finance for many low-income countries.

The objective of the study is to measure the development challenges and look at the means that we have to tackle them. ‘USD 120 billion more per year to meet the MDGs seems ambitious but it’s not impossible. It represents more than twice the annual cost of the European Union’s Common Agricultural Policy but less than a fifth of what is spent on defence in the US. Breaking the figures down, the poverty and education  goals are within a fairly reasonable reach’, says Jean-Philippe Stijns.


Thirty-five countries will not have halved extreme poverty by 2015. In these countries, under USD 5 billion per year would be needed for targeted welfare programmes to raise the income of half of the extremely poor above USD 1.25 a day, (MDG1) by 2015. Most of this cost will be concentrated in sub-Saharan Africa, USD 4.2 billion.


USD 60 billion per year would be needed to cut mortality among children under five by two thirds, reduce the maternal mortality ratio by three quarters and to combat AIDS, malaria and other major diseases (MDG 4-6) by 2015.

Geographically, by far the highest costs are associated with achieving health goals in South Asia and sub-Saharan Africa, respectively USD 35 billion and USD 20 billion.

The cost of achieving universal primary education (MDG 2) is smaller  - less than USD 9 billion per year would be needed by 2015 – as little as USD 2 billion would suffice to offer every African girl and boy a chance to attend primary education universal in subSaharan Africa.

Fuente: OECD Development Centre