The Finance Ministers and Central Bank Governors of the G20. Credit: TCMB/cc by 2.0

By Jaya Ramachandran
BERLIN, Sep 9 2015 (IPS)

Finance ministers and central bank governors of the world’s 20 major economies, accounting for 66 percent of world population, have pledged to “promote an enabling global economic environment for developing countries as they pursue their sustainable development agendas”.

In this context, they are looking forward to “a successful outcome” of the U.N. Summit in New York for the adoption of the 2030 Agenda for Sustainable Development. The summit will be held from Sep. 25 to 27 in New York as a high-level plenary meeting of the General Assembly of the world body.

The G20, meeting in Turkey’s capital Ankara on Sep. 4-5, reviewed ongoing economic developments, their respective growth prospects, and recent volatility in financial markets and its underlying economic conditions. They welcomed “the strengthening economic activity in some economies” but said that global growth was falling short of their expectations.

To remedy the situation, they vowed to take decisive action to keep the economic recovery on track and expressed confidence that the global economic recovery would gain speed. With this in view, they would continue to monitor developments, assess spillovers and address emerging risks as needed to foster confidence and financial stability.

The G20 welcomed “the positive outcomes of the Addis Ababa Conference on Financing for Development (FFD)”. In support of these, they aim to scale up their technical assistance efforts to help developing countries build necessary institutional capacity, particularly in the areas specified in the Addis Ababa Action Agenda.

The agreement was reached by the 193 U.N. Member States attending the Conference, following negotiations under the leadership of Ethiopian Foreign Minister Tedros Adhanom Ghebreyesus.

U.N. Secretary-General Ban Ki-moon said: “This agreement is a critical step forward in building a sustainable future for all. It provides a global framework for financing sustainable development.”

He added, “The results here in Addis Ababa give us the foundation of a revitalized global partnership for sustainable development that will leave no one behind.”

The G20 includes 19 individual countries – Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom and the United States – along with the European Union (EU). The EU is represented by the European Commission and by the European Central Bank.

The Group was founded in 1999 with the aim of studying, reviewing, and promoting high-level discussion of policy issues pertaining to the promotion of international financial stability.

It seeks to address issues that go beyond the responsibilities of any one organisation. Collectively, the G20 economies account for around 85 percent of the gross world product (GWP), 80 percent of world trade (or, if excluding EU intra-trade, 75 percent), and two-thirds of the world population. The G20 heads of government or heads of state have periodically conferred at summits since their initial meeting in 2008.

The G20 are responsible for 84 percent fossil fuel emissions worldwide. To support the climate change agenda of 2015, they welcomed the Climate Finance Study Group (CFSG) report, took note of the inventory on climate funds developed by the OECD (Organisation for Economic Cooperation and Development), and the toolkit developed by the OECD and the GEF (Global Environment Facility) to enhance access to adaptation finance by the low income and developing countries, especially those that are particularly vulnerable to the adverse effects of climate change.

While recognising developed countries’ ongoing efforts, they called on them to continue to scale up climate finance in line with their commitments.

“We are working together to reach a positive and balanced outcome at the 21st Conference of Parties of the UNFCCC (COP 21). Based on the outcomes and towards the objectives of the COP21, CFSG will continue its work in 2016 by following the principles, provisions and objectives of the UNFCCC,” they added.

UNFCC is the United Nations Framework Convention on Climate Change that emerged from the Earth Summit in June 1992 in Rio, Brazil, which is currently the only international climate policy treaty with broad legitimacy, due in part to its virtually universal membership.

The CFSG was established by Finance Ministers, in April 2012, and was welcomed by leaders in the Los Cabos Summit, in Jun 2012, with a view “to consider ways to effectively mobilize resources taking into account the objectives, provisions and  principles of the UNFCCC”.

In November 2012, Finance Ministers agreed to “continue working towards building a better understanding of the underlying issues among G20 members taking into account the objectives, provisions and principles of the UNFCCC”, and also recognised that the “UNFCCC is the forum for climate change negotiations and decision making at the international level”.

Following the mandate of the group, and building on the CFSG 2013 Report, the Group identified four areas to be studied in 2014, namely: (a) Financing for adaptation; (b) Alternative sources and approaches to enhance climate finance and its effectiveness; (c) Enabling environments, in developing and developed countries, to facilitate the mobilization and effective deployment of climate finance; (d) Examining the role of relevant financial institutions and MDBs in mobilizing climate finance.

This report aims to present to the G20 Finance Ministers and Leaders a range of non-exhaustive policy options (“toolbox”) for voluntary consideration, related to these four areas, and to suggest further work on other important issues on climate finance.

The G20 said they were “deeply disappointed” with the continued delay in progressing the 2010 International Monetary Fund (IMF) Quota and Governance Reforms. In their view, their earliest implementation is essential for the credibility, legitimacy and effectiveness of the Fund and “remains our highest priority”.

