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Opinion: From New York to Addis Ababa, Financing for Development on Life-Support – Part Two

Bhumika Muchhala is Policy Analyst in the Development and Finance Programme at Third World Network.

Bhumika Muchhala of Third World Network. Credit: UN Photo/Paulo Filgueiras

Bhumika Muchhala of Third World Network. Credit: UN Photo/Paulo Filgueiras

NEW YORK, Jul 10 2015 (IPS) - The key priorities of the Group of 77 developing countries (G77) remain somewhat aligned around a set of issues that have been present from the beginning of the FfD negotiations in New York.

This set of issues includes a re-commitment to Official Development Assistance (ODA) by developed countries, including the provision that climate finance and biodiversity financing is new and additional to traditional official development assistance (ODA). This language, regrettably, is not present in the current July 7 draft outcome document.

In the context of vested geo-political interests and the wide gap between North and South, a strengthened ethos of multilateralism is at its most critical imperative next week in Addis Ababa.

In the final plenary, the tone of the G77 was to remain within the main areas of debate while leaving the majority of the text, whose language has been arrived and agreed upon through arduous negotiations, closed to further negotiation in Addis Ababa. In other words, the entire text should, preferably, not be re-opened to negotiation.

However, the U.S. and Japan were far more aggressive, with Japan stating that it is important to emphasise that nothing is agreed until everything is agreed, and the U.S. making note of “a list” of problem issues, essentially warning Member States that some of the text could be at risk if consensus was not achieved.

The European Union noted that they were not in agreement with the formulation of South-South cooperation and fossil fuel subsidies, in that these sections are “too weak.” The long-standing position of the EU is that more obligations and commitments should be taken on through South-South cooperation and that fossil fuel subsidies should be rationalised with more determination.

Across all U.N. discussions, the issue of South-South cooperation is a centrifugal point. Developing countries routinely clarify that South-South cooperation is a complement, not a substitute, to North-South cooperation and that international development financing commitments are to be met by developed countries taking the lead in the framework of the global partnership for development.

Paragraph 56 in the July 7 text mentions South-South cooperation as having increased importance and different history and particularities, and stresses that “South-South cooperation should be seen as an expression of solidarity among peoples and countries of the South, based on their shared experiences and objectives.

It should continue to be guided by the principles of respect for national sovereignty, national ownership and independence, equality, non-conditionality, non-interference in domestic affairs and mutual benefit.”

Paragraph 57 welcomes the increased contributions of South-South cooperation to poverty eradication and sustainable development and encourages developing countries to voluntarily step up their efforts to strengthen South-South cooperation, and to further improve its development effectiveness in accordance with the provisions of the Nairobi Outcome document of the High Level U.N. Conference on South-South Cooperation.

The U.S. referred to a “list” of issues that, in their view, have not been agreed upon, and which they did not clarify. This list is a potential source of stalemate in Addis Ababa. It could become the foundation for contentious trade-offs and further dilution of an already extremely diluted outcome document.

The danger here is the reopening of hard-won text where there is already some degree of intergovernmental agreement. If developed countries reserve their option to ask for further movement in their favour, across the spectrum of issues ranging from public and private finance, debt and systemic issues, the opening paragraphs and systemic issues, a united G77 defence of FfD for developing countries would be critical.

In the context of vested geo-political interests and the wide gap between North and South, a strengthened ethos of multilateralism is at its most critical imperative next week in Addis Ababa. There is still ample space and prospect for Member States to push for the best possible compromise and outcome in Addis Ababa.

A genuine global partnership for development requires efforts where negotiations are conducted in good faith, without backhanded tactics to manipulate text, and without resorting to undemocratic measures to influence the text.

The very integrity of FfD as an international conference is that it addresses, with the most universal membership available in global governance fora to date, systemic issues in the international architecture for development finance, private finance, capital flows, debt, trade and now this year, technology as well.

The significance of FfD is that it can decide on intergovernmental commitments to deliver concrete and actionable commitments on development finance, as well as generate political momentum for much-needed reforms in the international systemic and structural architecture.

For example, it has the potential to push for reforms on financial regulation, debt sustainability, trade and the international monetary system. The history of political and social change involves a vital role for the international norm setting that can take place through the FfD conference.

As the draft civil society declaration for Addis Ababa states, the level of ambition witnessed in this year’s FfD negotiations is hardly suited to function as the operational MOI for the post-2015 development agenda, which is one of the goals, though not the only one, of this conference.

Even more unfortunately, there is now a serious risk of retrogression from the agreements in the Monterrey Consensus of 2002 and the Doha Declaration of 2008. The countries that historically, and with good reason, have taken on a large part of the responsibility to lead in delivering MOI, have gone to great lengths to shed this responsibility or shift them to others.

The FfD text as of the current draft of July 7 fails to ensure the space to undertake normative and systemic reforms that would enable developing countries to mobilise their own available resources. This combination makes it impossible for countries to generate the requisite resources to deliver a sustainable agenda.

Civil society has expressed its disappointment that save for an explicit decision in Paragraph 123 to establish a Technology Facilitation Mechanism at the U.N. post-2015 Development Summit in order to support the SDGs, the FfD draft outcome document is almost entirely devoid of actionable deliverables.

While not a pledging conference it is deplorable that a conference on financing fails to scale up existing sources and commit new financial resources. This calls into question governments’ commitment to realize a development agenda as expansive and multi-dimensional as the SDGs.

In particular, civil society notes the rejection of a U.N. tax body which would create significant sustainable financing for development through, for example, combating corporate tax dodging in developing countries.

A very low window of opportunity was expected if the FfD outcome document was closed in New York. On this note, it is a positive development that concrete negotiations will carry forth into Addis Ababa next week.

While inevitable friction will ensue across well-established battle-lines, the 3rd FfD conference still has a breath of hope for a better outcome.

Part One can be found here.

Edited by Kitty Stapp

 
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