Research-based
policy recommendations
for the G7

Publications

Global Public-Private Digital Utilities for MSME Recovery and Transition

A robust and equitable digital economy needs to promote the inclusive and sustainable recovery and growth of MSMEs (Micro, Small and Medium Sized Enterprises). Globally, these offer most of the formal employment, ranging from 53% to 86% (Kamal-Chaoui, L. 2017), providing the local infrastructure for capital circulation that most directly benefits communities. Today, the funding shortfall for formal MSMEs is approximately 55% of demand or an estimated $5.2 trillion dollars (International Finance Corporation, 2017). Drivers of global job creation, they suffer lower rates of digital adoption which constrains their growth. The opportunity exists for global leaders to nudge industry towards a profitable, inclusive, and self-sustaining future. A country-specific pilot defining global protocols, with configuration capability for national needs, is estimated to cost $2M and could be completed by 2023. Attractive markets for piloting a data utility have been identified, such as Indonesia, Puerto Rico, and Kenya. The pilot is intended to yield a self-sustaining model, and success metrics should include financial sustainability, adoption of the solution and impact on G7 priorities such as Net Zero transition. The initial use case proposed for pilot is in supporting access to finance and literacy programmes for communities that offer carbon sequestration potential, facilitating those communities in developing sustainable practices whilst supporting preservation and conservation activities. Success in these pilots could be readily transferred to other countries and expanded into other communities. By engaging local governments, traditional lenders, fintech firms, and larger pools of global capital, financial services firms will obtain the data transparency they need to facilitate funding for MSMEs and, through secondary markets, keep that capital in circulation, where it can have the greatest economic impact.

This policy brief proposes a better way for MSMEs to leverage their digital data for increased and cheaper access to finance and other value-added services via a public-private partnership establishing “Data Utilities” to provide real-time and affordable access to trusted data on MSMEs for better access to financial services, helping lenders better assess MSME credit risk and support faster onboarding.

New Conception of Prosperity and Measures of Progress Needed

To overcome the major challenges the world is facing today – from recovering from the pandemic to mitigating climate change – the global community will need concerted, transformative policy efforts, aligned with collective values and societal goals. To achieve this, a new conception of prosperity, along with a related comprehensive yet concise set of goalpost indicators, are needed. We call upon the G7 to begin systematically measuring progress through internationally comparable, multidimensional metrics that cover (1) social well-being, (2) economic well-being, and (3) environmental sustainability.

A G7 Infrastructure Club – Mobilizing the Transformative Power of Cities to Support Multilateralism and the Agenda 2030 in Post-COVID G7/G20

In the context of an increasing divergence of models, a highly divergent recovery and overlapping and multiple global crises, multi-level governance is critical to address systemic challenges. The benefits of such a strategy, too long ignored by national governments, was well documented during the Covid-19 pandemic. Thus, the G7 presidency of Germany has launched a G7 Urban development track to support investments for a better future and a sustainable planet and it has acknowledged the formation of an urban engagement group in the G7. The creation of an infrastructure club, complementing the G7 Germany proposal of a climate club would be an innovative way to support the transformative power of cities in the G7 and nurture a quality dialogue between G7 and G20 in support of the delivery of the Agenda 2030 despite times of uncertainties.

The Essential Role of Diagnostics in Global Health & Development

Quality, timely diagnosis is an essential enabler of health for all, yet diagnosis remains the weakest link in the care cascade. The COVID-19 pandemic has further highlighted how access to timely, accurate diagnostics is fundamental to effective healthcare and ensuring global health security. Progress has been made during the pandemic to enhance testing and surveillance capacity, but access to testing is still highly inequitable in low- and middle-income countries. As a result, meaningful action is needed to leverage the progress made during the COVID-19 pandemic in diagnostics and close the gaps that remain. FIND, the global alliance for diagnostics, alongside the Coalition for Epidemic Preparedness Innovations, is coordinating the ambitious mission to create the tests necessary to respond to the next global threat within 100 days, as part of the 100 Days Mission. The support of the G7 will be vital in achieving these goals. This policy brief outlines our policy recommendations for the G7 to achieve the 100 Days Mission and create a future with equitable access to diagnostics and strong global health security.