As part of continuing efforts to promote market confidence and business integrity, G20 Finance Ministers also endorsed a new set of G20/OECD corporate governance principles.

The G20/OECD Principles of Corporate Governance provide recommendations for national policymakers on shareholder rights, executive remuneration, financial disclosure, the behaviour of institutional investors and how stock markets should function.

Sound corporate governance is seen as an essential element for promoting capital-market based financing and unlocking investment, which are keys to boosting long-term economic growth.

“In today’s global and highly interconnected world of business and finance, creating trust is something that we need to do together,” OECD Secretary-General Angel Gurría said during a presentation of the new Principles with Turkish Deputy Prime Minister Cevdet Yilmaz,‎ who chaired the G20 finance ministers meeting.

Edited by Kitty Stapp

By Lakshmi Puri
UNITED NATIONS, Aug 17 2015 (IPS)

The efforts of the United Nations and the global women’s movement to promote the women’s rights agenda and make it a top international priority saw its culmination in the creation of U.N. Women, by the General Assembly in 2010.

UN Women is the first – and only – composite entity of the U.N. system, with a universal mandate to promote the rights of women through the trinity of normative support, operational programmes and U.N. system coordination and accountability lead and promotion.This is a pivotal moment for the gender equality project of humankind.

It also supports the building of a strong knowledge hub – with data, evidence and good practices contributing to positive gains but also highlighting challenges and gaps that require urgent redressal.

UN Women has given a strong impetus to ensuring that progressive gender equality and women’s empowerment norms and standards are evolved internationally and that they are clearly mainstreamed and prioritised as key beneficiaries and enablers of the U.N.’s sustainable development, peace and security, human rights, humanitarian action, climate change action and World Summit on the Information Society (WSIS) + 10 agendas.

In fact, since its creation five years ago, there has been an unprecedented focus and prioritisation of gender equality and women’s empowerment in all normative processes and outcomes.

With the substantive and intellectual backstopping, vigorous advocacy, strategic mobilisation and partnerships with member states and civil society, U.N. Women has contributed to the reigniting of political will for the full, effective and accelerated implementation of Beijing Platform commitments as was done in the Political Declaration adopted at 59^th session of the Commission on the Status of Women; a remarkable, transformative and comprehensive integration and prioritisation of gender equality in the Rio + 20 outcome and in the 2030 Agenda for Sustainable Development through a stand-alone Sustainable Development Goal and gender sensitive targets in other key Goals and elements.

Additionally, there was also a commitment to both gender mainstreaming and targeted and transformative actions and investments in the formulation and implementation of financial, economic, social and environmental policies at all levels in the recently-concluded Addis Accord and Action Agenda on  Financing For Development.

Also we secured a commitment to significantly increased investment to close the gender gap and resource gap and a pledge to strengthen support to gender equality mechanisms and institutions at the global, regional and national levels. We now are striving to do the same normative alchemy with the Climate Change Treaty in December 2015.

Equally exhilarating and impactful has been the advocacy journey of U.N. Women. It  supports and advocates for gender equality, women’s empowerment and the rights of women globally, in all regions and countries, with governments, with civil society and the private sector, with the media and with citizens – women and girls, men and boys everywhere including through its highly successful and innovative Campaigns such as UNiTE to End Violence against Women / orange your neighbourhood, Planet 50/50 by 2030: Step it up for Gender Equality and the HeforShe campaign which have reached out to over a billion people worldwide .

UN Women also works with countries to help translate international norms and standards into concrete actions and impact at national level and to achieve real change in the lives of women and girls in over 90 countries. It is in the process of developing Key Flagship Programs to scale up and drive impact on the ground in priority areas of economic empowerment, participation and leadership in decision making and governance, and ending violence against women.

Ending the chronic underinvestment in women and girls empowerment programs and projects and mobilising transformative financing of gender equality commitments made is also a big and urgent priority.

We have and will continue to support women and girls in the context of humanitarian crisis like the Ebola crisis in West Africa and the earthquake relief and response in Nepal and worked in over 22 conflict and post conflict countries to advance women’s security, voice, participation and leadership in the continuum from peace-making, peace building to development.

UN Women’s role in getting each and every part of the U.N. system including the MFIs and the WTO to deliver bigger, better and in transformative ways for gender equality through our coordination role has been commended by all. Already 62 U.N. entities, specialised agencies and departments have reported for the third year on their UN-SWAP progress and the next frontier is to SWAP the field.

Much has been achieved globally on women’s right from education, to employment and leadership, including at the U.N. Secretary-General Ban Ki-Moon has appointed more senior women than all the other Secretary-Generals combined.

Yet, despite the great deal of progress that has been made in the past 70 years in promoting the rights of women –persistent challenges remain and new ones have come up and to date no country in the world has achieved gender equality.

