Alfred de Zayas, Independent Expert on the promotion of a democratic and equitable international order. Credit: UN Photo/Cia Pak.

By Tharanga Yakupitiyage
UNITED NATIONS, Oct 25 2016 (IPS)

A UN Human Rights Expert has called on the international community to fight tax evasion and abolish tax havens that siphon off essential resources from human rights protection and global development.

“The United Nations must no longer tolerate the scandal of secrecy jurisdictions that facilitate tax evasion, corruption and money-laundering,” said the UN Independent Expert on the promotion of a democratic and equitable international order Alfred de Zayas to the General Assembly. Secrecy jurisdictions are also known as tax havens.

De Zayas particularly pointed to the human costs of such actions, noting that trillions of dollars kept offshore to escape taxation take away necessary resources to combat extreme poverty and address climate change.

He described this “systematic looting of society” in a new report presented to the General Assembly where he found that up to $32 trillion USD is held in offshore secrecy jurisdictions around the world. According to the UN Conference on Trade and Development (UNCTAD), this costs developing countries more than $100 billion USD per year.

In 2011 alone, developing nations lost almost $950 billion USD due to illicit financial flows, including tax evasion. According to the Organisation for Economic Cooperation and Development (OECD), this was seven times more than the official development assistance, the official term for aid, provided that year and substantially higher than the estimated costs of achieving the Millennium Development Goals.

Concerns for financial secrecy and tax evasion was reignited in April 2016 when the International Consortium of Investigative Journalists (ICIJ) released the Panama Papers which revealed how a single law firm in Panama aided thousands of prominent figures to create secretive offshore companies and use tax havens.

Within the almost 12 million leaked documents is the case of the Heritage Oil and Gas Ltd Company which Panamanian law firm Mossack Fonseca allegedly helped to avoid paying $404 million in taxes in Uganda by relocating to the tax haven of Mauritius. For Uganda, which has poor health services and one of the highest rates of maternal deaths in the world, this tax revenue represent more than the country’s annual health budget. Mossack Fonseca have denied any wrongdoing.

The latest leak by ICIJ and media partners has exposed politicians and others’ use of over 175,000 offshore companies in the Bahamas. Among those named in the Bahamas Leaks is the European Union’s former Commissioner for Competition Neelie Kroes who failed to declare her directorship of an offshore firm while in office.

In May, a group of 300 leading economists wrote to world leaders that there is no economic justification for tax havens and that offshore financial secrecy must end.

“This abusive global system needs to be brought to a rapid end. That is what is meant by good governance under the global commitment to sustainable development,” said Jeffrey Sachs, Director of Columbia University’s Earth Institute and special advisor to Secretary-General Ban Ki-moon.

Sachs and others highlighted the need for new global rules requiring companies to publicly report taxable activities in every country they operate.

In addition to the need to increase transparency and accountability, de Zayas urged the General Assembly to take the lead by drafting a convention outlawing tax havens worldwide and establishing an inter-governmental tax body to draft and enforce measures not only to ensure multinational corporations pay their fair share of taxes, but also to prosecute perpetrators.

“Corruption, bribery, tax fraud and tax evasion have such grave effects on human dignity, human rights and human welfare that they shock the conscience of mankind. They should be prosecuted nationally and internationally,” he stated.

The Independent Expert also called on the protection of whistleblowers who are often the most “effective” in shining a light on corruption.

“Whistleblowers, who should be considered as human rights defenders as they significantly contribute to a culture of transparency and accountability, often pay a heavy price. It is in the spirit of a democratic and equitable international order to adopt legislation to protect whistleblowers and witnesses from reprisals and to provide them with easy-to-access avenues to make disclosures,” he added.

De Zayas particularly looked to the newly selected UN Secretary-General António Guterres for robust action, noting that he has a “unique opportunity” to fight against tax evasion and illicit financial flows and should thus convene a world conference on the issue. Guterres will replace current Secretary-General Ban Ki-moon on 1 January 2017.

“I sincerely hope that the abolition of tax havens and the creation of a United Nations Tax Authority with a mandate to combat offshore tax avoidance and evasion, and to outlaw tax havens, will be among Mr. Guterres’ priorities,” he stated.

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:

Secretary-General Ban Ki-moon addresses the International Business Forum of the UN’s Third International Conference on Financing for Development, hosted by the Ffd Business Sector Steering Committee. Credit: UN Photo/Eskinder Debebe

By Thalif Deen
UNITED NATIONS, Aug 5 2015 (IPS)

When the United Nations seeks outside financial assistance either for development needs or to advocate social causes, it invariably turns to the private sector these days.

Perhaps the most demanding is Secretary-General Ban Ki-moon’s appeal to private investors to help the United Nations reach its 100-billion-dollar target per year to battle the devastating consequences of climate change.“We believe that youth can make a difference, especially in the achievement of the post 2015 agenda: but giving voice to them is not enough. It is important to give new generations the tools to make a change.” -- Mariarosa Cutillo of Benetton

But critics have urged the United Nations to double-check the credentials of some of these companies — on issues such as human rights, fair wages, child labour and environmental record — before deciding to collaborate.

Still, on a more modest scale, the U.N. Development Programme (UNDP) received over 135 million dollars in funds from the business sector between 2009 and 2013 for some of its projects relating to water, energy, healthcare, agriculture and finance and information technology.

A South African company called Mediclave has provided sterilising machines that decontaminate used medical equipment and waste, such as syringes, personal protective suits and gloves, used in treating communicable diseases.

In Liberia, a Japanese company, Panasonic, has distributed its first batch of 240 solar lanterns to health workers in Monrovia, allowing them to work at night.

The UNDP also has a partnership with Svani Group Limited, a Ghanaian vehicle dealership, which has provided over eight armoured vehicles deployed to the UN Mission on Ebola Emergency Response (UNMEER) in Guinea, Liberia, Sierra Leone and Ghana.

And more recently, the U.N. Academic Impact (UNAI), created under the aegis of the Department of Public Information (DPI) has collaborated with United Colours of Benetton’s “UnHate Foundation” for a Diversity Contest to “showcase the engagement of young people around the world, and the innovation, energy and commitment they bring to personally-crafted solutions that address some of the world’s most pressing issues”, including racial intolerance and xenophobia.

The contest drew more than 100 entries from 31 countries worldwide with innovative ideas and solutions for tackling a wide range of issues, primarily intolerance, racism and extremism.

A panel of judges picked 10 winners who received 20,000 Euros each donated by United Colors of Benetton, a global fashion brand based in Italy.

Benetton has also teamed with U.N. Women in its intense campaign to eliminate gender violence worldwide.

Nanette Braun Chief, Communications and Advocacy at U.N. Women, told IPS Benetton’s UnHate Foundation has been supporting U.N. Women in its advocacy on ending violence against women for the past two years through advertising and social media campaigns.

“We hope to expand the partnership and collaboration in the future,” she added.

Asked about Benetton’s role in advocating U.N. causes, Mariarosa Cutillo, Corporate Social Responsibility Manager at Benetton Group in Milan, told IPS the main reason is “because, first of all, this is an integral part of the DNA of our company, which has always been in the frontline – often in provocative and very progressive ways – on social issues, including the fight against any form of intolerance and discrimination.”

She pointed out this approach has been consolidated through social projects and communication campaigns, and has been translated also through the establishment of the UnHate Foundation.

Since 2011, the Foundation representing one of the arms of the company has developed social programmes to fight against hate in all its forms, while supporting youth leadership.

“We believe that youth can make a difference, especially in the achievement of the post 2015 agenda: but giving voice to them is not enough. It is important to give new generations the tools to make a change.”

With the UnHate news initiative, in partnership with UNAI/DPI, “we activated youth and gave them a possibility to concretely develop projects on human rights and development.”

Cutillo also cited “another outstanding example of successful support and activation of youth promoted by UnHate Foundation, which is the ‘Unemployee of the Year’ initiative through which the Foundation financed 100 projects and start-ups submitted and implemented by youth coming from all over the world in 2012.”

Unemployee of the Year celebrated young people’s ingenuity, creativity, and their ability to create new smart ways of addressing the problem of unemployment.

In general, she said, “putting people at the centre of our activities is one of the key points of Benetton Group sustainability strategy, of which UnHate Foundation is one of the assets.”

She described it as an example of private/public partnership that can work in an innovative way, by activating new generations and giving them the means to become leaders of change.

Asked if Benetton is planning to get involved in any other U.N. sponsored events in the future,

Cutillo told IPS: “We are presently exploring further joint possible collaboration programmes for the future with UNAI/DPI.”

She also said Benetton has a record of 20 years of cooperation, in different ways, with the United Nations.

More than ever before, “Benetton finds the United Nations as a most crucial partner within the stakeholders’ engagement of our present sustainability strategy.”

She said she sees partnerships with U.N. agencies as “a mutual growth process in our respective roles, where we can bring an active contribution to the achievement of the U.N.’s Sustainable Development Goals (SDGS) by putting in place partnerships that can bring an innovative approach and a real, concrete impact.”

Edited by Kitty Stapp

The writer can be contacted at thalifdeen@aol.com

Macharia Kamau, Permanent Representative of the Republic of Kenya to the U.N., addresses a press conference on the agreement achieved on 2 August by Member States on the outcome document of the United Nations Summit to adopt the post-2015 development agenda. Credit: UN Photo/Mark Garten

By Thalif Deen
UNITED NATIONS, Aug 3 2015 (IPS)

After more than two years of intense negotiations, the U.N.’s 193 member states have unanimously agreed on a new Sustainable Development Agenda (SDA) with 17 goals — including the elimination of extreme poverty and hunger — to be reached by 2030.

At a press briefing Monday, Ambassador Macharia Kamau of Kenya, one of the co-facilitators of the intergovernmental consultative process, told reporters the implementation of the agenda could cost a staggering 3.5 trillion to 5.0 trillion dollars per year.“Women and girls everywhere have much to gain from the SDGs. But to make this a reality, we have to keep pressure on governments to follow through on their commitments." -- Shannon Kowalski

This looks like “an astronomical figure”, he said, compared with the hundreds of billions of dollars – not trillions – the United Nations has been traditionally seeking for development aid.

“It is ambitious, but not unattainable,” he said, and could come mostly from domestic resources, both public and private.

“All countries have to rise to the occasion,” he said, adding that it was imperative for the business sector to get on board.

Still, the U.N. Under-Secretary-General for Economic and Social Affairs Wu Hongbo of China struck a more cautious note when he told reporters “it will be very difficult to give specific figures.”

But all 193 member states, he said, are expected to mobilise domestic sources to help attain the 17 Sustainable Development Goals (SDGs). https://sustainabledevelopment.un.org/post2015

The SDGs are a successor to the eight Millennium Development Goals (MDGs), which were approved by heads of state in 2000, and will end in December this year.

The new goals, which will be part of the U.N.’s post-2015 development agenda and to be approved at a summit meeting of world leaders Sep. 25-27, cover a wide range of political and socio-economic issues, including poverty, hunger, gender equality, industrialisation, sustainable development, full employment, human rights, quality education, climate change and sustainable energy for all.

Jens Martens, director of the Bonn-based Global Policy Forum, who has been closely monitoring the negotiations, told IPS the new Sustainable Development Agenda is a compromise and the result of a painful consensus building process.

“The new Agenda is unique, as it is universal and contains goals and responsibilities for all countries in the world, including the rich and powerful,” he noted.

The Agenda addresses the raising inequalities within and among countries and the enormous disparities of opportunities, wealth and power, Martens pointed out.

Some of the new Sustainable Development Goals (SDGs) are highly ambitious, like the first goal to end poverty in all its forms everywhere.

However, the Agenda is far less ambitious when it comes to the means of implementation, he warned.

“The implementation of the SDGs will require fundamental changes in fiscal policy, regulation and global governance. But what we find in the new Agenda is vague and by far not sufficient to trigger the proclaimed transformational change. But goals without sufficient means are meaningless,” he declared.

Bhumika Muchhala, senior policy analyst, finance and development at the Third World Network, told IPS the SDGs are indeed significantly more ambitious than the MDGs, but that much of this money is going to come from two key sources.

One, private money, through the “multi-stakeholder partnerships” that the U.N. has enshrined in the SDG Goal 17 as well as through various other processes, such as the Sustainable Energy for All initiative or the Global Financing Facility.

And second, from domestic money straight from developing country coffers, as no new international money is being committed.

She said the glaring absence of any intergovernmental process or model of governance over these proliferating multi-stakeholder partnerships renders them void of accountability and transparency, much less rigorous due diligence practices such as ex-ante and independent assessments, monitoring and oversight and third-party evaluation processes.

Such provisions and principles, she noted, are even integrated into the World Bank Group’s architecture, where the Ombudsman and even the IEO (Independent Evaluation Office) in the IMF serve as monitoring agencies.

For example, it has been demonstrated that the decision-making taking place in a fund like the Global Financing Facility will be done behind closed doors, by a small group of elite financial investors and private sector actors who contribute to the Facility, she added.

Shannon Kowalski, Director of Advocacy and Policy, International Women’s Health Coalition, told IPS the SDGs signal a major step forward, especially for women and girls.

With this new framework there is potential to really change the game and advance gender equality—which has been recognised as absolutely essential to sustainable development, she added.

“Women and girls everywhere have much to gain from the SDGs. But to make this a reality, we have to keep pressure on governments to follow through on their commitments. In the end, the promise of this historic development agenda is really up to us,” Kowalski declared.

Ian Koski, a spokesperson for the ONE Campaign, said the new global goals are a major landmark in the effort to end extreme poverty.

They lay out a global contract for a world where nobody lives in hunger or dies of preventable diseases, and while their formal adoption in September will rightly be cause for celebration, goals alone will not end poverty, he said.

It’s going to take a significant amount of hard work to turn these aspirations into reality. It’s going to take national blueprints for delivery that will improve the lives of the poorest people and the poorest countries, he cautioned.

“The monitoring of the goals will need a sharp focus on accountability, backed by investments in data collection and use so that citizens have the information they need to ensure that leaders keep their promises,” Koski declared.

