Consultant for SDG Finance for the support for the 12 Malaysia Plan Preparation

Background

Achieving the SDGs worldwide by 2030 will require an investment of about $3.3 to $4.5 trillion a year, whereas Official Development Assistance (ODA) in 2016 amounted to $142.6 billion. According to a study by the United Nations Environment Programme and DBS, the demand for additional ASEAN green investment alone from 2016 to 2030 is valued at an estimated USD$3 trillion. It is clear that ODA and State’s fiscal resources, on their own, would be incapable of helping developing countries fill their financing gaps, even if all developed countries deliver on their pledge to provide 0.7 percent of gross national income for the purpose.

Malaysia as an upper-middle-income nation has been committed to roll out SDG-supportive strategies, as shown in the list of initiatives 11MP and the 11MP Mid Term Review documents. Public investment in the 11MP was expected to be around RM131 billion on average per year between 2016 and 2020, mainly driven by development demand in infrastructure, transport and energy sectors. For comparison, actual Federal Government’s expenditure for 11MP initiatives in 2016-2017 was RM86.9 billion. This shortfall reflects the increasingly tight fiscal space the government is facing as far as financing the development activities from public sources. Tax buoyancy is on the downward trend, dropping from 2.2 in 2002 to 0.5 in 2017. Tax-based revenue fell from 13.8% of GDP to in 2016 to 13.1% in 2017. The new ruling government is undertaking fiscal consolidation efforts namely through improvements in spending efficiency, reprioritizing of programmes and mega projects, reduction in discretionary expenses and rationalization of public sector administration (11MTR, 2018). Existing levels of public debt, although fairly low relative to other countries, still constitute substantial fiscal exposure. As the government take steps to plan and carry out fiscal reforms, it is more necessary than before that private domestic sources are brought in to fill in the funding gap, especially for projects that has strong social, economic and environmental outcomes.

The Addis Ababa Action Agenda on Financing for Development (2015) recognized the role of additional financing, in particular using innovative mechanisms, instruments and modalities which do not unduly burden developing countries. It encourages mechanisms based on models combining public and private resources (blended finance) such as green bonds, vaccine bonds, triangular loans and pull mechanisms, and carbon pricing mechanisms. Sustainable, responsible and impact investing (SRI) and the Islamic Social Finance (ISF) are two broad frameworks that have great potential for supporting development finance, given their fundamental emphasis on environmental, social and corporate governance criteria to generate positive societal impact. Impact investment is fast-gaining ground in the Asia-Pacific region, particularly as income and the number of high-net worth individuals in the region increase at unprecedented rates. Foreign-based international investors are also attracted to the high returns from debt and equity instruments offered under the SRI theme. The annual impact investor survey by Global Impact Investing Network found that among five-year repeat international investor respondents, their combined allocation on impact investments in East and Southeast Asia grew from US2.7 billion in 2013 to US$7.3 billion in 2017, which translates into an average annual growth of 28 per cent.

Islamic finance’s global assets are estimated to reach $3.2 trillion USD in 2020. Malaysia is leading efforts for convergence of Islamic and green financing following the country’s issuance of the world’s first green sukuk in July 2017. To date, five private sector green sukuk have been issued under the Securities Commission Malaysia’s (SC) Sustainable and Responsible Investment (SRI) Sukuk Framework totaling RM2.407 billion. Malaysia’s track record in green and Islamic finance will stand her in good stead to be a key player in sustainable development funding in the region.

Objectives:

A Consultant with extensive experience in innovative finance is required for the formulation of UNDP’s Strategy Paper on SDG Innovative Financing to support the 12th Malaysia Plan. The main objectives covered by this consultancy are:

1. To perform a landscape analysis of sustainable development financing for Malaysia that covers (i) domestic public finance, (ii) domestic private finance, (iii) international private finance and (iv) international public finance. This shall be continuation from the 2017 Development Finance Assistance (DFA) research and in preparation for the Integrated National Financing Framework (INFF).
2. To identify and unpack innovative financing opportunities within SRI and ISF such as bonds, sukuk, zakat and waqf as potential solutions to address funding gaps for projects that addresses the issues of marginalization or vulnerability in the society.To initiate development of systematic principles and standards for the utilization of SRI and ISF instruments in financing SDG programs including M&E reporting. This includes standards on disclosure and transparency in project choice, implementation and impact identification and assessments.

Duties and Responsibilities

Objective 1: To perform a landscape analysis of sustainable development financing for Malaysia that covers (i) domestic public finance, (ii) domestic private finance, (iii) international private finance and (iv) international public finance. This shall be continuation from the 2017 Development Finance Assistance (DFA) research and in preparation for the Integrated National Financing Framework (INFF).

• Perform desk research on development finance capacity and trend for Malaysia.
• Identify which types of development needs are already well served by existing funding sources and which are still underserved in general as well as any white space where funding is less active.

Objective 2: To identify and unpack innovative financing opportunities within SRI and ISF such as bonds, sukuk, zakat and waqf as potential solutions to address funding gaps for projects that addresses the issues of marginalization or vulnerability in the society.

• Identify new integrated financing opportunities within SRI and ISF (including sukuk, waqf and zakat) frameworks that lends themselves well to the Malaysian context
• To showcase and propose types of social investment in which blended finance mechanisms will be most appropriate and can maximize benefit received by all stakeholders.
• Link and adopt recommendation from best practice and including recent UN’s report on Financing SDGs.

Objective 3: To initiate development of systematic principles and standards for the utilization of SRI and ISF instruments in financing SDG programs including M&E reporting. This includes standards on disclosure and transparency in project choice, implementation and impact identification and assessments.

• To initiate development of a set of principles and standards for the funding modalities. This includes describing the key players’ roles and responsibilities, cost-sharing modalities, checklists of suitability, engagement approach and monitoring & evaluation.

Duration of work:

• The consultancy is an engagement which will run from May 2019 to 31 December 2019 (6 months).

Duty Station:

• The Consultant will be reporting to the Assistant Resident Representative and Development Economist based at UNDP Malaysia Country Office at Putrajaya.

Competencies

• Demonstrates strong analytical skills;
• Ability to lead a team effectively to produce results with consistent quality;
• Consistently approaches work with enthusiasm and a positive, constructive attitude;
• Ability to work under pressure and time constraint, and produce quality deliverables.

Required Skills and Experience

• Minimum Masters’ degree and at least 5 years’ experience in development economics, public finance and ISF or other related fields; or
• Minimum 10 years’ experience in of relevant experience (incl. academic research) in development economics, public finance OR ISF social sciences in lieu of the Masters’ degree.

Experience:

• Experience and able to demonstrate strong grasp of Malaysian public finance, Islamic Social Finance, impact investing and the Sustainable Development Goals;
• Demonstrate understanding on development economics landscape and including support to the preparation to the Malaysia’s 5-year plan;
• Experience working with national and local development actors such as Ministry of Economic Affairs, financial institutions, regulatory bodies, State religious councils and local authorities;
• Knowledge and experience of working in projects at grassroot level especially those that directly improves the lives of disadvantaged and poor communities will be preferred.

Language:

• Demonstrates strong oral and written communication skills, in English and Bahasa Malaysia.

UNDP is committed to achieving workforce diversity in terms of gender, nationality and culture. Individuals from minority groups, indigenous groups and persons with disabilities are equally encouraged to apply. All applications will be treated with the strictest confidence.

UNDP does not tolerate sexual exploitation and abuse, any kind of harassment, including sexual harassment, and discrimination. All selected candidates will, therefore, undergo rigorous reference and background checks.

For further information, and to apply, please visit our website via the “Apply” button below.