The majority of the world’s poor are women and they remain disempowered and marginalised. Violence against women and girls is a global pandemic. Women and girls are denied their basic right to make decisions on their sexuality and reproductive life and at the current rate of progress, it would take nearly another 80 years to achieve gender equality and women’s empowerment everywhere, and for women and girls to have equal access to opportunities and resources everywhere.

The world cannot wait another century. Women and girls have already waited two millennia. The 2030 Agenda for Sustainable Development and all other normative commitments in the United Nations will remain ‘ink on paper’ without transformative financing in scale and scope, without the data, monitoring and follow up and review and without effective accountability mechanisms in this area.

As we move forward, the United Nations must continue to work with all partners to hold Member States accountable for their international commitments to advance and achieve gender equality and women’s empowerment in all sectors and in every respect.

UN Women is readying itself to be Fit For Purpose but must also be Financed For Purpose in order to contribute and support the achievement of the Goals and targets for women and girls across the new Development Agenda.

This is a pivotal moment for the gender equality project of humankind. In order to achieve irreversible and sustained progress in gender equality and women’s empowerment for all women and girls – no matter where and in what circumstances they live and what age they are, we must all step up our actions and investment to realise the promise of “Transforming our World ” for them latest by 2030. It is a matter of justice, of recognising their equal humanity and of enabling the realisation of their fundamental freedoms and rights.

As the U.N. turns 70 and the entire international development  and  security community faces many policy priorities – from poverty eradication, conflict resolution, to addressing climate change and increasing inequalities within and between countries – it is heartening that all constituents of the U.N. – member states, the Secretariat and the civil society – recognise that no progress can be made in any of them without addressing women’s needs and interests and without women and girls as participants and leaders of change.

By prioritising gender equality in everything they pledge to not only as an article of faith but an operational necessity, they signal that upholding women’s rights will not only make the economy, polity and society work for women but create a prosperous economy, a just and peaceful society and a more sustainable planet.

Part One can be read here.

Edited by Kitty Stapp

Excerpt:

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

By Bhumika Muchhala
UNITED NATIONS, Aug 7 2015 (IPS)

At about a quarter to seven on the evening of Sunday, Aug. 2, the member states of the United Nations adopted the post-2015 development agenda outcome document, titled “Transforming Our World: The 2030 Agenda.”

As governments endorsed the 29-page product resulting from almost two years of transparent and relatively democratic negotiations, the final 48 hours had witnessed a very different story, that of a sharp turn towards closed-door consultations and last-minute bargaining chips.What transpired requires a moment to reflect on the reality of vested interests and deeply unequal power between negotiating governments.

The 2030 Agenda is arguably the most ambitious and expansive development agenda that has ever been set in motion. It will be in effect for 15 years (2015-2030) and is to be implemented on all levels ranging from the global and multilateral level (such as the World Bank), regional (such as regional commissions and funds) and national (both government level and development agencies).

The main meat of the 2030 agenda is the Sustainable Development Goals (SDGs), comprised of 17 goals and 169 targets covering economic, social and environmental issues ranging from inequality, poverty, climate change, infrastructure, energy, industrialisation, consumption and production, health, education, ecosystem, biodiversity and oceans.

These SDGs will be the first global development paradigm to be marked by universality, meaning that all countries are to take action toward sustainable development, including the rich and powerful. This distinguishes the SDGs from the Millennium Development Goals (MDGs) of 2000-2015, which was based on an explicitly donor-recipient model of aid from the rich countries to the poor.

For all 193 governments of the U.N. to come to an agreement on this agenda was a breathtaking feat of conflict and compromise. However, over the first weekend of August, the otherwise open and recorded negotiations went into radio-silence in the back-rooms as the United States reportedly issued an ultimatum without which they refused to adopt the document.

The U.S. wanted to replace the word “ensure” with the word “promote” in two goals that talked about ensuring that the profits and patents reaped from the world’s natural biodiversity are shared fairly with the countries and communities from which they are extracted. The legal agreement on biodiversity clearly states the word “ensure.” By injecting the much weaker word “promote,” the U.S. tried to dilute hard-won legal language to something that is nebulous at best and unenforceable at worst.

This amendment essentially lets rich and powerful countries, whose corporations and research institutions extract the vast majority of biodiversity resources of the world, off the hook from their legal commitments to equitably share benefits and rewards that come from these resources. Developing countries were infuriated because most of this extraction happens in their countries, specifically, from the seeds, plants, forests and land on which most indigenous peoples across the world live in.

The negotiating group of 134 developing countries had repeatedly stated that the global goals were not to be re-opened for negotiation at the last minute, that they were sacrosanct. The fact that this firm position was flagrantly violated as a last-minute take-it-or-leave-it deal filled the air of the U.N. conference room with a palpable distrust and tension. People rushed in and out of conference rooms, furiously whispering in each other’s ears while working day and night to reach a consensus, no matter what.

