By Daniele Brunetto
BRUSSELS, Jun 19 2015 (IPS)

As a young person interested in development, my heart beats a little faster when I look at the potential of 2015. There has never been so much at stake as this year for the future of our planet.

Courtesy of Daniele Brunetto.

2015 is full to bursting with game-changing moments for development. The recent G7 summit got the ball rolling on the post-2015 agenda, while other key moments of the year include the United Nations General Assembly in September, when the new Sustainable Development Goals (SDGs) will be agreed on, and the U.N. Climate Change Conference in Paris in December, which will close this pivotal year.

However, the number one moment for me this year is the Third International Conference on Financing for Development, from July 13 to 16. Here, world leaders, civil society and relevant actors from the private sector will gather in Addis Ababa and set out a path for financing the next 15 years of international development.

Why is Addis such a momentous opportunity? Firstly, it is about learning from the past and looking to the future – working out where the Millennium Development Goals succeeded, and where they fell short – and most importantly, how this can be rectified in the future.We want to see ambitious, concrete and measurable commitments to end extreme poverty by 2030, making sure the poorest are put first and that no-one is left behind.

Secondly, Addis provides a crucial opportunity to move the discussion beyond aid, and to engage with private sector investment and increase domestic resource mobilisation, through fighting corruption and curbing illicit financial flows.

Thirdly, it allows for a reassessment of what exactly aid is for, and whom it should be directed to over the next 15 years and beyond. Embracing alternative sources of financing for development is vital, but this must be coupled with the mapping out of aid flows to where it is most needed.

Seeing as the Least Developed Countries have limited means to generate domestic revenue and attract foreign investment, and that these countries have far greater proportions of people living in extreme poverty, it doesn’t take a genius to work out that it is those countries which should be prioritised when it comes to aid flows.

So, how are things looking? Are world leaders ready to come to Addis and to ensure that the new Goals are well financed, well tracked, and that they meet the basic needs of all?

Let’s look at the European Union. It’s the world’s largest provider of Official Development Assistance (ODA), and its overall levels of spending are increasing year after year. However, its own target of spending 0.7 percent of its collective GNI on ODA remains decidedly unmet.

Although EU leaders have recently reaffirmed their commitment to reaching this target as part of the post-2015 agenda, they have not set out a clear roadmap on how and when this will be implemented, which brings their commitment into question.

Among the European countries who could take the lead on this, I would like to see my own country, Italy, stepping up. Although Italy’s investment in ODA leaves a lot to be desired (Italy gave just 0.16 percent of its GNI in ODA in 2014), it has demonstrated a clear ambition to reach the goal soon and to ensure an increasing amount of transparency in investment in developing countries.

It was indeed under the Italian Presidency of the Council of the European Union that new anti-money laundering rules were approved, something which can help combat illicit financial flows from developing countries. While the rules leave it up to member states to render this information public, this is undeniably a step forward, and I can only be happy about this achievement of my country!

So, what can I do, as a young ‘development geek’, a ‘factivist’, in order to make sure this year doesn’t pass in vain? Lots, as my time campaigning with ONE has proven!

As a young anti-poverty activist, I have learned that world leaders are not as distant to young voices as I expected, and that our demands do not fall on deaf ears. With my fellow Youth Ambassadors, for example, I was able to convince over half of the Members of the European Parliament to publicly commit to do everything in their capacity to end extreme poverty by 2030.

We, as young people, must show leaders how important it is to us to bring about the end of extreme poverty within a generation. Supported by powerful data and irrefutable facts, we must push our representatives to stand up for the world’s poorest and seize the opportunities this year offers with both hands.

We want to see ambitious, concrete and measurable commitments to end extreme poverty by 2030, making sure the poorest are put first and that no-one is left behind. This year we can shape a better future, and we, as young people, must play our part and make our voices heard.

Edited by Kitty Stapp

Excerpt:

New analysis suggests that developing countries are losing a trillion dollars or more each year to tax evasion and corruption facilitated by lax laws in Western countries, raising pressure on global leaders to agree to broad new reforms at an international summit later this year.

These massive losses could be leading to as many as 3.6 million deaths a year, according to the ONE Campaign, an advocacy group that focuses on poverty alleviation in Africa. Recovering just part of this money in Sub-Saharan Africa, the organisation says, could allow for the education of 10 million more children“Whenever corruption is allowed to thrive, it inhibits private investment, reduces economic growth, increases the cost of doing business, and can lead to political instability. But in developing countries, corruption is a killer” – ONE Campaign
 a year, or provide some 165 million additional vaccines.

“Whenever corruption is allowed to thrive, it inhibits private investment, reduces economic growth, increases the cost of doing business, and can lead to political instability. But in developing countries, corruption is a killer,” a report on the findings, released Wednesday, states.