Secretary-General Ban Ki-moon said the new development agenda “encompasses a universal, transformative and integrated agenda that heralds an historic turning point for our world.”

“This is the People’s Agenda, a plan of action for ending poverty in all its dimensions, irreversibly, everywhere, and leaving no one behind. It seeks to ensure peace and prosperity, and forge partnerships with people and planet at the core.”

He said the integrated, interlinked and indivisible 17 Sustainable Development Goals are the people’s goals and demonstrate the scale, universality and ambition of this new Agenda.

Ban said the September Summit, where the new agenda will be adopted, “will chart a new era of Sustainable Development in which poverty will be eradicated, prosperity shared and the core drivers of climate change tackled.”

Deon Nel, international acting executive director for conservation at World Wide Fund for Nature (WWF) said: “We congratulate negotiators on their bold action. This is an essential move toward realizing our dream of shaping a world where people, planet and prosperity come together.”

He said SDGs are universal goals that will commit all countries to take action both within their own borders and in support of wider international efforts.

Individual national commitments must add up to a worldwide result that helps all people and ensures a healthy environment.

He said the new development plan represents significant improvement from the U.N.’s MDGs as it recognises the interlinkages between sustainability of ecosystem services, poverty eradication, economic development and human well-being.

Edited by Kitty Stapp

The writer can be contacted at thalifdeen@aol.com

By Soren Ambrose
NEW YORK, Jul 27 2015 (IPS)

The final round of negotiations on the Sustainable Development Goals – the successor to the Millennium Development Goals, due to be inaugurated in September at the U.N. General Assembly – is now underway in New York.

Courtesy of Soren Ambrose/ActionAid

The United Nations and many member governments want to conclude the debates by the end of July, so that there will not be open debate during the SDG Summit. But reports indicate that the atmosphere in the room is one of seething distrust.

That’s because of what happened during the Financing for Development (FfD) conference in Addis Ababa, Ethiopia last month.

The developing countries – those grouped together in the “G77,” which 50 years after its founding actually has 134 members – were pushing a proposal for a universal intergovernmental organisation, within the U.N., which would have as its mandate reform and maintenance of the international tax system.

While this proposal would not have immediately remedied any of the myriad ways that corporations dodge taxes in developing countries, it would be a decisive change to the system that has allowed such activities to flourish.

To the extent that there are international rules, or standards and guidelines, on taxation now, they are proposed and elaborated by the Organization for Economic Cooperation & Development (OECD), a club of 34 of the world’s richest countries. Every once in a while they make a show of consulting those other 134 countries, but those others never actually get a vote.Ultimately it’s the pressure of the people which will force their governments to be responsible. The movement to stand up to those who have hijacked our power is building.

In the new proposed way of making decisions on international tax rules, every country would have an equal voice and equal vote. This fight matters is because developing countries are confronting the need to change how the rules are made, and who makes the rules.

Until they manage that, they will always, at best, be running to stay in place. Changing who makes the rules is a necessary, although not sufficient condition, for creating permanent change.

Taxation is vital because wealthy companies and individuals get and stay rich by using a portion of their considerable resources to hire lawyers and accountants to guide them in dodging the taxes they should be paying in the countries where they excavate, grow, or purchase their raw materials, assemble their products, and make an increasing proportion of their sales.

If they don’t have such staff in-house, they can hire the services of big accounting firms for whom this is the most lucrative activity.

Most big companies manipulate “tax treaties” between countries and tax havens like Switzerland, Mauritius, and the Cayman Islands to create legal fictions that exempt them from paying most of the taxes they owe.

What they do is usually not technically illegal, because of the impossibility of keeping up with the tactics of the armies of experts dedicated to avoiding taxes. But neither is it quite ethical.

This deprives countries of the revenue – to the tune of at least 100 billion dollars every year – that they need to fund development, and ensures the perpetuation of the concentration of wealth in the hands of a very few. That wealth translates to power – a veritable global plutocracy.

The OECD, to be fair, has made some moves to clamp down on the most egregious forms of tax avoidance, including their “base erosion and profit shifting” (BEPS) process begun in 2013.

The corporate lawyers and accountants were a little nervous about BEPS, but with the process winding up, it appears that any reforms it demands will not be manageable. The promises at the outset of the process to include developing countries never amounted to much.

The FfD process in the U.N. was, of course, universal. The U.N. and national governments usually like to have the “outcome document” finalised before a summit meeting. The prospect of a messy negotiation with thousands of advocates just outside the door makes them nervous.

But after months of negotiations in New York and a series of missed deadlines, the big debate over the tax body was not resolved. The ministers would go to Addis facing open negotiations.

Bolstered by the support of hundreds of civil society groups, the G77 governments – a group that has to accommodate the interests of very disparate countries – held together. Three BRICS countries – South Africa as the chair of the G77, along with India and Brazil – were vocal actors on the side of the developing countries, something they can’t always be relied on to do as they ascend the global power ladder.

With negotiators starting to meet before the formal start of the meetings on July 13, there were several days filled with ever-shifting rumours. But on the evening of July 15, the eve of the scheduled end of the conference, the announcement came: there would be an outcome document little changed from the unsatisfactory draft they brought from New York.

Promises were made to expand the resources and prestige of the existing U.N. Committee of Tax Experts, but nothing more. No universal membership, and no mandate for reform.

The G77 held out to the end. But the rich countries, led by the United States with the steady support of the European Union, Canada, Japan, and Australia, refused to give up the regime of loopholes and havens and double-dealing that adds up to billions in lost revenue every year.

Make no mistake, ordinary people in rich countries also lose out as corporations dodge taxes. But with their territories serving as the leading facilitators of tax avoidance in the world, their governments showed they want the present system to endure.

The current global hyper-capitalism now puts no constraints on capital. Unlimited profits, unlimited wealth, and unlimited power have been accruing to the finance industry and the wealthy corporations and individuals it serves for over 40 years.

The rich countries’ politicians not only put up with it, they tout the “private sector” as the panacea for development in poor countries, with nearly no evidence to support them.

And at home, they cut public services and impose austerity, explaining that government just can’t afford to serve the people. Their priority has been corporations’ and investors’ bottomless appetite for profit and power.

As my colleague Ben Phillips has written about the FfD, it’s actually good news that the rich countries had to put an ugly stop to the negotiations, with barely a face-saving compromise to point to. Usually they manage to find a way to assign the blame to someone else.

Forcing them to show their hand is valuable; it’s clear that those making the rules are far more identified with a powerful few than with the public they claim to serve.

The next step is at the SDG Summit at the end of September, at the time of the annual U.N. General Assembly meetings. There we will learn whether and to what extent the developing countries will stand up to those who have monopolised power for so long. If they do, we may be on the road to reversing parts of the system that perpetuates the status quo.

Whatever happens, we aren’t going anywhere. Civil Society won’t change this global dynamic by attending these conferences, or through polite lobbying. We will have to endure many more meetings, and more setbacks.

But ultimately it’s the pressure of the people which will force their governments to be responsible. The movement to stand up to those who have hijacked our power is building.

Edited by Kitty Stapp

Excerpt:

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

By Bhumika Muchhala
ADDIS ABABA, Jul 23 2015 (IPS)

The United Nations is the only universal forum that connects systemic issues to the global partnership for development. The latter recognises North-South cooperation based on historical responsibility and varying levels of development and capacity among member states of the U.N.

And there is a vital acknowledgement of the global rules and drivers that determine national policy space for development.While prospects are uncertain for now, what is increasingly clear is the stark fact that the geopolitical offensive in the U.N. has not abated. If anything, it has become even more pronounced.

With regard to such systemic reforms, the Addis Ababa outcome on Financing for Development (FfD) explicitly ignores a landmark initiative in the U.N. itself to establish an international statutory legal framework for debt restructuring.

Instead, it reaffirms the dominance of creditor-led mechanisms, such as the Paris Club, whose inequitable governance was criticised in the Doha Declaration of 2008.

The Addis outcome also welcomes existing OECD and IMF initiatives which do not address the scale of debt problems afflicting many developing countries today, such as Jamaica, which according to its finance minister’s intervention in Addis Ababa, won’t be able to finance its SDGs until its external debt can achieve sustainability in 2025.

Clearly, servicing creditors has to precede development goals. Reversing this order by incorporating national development financing needs into debt sustainability analyses was neglected by most member states in the FFD negotiations.

In spite of the global recognition that capital controls are crucial to developing countries ability to protect themselves from financial crises, the outcome document demotes the use of “capital flow management measures” as a last resort “after necessary macroeconomic policy adjustment.”

This is a regression from the 2002 Monterrey Consensus, which recognised that “Measures that mitigate the impact of excessive volatility of short-term capital flows are important and must be considered.” Financial regulations, particularly on derivatives trading, goes unheeded.

Similarly, the Addis outcome makes no call for special drawing rights (SDR) allocations. Again, this is a step back from Monterrey, which addressed SDR allocations in two clauses. SDR allocations, if carried out on the basis of need, could serve as a development finance tool by boosting developing countries foreign exchange reserves without creating additional dependency on primary reserve currencies.

Unlike most global economic arenas, FfD has the mandate to address international monetary system reform in a development-oriented manner. The Addis outcome, again, missed this chance entirely.

Despite these critical retrogressions, there are two beacons of light in the Addis outcome: the establishment of a Technology Facilitation Mechanism (TFM) in the UN that supports SDG achievement, and an institutionalized FFD follow-up mechanism that will involve up to five days of review every year to generate “agreed conclusions and recommendations.”

However, this follow-up forum is to be shared with the review of MOI for the post-2015 development agenda, going against developing countries call for the FFD follow-up to be distinct and independent from that for the post-2015 development agenda in order to maintain focus on the specificities of the FFD agenda.

While the TFM has positive potential, especially if it address intellectual property rights and endogenous technological development in developing countries and does not become a platform to facilitate the ‘green economy’ through the , it is at the same time not tantamount to the financing items that comprise the development agenda. As such, the TFM helps obscure the paucity of political ambition on the FFD agenda.

A crisis of multilateralism

Perhaps the most sordid mark of a process that occurred in bad faith is the fact that negotiations never transpired in Addis Ababa. There was no official plenary, no proposals articulated and no document projected onto a screen to amend.

Instead, what took place over four days in Addis Ababa was a behind-the-scenes pressure campaign exerted by the most powerful countries onto most developing countries. One developing country delegate revealed that the pressure included bullying and blackmailing to silence many developing countries who can’t afford to be politically defiant.

Another delegate disclosed that he had never before experienced such an absence of transparency within the U.N. Some observers commented that what transpired in Addis Ababa was akin to a ‘Green Room’ style of discussions, where private talks are held in small groups without any gesture of openness or transparency.

A central strategy of developed countries was the distortion of developing country narratives and the creation of new narratives to undermine the longstanding arguments of developing countries. Throughout the FFD negotiations in New York, the European Union (EU) created a narrative of ‘the world has changed.’

They argued that developing countries’ emphasis on international public finance as the primary source for financial resources and developing countries’ red line on the Rio principle of CBDR does not reflect a world that has changed since Monterrey in 2002.

Much of the FfD text is still premised on an outdated North-South construct, the EU said, which does not reflect the complexity of today’s world. Germany reinforced the EU’s position, adding that the G77’s positions do not consider the reality that emerging economies are now capable of taking on some of the financing burdens for development.

In response to this challenge laid on middle-income countries, India provided a succinct response. India pointed out that the 30 richest countries of the world account for only 17 percent of the global population, but over 60 percent of global GDP, more than 50% of global electricity consumption and nearly 40 percent of global CO2 emissions.

The UN report on “Inequality Matters – World Social Situation 2013,” said that in 2010, high-income countries generated 55 percent of global income, while low-income countries created just above 1 percent of global income even though they contained 72 percent of the global population. India clarified that despite the relatively faster rates of growth in developing countries, international inequality has not fallen.

The above UN report on inequality shows that that excluding one large developing country (e.g. China), the Gini coefficient of international inequality was higher in 2010 than as compared to 1980. India concluded that these figures attest to the fact of the North-South gap, saying that member states will be doing themselves a disservice if reality is misrepresented.

Implications for post-2015 and climate change

The ways in which key words such as “transformative,” “ambitious,” “rule of law” and “enabling environment” were used, or misused, by developed country negotiators in the FFD negotiations have made their developing country counterparts wary of the gap between actual meaning and rhetorical application.

The phrase ‘enabling environment’ is used by developing countries to refer to an enabling environment for development. This involves development-oriented reforms in the international financial and trade architecture, such as addressing unfair agricultural subsidies in developed countries or pro-cyclical macroeconomic conditions attached to financial loans.

However, developed countries also use the phrase ‘enabling environment’ with equivalent vigor. Except that they are referring to an enabling environment for private investment, such as business-friendly taxes and labour market deregulation.

The experience of the FfD negotiations suggests that when these terms are tossed about in the post-2015 and COP 21 negotiations, they will be associated with limiting the policy space of developing countries. For the most part, this limitation is linked to facilitating private sector activity through multi-stakeholder or public-private partnerships that involve shared financing between multiple entities while most decision-making remains in the seat of the private sector.

Meanwhile, an implicit ebbing, if not a reneging, takes place on the public and international financing obligations of developing countries. Consequently, financing and decision-making shifts to institutions where developing countries have to compete with representatives of the private sector and private foundations for voice and representation.

As the last two weeks of post-2015 development agenda negotiations conclude in New York, the repercussions of the FFD experience remain to be witnessed. Will developing countries unite with renewed strength and determination to bring multilateralism back? Or will the retrogression in commitments and actions induced by Addis Ababa drag the post-2015 outcome down to its lowly ambition?

While prospects are uncertain for now, what is increasingly clear is the stark fact that the geopolitical offensive in the U.N. has not abated. If anything, it has become even more pronounced.

In fact, the current geopolitical dynamics in the U.N. renders a troubling irony to the international community as it embarks on its most ambitious sustainable development paradigm for the next 15 years.

Part of this Op-Ed can be read here.