Similarly, the progressive language on debt was also undermined, reportedly by the European Union this time. Up until the morning of Sunday, Aug. 1, the document said: “We recognize the need to assist developing countries … through debt financing, debt relief, debt restructuring and sound debt management, as appropriate.” This language recognised the sound development economics arguments called for by numerous economists and developing countries, on the urgent need to address external debt if any development goals are to be achieved.

By late afternoon, this was inserted: “Maintaining sustainable debt levels is the responsibility of the borrowing countries…”  Plucked out of the outcome document of the Financing for Development conference in Addis Ababa last month, this sentence harmfully faults borrowing countries for their debt burdens without due attention on the complex role of lenders and creditors, a point that has been repeatedly emphasised in the Greek case.

It’s a stark regression from the notion of co-responsibility between lenders and borrowers in previous U.N. documents from Monterrey in 2002 and Doha in 2008.

The fear of such retrogression in language from the Addis Ababa document drove developing countries to keep insisting until the last hour that it not be annexed to the 2030 Agenda as developed countries called for. In the end, the Addis Ababa text was not annexed. But the compromise was this sort of selective importation of language. Other attempts were also proposed by developed countries in the final hours but were steadfastly fought back, such as removing reference to “policy space,” arguably the most vital demand of developing countries.

Although policy space is mentioned twice in the 2030 agenda and once in the SDGs, it is qualified with language from the Addis Ababa text in one of these three mentions. This language is: “…while remaining consistent with relevant international rules and commitments.” This negates the very point of policy space, which is to address the very “international rules and commitments” that constrain the ability of a state to formulate and carry out development-oriented policies and pathways.

On the other side of the North-South firewall, African and Arab countries called for the removal of a critical paragraph recognising human rights as a principal aim of sustainable development and a commitment to non-discrimination for all. While the paragraph was saved from this late Friday night intervention, the essential term “discrimination” was scrapped and the word “fulfill” was demoted to “promote.”

Issues such as ethnicity, migration status, culture, economic situation or age as a protected status were also scrapped although “race, colour, sex, language, religion, political opinion, national or social origin, property, birth, disability or other status” remain.

African and Arab diplomats argued against the recognition of LGBT rights and objected to the inclusion of “all social and economic groups,” while many Latin American countries, the European Union and the U.S. firmly opposed the offense against human and civil rights.

It is now more than two decades since the U.N. reaffirmed the interdependence of human rights and development at the Vienna World Conference on Human Rights and more than 20 years since the U.N. first recognised sexual orientation and gender identity as prohibited grounds of discrimination.

The 11^th hour turn from openness to opacity reflects a crisis of multilateralism in the world’s primary locus of multilateralism, the U.N. After all, the U.N. is supposed to be the most democratic and universal institution that exists to date, one in which every nation has a vote, unlike the rich country-dominated IMF or World Bank.

The private bilateral consultations over the weekend of Aug. 1-2 were, according to many independent observers, a manufactured crisis that opened the door to text that endangers global development and law.

The problem is that backroom dealings and pressure campaigns have ominous implications for the legitimacy and fairness of international negotiations, not to mention the political will of governments to take the sustainable development goals seriously.

The new global development agenda has powerful potential to make an ambitious and universal dent of urgently needed progress in our economies, societies and environments.  At the same time, process is also important. What transpired this first weekend of August requires a moment to reflect on the reality of vested interests and deeply unequal power between negotiating governments.

(Note: As of Aug. 6, 3:00 p.m., the final outcome document of the post-2015 development agenda has not yet been officially published by the U.N. Secretariat. The last draft available is the Aug.1  draft without the changes noted above.  There is some speculation and concern as to why there is a delay of four days, which is only compounding the lack of transparency in the final hours of negotiation.)

Edited by Kitty Stapp

Excerpt:

Jomo Kwame Sundaram. Credit: FAO

By Jomo Kwame Sundaram
ROME, Aug 5 2015 (IPS)

The Addis Ababa Action Agenda is widely seen as a major disappointment for developing countries as well as others hoping for adequate means of implementation to realise national development ambitions and the Sustainable Development Goals (SDGs).

It has become clear that the South, including the least developed countries, should not expect any serious progress to the almost half century old commitment to transfer 0.7 percent of developed countries’ economic output to developing countries. But to add insult to injury, developing countries cannot expect to participate meaningfully in inter-governmental discussions to enhance overall as well as national tax capacities.In the vast majority of countries in sub-Saharan Africa and Latin America, the tax to GDP ratio has actually stagnated or declined as tariffs and export duties, which accounted for the largest share of tax revenue, declined with trade liberalisation.

While OECD countries agree that taxation is the only viable strategy for developing countries to exit foreign aid dependency in the long run, they have refused to accede to the latter’s desire for a full-fledged inter-governmental body for international tax cooperation under United Nations auspices.