“When governments are deprived of their own resources to invest in health care, food security or essential infrastructure, it costs lives, and the biggest toll is on children.”

The new analysis focuses on a spectrum of money laundering, bribery and tax evasion by criminals as well as government officials. The lost money is not development aid but rather undeclared or siphoned-off business earnings – immense tax avoidance resulting in a decreased base from which governments can fund essential services.

International trade offers a key point of manipulation, the report says, with the extractive industries particularly vulnerable. In Africa alone, exports of natural resources grew by a factor of five in the decade leading up to 2012, offering clear prospects for growth alongside lucrative opportunities for corruption on a mass scale.

“Between 2002 and 2011 we saw an exponential increase in illicit financial flows across the globe,” Joseph Kraus, a transparency expert at the ONE Campaign, told IPS.

“Yet while we’re all familiar with corruption in developing countries, it takes two to tango – that money often ends up in the financial centres of the Global North. Those banks, lawyers and accountants are all essentially facilitators of that corruption, so in order to get at the root of this issue we need to go after the problems there.”

Real opportunity

Advocates including the ONE Campaign are currently stepping up pressure on industrialised countries to institute a series of across-the-board transparency measures. Some are aimed at corruption in developing countries, such as strengthening disclosure laws impacting on the extractives industry and bolstering “open data” standards to allow citizens increased oversight over their governments’ dealings.

Several other reforms would need to be carried out by developed countries, particularly those housing major financial centres such as the United States and United Kingdom. These would include new standards requiring governments to automatically exchange tax information, to mandate the publication of full information on corporate ownership, and to force multinational corporations to report on their earnings on a country-by-country basis.

In certain circles, such demands have been percolating for years. But current circumstances could offer unusual opportunity for such changes.

“In the last two years we’ve seen an acceleration of this agenda,” Kraus says. “Eighteen months ago, no one was talking about phantom firms or anonymous shell companies. But these issues have gained a lot of momentum in a short period of time, and there is real opportunity coming up.”

This new energy has been motivated particularly by concerns in advanced economies over shrinking government budgets in the aftermath of the global economic downturn. Yet developing countries arguably stand to benefit the most from substantive reforms, provided they’re structured accordingly.

Advocates of such changes are now looking ahead to a summit, on Nov 15 and 16 in Australia, of the members of the Group of 20 (G20) world’s largest advanced and emerging economies as well as two major meetings of finance ministers in the run-up to that event.

The G20 represent about two-thirds of the world’s population, 85 percent of global gross domestic product and over 75 percent of global trade.

The members of the G20 are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States and the European Union.

The G20 has taken on a primary role in issues of global financial stability and, more recently, in pushing the automatic exchange of tax information between governments. A new global standard on such exchange could be approved by the G20 ministers in November, among other actions.

“For too long, G20 countries have turned a blind eye to massive financial outflows from developing countries which are channelled through offshore bank accounts and secret companies,” according to John Githongo, an anti-corruption campaigner in Kenya.

“Introducing smart policies could help end this trillion dollar scandal and reap massive benefits for our people at virtually no cost. The G20 should make those changes now.”

Coordinated response

In fact, many G20 countries have instituted some of these reforms on their own. The U.K. government, for instance, has taken unilateral action on publicising information on corporate ownership, while the United States was the first to pass strong transparency requirements for multinational extractives companies.

While such piecemeal national legislation can spur other countries to action, many feel only a comprehensive approach would have a chance at having a substantial impact. Further, many governments have pledged to act on these issues, but have yet to actually follow through.

“Illicit financial flows are a perfect example of a transnational problem, in that you have two legal regimes in which loopholes are being exploited,” Josh Simmons, a policy counsel at Global Financial Integrity, a Washington watchdog group that supplied data for the new ONE Campaign report, told IPS.

“So when an international cooperative body is able to identify these loopholes, they can get member countries to move in sync to address the situation. But if only one country tries to do so, businesses would probably just move elsewhere.”

Others are looking even more broadly than the G20. A paper released last month by researchers with the Center for Global Development, a think tank here, calls for the inclusion of anti-tax-evasion aims in the new global development goals currently being negotiated under the United Nations.

Indeed, even while there could be real movement at the G20 on several of these issues this year, the work on the other end of this equation – in developing countries – remains onerous.

“We need to get developing countries’ tax systems up to speed, strengthen their financial intelligence units and get their anti-laundering laws up to code. And that is proceeding, but much more under the radar given its complexity,” Simmons says.

“Still, that’s where people are actually bearing the brunt of this problem. Tax avoidance in the United States contributes to the national debt, but in developing countries it’s literally causing people to go hungry.”

Edited by Ronald Joshua