Edited by Kitty Stapp

Excerpt:

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

By Bhumika Muchhala
ADDIS ABABA, Jul 22 2015 (IPS)

The third Financing for Development (FfD) conference in Addis Ababa concluded last Thursday, July 16, in bad faith as developed countries rejected a proposal for a global tax body and dismissed developing countries’ compromise proposal to strengthen the existing U.N. committee of tax experts.

Usually, when large conferences end after conflicts and climax in intergovernmental negotiations, there is a sense of exhilaration. This did not happen in Addis Ababa.The hallmark failure of the 3rd FfD conference is the missed opportunity to create an intergovernmental tax body, despite the persistent push into the 11th hour by a critical mass of developed countries led by India and Brazil.

Instead, there was deep disappointment amidst developing countries and many U.N. staff and outrage amidst civil society who had been following the FfD process over the last year. But among developed countries, there was relief, at best, or complacency, at worst. As the representative of Japan said in the final plenary, many developed countries, including Japan felt a sense of relief.

As the civil society coalition on FfD stated in its reaction to the outcome document, a fundamental opportunity was lost to tackle structural injustices in the current global economic system and ensure that development finance is people-centred and protects the environment.

Not only does the Addis Ababa outcome not rise to the world’s multiple crises, including finance, climate and distribution, it lacks the necessary ambition, leadership and actions to be associated with the post-2015 development agenda.

Indeed, the outcome is wholly inadequate to support the operational Means of Implementation (MOI) for the Sustainable Development Goals (SDGs), and exposes an unbridged gap between the rhetoric of aspirations in the post-2015 development agenda and the reality of the void of actions in the Addis Ababa outcome, which does not commit to new financial resources let alone scaling up existing resources.

In light of the agreements in the Monterrey Consensus and the Doha Declaration (in the first and second FfD conferences), the Addis Ababa Action Agenda displays a retrogression from the past, which undermines the FfD mandate to address international systemic issues in macroeconomic, financial, trade, tax and monetary policies.

The hallmark failure of the 3rd FfD conference is the missed opportunity to create an intergovernmental tax body, despite the persistent push into the 11th hour by a critical mass of developed countries led by India and Brazil.

Such a global tax body, that would enable the U.N. to have a norm-setting role in tax cooperation at an equal capacity to that of the current monopoly of the OECD, would have been a meaningful advancement in global economic governance and domestic resource mobilisation.

The intransigence of developed countries against such a key step demonstrated their unwillingness to democratise global economic governance and their disregard for FfD and U.N. standards of “good governance at all levels” and “rule of law.”

The core argument of developing countries is that given the reality that they are most affected by illicit financial flows, tax evasion and avoidance and transfer mis-pricing by large corporations, they should have an equal say at an international negotiation table on tax rules.

Given the glaring absence of new financial commitments, let alone the assurance of new and additional financial resources for climate and biodiversity finance, the majority of funds needed to finance the SDGs will come out of domestic budgets.

However, ample research shows how hundreds of billions of dollars are extracted out of the corporate tax purse of developing countries, particularly in the resource-rich African continent.

This is due to the very loopholes and tricks in the international tax architecture that is defined and dominated by the OECD. A global tax body could have shifted this power imbalance and delivered some fairness to global political economic structures.

The Addis Ababa outcome legitimises the predominance of private finance through blended finance and public-private partnerships (PPPs). This is problematic precisely because it is unattached to accountability measures or binding commitments based on international human and labour rights, and environmental standards.

A fast-growing body of evidence substantiates global concern over an unconditional support for PPPs and blended financing instruments. Without a parallel recognition of the developmental role of the state and robust safeguards to enable the state to regulate in the public interest, there is a great risk that the private sector undermines rather than supports sustainable development.

The Addis outcome’s blind trust in PPPs and blended finance is premised on the notion that such arrangements will lower the risk for private investment. The outcome makes no mention of the critical importance of inclusive and sustainable industrial development for developing countries, for the objectives of supporting economic diversification, adding value to raw materials and ascending the value chain, improving economic productivity and developing modern and appropriate technologies.

Civil society had hoped that being in Addis Ababa governments would remind themselves of the African Union’s Agenda 2063 based on shared prosperity through social and economic transformation.

Similarly, there is no critical assessment of trade regimes. Instead of safeguarding policy space, the Addis outcome fails to critically assess international trade policy in order to provide alternative paths to commodity-dependence, eliminate or at least review investor-state dispute settlement clauses, and undertake human rights impact and sustainability assessments of all trade agreements to ensure their alignment with the national and extraterritorial obligations of governments.

Furthermore, the additional steps to address gender equality and women’s empowerment seem to speak more to “Gender Equality as Smart Economics” than to women and girls’ entitlement to human rights and show a strong tendency towards the instrumentalisation of women by stating that women’s empowerment is vital to enhance economic growth and productivity.

The core competencies of FfD are comprised of international systemic issues such as capital flows, external debt, trade, financialisation and the monetary system.

The ability of the U.N. to address systemic issues is routinely challenged by developed countries who argue that these issues are outside the domain of the U.N.

Power and control over systemic issues and reforms are thus kept exclusively in the rich countries’ domain of the Bretton Woods Institutions (the IMF and World Bank), the G7 and the G20.

However, not only does the U.N. have a longstanding history in substantively analysing and proposing reforms on systemic issues, it is also the only universal forum where all countries, from the smallest island nation to the poorest landlocked country, have a voice and a vote in the General Assembly.

Part Two can be read here.

Edited by Kitty Stapp

Excerpt:

Jomo Kwame Sundaram. Credit: FAO

By Jomo Kwame Sundaram
ROME, Jul 20 2015 (IPS)

By the end of this year, the 15-year time frame for the Millennium Development Goals will end, with good progress on several indicators, but limited achievements on others.

But public interest has already moved on to the post-2015 Sustainable Development Goals.Recent experience has amply demonstrated that investment and growth alone cannot eliminate hunger and poverty by 2030.

Despite uneven success with the MDGs, the level of ambition has risen, with SDG1 seeking to eradicate poverty and SDG2 to eliminate hunger and malnutrition, all by 2030. Last week, the Addis Ababa Action Accord began with: “Our goal is to end poverty and hunger.”

Almost four-fifths of the world’s poor live in rural areas, which have less than half the world’s population. Hence, raising rural incomes sustainably is necessary to achieve the first two SDGs.

Ending poverty and hunger sustainably will need a combination of social protection and ‘pro-poor’ investments.

As food costs 50 to 70 percent of the World Bank’s poverty line income, poverty and hunger are intimately inter-related, although poverty and hunger measurement generates different numbers.

Agricultural investments generally have the biggest impact on reducing poverty, all the more so, if pro-poor, as well as designed and implemented well. Yet, while farmers themselves are the major source of agricultural investments, most formal financial institutions discriminate against them, especially smallholder family farmers, landless tenants and labourers, with little bankable collateral to offer.

Recent experience has amply demonstrated that investment and growth alone cannot eliminate hunger and poverty by 2030. Most developing countries have long suffered high unemployment and underemployment, with youth unemployment growing rapidly. With current economic prospects uncertain, especially after the recent slowing of the world economy, and widespread insistence on fiscal austerity and economic liberalisation, things are likely to get worse.

With sufficient political will and fiscal resources, poverty and hunger can be ended very quickly with adequate, well-designed and sufficient social protection, in fact, well before 2030. (This is why the G77 group of developing countries insisted last week on strengthening the U.N. committee on international tax cooperation — surely of interest to most developed countries as well.)

The world can currently produce enough food to feed everyone, but most of the hungry simply do not have the means to access enough food.

Social protection can not only ensure adequate food consumption, but also enable investments by those assisted to enhance their nutrition, health and other productive capacities, thus raising their incomes and, in turn, further increasing investments to expedite the transition from the vicious cycle of poverty and hunger, in which they have been trapped, to a more virtuous cycle free of want.

According to a recent World Bank report, a billion people in 146 low (LICs) and middle income countries (MICs) currently get some form of social protection. Yet, 870 million of the world’s extreme poor – most recently estimated at 836 million for 2015 – remained uncovered, mainly in the countryside. Not surprisingly, the greatest shortfalls are in the LICs.

In the LICs, 47 percent of the population are the extreme poor, with social protection covering less than a tenth of the population. In the lower MICs, social protection reaches about a quarter of the extreme poor, but half a billion remain uncovered. In the upper MICs, about 45 percent of the extreme poor is covered by social protection.

Last week, the Director-General of the Food and Agricultural Organization (FAO), and his counterparts from the International Fund for Agricultural Development (IFAD) and the World Food Programme (WFP), presented their new estimates on investments for sustainable hunger and poverty eradication by 2030.

While some may quibble over details, they made the compelling case that ending hunger and poverty in a sustainable way is eminently viable, feasible and affordable, costing about 0.3 per cent of world economic output in 2014. Most MICs can afford the needed financing, but most LICs face serious fiscal constraints and will need budgetary support and technical assistance.

Enough social protection could end hunger and poverty very quickly, but it is not sustainable without higher earned incomes for those of the extreme poor able to work. An early big investment push will reduce longer term financing costs besides providing a much needed boost to aggregate demand in the face of the world economy’s ongoing economic doldrums.

The joint proposal by the Rome-based U.N. agencies not only shows that with the requisite political commitment, we can end hunger and poverty very quickly while creating the conditions for keeping both permanently in the catacombs of history.

Despite the poor compromise in Addis Ababa, quick real progress to enhance countries’ fiscal capacities through more effective international tax cooperation under U.N. auspices can be the third Financing for Development conference’s biggest contribution to this effort.

Edited by Kitty Stapp

Excerpt:

By Savio Carvalho
LONDON, Jul 16 2015 (IPS)

Corporate lobbyists are unusual guests at development meetings, but when the United Nations held its Financing for Development conference in Addis Ababa this week to decide who pays for its new “Sustainable Development Goals”, some governments laid out the red carpet for the private sector.

Photo Courtesy of Amnesty International

Unfortunately, the conference failed to agree on any mechanism for making sure the role of companies in development is kept transparent and accountable.

Some see giving companies a bigger role in development as a simple win-win. Governments get access to financing to take the pressure off aid budgets and come up with the 2.5 trillion dollars needed to respond to poverty and climate change, while meeting the housing, health, education and infrastructure targets in the post-2015 agenda.

On the other hand, companies get a potential say in policy making and access to juicy public contracts.

But before governments allow companies to shoulder significant responsibility for fighting poverty, climate change and other global challenges, they will have to convince critics who warn that they are putting the fox in charge of the henhouse.

While getting companies involved in development has the potential to provide important sources of funding to improve lives, experience equally shows that when companies are not held to account, people and communities can be seriously harmed. If private sector involvement in development is going to pay off for the people who need it and not just corporate shareholders, states have to leave impunity at the door.

Increasing the role of the private sector in the delivery of crucial public services such as water, education and health is fraught with risk. On July 2, the U.N. Human Rights Council warned that without proper regulation the privatisation of education could put the right to education at risk for countless children, especially if it means those children who cannot afford to pay lose out on quality education.

Around the world, Amnesty International has documented too many cases of marginalised communities waiting to see justice done, sometimes for decades, for human rights abuses perpetrated after a multinational company rolled into town. States who seek the involvement of the private sector in advancing development goals without putting effective safeguards in place, forget these cases at their peril.

The more than 570,000 victims of the 1984 Bhopal toxic gas leak, India’s worst industrial disaster, are still waiting for justice more than 30 years later. The firm responsible, Union Carbide, is now owned by U.S.-based Dow Chemical. A Bhopal court is pursuing criminal charges against Dow but the company has failed to even show up to multiple hearings over the last year. Meanwhile, survivors have tried and failed to seek justice in both India and the U.S.

While Union Carbide paid some compensation to those affected under a 1989 settlement agreement with the Indian government, it was wholly inadequate to cover the harm caused and there were serious issues with the way it was paid out to victims. At the time, the Indian government lacked the leverage to effectively hold a powerful global company to account.

Foreign companies operating in countries that are rich in natural resources and poor in regulation can reap huge profits at the expense of vulnerable people.

Earlier this year Amnesty International warned that Canadian and Chinese mining giants have profited from, and in some cases colluded, with  human rights abuses by the Myanmar authorities to exploit one of the country’s most important copper mines, with thousands of people being illegally driven off their lands, serious environmental risks going unchecked, and peaceful protest brutally suppressed.

Far from investigating the abuses, one multinational company involved used an opaque trust fund in the British Virgin Islands to divest its investment, in a manner which possibly breached economic sanctions applicable at the time. Reducing their exposure to the problem, rather than fixing it, has often been the mantra of companies faced by scandalous abuses.

For residents of Niger Delta, the legacy of half a century of oil production in Nigeria is the devastation of their farming and fishing lands. Today the oil spills continue unabated. In Shell’s operations alone, there were 204 spills in 2014. Shell blames sabotage and theft, but old pipelines and badly maintained infrastructure are a major cause of pollution.

This year one local community in Bodo has finally won 80 million dollars in compensation from Shell for the impacts of a massive spill, but only after a lengthy court battle in the UK and years of false claims by the company.

These are cautionary tales world leaders should consider as they plan to entrust the private sector with responsibility for funding and carrying out development projects. In all these cases, corporate political and financial clout created barriers to local communities accessing justice and accountability.

Governments have watched corporate political power grow for decades, often doing their best to get out of its way instead of properly regulating it to ensure that human rights are not violated.

Corporate lobbyists, meanwhile, have done everything possible to ensure that the important international standards addressing these risks remain entirely voluntary.  Voluntary codes of conduct and standards that have no enforcement mechanism ultimately lack the teeth to really change corporate behaviour, and when abuses occur, they can leave victims with little or no hope of remedy.

If private sector involvement in development is going to pay off for the people who need it and not just corporate shareholders, states have to leave impunity at the door. Companies that want to make a profit through work on sustainable development must be required to show they have a clean track record when it comes to human rights.

They must demonstrate that they have internal systems that ensure they do not cause human rights abuses. They must disclose information to communities about any local operations that impact them, as well as any payments they make to the authorities.