The ability to pursue development policies depends crucially on available fiscal space, which relies mostly on domestic revenues, especially taxes. However, tax revenues in most low- and lower middle-income developing countries are low.

The average tax-GDP ratios in low-income and lower-middle income countries are around 15 and 19 per cent respectively, compared to over 30 percent in high income countries.

Low- and lower-middle-income countries should take steps to increase their revenues; but the main approach in recent decades has been to increase tax rates only if unavoidable. It was presumed that lower rates would ensure better compliance with tax laws, and thus raise revenue.

The prevailing tax wisdom also favoured broadening the tax base, even when taxation capacities are modest. Thus, indirect taxation has tended to increase while direct taxation of corporations and individuals has tended to decline. The latter was supposed to be good for investment and growth although the empirical support for this presumption is dubious.

In the vast majority of countries in sub-Saharan Africa and Latin America, the tax to GDP ratio has actually stagnated or declined as tariffs and export duties, which accounted for the largest share of tax revenue, declined with trade liberalization. Unfortunately, other taxes have not grown to compensate for the lower trade taxes.

There is an urgent need to reverse this trend, with greater commitment to revenue generation in order to improve social protection, create employment and otherwise contribute to sustained economic recovery.

With their different economic circumstances, it does not make sense for developing countries to simply try to emulate developed economies in trying to generate revenue. Even among developing countries, no one size fits all.

And certainly not for all time, as tax systems must evolve with changing economic circumstances. A key question is: which taxes are most likely to meet the requirements of implementability, buoyancy and stability?

Domestic Taxes: Direct or Indirect?

The revenue to GDP ratio can rise in the following ways: the domestic tax base is widened; tax avoidance and evasion are reduced; and new sources of international taxation are found.

There is no reason to be overly pessimistic about direct taxation as tax reform has significantly improved the contribution of direct taxes to overall revenue in many countries. It is certainly possible to enhance tax revenues by increasing the share of direct taxation of the wealthy through more progressive income taxes in developing countries.

However, there should also be a greater effort to ensure better compliance with, and higher collection of existing taxes.

Limiting the discretionary authority of tax officials could also help improve compliance and reduce evasion. Computerisation of tax administration can help limit corruption, as it makes it harder to tamper with records. But government computerisation alone cannot ensure effective introduction of the much-touted value-added tax (VAT), an indirect tax largely responsible for facilitating the shift from direct to indirect taxation.

Improved tax administration can increase the share of personal income taxes in total tax revenue. Expansion of the scope for tax deduction at source has been very effective in taxing those otherwise hard to reach.

Every individual who is a house owner, vehicle owner, club member, credit card holder, passport, driving licence or identity card holder and telephone subscriber can be required to file a tax return.

Excise taxes are another important source of revenue in developing countries as they have a buoyant base and can be administered at low cost. They are typically levied on products such as alcohol, tobacco, petroleum, vehicles and spare parts.

From a revenue perspective, they are convenient, involving few producers, large sales volumes, relatively inelastic demand and easy observability.

Excises may be levied on quantities leaving the factory or arriving at ports, thus simplifying measurement and collection, ensuring coverage, limiting evasion and improving monitoring. Excise taxes currently amount to less than 2 per cent of GDP in low-income countries, compared to about 3 per cent in high-income countries.

Globalisation and Tax Evasion

Revenue losses due to globalisation need to be addressed. There are three main reasons for revenue losses: first, capital movements increase opportunities for tax evasion because of the limited capacity that any tax authority has to check the overseas incomes of its residents; evasion is easier as some governments and financial institutions systematically conceal relevant information.

Where dividends, interest, royalties, and management fees are not taxed in the country in which they are paid, they more easily escape notice in the countries where the beneficiaries live. There have been large non-resident aliens’ bank deposits in some countries like the U.S. that imposes no taxes on interest from such deposits.

Second, avoidance (not evasion) may increase, given international differences in tax rules and rates, because of the choice of tax regime that international-tax-treatment of enterprise income commonly offers. This is more likely for taxation of profits from corporations’ international operations.

Transfer pricing for goods, services and resources – moving among branches or subsidiaries of a company – provides opportunities for shifting income to minimise tax liability.

Third, international competition for inward foreign direct investment has lead governments to reduce tax rates and increase concessions to foreign investors. The tax rates that governments can impose are thus constrained by international competition.

Hence, they are reluctant to raise rates or to tax dividend and interest income for fear of capital flight although it is well known that direct tax concessions have little effect in diverting international investment, let alone in attracting such flows. Hence, such tax concessions constitute an unnecessary loss of revenue.

Not surprisingly, income tax rates, both on corporations and on individuals, have fallen sharply since the 1980s. Beggar-thy-neighbour policies have led to losses of revenue for many developing countries in a larger race-to-the-bottom also involving labour and environmental standards and conditions, which also undermines the possibility of balanced, inclusive and sustainable development.

