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As a deal was struck on funding the poverty battle at the development finance summit in Addis Ababa, the UN hailed a historic moment while others branded the outcome tragic. We look at what was agreed
Some campaigners gravely warned the talks were about to fail, while others criticised the obduracy of participants who refused to budge from pre-set positions. But after three days of sometimes tense negotiations in the Ethiopian capital, a deal on financing global development was struck late on Wednesday. The Addis Ababa action agenda lays out the different ways nations aim to pay for an ambitious plan to end poverty, ensure equality and put an increasingly fragile world on the path to sustainable development.
But just what kind of deal was struck is seemingly still up for debate.
The UN, which organised the financing for development (FFD) summit, described “a series of bold measures to overhaul global finance practices and generate investments for tackling a range of economic, social and environmental challenges”.
“Historic”, “groundbreaking”, “a milestone” – just some of the words the UN used to describe a blueprint that it said would forge “an enhanced global partnership that aims to foster universal, inclusive economic prosperity and improve people’s wellbeing while protecting the environment”.
Neven Mimica, the European Union’s commissioner for international cooperation and development, tweeted late on Wednesday: “Great night in #Addis – we have an agreement for our world, our dignity, our future!”
The hosts might be expected to talk up their party. Some of the guests were not so impressed. Civicus, a global network of civil society organisations, said the meeting had brought no new money to the table.
“We are disappointed that the FFD process has neither yielded new resources to fund the investments needed to end poverty nor taken meaningful steps to address problems in the international financial system,” said Danny Sriskandarajah, the group’s secretary general.
Some observers were even blunter.
“After three days of bullying, developing countries were finally run over. The consequence of the Addis Ababa outcome is that more than 100 developing countries will remain excluded from decision making on global tax standards,” said Tove Maria Ryding, policy and advocacy manager for tax justice at Eurodad.
“This is not only a tragic day for the world’s developing countries, who will now have to accept that global tax standards will get decided in a closed room where they are not welcome. It is a tragic day for all of us, because a global tax system where half of the world’s countries are excluded from decision-making will never be effective. As long as our governments keep failing to cooperate on tax matters, multinational corporations will be able to dodge taxes,” Ryding said in a statement.
Others took a glass half-full view.
Irene Dotterud of Save the Children said: “Addis isn’t everything we wished for but it’s an important step forward.” There was an opportunity now to build momentum towards the UN summit in September where the sustainable development goals – the priorities that will define the development agenda for the next 15 years – will be ratified, she added.
But the charity was also disappointed that calls for a new global tax body went unanswered. It said the “the genie of international tax reform” was out of the bottle and it expected rapid progress in the coming months.
Oxfam said the summit had delivered “unresolved rigged tax rules and privatised development” but it too pledged the fight for “true global tax reform and tax cooperation” would continue.
“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,” said Winnie Byanyima, Oxfam’s international executive director. “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.”
UN secretary general Ban Ki-moon said the deal marked a “critical step forward”, suggesting more work ahead. Not only will the focus now be on the New Yorkmeeting to ratify the SDGs but, in December, a UN climate conference will be looking for action and commitments to combat that peril too by reducing carbon emissions.
“It provides a global framework for financing sustainable development … The results here in Addis Ababa give us the foundation of a revitalised global partnership for sustainable development that will leave no one behind,” he said.
So what was agreed?
The Addis Agenda includes more than 100 concrete measures, addressing all sources of financing, and covering cooperation on issues ranging from technology, science, innovation, trade and helping developing countries strengthen their systems and institutions, the UN said.
Among the main points are:
- A social compact: countries committed to set up social protection systems, with national spending targets for essential services like health and education.
- Recommitments to the target of spending 0.7% of gross national income on aid. Sceptics might say, however, that the target is already 45 years old, and only a handful of countries have yet reached the goal. Campaigners now want to see clear timetables for action.
- Commitments to collect more taxes, fight tax evasion and deal with illicit financial flows. But the absence of a commitment to an international tax body could be rated the biggest “fail”. Campaigners said talks went to the wire, but there were no major changes to the existing UN tax committee of experts.
The role of private investment was underlined, with promises to create enabling environments through regulation and public policies. But some NGOs warn that the emphasis on private finance might not benefit the world’s poorest people. “This agreement opens the door for the private sector to use development money to generate profits, while the standards to ensure that companies comply with human rights remain non-binding guidelines,” said María José Romero of Eurodad.
Countries agreed to work together to fund infrastructure for energy, transport, and water and sanitation, and there was also a commitment to promote affordable and stable access to credit for smaller enterprises.
There were also promises to create more institutions to tackle some tricky issues that require deep pockets: a technology facilitation mechanism is to be created at the SDG meeting; a global infrastructure forum will look at infrastructure gaps and identify areas for investment; and the creation of a global strategy for youth employment was proposed.
Still up for negotiation are a proposal to tax harmful substances like tobacco to reduce consumption and boost revenues; and a request to developed countries to implement their commitment to a goal of jointly mobilising $100bn a year by 2020 to address the needs of developing countries.
The battle fought in Addis is still being analysed, but many campaigners stressed that the war to secure financing to “leave no one behind” was far from over.
“Citizens from all around the world must continue to challenge rigged rules that favour vested interests, and governments must listen. 2015 can still deliver the change we need towards a fairer future,” said Byanyima.