Crucially, governments must be ready to hold companies to account when abuses happen. The failure of all but five countries to meet the U.N.’s official aid targets is a crying shame, but if filling the gap by giving the private sector free rein leads to human rights abuses in already vulnerable communities, it will only rub salt in the wounds that sustainable development is supposed to heal.

Edited by Kitty Stapp

Excerpt:

Secretary-General Ban Ki-moon (left) addresses a press conference before departing from Addis Ababa, after attending the Third International Conference on Financing for Development. At his side is Wu Hongbo, UN Under-Secretary-General for Economic and Social Affairs. Credit: UN Photo/Eskinder Debebe

By Thalif Deen
UNITED NATIONS/ADDIS ABABA, Jul 15 2015 (IPS)

Despite high expectations, the third International Conference on Financing for Development (FfD) ended on a predictable note: the United Nations proclaimed it a roaring success while most civil society organisations (CSOs) expressed scepticism over the final outcome.

Hours after the conclusion of the conference in the Ethiopian capital, the United Nations trumpeted the Addis Ababa Action Agenda (AAAA) as a “ground-breaking agreement that provides a foundation for implementing the global sustainable development agenda that world leaders are expected to adopt this September.”“The outcome will not deliver the reforms we need in areas like tax, that most in civil society had hoped for and, that are needed to increase the resources available for development." -- Dr. Danny Sriskandarajah

U.N. Secretary-General Ban Ki-moon sounded optimistic when he said the agreement was a critical step forward in building a sustainable future for all since 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.”

But Dr. Danny Sriskandarajah, Secretary-General of the Johannesburg-based CIVICUS, was blunt: “This week we saw a further sign that we are at the beginning of the end of the post-World War II (WWII) development world order.”

Rich countries seem unable or unwilling to increase official aid flows, which stand at a fraction of what they themselves promised years ago, he said.

“We are disappointed that the FfD process has not yielded new resources to fund the investments needed to end poverty or taken meaningful steps to address problems in the international financial system,” he said at the conclusion of the conference Wednesday.

He added: “The outcome will not deliver the reforms we need in areas like tax, that most in civil society had hoped for and, that are needed to increase the resources available for development.”

Asked about the failed proposal for the creation of a global tax body, ActionAid’s international tax power campaign manager, Martin Hojsik, told IPS: “The decision is an appalling failure and a great blow to the fight against poverty and injustice.”

He said it means that developing countries, which are losing billions of dollars a year to tax dodging, are not being given an equal say in fixing unjust global tax rules.

“This lost money could have gone to the provision of education, healthcare and other poverty-reducing public services. While the multinationals prosper, the poor and marginalised will suffer,” he said. “The fight for a fair global tax system should not and cannot falter.”

In a statement released here, Oxfam International said unresolved rigged tax rules and privatised development are the major drawbacks of the FfD outcome.

However, after such tense negotiations there can be no doubt that developing countries’ determination to call for true global tax reform and tax cooperation has been noted, and cannot go unheeded for long.

Oxfam International Executive Director Winnie Byanyima said: “Today, one in seven people live in poverty and Addis was a once in a decade chance to find the resources needed to end this scandal. But the Addis Action Agenda has allowed aid commitments to dry up, and has merely handed over development to the private sector without adequate safeguards.”

She said developing countries held firm in Addis on the need to set up an intergovernmental tax body that would give them an equal say in how the global rules on taxation are designed.

“Instead they are returning home with a weak compromise meaning rigged rules and tax avoidance will continue to rob the world’s poorest people.”

Byanyima said fair taxation is vital in the fight against poverty and inequality.

“Citizens must be able to depend on their own governments to deliver the services they need. But it is just not logical to ask developing countries to raise more of their own resources without also reforming the global tax system that prevents them doing this,” she added.

Eric LeCompte, executive director of the Jubilee USA Network, told IPS “while compromised language on a tax committee was reached, we have the first global agreement that notes the harm of illicit financial flows and calls to stop them by 2030.”

Right now the developing world is losing a trillion dollars a year to corruption and tax evasion, he said, pointing out, “those are resources we need to end poverty.”

In a joint statement released late Wednesday, Global Financial Integrity (GFI), the Africa Progress Panel (APP) and Jubilee USA applauded the global commitment to reduce the massive flow of illicit funds from developing country economies.

For the first time international consensus was reached on the importance of an issue that has been at the forefront of efforts by hundreds of research and development organisations for the last 10 years.

Specifically, the FfD3 Outcome Document requires member states to “redouble efforts to substantially reduce illicit financial flows (IFFs) by 2030, with a view to eventually eliminate them, including by combatting tax evasion and corruption through strengthened national regulation and increased international cooperation.”

Additionally, the final text calls on “appropriate international institutions and regional organizations to publish estimates of IFF volume and composition”

The statement said the ability to measure illicit flows was at the heart of significant disagreement during the FfD3 preparatory negotiations in New York earlier this year with the 132-member Group of 77 developing countries calling for country-level estimates of illicit flow volumes.

In its statement, the United Nations said the Addis Ababa Action Agenda contains more than 100 concrete measures.

It also addresses all sources of finance, and covers cooperation on a range of issues including technology, science, innovation, trade and capacity building.

The Action Agenda builds on the outcomes of two previous Financing for Development conferences, in Monterrey, Mexico, and in Doha, Qatar.

Wu Hongbo, the Secretary-General of the Conference, said, “This historic agreement marks a turning point in international cooperation that will result in the necessary investments for the new and transformative sustainable development agenda that will improve the lives of people everywhere.”

Edited by Kitty Stapp

The writer can be contacted at thalifdeen@aol.com

Jomo Kwame Sundaram. Credit: FAO

By Jomo Kwame Sundaram
ROME, Jul 14 2015 (IPS)

The growth in global interdependence poses greater challenges to policy makers on a wide range of issues and for countries at all levels of development.

Yet, the mechanisms and arrangements put in place over the past three decades have not been adequate to the challenges of coherence and coordination of global economic policy making. The recent financial crises have exposed some such gaps and weaknesses.The U.N. was among the very few warning Mexico in 1994 and the East Asian countries in 1997 that excessive liberalisation threatened crisis.

Reforming the international economic governance architecture, through the United Nations system, can address these problems.

Although sometimes seemingly slow, the U.N. has a clear advantage in driving discussion on reform because of its more inclusive and open governance.

Lop-sided influence in the current international financial system is a principal reason why many countries lack confidence in the existing arrangements. Rebuilding confidence in such arrangements will require that all parties feel they have a stake in the reform agenda.

But the U.N. is also suited to drive the discussion because of its long tradition of reliable work on international economic issues.

The United Nations secretariat has developed and maintained an integrated approach to trade, finance and sustainable development, with due attention to equity and social justice issues.

The ongoing ‘secular stagnation’ has again highlighted the interdependence of global economic relations, exposing a series of myths and half-truths about the global economy.

These include the idea that the developing world has become “decoupled” from the developed world; that unregulated financial markets and the new financial instruments have ushered in a new era of “great moderation” and “stability”; and that macroeconomic imbalances — due to decisions made in the household, corporate and financial sectors — are less dangerous than those involving the public sector.

The U.N. secretariat has long doubted such arguments, and warned that any unravelling of global macroeconomic imbalances would be unruly.

Also, persistent asymmetries and biases in global economic relations have particularly hit developing countries, both emerging and least developed.

Not surprisingly, the U.N. Secretariat has also drawn attention to the close links between the financial crisis and the food and energy crises.

A more integrated approach to handling these threats is needed, particularly to alleviate the downside risks for the poorest and most vulnerable communities.

The U.N. Secretariat has a strong track record of identifying systemic threats from unregulated finance, warning against a misplaced faith in self-regulating markets and offering viable solutions to gaps and weaknesses in the international financial system.

Special drawing rights (SDRs), the 0.7 per cent aid target and debt relief, for example, were all conceived within the U.N. system during the 1960s and 1970s.

From the 1980s, the U.N. secretariat – both in New York and Geneva — have consistently warned against the excessive conditionalities attached to multilateral lending, promoted the idea of rules for sovereign debt restructuring, and cautioned that the international financial institutions were moving away from their traditional mandates of guaranteeing financial stability and providing long-term development finance.

During the 1990s, U.N. agencies warned against the dangers to economic stability, particularly in developing countries, from volatile private capital flows and the speculative behaviour associated with unregulated financial markets.

The U.N. was among the very few warning Mexico in 1994 and the East Asian countries in 1997 that excessive liberalisation threatened crisis.

The U.N. system was also almost alone among international institutions to identify growing inequality as a threat to economic, political and social stability, and insisted early on measures for a fairer globalisation.

Many of these concerns culminated in the 2002 Financing for Development Conference in Monterrey, Mexico.

More recently, the U.N. has insisted on the importance of policy space for effective development strategies and particularly on the need for macroeconomic policies to support long-term growth, technological upgrading and diversification.

Some countries have sometimes resisted such work by the U.N. secretariat.

However, the combination of a strong track record and a core secretariat steeped in its tradition of an integrated approach to policy-oriented research places the U.N. secretariat in the best position to advance current discussions to reform the international financial architecture.

Edited by Kitty Stapp

Excerpt:

Malaria has dreadful health consequences for HIV positive pregnant women and their babies. Sleeping under a net and taking antimalarial pills help HIV positive pregnant women have healthier babies. Credit: Mercedes Sayagues/IPS

By Kitty Stapp
UNITED NATIONS/ADDIS ABABA, Jul 13 2015 (IPS)

Although malaria is both preventable and curable, it still killed an estimated 584,000 people in 2013, the majority of them African children.

According to the World Health Organization (WHO), mortality rates have fallen by 47 percent globally since 2000. But in Africa, a child dies every minute from malaria.

The economic toll is also high: each year, malaria costs the African continent alone an estimated 12 billion dollars in lost productivity, and in some high-burden countries, it can account for as much as 40 percent of public health spending.

As the Third International Conference on Financing for Development (FfD) kicked off Monday in Addis Ababa, Ethiopia, leaders presented a new strategic vision for malaria elimination that calls for doubling current financing by 2020.

“The new 2030 malaria goals – and the 2020 and 2025 milestones laid out in the WHO and RBM [Roll Back Malaria Partnership] strategies – are ambitious but achievable,” said Dr. Pedro Alonso, Director of the WHO’s Global Malaria Programme.

“We must accelerate progress toward malaria elimination to ensure that neither parasite resistance to drugs, mosquito resistance to insecticides, nor malaria resurgence unravels the tremendous gains to date. We can and must achieve even greater impact to protect the investment the global community has made.”

The result of worldwide expert consultation with regions, countries and affected communities, the strategy aims to reduce global malaria case incidence and deaths by 90 percent – compared to 2015 – and eliminate the disease in an additional 35 countries.

Experts at the RBM say that just over 100 billion dollars is needed to eliminate malaria by 2030, with an additional 10 billion to fund research and development of new tools, including new drugs and insecticides.

To achieve the first milestone of reducing malaria incidence and mortality rates by 40 percent, annual malaria investments will need to rise to 6.4 billion dollars by 2020.

“Reaching our 2030 global malaria goals will not only save millions of lives, it will reduce poverty and create healthier, more equitable societies,” said U.N. Secretary-General Ban Ki-moon. “Ensuring the continued reduction and elimination of malaria will generate benefits for entire communities, businesses, agriculture, health systems and households.”

Malaria is caused by Plasmodium parasites. The parasites are spread to people through the bites of infected Anopheles mosquitoes, called “malaria vectors”, which bite mainly between dusk and dawn.

Approximately half of the world’s population is at risk of contracting malaria.

“Investing to achieve the new 2030 malaria goals will avert nearly three billion malaria cases and save over 10 million lives. If we are able to reach these targets, the world stands to generate 4 trillion dollars of additional economic output across the 2016-2030 timeframe,” said Dr. Fatoumata Nafo-Traoré, Executive Director of the RBM.

The fight against malaria has been one of the great success stories of the Millennium Development Goals (MDGs), with more than six million deaths projected to have been averted between 2000 and 2015, primarily of children less than five years old in sub-Saharan Africa.

The new Sustainable Development Goals (SDGs), to be approved by the United Nations in September, offer a fresh opportunity to ramp up funding for the disease and stamp it out for good, experts say.

They note that easing the malaria burden would advance development efforts across sectors by reducing school absenteeism, fighting poverty, increasing gender parity and improving maternal and child health.

Edited by Kanya D’Almeida

As the Third International Conference on Financing for Development opens in the Ethiopian capital, Addis Ababa, Monday, all eyes are on the United Nation’s post-2015 development agenda, billed as the most ambitious and far-reaching poverty eradication plan in the organisation’s history.

On the eve of the conference, on Jul. 10, some of the world’s leading development banks announced plans to extend 400 billion dollars in financing towards the U.N.’s Sustainable Development Goals (SDGs) over a three-year period.

The African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank, World Bank Group (referred to as the MDBs), together with the International Monetary Fund (IMF), have also “vowed to work more closely with private and public sector partners to help mobilize the resources needed to meet the historic challenge of achieving the SDGs”, said a press release issued this past weekend.

Christine Lagarde, managing director of the IMF, announced here in Washington on Jul. 8 that the Fund has decided to increase developing nations’ access to credit to promote sustainable growth.

The changes, approved by the IMF executive board on Jul. 1, will expand concessional facilities – money-lending mechanisms – to developing countries by 50 percent.

More aid will be targeted at poor and vulnerable countries, and the IMF will maintain a zero-percent interest rate on rapid credit facility loans to fragile states and countries hit by natural disasters

Lagarde referred to three major international conferences – including the financing conference underway in Ethiopia, the U.N. summit slated to take place in New York City in September, and the year-end climate negotiations scheduled to be held in Paris – as “rare windows of opportunities” for the international community, including the IMF, to help developing countries achieve the SDGs.

“These three [meetings] combined can help us change the music,” she said. “We have a chance to collectively take a new approach.”

First laid out in the Rio+20 summit in 2012, the SDGs currently comprise 17 goals, ranging from reducing poverty and inequality to combating climate change. They are expected to form the global blueprint from which member states will derive their national policies over the next 15 years.