Finance ministries and tax authorities in developing countries need to cooperate among themselves and with their counterparts in the OECD economies to learn from one another and to close existing loopholes in their mutual interest. With the huge and growing size of public debts as well as the real and imagined fiscal constraints to sustained global economic recovery, such cooperation is more urgent than ever.

Edited by Kitty Stapp

Excerpt:

School children in a classroom in Gao, Mali. Advocates of a global tax body say revenues lost in tax havens could go to the building of much-needed schools, clinics, and roads and provide clean water and electricity to help combat poverty and boost development. Credit: UN Photo/Marco Dormino

By Thalif Deen
UNITED NATIONS/ADDIS ABABA, Jul 10 2015 (IPS)

When the four-day-long international conference on Financing for Development (FfD) concludes in the Ethiopian capital later this week, one of the lingering questions in the minds of departing delegates may well be: did we really achieve anything concrete after years of negotiations?

As Oxfam International rightly points out, 2015 is a big year for major global conferences – on combating poverty, inequality, environmental degradation and climate change.“Setting up a tax body is a crucial first step towards a better global financial system which works to uplift the majority and not further enrich the wealthy." -- Lidy Nacpil of APMDD

But in the first of these big conferences – in Addis Ababa, July 13-16 – decisions will be made about how money is delivered and spent by governments to tackle poverty and inequality.

One of the major sticking points during the negotiations in New York was the creation of a global tax body, including international tax reforms.

The final decision, however, will be made by ministers and high-level officials from 193 governments in Addis Ababa, the third in a series, the first FfD conference being held in Monterrey, Mexico in 2002 and the second in Doha, Qatar in 2008.

If you look at the big finance-related issues that are in the media these days, says Oxfam, “we read about economic crisis, government budget cuts, major tax dodging scandals, and countries in debt crisis. All of these are issues that fall under the financing for development agenda. “

Therefore, if the FfD conference is to be a success it could mean a rebalancing of power and a new cooperation with developing countries, which would get to have a voice in the international financial system.

The FfD conference could be a once in a decade opportunity to ensure that efforts to fight climate change, poverty and inequality are funded fairly.

“Unfortunately, current signs indicate that it will far from deliver on that promise. Negotiations (in New York) have seen more and more eroded from these ambitions,” said Oxfam in a statement released here.

McKinley Charles, media coordinator for ActionAid in Addis Ababa, told IPS its primary focus will be on tax reforms, more specifically the international tax body that is still currently being negotiated.

“We are working to improve and democratise the international tax body so that regulations can be put in place to stop tax dodging which robs developing countries of billions of dollars of revenue every year.”

These are revenues, she pointed out, that could have gone to the building of much-needed schools, clinics, and roads and provide clean water and electricity to help combat poverty and boost development.

“Addis is a big opportunity since it looks as if a decision on the international tax body will be made there,” she added.

Charles also said ActionAid, as part of its efforts, will be involved in a number of side events on tax justice, including panel debates.

ActionAid is also fielding some 12 tax policy analysts and campaigners from Europe, South Africa, Kenya, Zambia and Mozambique “to get our messages out to the policy makers and the public influencers.”

Asked whether the success or failure of the FfD will largely depend on tax reform, Alison Holder, Oxfam’s policy advisor on tax reform, told IPS the tax body issue will be a litmus test of whether this FfD conference is really about building a new common agenda and whether it is about real reform to address the international barriers that prevent developing countries from raising sufficient tax revenue.

The tax body raises the question of whether rich countries recognise that if the world is able to finance ambitious development goals, “then we need to see some shift in the balance of power”, she said.

“Without the commitment to create a truly global tax body, any outcome from these negotiations will continue to place all of the burden of financing for development on developing countries’ own doorsteps. They would be told to improve their own tax systems and live with current broken tax system.”

Holder also said rich countries are refusing to recommit to their decades-old promise to deliver 0.7 percent of their national income in aid – which would release an estimated 250 billion dollars a year.

Official development assistance (ODA) is declining and countries need taxes to fill the gap.

“There is still a real chance that all of the months of negotiations on this FfD conference will come to nothing, and that no agreement will be forged. But this doesn’t have to be the way it turns out,” she declared.

Some of the world’s major multinational corporations are accused of shifting their profits out of countries where they make their money and hide it in tax havens, increasing their profits and leaving the poorest countries with an estimated loss of 100 billion dollars a year.

But the rich countries want to retain their status quo, where global tax rules are set within the Organisation for Economic Cooperation and Development or OECD, long described as a rich man’s club based in Paris.

The Asian People’s Movement on Debt and Development (APMDD), one of more than a thousand organisations which are part of the Global Alliance for Tax Justice (GATJ), said it is joining the call for the establishment of a global tax body.