Call for Action: New Conception of Prosperity and Measures of Progess Needed

To overcome the major challenges the world is facing today – from recovering from the pandemic to mitigating climate change – the global community will need concerted, transformative policy efforts, aligned with collective values and societal goals. To achieve this, a new conception of prosperity, along with a related comprehensive yet concise set of goalpost indicators, are needed. We call upon the G7 to begin systematically measuring progress through internationally comparable, multidimensional metrics that cover (1) social well-being, (2) economic well-being, and (3) environmental sustainability.

Issue Paper: Saving the Planet

Humans are destroying the planet through unrelenting emissions of greenhouse gases, land use change and pollution, causing widespread biodiversity loss and ongoing land, forest and ocean degradation that are undermining human health and harming agriculture and food production. These challenges can be addressed in a limited window of opportunity. G7 leaders at Elmau should:

  1. Create climate clubs
  2. End fossil fuel subsidies
  3. Expand climate finance
  4. Bolster biodiversity
  5. Strengthen sustainable agriculture, food and water security
  6. Create climate–health benefits

These six recommendations should be implemented in SDG-supportive, jobs-rich, inclusive, equality-enhancing, gender-equalizing, independently monitored and continuously improved ways.

Finding Solutions to Common Digital Economy Challenges under Germany’s Presidency for the G7

Authors:

This policy brief addresses the two goals of better future as well as economic sustainability and recovery goal, which were outlined by the G7 under Germany’s current presidency to the G7. It aims to analyze four distinct digital trends that are existing in today’s global digital economy in both developing and developed countries with various degrees of penetration and adoption. These trends include data as a new type of infrastructure, Cross Border Flow of Data (CBFD), leveraging Private Public Partnership (PPP) business model in the uptake of 5G, in tandem with strengthening the regulatory bodies, leveling the playing field for all market players, and adopting effective market liberalization strategies. Finally, the fifth trend includes ensuring suitable and harmonized governance and regulatory frameworks for digital platforms on a global level.

This policy brief is meant to help developing countries’ policy makers make suitable decisions and drafting appropriate policies in this specific area. By leveraging best practices and international experience distinctively from the G7 context, the findings of this policy brief would help in achieving this goal. Finally, this contribution ends with suggested implementation plan that aims to strengthen the international cooperation and ties between G7 and developing countries by increasing the awareness of the latter with lessons learned and best practices to promote the above mentioned new digital trends in developing countries. This policy brief is consistent with the pillar of strengthening the common good pillar outlined in Germany’s priorities in its presidency to the G7.

Reform Subsidies Harmful to Nature

G7 countries are actively working to repurpose agricultural subsidies to reduce unintended effects on nature (across climate, biodiversity and lands impacts). The G7 has a key role to play on agricultural subsidies discussions in the World Trade Organization. At the WTO and elsewhere, the G7 should move to replace subsidies harmful to nature with incentives that increase agricultural resilience while benefiting the natural environment.

Aligning Climate And Biodiversity Finance

The G7 can provide a powerful signal on resource mobilization for biodiversity and climate change ahead of the Biodiversity Convention COP15 in Kunming to ensure that financing efforts to address the global climate crisis and the global biodiversity crisis are synergistic and mutually re-enforcing. G7 countries should commit to allocate 30% of their international climate finance towards nature-based solutions in order to simultaneously achieve climate and biodiversity outcomes. Furthermore, the G7 should commit to ensure that, in achieving the $100B climate finance commitment, all climate finance is screened to be nature-positive. Additionally, Lastly, the G7 should call upon the Multilateral Development Banks to build on the MDB Joint Nature Statement from Glasgow to become “Kunming Aligned” following the adoption of the Global Biodiversity Framework at UNCBD COP15, just as they have previously committed to become “Paris Aligned.

Using Debt Conversions to Support the Sustainability Agenda

Countries across the global are facing a sovereign debt challenge in the wake of the economic impacts of Covid. This will likely result in an increasing need for debt restructuring and debt forgiveness operations. As global institutions look at this issue, they have an opportunity to ensure that these restructuring and forgiveness interventions are truly sustainable by incorporating climate and nature risk. The G7 countries are influential creditors in the sovereign debt market. As such, setting out a joint statement of intent and direction through the G7 process would be an important market signal. Importantly, the G7 countries – when acting together – can also influence discussions and outcomes at the IMF and other influential sovereign debt fora to ensure that debt conversions and debt forgiveness operations explicitly secure climate and biodiversity benefits.