The goals come on the heels of the Millennium Development Goals (MDGs), eight poverty reduction targets set out in 2000 that will expire by the end of this year.

Many are worried that the SDGs are too broad and may be costly.

A United Nations report by the Intergovernmental Committee of Experts on Sustainable Development Financing released in August 2014 puts the estimate of eradicating extreme poverty in all countries, one of the goals, at around 66 billion dollars annually.

The cost of investments required to achieve “climate-compatible” scenarios may go up to several trillion dollars per year.

United Nations Under-Secretary General for Economic and Social Affairs Wu Hongbo said in an IMF Survey published on Apr. 18 that achieving the SDGs will cost more than the MDGs.

“In addition to eradicating poverty, this agenda will cover economic, social and environmental issues, so huge amounts of financial resources will be required for its implementation,” he said.

Other than international aid, the report calls for the use of private resources, partnerships and innovative mechanisms to finance implementation of the SDGs.

But international aid is still crucial for many least developed countries, especially nations on the African continent and landlocked developing states.

In 1970, a target was set for developed countries to allocate 0.7 percent of their Gross National Income (GNI) as Official Development Assistance (ODA) to developing countries. However, only five developed countries from the Organisation for Economic Cooperation and Development (OECD) have reached the target so far.

ODA is the measure of resource flows to developing countries for economic development and welfare.

Charles Kenny, senior fellow at the Center for Global Development in Washington, D.C. said in a blog post on Jul. 7 that aid flows alone could not float the multi-trillion-dollar price tag of the SDGs.

“The truth is that development is no longer mostly about aid,” he said.

He referred to remittances from migrants living overseas, foreign direct investment and private lending to developing countries as well as domestic government revenues as other lucrative sources of financing.

The IMF has contributed to the goals by providing advice, assistance and lending to the countries.

Lagarde said that the IMF will focus on mobilising domestic revenue, especially through increasing the tax ratios in developing countries. She said that tax ratios in developing countries are below 15 percent in comparison to the OECD average of 34 percent.

“Money raised in that simple, fair and broad-based system and well spent on the right policies can be a game changer,” she said.

Eliminating inefficiency by combating corruption and untargeted subsidies was another IMF goal. Around 30 percent of public spending is lost due to inefficiencies in the public investment process, she said.

“They [developing countries] can’t do it by themselves,” Lagarde said. “If the international community participates in that effort, it will go a lot further.”

Edited by Kanya D’Almeida

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

Gyan Chandra Acharya, Under-Secretary-General and High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (UN-OHRLLS). Credit: UN Photo/Loey Felipe

By Gyan Chandra Acharya
UNITED NATIONS/ADDIS ABABA, Jul 10 2015 (IPS)

Three years ago the United Nations initiated a conversation on a successor to the Millennium Development Goals (MDGs) and how the global community can lay foundations for an ambitious endeavour to eradicate extreme poverty, protect the planet, reduce vulnerability to shocks and ultimately raise the dignity of all humanity.

This conversation is set to result in the adoption of wide ranging targets by heads of state and government when they meet next September at the U.N. General Assembly.We can only measure our success based on how we support the most vulnerable members of the global community by translating all-encompassing aspirations into concrete and life changing realities on the ground.

This is indeed a noble endeavour, as the new agenda will not only continue with the unfinished business of MDGs, but sets the tone for an integrated and comprehensive approach, whose time has come.

Despite the aspirations of the Post-2015 Development Agenda, it must be recognised that the goals and targets will be fully and effectively realised only if we make them inclusive of all.

We can only measure our success based on how we support the most vulnerable members of the global community by translating all-encompassing aspirations into concrete and life changing realities on the ground.

Adopting the right vision is key, but implementation is what makes all the difference. In Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, the capacity and resources to deal effectively with the intertwined challenges of poverty eradication, inclusive and rapid economic growth and environmental sustainability and structural vulnerability are limited.

They need to show a strong and coherent leadership, and it is equally important that the global community steps up to the plate.

The Third International Conference on Financing for Development (FfD) to be held in a few days in Addis Ababa, Ethiopia, represents a real opportunity to address these challenges.

Holding the FfD Conference before reaching agreement on a development agenda for the next 15 years raises the stakes higher. An ambitious and forward looking FfD outcome will set the tone for the adoption of a holistic, transformative and integrated global development framework, with sustainable development at its centre.

Furthermore, owing to this chronology but also because of the centrality of the means of implementation, commitments contained in the outcome document of the FfD Conference will largely determine the degree to which the world, in particular, the most vulnerable countries, will fulfil the aspirations to end extreme poverty, achieve sustainable economic and social development, protect the planet and build resilience to shocks. The fundamental principle of equity demands that their issues remain at the core of our discourse.

A business-as-usual approach will clearly not be enough. Undertaking the investments needed to steer the most vulnerable countries towards sustainable development will require that traditional sources of finance be scaled up and targeted more clearly.

And access to new forms of development finance should be expanded to provide them with a wider pool of resources. LDCs, LLDCs and SIDS must therefore be extended an additional, preferential, concessional and most favourable support in areas such as market access, finance, technologies, know-how and other resources.

Efficient and effective use of these resources will be equally critical. Currently most of the aid distributed in the world does not go to the poorest countries. As the global community meets in Addis, least developed countries are calling for commitments that would channel the equivalent of at least 50 percent of net overseas development assistance to LDCs by 2030.

The world has not only a moral responsibility to ensure that the most vulnerable are sufficiently supported, but also to track where aid spending is going in a transparent and accountable manner.

LDCS will commit themselves to exhibit stronger national leadership and ownership for inclusive and transformative sustainable development. Their institutions and strategies need to be supported for effective delivery of services.

An increase in resources going into productive sectors and infrastructure will be a game changer for them in the medium term. It also creates a stronger base for domestic resource mobilisation. LDCs are asking that commitments already made by development partners are delivered, along with effective market access for their goods and services and an enhanced share of aid for trade.

Integrating sustainability in their development strategies will help build better resilience. Setting up crisis mitigation and a resilience-building fund for LDCs are key to putting vulnerable countries on a positive course for sustainable development through the next fifteen years. This is urgent as climate change, environmental degradation and external shocks are affecting them disproportionately.

Mutual accountability should clearly inform the next development agenda.

These actions will also ensure universal recognition and a stronger voice and participation for LDCs in global decision-making and norm-setting processes.

They will also restore hope to almost 1 billion people living in the Least Developed Countries and send a message that emancipation from a life of deprivation and moving towards a resilient and dignified future is a true possibility.

It will bring economic and social progress to the far corners of the world that have not yet reaped the equitable benefits of globalisation in a truly transformative manner. These countries have the potential to make powerful contributions to a stable and peaceful global order based on shared prosperity.

Of course, these actions have some costs. But these costs should be considered as investments for a better and stable future, and are largely within the existing means of humanity. Global resolve and clear pathways are required. To everything, there is a season, and a time to every purpose.

This is a time for actions, and we have a purpose worthy of our collective commitment. We have a lot at stake. We must not miss this opportunity staring at us in Addis.

Edited by Kitty Stapp

Excerpt:

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

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

By Bhumika Muchhala
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

Excerpt:

By Gunter Nooke
BERLIN, Jul 10 2015 (IPS)

When the three-day conference on Financing for Development begins on Jul. 13 in Addis Ababa, the competitors in this year’s Tour de France will have reached the mountains. They will have already experienced a few spills and will still have many kilometres to go.

A similar situation is facing us with the many important conferences taking place in this important, watershed year for development.

Günter Nooke. Credit: Bundesregierung/Bergmann

The journey began with a successful and financially productive pledging conference organised by Gavi, the global vaccine alliance, in Berlin in January, and it is set to end in December with the conclusion in Paris of a climate agreement that is binding under international law.

In between, we had a G7 Summit at Schloss Elmau in Bavaria in June that will surely remain in our memories for a long time. For one thing, this was probably the first summit where so many guests were invited to attend for such a long time and where development issues were so prominent on the agenda.

Heads of government from Nigeria, Senegal, Ethiopia, Liberia, Tunisia and Iraq were joined by the heads of international organisations such as the United Nations, World Bank, International Monetary Fund (IMF), World Trade Organisation (WTO), International Labour Organisation (ILO), Organisation for Economic Cooperation and Development (OECD) and U.N. Environment Programme (UNEP).

As announced by German Chancellor Angela Merkel in Brussels back in 2014, it was a true development outreach focusing on Africa for all that security issues also played a major role.

For the first time ever the heads of state and government of the G7 countries agreed to strive for a carbon-free world by the end of the century. Merkel, Germany’s environment minister at Kyoto in 1997 and the climate chancellor of Heiligendamm in 2007, has once again succeeded in convincing others to join forces in forging ahead with regard to an important issue.“If the countries of Europe and Africa could agree that those who use up more of the permitted volume for storing CO2 in the atmosphere than others should pay more into the climate fund, then we would have taken a huge step forward. And those whose CO2 emissions are lower … should enjoy a comparatively greater benefit from this climate money"

So far what we mostly have are words. Germany is the only industrialised country to have significantly increased its Official Development Assistance (ODA) in 2015.Germany stands by the 0.7 percent target, but is unwilling to commit to a rigid timetable with fixed increments for increasing ODA.

Of course, ODA remains important but there are other sources for financing development. Above all it is about how efficiently the money is spent and whether the burden is fairly shared. That should also be the most important leitmotif for the Financing for Development conference in Addis Ababa.

It will scarcely be possible to get binding financial commitments from everyone in Addis. It would also be a great shame if developing countries were to call for more money from the industrialised countries and donors and the “accused”, having been put on the spot, were to respond by pointing the finger at the poor performances of the developing countries when it comes to governance, legal certainty, human rights and an independent judiciary.

Instead of confrontation it would be better if efforts were made in Addis, as they were in Elmau, to continue laying the ground for working together on a basis of mutual trust, with concrete topics and fields of cooperation being named.

Before the December climate conference in Paris, there will be the General Assembly week in New York with all the heads of state and government, a meeting that is especially important this year.

This will be the occasion for agreeing on new goals for sustainable development, on a new pact on the world’s future with concrete goals (Sustainable Development Goals – SDGs), with targets for both developing and industrialised countries.

The intention is that all countries should each make their own contribution. The SDGs are to be universally applicable, but with shared yet differentiated responsibilities for achieving them jointly.

The success of the Elmau summit was the outcome of a rare harmony between language and substance. The Group of Seven is not just a group formed by the world’s strongest industrialised countries. Following the exclusion of Russia, it has once more become evident how much we need a partnership of countries that really want to build a community of values.

The situation at the United Nations, where 193 nations are represented by their national governments, is different.

Surely, in this critical situation and in the interests of Germans and Europeans, it behoves us to work towards a special trust-based partnership between Africa and Europe. The only way for the countries of Europe and of Africa to develop in peace is by working together as good neighbours.

If we take this partnership a bit further in Addis and in New York, then we will also be successful in Paris and will reach a binding climate agreement. And then we will no longer be able to get away with being vague about the numbers, we will have to share out the CO₂ savings among us and, from 2020 onwards, find the 100 billion dollars for the Green Climate Fund.

If the countries of Europe and Africa could agree that those who use up more of the permitted volume for storing CO₂ in the atmosphere than others should pay more into the climate fund, then we would have taken a huge step forward. And those whose CO₂ emissions are lower than the average level or the maximum level per head according to the dictates of sustainability should enjoy a comparatively greater benefit from this climate money.

This arrangement would be good for everyone in Europe and in Africa. Germany, the strong export nation with emissions levels of about nine tonnes a head, would have to pay a lot of money and countries like Burkina Faso or Malawi would receive a lot. And a country like Nigeria would also finally have an incentive to put an end to gas flaring once and for all.

There are many mountains and cliffs to overcome before reaching Paris, not just for the participants in the Tour de France. However, it is important that we know the route. Otherwise we may find that there are only two parties sitting at the table together in Paris and talking about what they – the United States and China – consider acceptable.

Europe and Africa would be out of the running. This other way is not the route that will lead us to our goal.

Edited by Phil Harris    

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

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

By Bhumika Muchhala
NEW YORK, Jul 9 2015 (IPS)

Lack of ambition and consensus in the New York negotiations begs the question of whether governments in Addis Ababa will salvage or further dilute the outcome of the Third International Conference on Financing for Development from July 13-16.

The establishment of a global tax body, a strong and independent follow-up process for FfD, the Rio principle of CBDR and the link between the post-2015 development agenda and the FFD agenda are among the central issues for the Addis Conference to resolve.To some degree, this dearth of intergovernmental consensus that leaves an open document maintains the pressure for final hour compromises in Addis Ababa.

After weeks of political impasse in the intergovernmental negotiations for the Third Conference on International Financing for Development (FfD), an open text to be negotiated in Addis Ababa next week was presented on July 7 by the FfD Co-Facilitators to government delegates and negotiators in New York.

Titled ‘The Addis Ababa Action Agenda of the Third International Conference on Financing for Development”, the draft outcome document, containing 134 paragraphs across 31 pages, is a result of numerous draft revisions beginning with the first ‘Elements Paper’ in January 2015.

Negotiations in New York gathered momentum in April and in the last few months have become heated and tense affairs marked by clashing positions between developed and developing countries and deep discontentment over both content and process.

The Co-Facilitators of the process, Ambassadors George Talbot of Guyana and Geir Pedersen of Norway, convened non-stop informal discussions and even smaller private meetings, all behind closed doors, in the last several weeks. Until mid-June, negotiations in plenary format were open and transparent to all, including via webcast, and interventions by civil society organisations (CSOs) were accepted from the floor.

However, recent informal meetings were explicitly closed, with CSOs being asked to leave the room at initial sessions when some individuals made attempts to observe the proceedings in person.

At the heart of the intergovernmental wrangling is a glaring lack of consensus, which the Co-Facilitators highlighted in their introduction to the final FfD plenary in New York.