“Civil society groups in Asia are criticising the United States and European Union for opposing a global tax body that would be more democratic than the OECD and G20, where rich countries dominate,” said Lidy Nacpil, coordinator of APMDD.

“Setting up a tax body is a crucial first step towards a better global financial system which works to uplift the majority and not further enrich the wealthy. It can level the playing field against tax evaders and provide more funds for developing countries,” she added.

Meanwhile, the European Union, the United States, UK, Germany, Netherlands, Finland and Sweden are expected to announce a new tax initiative, which aims to strengthen the capacity of developing countries’ tax authorities.

The initiative aims to double the collective overseas development aid available to help developing countries build more progressive tax systems and improve the collection of national taxes; support them in their efforts to clamp down on tax dodging practices by multinational companies; and increase their capacity to engage in global fora which deal with international tax reform.

Called the Tax Inspectors without Borders (TIWB) initiative, it will be jointly launched by the OECD and the U.N. Development Programme (UNDP) at a side event during the FFD3.

The initiative aims to help build tax audit capacity in developing countries by providing tax audit experts to work alongside local officials of developing country tax administrations – this should help developing countries identify cases of tax evasion and avoidance and claim back the revenue they are owed.

The TIWB programme aims to support 200 expert tax deployments between 2016 and 2019.

Holder told IPS Oxfam welcomes both initiatives to help build the capacity of developing countries’ tax administrations.

Less than 1 per cent of total aid budget is dedicated to support domestic resource mobilisation yet fairer and progressive tax systems are vital to reduce poverty and inequality. However, developing countries need more from Addis, she noted.

“Developing countries are not claiming the tax revenues they are entitled to because of a broken international tax system. This system allows multinational companies to cheat poor nations out of billions of dollars in taxes. Despite this, rich countries, led by the OECD, have denied them an equal say at the international negotiation table on new global tax rules.

“The Addis tax initiative includes the objective to increase the capacity of developing countries to negotiate global rules and to facilitate their presence at e.g. OECD-lead international tax meetings. This cannot replace the need for a truly inclusive global tax body where all countries can participate on equal footing to negotiate global tax rules. The same countries that initiated the Addis tax initiative have spent months blocking the creation of such a new intergovernmental tax body in Addis.”

Oxfam called on all countries to walk the extra mile in Addis and ensure that developing countries will be able to increase their tax revenues and build fairer tax systems at the national and global levels.

They should agree on the establishment of a U.N. tax body that will enable developing countries to claim their fair share of global corporate tax revenues, Holder declared.

Edited by Kitty Stapp

The writer can be contacted at thalifdeen@aol.com

A woman carries a container of water in San Mateo, Guatemala. Credit: UN Photo/Antoinette Jongen

By Roger Hamilton-Martin
UNITED NATIONS, Jul 10 2015 (IPS)

Ahead of the all-important International Financing for Development Conference in Addis Ababa, a top water charity has called upon world leaders to prioritise programmes for water, sanitation and good hygiene, so that no one is left behind.

WaterAid’s new report, ‘Essential Element’, identifies 45 high-priority countries which have been left behind in financing for water, sanitation and hygiene programmes.

In a statement, WaterAid Director of Global Policy and Campaigns, Margaret Batty, said, “As government representatives from around the world travel to Addis Ababa, they have a once-in-a-generation chance to tackle extreme poverty and help more children grow up to reach their full potential.

“Safe water and basic toilets create healthier communities, and spare women and girls their long and difficult journeys to fetch water and the indignity and insecurity of having to find a private place to relieve themselves when there is no toilet.”

In each of the 45 high-priority countries identified by WaterAid, half or more of the population does not have a basic, safe place to defecate – polluting the water supply and general environment. As a result their citizens are at high risk of contracting waterborne diseases as well as pandemic illnesses.

The report calls for countries to “look ahead at the challenges that will have a major impact on delivering universal access to water, sanitation and hygiene”, including inequalities between countries, climate change and stress on water resources.

The report demonstrates that for many countries, aid will be a vital international resource to support the achievement of universal access to water, sanitation and hygiene.

When world leaders gather in the Ethiopian capital on Monday, July 13, to hash out the Addis Accord, it is critical they include a strong focus on equity and sustainability of services, says WaterAid. According to the charity, this must incorporate action to address financial absorption and human resource constraints.

The Addis conference will bring together thousands of politicians, lobbyists, policymakers and businesses for five days, in the first of three 2015 summits to work out where money will come from to fund development processes beginning this year. The new U.N. Sustainable Development Goals are to be finalised in New York this September.

Currently, roughly 1,400 children die around the world every day from diseases caused by dirty water and poor sanitation. More than 660 million people are without safe water, and nearly 2.4 billion are without adequate sanitation, or one in three in the world.