Developed countries were intent on seeking to wrap up the negotiations in what would have been a diminished outcome compared to the agreed outcomes in the Monterrey Consensus of 2002 and the Doha Declaration of 2008, and what is needed for the current and future challenges of FfD.

On the other hand, developing countries continue to demand a more ambitious outcome.

Intergovernmental discussions commenced in October 2014 and evolved into negotiations by April 2015. However, rather than convergence on key actions and decisions, the conflicts and red lines became further entrenched for both developed and developing countries.

To some degree, this dearth of intergovernmental consensus that leaves an open document maintains the pressure for final hour compromises in Addis Ababa.

Parts of the text where tension is rife and where negotiation efforts will be targeted include the contentious and central decision to establish an intergovernmental, or global, tax body where developing countries have a voice in agenda-setting, as many developing countries have been arguing for, most notably India.

Developed countries are firmly against such an establishment and have ensured that the relevant language was deleted from earlier versions of the text and now Paragraph 29 refers only to the U.N. Committee of Experts on International Cooperation in Tax Matters and to enhance its resources and increase the frequency of its meetings to two sessions per year.

Besides international tax cooperation, the two other issues highlighted by the Co-Facilitators in the plenary were the conflict on the Rio Principle of common but differentiated responsibilities (CBDR) and the link between FfD and the post-2015 development agenda, including its core component of the Sustainable Development Goals (SDGs), and the means of implementation (MOI) that the FfD outcome is to contribute toward.

The discord on CBDR has consumed a significant amount of time and space in the FfD negotiations, with sharp arguments for it propounded by the G77 and China group of 134 developing countries and arguments against it by developed countries, in particular the European Union and the United States.

The G77 has argued that if the 2015 FfD conference is to contribute to the MOI for the SDGs, the application of CBDR is indispensable for the political legitimacy of the FfD agenda.

The G77 explained how CBDR encapsulates universality, differentiation and responsibility: differentiation as the basis of crafting commitments; responsibility as the basis of delivering actionable MoI and for upholding the global partnership for development; and universality of the implementation of goals by all States.

Developed countries argued that CBDR only applies to environment and climate change-related issues, and that the North-South dichotomy is in today’s world anachronistic, and no longer reflects a world that has changed.

In response developing countries highlighted how the North-South gap in terms of inequality of consumption and production is still sharp and visceral in its magnitudes, and that if the SDGs have effectively mainstreamed environmental action across all goals and targets, it is only natural that the principle of CBDR is equally valid for the entire agenda of not only the post-2015 development agenda but also the FfD agenda.

The current text of July 7 refers in Paragraph 6 to the reaffirmation of “all the principles of the Rio Declaration on Environment and Development.”

While this formulation does not specify CBDR, the principle as such is included on the whole and is a more favourable outcome than the danger of a redefinition or distortion of the principle.

The link between the FfD conference and the post-2015 development agenda is located in the articulation of MOI. Developed countries have been clear that the FfD outcome is to comprise all of the MOI for the post-2015 development agenda, whereas developing countries have been resolute in the nuance that while the FfD outcome contributes significantly to the MOI for the post-2015 development agenda, it does not by any means comprise the whole of the MOI.

This argument has been central to developing countries’ call for a follow-up process for FfD that is distinct and independent from the follow-up process of the post-2015 development agenda.

The text of July 7 reflects this position of developing countries in Paragraph 19, in the formulation that reads: “The post-2015 development agenda, including the SDGs, can be met within the framework of a revitalized global partnership for sustainable development, supported by the concrete policies and actions as outlined in the present Action Agenda.”

Part Two can be found here.

Edited by Kitty Stapp

Excerpt:

By Jomo Kwame Sundaram
ROME, Jul 8 2015 (IPS)

More than four decades ago, the richer members of the international community committed to deliver at least 0.7 percent of their respective national incomes as official development assistance.

Jomo Kwame Sundaram. Credit: Abdul Ghani Ismail

Sadly, less than half a dozen smaller countries have actually met this goal. Furthermore, ODA disbursements have not been stable, reliable or reflective of need, with continuing doubts about development effectiveness.

ODA declined greatly during the 1990s after the Cold War to 0.22 percent of developed countries’ combined national incomes during 1997-2001, before rising again after 9/11 and the 2002 Monterey Financing for Development conference. However, as governments tightened their fiscal austerity screws, ODA declined between 2010 and 2011 to 0.31 percent.

ODA not enough

Since Monterrey, major additional development financing requirements have been identified. Most importantly, these include Aid for Trade (A4T) as well as financing for climate change mitigation and adaptation consistent with the principle of common, but differentiated responsibility — which came out of the 1992 Rio Earth Summit, and was reaffirmed by the UNFCCC and Kyoto Protocol.

Thanks to the efforts of the Leading Group on Innovative Financing for Development — which now includes 63 governments, as well as international organisations and civil society groups – the world has come some way since the Zedillo Report for the Monterey conference in 2002. It has defined innovative development finance especially to provide global public goods, either by taxing those who have gained most, or by taxing public ‘bads’, such as carbon emissions.Innovation is also needed to effectively align development finance with national development strategies, rather than merely giving lip service to this aspiration of most, if not all developing countries.

Additionality

Unfortunately, there is no agreed definition of innovative development finance. Some innovative proposals involve frontloading or better disbursement, rather than additionality. Sources of finance do not necessarily determine allocation, let alone end use.

For example, although currency transaction or Tobin tax proposals were originally intended to finance development, its recent acceptance in Europe is to supplement national public finances.

The UN’s 2012 World Economic and Social Survey on new development finance discusses various innovations in financing sources, intermediation and disbursement. Ideas include supplementing public sector revenue with the allocation and trading of greenhouse gas (mainly carbon or ‘carbon equivalent’) emissions allowances, airline ticket ‘solidarity levies’, aviation or bunker fuel taxes, carbon taxes, currency transaction taxes, financial transaction taxes and wealth taxes.

A set of new ideas involves special drawing rights (SDRs) issuance, the reallocation of unutilised SDRs and leveraging SDRs to augment investment resources. Other ideas include deploying royalties for natural resource extraction from the global commons for development, e.g. from Antarctica or from beyond ‘exclusive [national] economic zones’.

Meanwhile, Project Red seems to be an idea to extract royalties from branding corporate social responsibility.

Other helpful innovative ideas which do not involve additionality include restructuring financial resource flows such as the International Finance Facility for Immunization (IFFIm), Debt2Health and ‘debt for nature’ swaps.

Similarly, some worthwhile new risk management ideas include advance market commitments for new vaccines, subsidies to drug manufacturers to ensure affordable prices and regionally pooled catastrophe insurance.

Not much so far

Over the last six years, about six billion dollars has been attributed to innovative sources of financing, averaging one billion annually, compared to current annual ODA of over 120 billion dollars — much less than the almost 20 trillion committed by G20 countries to economic recovery (including bail-outs), or even the 1.6 trillion actually used for fiscal stimuli in 2009.

However, some recent proposals promise to raise far more resources for sustainable development. An internationally coordinated carbon tax could raise 250 billion dollars per year, while a small currency transaction tax could raise 40 billion annually.

Regular SDR emissions to keep up with the growth of global liquidity could yield approximately 100 billion dollars annually for international development cooperation. Such emissions would reduce the demand for U.S. Treasury bonds and other liquid assets of preferred currencies.

Additionally, if full capital account liberalisation was no longer promoted by the powerful, there would be less need for self protection (or ‘self insurance’) through accumulation of foreign exchange reserves.

If no longer needed as reserves in the form of easily liquidated foreign exchange assets, these could then be invested for development, addressing both savings and foreign exchange constraints.

Innovative partnerships

Innovation is also needed to effectively align development finance with national development strategies, rather than merely giving lip service to this aspiration of most, if not all developing countries.

This can blaze the way in operationally transforming the inclusive multilateral system to more effectively work with stakeholders on the ground in realising national development strategies.

Many have forgotten that the United Nations has been very successful with the Montréal Protocol to eliminate CFCs. While the reduction of greenhouse gas emissions is much more complicated, this earlier success underscores the continued potential of inclusive multilateralism, especially if there is a shared sense of purpose.

In this regard, the U.N. system is perhaps best placed to work closely with Member States and other stakeholders at the national level to conceive, design and operationalise Green Climate Fund projects.

Edited by Kitty Stapp

Excerpt:

Fifty-five percent of the world’s poor still have limited protection from hunger and economic, social or political crises despite expansion of social safety programmes in developing countries in recent years.

According to a report released by the World Bank on Jul. 7, most of the poor without a social safety net system are in lower-income countries, especially in sub-Saharan Africa and South Asia, where the vast majority of the world’s poor reside.

In these countries, safety schemes like cash transfers and school feeding programmes only cover 25 percent of the extreme poor, compared to 64-percent coverage in upper-middle-income countries.

Existing social welfare mechanisms are insufficient to close the poverty gap, leaving approximately 773 million people struggling to survive, experts say.

The report, the second in a series, was released following the World Bank Group and International Labor Organisation’s (ILO) announcement of their goals to provide universal social protection within the next 15 years.

A joint statement released by the two organisations on Jun.30 cited universal coverage and access to social protection as twin goals by 2030.

“The World Bank Group and the ILO share a vision of social protection for all, a world where anyone who needs social protection can access it at any time,” according to the joint statement by Jim Yong Kim, president of the World Bank Group, and Guy Ryder, executive director of the ILO.

“The new development agenda that is being defined by the world community – the sustainable development goals (SDGs) – provides an unparalleled opportunity for our two institutions to join forces to make universal social protection a reality, for everyone, everywhere.”

The report comes just ahead of the United Nations’ third Financing for Development (FfD) conference scheduled to take place in the Ethiopian capital Addis Ababa next week, where world leaders will discuss plans for funding the post-2015 development agenda, due to be launched in September.

The issue of providing universal social protection is slated to be at the centre of the agenda.

The five largest social safety programmes in the world are in China, India, South Africa and Ethiopia, where regular assistance reaches a combined total of 526 million people.

According to the report, all countries have at least one type of social security scheme, while the average developing country has about 20 such programmes. Globally, approximately 1.9 billion people benefit from these mechanisms.

On average, low-middle-income countries devote 1.6 percent of their gross domestic product (GDP) to these mechanisms, while richer countries devote 1.9 percent of their earnings to social programmes.

The World Bank reports that poor policy choices lie at the heart of inefficiencies in adequately providing for the poor. Fuel and electricity subsidies, for instance, reduce the portion of government spending allocated to social spending. These regressive subsidies disproportionately benefit the rich.

For example, Yemen spends nine percent of its GDP on energy and electricity subsidies, compared to the three percent it spends on social security net programs. The country, engulfed in political turmoil for the past few years, is already one of the poorest countries in the Arab World with up to 54.5 percent of its population living in poverty.

As developed countries like the United States and the European Union grapple with the balance between providing social security and maintaining economic growth in the slumping economy, developing countries have expanded their safety nets in a bid to reduce poverty.

Cash transfer programmes, recommended by the report as the most effective method, has “positive spillover effects on the local economy.” For each dollar transferred, the total income of the beneficiary increases from 1.08 dollars to 2.52 dollars.

“There is a strong body of evidence that these programmes ensure poor families can invest in the health and education of their children, improve their productivity, and cope with shocks,” said Arup Banerji, the World Bank Group’s senior director for social protection and labour.

“Going forward, more can be done to close the coverage gap and reach the world’s poorest by improving the effectiveness of these programmes underpinned by enhanced targeting, improved policy coherence, better administrative integration, and application of technologies.”

Edited by Kanya D’Almeida

The answer to the question “How much money will it take to achieve the new SDGs?” is … drum-roll … every single dollar in the world. Credit: Bindalfrodo/cc by 2.0

By Paul Ladd and Pedro Conceição
UNITED NATIONS, Jul 7 2015 (IPS)

Ethiopia will host an important meeting on Financing for Development (FfD) Conference next week. One of the most-asked questions is:  How much will it cost us to achieve the Sustainable Development Goals (SDGs)?

The question sounds sensible at first glance and flows naturally from our experience of the Millennium Development Goals (MDGs).Everything we buy has little impacts across the SDGs. For example, when we buy a shirt we are also ‘buying’ the environmental waste and labour standards used when making that shirt.

The grand MDG deal was that poor nations would focus on reducing poverty and improving governance, in exchange for Official Development Assistance (ODA) that would top up resources mobilised by developing countries themselves.

This ‘gap filling’ logic led to expansive exercises in MDG costing, estimations of how quickly governments could improve their tax take, and campaigns to scale up aid.

Many governments responded, and a great deal of good has been done through development aid: Expanded vaccine programmes, more children in school, cleaner water for more people, and many more less measurable achievements like gradually strengthening institutional capacities.

But as we now move to a different development agenda – one that is more ambitious, complex, integrated and universal – our logic on financing also needs a radical overhaul.

While gap-filling will still be important for some countries with very low tax bases and underfunded challenges (like some communicable diseases), for the majority it will be much more about aligning existing resources.

So the answer to the question “How much money will it take to achieve the new SDGs?” is … drum-roll … every single dollar in the world.

This means that every dollar we spend as consumers should work in the direction of achieving the SDGs and not against them. This includes our spending on clothes, food, and travel.

Everything we buy has little impacts across the SDGs. For example, when we buy a shirt we are also ‘buying’ the environmental waste and labour standards used when making that shirt.

But voluntary action by consumers will not be enough. Companies will also have to play their part.

Some are starting to change their business models realising that building a sustainable business will require a sustainable world. Some are engaging in development impact investment.

But beyond these voluntary actions, governments will need to step up and play the critical role of creating the right incentives and regulations to align actions by all consumers, businesses and investors.

While aligning private finance is the big win, changing how we spend public monies will also require a major overhaul. The classic example is energy: If we continue to subsidise non-renewable energies, we are deliberately and consciously working against the Goals.

Globally, energy subsidies are estimated to reach five trillion dollars this year, approaching 20 percent of GDP in some countries. They are overwhelmingly directed towards fossils fuels.

Energy subsidy reform would increase government revenue globally by three trillion dollars a year, reduce carbon dioxide emissions by 20 percent, and cut premature air pollution deaths by half.

Sometimes incentives, regulation, and fiscal reform are seen as imposing costs. Attention is drawn to these costs by those directly affected, with less attention given to society-wide and long-term benefits.

And many inefficiencies that are staring us in the face can unlock trillions more in gains. For instance, advancing gender equality would directly advance the SDGs and generate economic benefits.

Arguing that aligning existing finance with sustainable development is more important than raising ever more money shouldn’t be interpreted as support for the anti-aid movement. Done well, aid has its place.

Donors should indeed meet their 0.7 percent commitments and make much faster progress on their commitments on improving how aid is done.

But if the Conference in Addis Ababa, scheduled to take place next week, only focuses on mobilizing more money and doesn’t do something about improving how that money is spent, then we will have missed the point, and will certainly miss the grand targets we have set for ourselves. This is why every dollar counts.

Edited by Kitty Stapp

Excerpt:

We are witnessing a shift in the original rationale behind the unique relationship between the European Union and the African, Caribbean and Pacific countries of the ACP group, which goes beyond the logic of “unilateral aid transfer”, “donor-recipient approach” and “North-South dialogue”.

“The [ACP] Group will have to transform itself if it wants to realise its ambition of becoming a player of global importance, beyond its longstanding partnership with the EU” – Dr Patrick I. Gomes, ACP Secretary General
In November last year, in his mission letter to the newly appointed European Commissioner for International Cooperation and Development, Neven Mimica, European Commission President Jean-Claude Junker said: “The first priority is the post-2015 framework and the second priority of my mandate is the future of EU’s strategic partnership with African, Caribbean and Pacific (ACP) countries.”

With the agreement for that partnership coming to an end in 2020, both the European Union and the ACP group are currently stimulating intense debates on a critical review of the past and future perspective as well as challenging issues for the future “acquis” between the ACP countries and Europe under the umbrella of the Cotonou Agreement.

Last month’s Joint Session of the ACP-EU Council of Ministers held in Brussels (May 28-29) May offered an occasion for discussing innovative options to outline new bases of common interests, needs and difficulties, and to forge forthcoming cooperation, particularly in terms of the post-2015 agenda, financing for development, migration, international trade, climate change and democratic governance.

At ACP level, there is a growing awareness among members that “the Group will have to transform itself if it wants to realise its ambition of becoming a player of global importance, beyond its longstanding partnership with the EU,” said ACP Secretary General, Dr Patrick I. Gomes.

“There is the need to re-balance the ACP-EU partnership in favour of the ACP Group” was one of the key messages from the 101^st ACP Council of Ministers held on May 27-28 to re-align ACP positions before the Joint Session with the European Union.

Within the European Union, there is also recognition of the relevance of the EU-ACP relationship. “Our exchanges of view on a number of key issues such as the post-2015 development agenda and migration once again underlined the importance of our partnership,” said Zanda Kalniņa-Lukaševica, Latvian Parliamentary State Secretary for E.U. Affairs, in a statement.

Zanda Kalniņa-Lukaševica (right), Latvian Parliamentary Secretary of State for E.U. Affairs and Meltek Livtuvanu, Minister for Foreign Affairs of Vanuatu and President of the ACP’s Council of Ministers. Photo Credit: EU Council

On paper, the Cotonou Agreement remains the most sophisticated framework for ACP-EU cooperation, covering political, trade, economic and development cooperation issues.

According to the last figures for the E.U. budget for 2014-2020, a package of 30.5 billion euros is specifically provided to ACP regions and countries. In fact, the ACP still remains the biggest group of states with which the European Union has a partnership.

The European Development Fund (EDF), an implementing instrument of the Cotonou Agreement, will finance E.U. development cooperation projects until 2020 to assist partner countries in poverty eradication. These funds will target the people most in need and finance different sectors such as health and education, infrastructure, environment, energy, food and nutrition.

Looking towards the future, the ACP is determined to move from being on the receiving end of development assistance to asserting its aim to speak with “one voice in global governance institutions”, in the words of ACP Secretary-General Gomes.

The need to consider and treat ACP countries as “responsible partners” at the global level despite the reluctance of the international community, emerged strongly during the E.U.-Africa Summit in  April 2014, with ACP members hoping for a lift-up effect on the ACP’s political leverage.

According to observers, ACP countries matter for the European Union partly to help overcome the effects of the economic crisis. Some ACP countries in the North African region, for example, have witnessed upturns in economic growth since 2004. At the same time, the abundance of natural resources in ACP countries provides an alternative to the volatile Middle East, Russia and some other countries as a source of energy and raw materials.

On the issue of financing for development, Alexandre Polack, European Commission Spokesperson for Humanitarian Aid and Crisis Management & International Cooperation and Development told IPS: “We need to come away from Addis with a comprehensive agreement which covers all the means of implementation for the post-2015 development agenda.”

He was referring to the Third International Conference on Financing for Development which will take place in Addis Ababa, Ethiopia from Jul. 13 to 16 this year.

“This,” added Polack, “means addressing non-financial aspects, including policies. We need an agreement which puts domestic actions and domestic capacities at the heart of poverty eradication and sustainable development, and adheres to the principles of universality in terms of shared responsibilities.”

Observers also point out that the ACP countries can also be important interlocutors during the U.N. Climate Change Conference this coming December in Paris.

While the Western industrialised and emerging countries are the main greenhouse gas emitters, many ACP countries – particularly Small Island Developing States (SIDS) – are directly threatened by the consequences of climate change through, for example, natural disasters, hurricanes and tornados, flooding and drought.

Their voice on this, along with their experience and good practices developed in countering or mitigating the drastic effects of climate change, can make a useful contribution to the deliberations in Paris.

Meanwhile, the ACP-EU Joint Council has endorsed recommendations concerning the migration crisis, including enacting comprehensive legislation on both trafficking in human beings and smuggling of migrants, stressing the differences between both phenomena, while also implementing relevant national laws.

The co-President of the Joint Council, Hon. Meltek Sato Kilman Livtuvanu of Vanuatu, speaking on behalf of the ACP ministers, said: “We consider that even if the military and security approach is meant to discourage and respond immediately to the issue, there is an urgent need to have a comprehensive approach to deal with the root causes of this phenomenon, in partnership with all the countries involved.”

Edited by Phil Harris   

G7-based companies and investors cheated Africa out of an estimated six billion dollars in a year through just one form of tax dodging, according to a new Oxfam report ‘Money talks: Africa at the G7’, released Jun. 2.

This is equivalent to three times the amount needed to plug the healthcare funding gap in the Ebola-affected countries of Sierra Leone, Liberia, Guinea and at-risk Guinea Bissau.

According to an Oxfam briefing paper release in April this year, an estimated 1.7 billion dollars is required to close the healthcare funding gap to improve dangerously inadequate health systems in these countries. This figure is based on raising spending to the recommendation of the World Health Organisation (WHO) that 86 dollars per capita is required to achieve the minimum package of essential services.“Multinational companies, many with headquarters in the United Kingdom and other G7 countries, are cheating African countries out of billions of dollars in vital tax revenues that could help vulnerable people get decent healthcare and send their children to school” – Nick Brye, Oxfam’s Head of U.K. Campaigns

The new Oxfam report comes as G7 leaders prepare to meet their African counterparts at the annual summit in Bavaria, Germany from Jun. 8 to 9. African leaders from Ethiopia (Prime Minister Hailemariam Desalegn), Liberia (President Ellen Johnson Sirleaf), Nigeria (President Muhammadu Buhari) and Senegal (President Macky Sall) are scheduled to join an outreach session on Jun. 8.

Oxfam is calling for the leaders of the G7 countries – Canada, France, Germany, Italy, Japan, United Kingdom and United States – to include action for ambitious tax reform in discussions about how the group can support economic growth and sustainable development on the continent.

In the United Kingdom, Oxfam is part of a coalition that has been calling on the recently elected new British government to show leadership by introducing a Tax Dodging Bill, which would make it harder for U.K. companies to avoid paying tax in the countries in which they operate – practices which currently cost some of the world’s poorest countries billions each year.

The coalition, which includes ActionAid and Christian Aid in addition to Oxfam, is currently running a Tax Dodging Bill campaign.

According to Oxfam, a well-crafted Tax Dodging Bill would also make it harder for big companies to avoid paying tax in the United Kingdom, and could bring in at least 3.6 billion pounds (5.4 billion dollars) a year to the U.K. Treasury, the equivalent of 600 pounds (910 dollars) for every household living below the poverty line.

“Multinational companies, many with headquarters in the United Kingdom and other G7 countries, are cheating African countries out of billions of dollars in vital tax revenues that could help vulnerable people get decent healthcare and send their children to school,” said Nick Brye, Oxfam’s Head of U.K. Campaigns.

“To fund the fight against poverty and to tackle worsening extreme inequality, we need action to ensure big companies pay their fair share, here and in the world’s poorest nations.”

Oxfam also notes that existing international efforts to tackle corporate tax dodging, such as the BEPS (Base Erosion and Profit Shifting) process, led by the Organisation for Economic Cooperation (OECD) for the G20 group of the world’s major economies, will leave gaping tax loopholes.

It warns that these loopholes can continue to be exploited by multinational companies across the developing world and that many African nations have been shut out of discussions on BEPS reform and will not benefit from them as a result.

Oxfam is also calling for British Chancellor of the Exchequer George Osbourne to attend July’s Financing for Development Conference in Ethiopia which will play host to heads of states and finance ministers from around the world.

The talks, which will focus on how the international community will fund development over the next two decades, are an opportunity for governments to work together to start shaping a more democratic and fairer global tax system.

In 2010, the last year for which data are available, Oxfam says that companies and investors based in G7 countries avoided paying tax on 20 billion dollars of income through a practice called trade mispricing – where a company artificially sets the prices for goods or services sold among its subsidiaries to avoid taxation.

With corporate tax rates in Africa averaging 28 percent, this equates to nearly six billion dollars in lost revenues. In addition, developing countries as a whole lose around 100 billion dollars a year through tax avoidance schemes involving tax havens, according to the U.N. Conference on Trade and Development (UNCTAD).

“Reforming global corporate tax rules so that African governments can claim the money owed to them is vital to tackle extreme poverty and inequality and boost economic growth, said Brye. “That’s why Oxfam has been calling for a U.K. Tax Dodging Bill that would ensure U.K. companies do their bit to help poor families at home and in developing countries.”

Edited by Phil Harris   

Opening Ceremony of the 101st Session of the ACP Council of Ministers, May 2015, with Secretary-General Dr Patrick I. Gomes (third from left) and President of the Council of Ministers Meltek Sato Kilman Livtuvanu (third from right). Credit: Valentina Gasbarri/IPS

By Valentina Gasbarri
BRUSSELS, May 27 2015 (IPS)

“Four decades of existence is a milestone for the ACP as an international alliance of developing countries,” Dr Patrick I. Gomes of Guyana, newly appointed Secretary-General of the African, Caribbean and Pacific group of countries, said at the opening of the 101st Session of the group’s Council of Ministers.

“With the organisation currently repositioning itself for more strategic engagements with regards to its future, this is an opportunity not only to review the past, but also to project to the decades ahead, especially in terms of how to be effective and better respond to the development needs of our member countries in the 21st century,” he added.“From the viewpoint of the poor and vulnerable, we are the moral majority. Not only do we count, but we must continue to make our voice count in the global arena if we are to transform the ACP Group of States into a truly effective global player” – Meltek Sato Kilman Livtuvanu, President of the ACP’s Council of Ministers

The meeting, which opened May 26, brought together more than 300 officials from the ACP group who are determined to put an emphasis on re-positioning the ACP group as an effective player in a challenging global landscape.

At the group’s 7^th Summit of Heads of State and Government held in Equatorial Guinea in December 2012, the group issued the Sipopo Declaration which noted that “at this historic juncture in the existence of our unique intergovernmental and tri-continental organisation, the demands for fundamental renewal and transformation are no longer mere options but unavoidable imperatives for strategic change”.

Meltek Sato Kilman Livtuvanu, Minister of Foreign Affairs of Vanuatu and President of the ACP’s Council of Ministers, told the opening session of this week’s Council meeting that “from the viewpoint of the poor and vulnerable, we are the moral majority. Not only do we count, but we must continue to make our voice count in the global arena if we are to transform the ACP Group of States into a truly effective global player.”

A key focus of the 40th anniversary is how to enhance regional and intra-ACP relations in order to better position the ACP group to deliver on development goals in the post-2015 era, starting with playing a decisive role at the Third International Conference on Financing for Development to be held in July in Addis Ababa, Ethiopia, as well as at the U.N. Summit on the Post-2015 Development Agenda to be held in New York in September.

ACP Secretary-General Dr Patrick I. Gomes (left) and President of the Council of Ministers Meltek Sato Kilman Livtuvanu at the opening ceremony of the 101st Session of the ACP Council of Ministers, May 2015. Credit: Valentina Gasbarri/IPS

For ACP Secretary-General Gomes, the most critical meeting for the group will be the 8th ACP Summit, which had originally been scheduled to be held in November in Suriname before that country had to withdraw due to multiple commitments.

Inviting member countries to step forward and offer to host the event, Gomes said that the 8^th Summit “must be a beacon that refines our strategic policy domains for the next decade and project a powerful political vision to serve the ACP in our engagement with the European Union.”

More importantly, that summit would provide the strategic direction and financial commitment necessary to build the capacity of the ACP group to address the development needs of its populations.

Viwanou Gnassounou of Togo, ACP Assistant Secretary-General for Sustainable Economic Development and Trade, told IPS that the group “will be fully engaged in 2015 in high-level negotiations not only calling for a strategic approach but also trying to raise our common voice in a more holistic manner.”

He said that the ACP is finalising a position paper to be presented in December at the U.N. Climate Change Conference in Paris, as well as at the 10th Ministerial Conference of the World Trade Organisation (WTO) in Nairobi in December.

Participants at the Council of Ministers meeting agreed that the plethora of priorities facing the ACP today calls for widening its partnership with the European Union and beyond, embracing the global South as well as emerging economies with greater determination, and promoting South-South and triangular cooperation.

The Cotonou Partnership Agreement which currently governs relations between the ACP and the European Union expires in 2020 and the ACP Secretariat has commissioned a consultancy exercise to formulate the ACP Group’s position future relations with the European Union.

The ACP-EU Joint Council of Ministers, which meets May 28, is expected to place a special focus on migration and discuss recommendations from an ACP-EU experts’ meeting on trafficking in human beings and smuggling of migrants following the unacceptable loss of thousands of lives in the Mediterranean Sea as people try to reach Europe.

The two sides are also expected to exchange views on the broad range of issues affecting the ACP-EU trade relations at multilateral and bilateral levels, as well as financing for development as a follow up to the ACP-EU Declaration on the Post-Development Agenda approved in June 2014, which called for “an ambitious financing framework to adequately tackle sustainable development issues and challenges.”

In this context, the declaration said that a “coherent response based on a global comprehensive and integrated approach, fuelled by traditional and innovative financing solutions and governed by principles for efficient resource use seems the most appropriate way to finance sustainable development.”

Edited by Phil Harris  

The European Commission is calling for SDGs to address poverty eradication and sustainable development together in three dimensions – economic, social and environmental. Photo credit: UNFPA Sudan

By Ramesh Jaura
BRUSSELS, May 5 2015 (IPS)

In the run-up to the international Conference on Financing for Development from Jul. 13 to 16 in Addis Ababa, Ethiopia, the European Union has called for a “true paradigm shift” in global development cooperation.

The Addis Ababa conference will be followed by the U.N. post-2015 Summit in New York and the Climate Change conference in Paris in December. “These meetings will define our future and will set the level of ambition of the international community for the years and decades to come,” according to European Union Commissioner for International Cooperation and Development Neven Mimica.

The Addis Ababa conference on development financing in July and the Paris climate conference in December offer a “once in a lifetime” opportunity “to end poverty, achieve shared prosperity, transform economies, protect the environment, promote peace and ensure the respect of human rights” – Neven Mimica, European Union Commissioner for International Cooperation and Development
This, Mimica believes, offers a “once in a lifetime” opportunity “to end poverty, achieve shared prosperity, transform economies, protect the environment, promote peace and ensure the respect of human rights.”

The European Commission, which represents the interests of the 28-nation European Union, believes that the sustainable development goals (SDGs) to be agreed in New York in September should not only cover “traditional” development challenges such as poverty, health and education, but go much further and address poverty eradication and sustainable development together in three dimensions – economic, social and environmental.

The Commission is pleading for “moving towards a universal agenda”. This means that the goals and targets to be agreed in New York will apply to all countries, challenging them to achieve progress domestically, while contributing to the global effort. “Such a far-reaching agenda can only be delivered through a true global partnership,” said Mimica.

The E.U. Development Commissioner is backed by an eminent group of experts from Finland. France, Germany and Luxembourg, who have authored the fifth edition of the European Report on Development (ERD), which focuses on ‘Combining Finance and Policies to Implement a Transformative post-2015 Development Agenda’.

Mimica wants the agenda to serve to mobilise action by all countries and stakeholders at all levels: governments, private sector and civil society, all of which would need to play their part.

The key message of the ERD report, launched on May 4, is that policy and finance go together and that they are both crucial to implement a transformative post-2015 development agenda.

Based on existing evidence and specific country experiences, the report shows that finance alone is not enough – it seldom reaches the intended objectives, unless it is accompanied by complementary policies, the right combination of financing and enabling policies, says the report.

According to Mimica, “the findings and analysis contained in the report provide a most valuable research-based contribution to the debate, particularly in view of the Addis Conference on Financing for Development – but also beyond”.

“In this crucial year for international development cooperation, the 2015 European Report on Development can serve as a key point of reference, not just for the European Union, but for the international community at large,” Mimica said at the launching of the report.

The findings of the report are in line with three major guidelines which would drive the E.U. Commission’s action to implement the new development agenda:

• if it is not sustainable, it is not development
• if it is not resilient, it is not development
• if it is without women, it is not development

In many ways, the report complements and supports the work of the Commission in advocating a comprehensive approach to the means of implementation for the post-2015 development agenda. At the same time, it challenges the Commission to keep pushing our thinking forward, said Mimica.

The significance of the report is underlined by the fact that the European Union as a whole has consistently remained the biggest global aid donor, even in times of significant budgetary constraints.

According to latest figures, the European Union’s collective official development assistance (ODA) (by E.U. institutions and member states) has increased to Euro 58.2 billion (up by 2.4 percent from 2013) – growing for the second year in a row, and reaching its highest nominal level to date. Collective European Union ODA represented 0.42 percent of E.U. gross national income (GNI) in 2014.

A 0.7 percent ODA/GNI target was formally recognised in October 1970  when the U.N. General  Assembly adopted a resolution including the goal that “each economically advanced country will progressively increase its official  development  assistance  to  the  developing  countries  and  will  exert  its  best  efforts  to  reach  a minimum net amount of 0.7 percent of its gross national product at market prices by the middle of the decade.”

To date, the target has not been achieved but it has been repeatedly re-endorsed at the highest level at international aid and development conferences.

“We are committed to playing our full part in all aspects of the post-2015 agenda, including means of implementation,” Mimica stressed.

He added: “In our February Communication [on a Global Partnership for Poverty Eradication and Sustainable Development after 2015], the Commission was very clear. We proposed to the Member States a collective E.U. re-commitment to the 0.7 ODA/GNI target – and we hope indeed that there will be agreement amongst Member States on this ahead of Addis.”

Official development assistance will certainly remain important in a post-2015 context – in particular for the least developed countries (LDCs), according to Mimica.

“At the same time, we expect other partners – including other developed economies and emerging actors – to also contribute their fair share. The efforts of the European Union alone will not be enough.”

Aware that this is a rather controversial issue, he added: “To be able to speak of an ambitious outcome in Addis and New York, we will all need to raise our level of ambition. The EU is ready to engage with all partners to achieve this. We have been active and constructive in the negotiations so far, and we will continue to do so, taking a responsible, bridge-building approach.”

Edited by Phil Harris    

By Roberto Azevêdo
GENEVA, May 2 2015 (IPS)

Up to 80 percent of global trade is supported by some form of financing or credit insurance. Yet in many countries there is a lack of capacity in the financial sector to support trade, and also a lack of access to the international financial system. Therefore the ability of these countries to use simple instruments such as letters of credit is limited.

The impact of these limitations on a country’s trading potential can be very, very significant.

WTO Director-General Roberto Azevêdo. Credit: WTO/CC BY SA-2.0

After the financial crisis, the supply of trade finance has largely returned to normal levels in the major markets, but not everywhere and not for everyone.

The structural difficulties of poor countries in accessing trade finance have not disappeared – indeed the situation may well have declined due to the effects of the crisis.

There are indications that markets are even more selective now. Under increased regulatory scrutiny, many institutions have lowered their risk-appetites and are focusing more on their established customers. Some are deliberately decreasing their number of clients in a so-called “flight to quality”.

In this environment, the lower end of the market has been struggling to obtain affordable finance, with the smaller companies in the smaller, less-developed countries affected the most.

I was particularly struck by the fact that the financing gaps are the highest in the poorest countries, notably in Africa and Asia. And I was struck by the size of those gaps.

A survey by the African Development Bank of 300 banks operating in 45 African countries found that the market for trade finance was somewhere between 330 and 350 billion dollars.

It also found that this could be markedly higher if a significant share of the financing requested by traders had not been rejected.“The lower end of the market has been struggling to obtain affordable finance, with the smaller companies in the smaller, less-developed countries affected the most”

Based on such rejections, the estimate for the value of unmet demand for trade finance in Africa is between 110 and 120 billion dollars.

This gap represents one-third of the existing market.

The main reasons for the rejection of requests for financing were:

• the lack of creditworthiness or poor credit history
• the insufficient limits granted by endorsing banks to local African issuing banks
• the small size of the balance sheets of African banks, and
• insufficient U.S. dollar liquidity

Some of these constraints are structural, and can only be addressed in the medium to long term. The retreat of global banks from Africa, and from other poor countries, is one such issue.

The Asian Development Bank conducted a similar survey in Asia, looking at countries like Viet Nam, Cambodia, Bangladesh, Pakistan and India.

According to preliminary estimates, the unmet demand there is around 800 billion dollars.

Small and medium-sized enterprises are the most credit-constrained as 50 percent of their requests for trade finance are estimated to be rejected. This is compared with just seven percent for multinational corporations.

Moreover, two-thirds of the companies surveyed reported that they did not seek alternatives for rejected transactions.

Therefore, these gaps may be exacerbated by a lack of awareness and familiarity among companies – particularly smaller ones – about the many options which exist.

A large majority of firms stated that they would benefit from greater financial education.

These findings are particularly striking as Africa and developing Asia are two areas of the world in which trade has grown fastest in the past decade.

But the potential evolution of new production networks is faster than the ability of the local financial sectors to support them.

In this way the lack of development of the financial sector can be a significant barrier to trade.

It can prevent developing countries from integrating into the trading system and accessing further trade opportunities.

And it can therefore prevent them from leveraging trade as a powerful source of development.

So we need to respond to this problem.

The exchanges that we have here can form part of this response. We need to join together in order to advocate action in this area and to devise practical solutions.

Of course, there is no magic bullet. This is a complex issue. However, that should not discourage our efforts.

The trade finance facilitation programmes that I outlined earlier are one example of practical action that we can take.

Of course this only fills part of the gap, so our response needs to be more fundamental.

In July this year, the United Nations’ major ‘Financing for Development’ conference will take place in Addis Ababa. And I think it is essential that we put trade finance on the agenda there.

In this way we can ensure that this issue is given its proper prominence in the development debate, especially at a time when the all-important U.N. Sustainable Development Goals are being finalised.

Edited by Phil Harris    

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

Excerpt:

IPS U.N. Bureau Chief Thalif Deen interviews Secretary-General Ban Ki-moon. Credit: Lyndal Rowlands/IPS

By Thalif Deen
UNITED NATIONS, Nov 11 2014 (IPS)

The continued widespread economic recession – aggravated by the recent Ebola outbreak in West Africa – is threatening to undermine the U.N.’s highly-touted post-2015 development agenda.

Still, Secretary-General Ban Ki-moon is placing his trust and confidence on two key upcoming summit meetings: a G20 gathering of world leaders in Brisbane, Australia later this week, and the International Conference on Financing for Development (ICFD) in Addis Ababa, Ethiopia, next July.

In an interview with IPS, just before his departure to Brisbane, he described the G20 as “the world’s primary global economic forum”, while the ICFD, he predicted, will be “one of the most important conferences in shaping sustainable development goals (SDGs).”

Ban has already cautioned world leaders of the urgent need for “a robust financial mechanism” to implement the proposed SDGs – and such a mechanism, he said, should be put in place long before the adoption of these goals in September 2015.

In a letter to G20 leaders, he says the successful implementation of the growth and sustainable development agendas will depend largely on mobilising “all sources of financing”.

“It is difficult to depend on public funding alone,” he told IPS, stressing the need for financing from multiple sources – including public, private, domestic and international.

The G20, a rare mix of both developed and developing countries, includes Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom and the United States, plus the European Union.

Overall, the G20 represents about two-thirds of the world’s population, 85 per cent of global gross domestic product and over 75 per cent of global trade.

The G20 president, this time around Australian Prime Minister Tony Abbott, usually invites several guest countries to participate in the summit. The presidency rotates on a geographical basis.

The countries which previously hosted the G20 summit include the United States (in 2008 and 2009), the United Kingdom (2009), Canada (2010), the Republic of Korea (2010), France (2011), Mexico (2012) and Russia (2013).

At the meeting in Brisbane Nov. 15-16, Abbott will welcome Spain as a permanent invitee; Mauritania as the 2014 chair of the African Union; Myanmar as the 2014 chair of the Association of South-East Asian Nations (ASEAN); Senegal, representing the New Partnership for Africa’s Development; New Zealand; and Singapore.

The ICFD, scheduled for July 2015, is billed as a U.N. conference and will be attended by all 193 member states.

Speaking of financing for development, Ban said official development assistance (ODA), from rich nations to poorer ones, “is necessary but not sufficient.”

According to the latest available statistics, only five countries – Norway (1.07 percent), Sweden (1.02), Luxembourg (1.00), Denmark (0.85) and the United Kingdom (0.72) – have reached the longstanding target of 0.7 of gross national income as ODA to the world’s poorer nations.

Meanwhile, the economic recession is taking place amidst the millions still living in hunger (over 800 million), jobless (more than 200 million), water-starved (over 750 million) and in extreme poverty (more than one billion), according to the United Nations.

Asked about a proposal for innovative sources of financing for development – including a tax on foreign exchange transactions – Ban said he has appointed a former French cabinet minister, Philippe Douster-Blazy, as his special adviser to explore these funding sources.

The proposal for innovative financing was approved at the 2002 ICFD in Mexico and it has raised about 2.0 billion dollars so far.

Ban’s most formidable task will be to ensure that rich countries deliver on their pledges, made in 2009, to provide a staggering 100 billion dollars by 2020 for a Green Climate Fund to prevent the most disastrous consequences of climate change.

“I need at least 10 billion dollars to operationalise the fund,” he said. So far, about 2.5 billion dollars have been made available.

Meanwhile, in his letter to the G20 leaders, Ban says new threats, including geopolitical tensions and the Ebola crisis, “have emerged to create further uncertainty” for the U.N.’s development agenda.

“The G20 Brisbane summit is well timed to provide the leadership that will translate into strong global growth and positive change in people’s lives,” he wrote. “Therefore, I urge you and your fellow leaders to seize the moment in Brisbane and set the stage for success in our shared work to build a more sustainable and prosperous world for all.”

The United Nations, he said, “stands ready to partner with you in your endeavour in Brisbane – and beyond.”

But a lingering question remains: how many of the world leaders will respond to the call?

Edited by Kitty Stapp

The writer can be contacted at thalifdeen@aol.com