Edited by Kitty Stapp

A woman smokes a cigarette branded ‘Fortune’ at a campaign rally for Philippine President Benigno Aquino III, a smoker who has said he has no intention of quitting the habit. The Philippines has the second highest number of smokers in South-east Asia. Credit: Kara Santos/IPS

By Katie Dain
NEW YORK, May 26 2015 (IPS)

Governments are in the midst of tough talks in New York over the text of the Addis Ababa Accord, which is scheduled to be adopted at the end of the Third Conference on Financing for Development (FfD) , to be held in Ethiopia in July.

However at last report, negotiators continued to downplay a powerful mechanism that governments could use to help achieve and finance the Sustainable Development Goals (SDGs) that will replace the Millennium Development Goals (MDGs) in September: tobacco taxes.Tobacco use killed 100 million people in the 20th century and, if trends do not change, it will kill one billion people this century.

According to a recent estimate, increasing specific excise taxes on tobacco worldwide, in order to double prices, would raise about 100 billion dollars per year in revenues, in addition to the approximately 300 billion that the World Health Organization (WHO) estimates governments already collect on tobacco.

Tobacco use is the world’s leading preventable cause of death, and the one risk factor common to four major non-communicable diseases (NCDs): cancers, cardiovascular and lung disease, and diabetes.

Tobacco use killed 100 million people in the 20th century and, if trends do not change, it will kill one billion people this century. The proposed SDGs recognise the devastating impact of NCDs and the tobacco use risk factor, and set targets for reducing the deadly impacts of both.

Fear of trampling on governments’ right to decide on taxation is reportedly at the heart of the negotiators’ reluctance to recommend taxation in general as a way to generate funding for sustainable development.

Yet, 180 of the world’s governments have already agreed that tobacco taxation is an important tool to both generate revenue and save lives. Meeting as the Parties to the WHO Framework Convention on Tobacco Control (FCTC), these governments have even agreed on guidelines that set out how to tax tobacco as effectively as possible.

Notably, these guidelines, to the FCTC’s Article 6, represent the first time that governments have agreed on what makes – and what doesn’t make – good tobacco tax policy.

Raising tobacco taxes, and subsequently tobacco prices, is good for health because it reduces the amount of tobacco consumed in three ways:

• Some existing smokers quit entirely;
• Some people, mostly teenagers, are deterred from starting to use tobacco;
• Some people continue to use tobacco, but reduce how much they use each day.

As a result, tobacco sales decline; however the revenue generated by the higher taxes on the remaining products sold more than makes up for lower sales. That is why increasing tobacco taxes is a win-win for governments: good for health and good for the bottom line.

Most of the revenue would initially be generated in rich countries, as taxes and prices there are much higher to begin with, but developing countries could still raise substantial revenue.

For example, the Philippines hiked specific excise taxes in 2013, raising the average price per cigarette pack by 48 percent. Sales declined and the number of smokers dropped from 28.3 percent of adults in 2009 to 25.4 percent in 2013, while government revenue from tobacco taxes more than doubled from 702 million dollars in 2012 to 1.5 billion in 2013 .

To be effective, tobacco tax increases must be accompanied by other measures, as FCTC Article 6 guidelines point out. Governments should also:

• Implement the simplest, most efficient tax systems;
• Make regular adjustments so that tobacco products become less affordable over time;
• Tax all tobacco products consistently to avoid substitution;
• Phase out tax-free and duty-free products; and,
• Set long-term policies, which could include a tax target.

Parties to the FCTC are not alone in recognising the potential of tobacco taxation. In their recent paper on financing for sustainable development, Jeffrey Sachs and Guido Schmidt-Traub praise tobacco taxes:

“Consumption taxes on tobacco products have been shown to have a very positive impact on reducing tobacco use and improving health. Higher tobacco taxes are particularly effective at reducing consumption by vulnerable populations, particularly youth. In many countries, tobacco taxation is also an important source of government revenue and is dedicated to tobacco control activities, hospital services and other health prevention or promotion services.”

The authors also refer to a 2011 report that Bill Gates presented to a meeting of G20 leaders.

In the executive summary Gates wrote: “Among the revenue proposals I have examined, tobacco taxes are especially attractive because they encourage smokers to quit and discourage people from starting to smoke, as well as generate significant revenues. It’s a win-win for global health.”

Gates continued: “Tobacco taxes are already ubiquitous. Ninety percent of countries have some form of them. And they work. In Thailand, as cigarette taxes rose from 1994 to 2007, revenues doubled even though the number of smokers went down significantly.”

The Sustainable Development Goals provide the roadmap for creating a healthier, more equitable and prosperous world, and as such are extremely ambitious. Considerable resources will be needed for these goals to be realised in the next 15 years.

Already endorsed by a large majority of the world’s governments, and with a clear road map for implementation, tobacco taxation should be highlighted in the Addis Ababa Declaration as an effective domestic tool for financing sustainable development.

Edited by Kitty Stapp

Excerpt: