FFD3: From delusion to new hopes for the future
by Angela Zarro, SID | The FfD3 concluded in Addis Ababa with the signing of an agreement that - as expected - raised a cacophony of groans of delusion and disappointment from civil society organizations, development experts, practitioners, and advocacy groups. The outcome document failed to recognize and respond to the mulitple challenges that the world is presently facing. Substantially the conference missed the occasion to find sustainable ways to finance development, as mandated, taking a step backward with regards to the previous Monterrey (2002) and Doha (2008) agreements. 'The talks had damaged the integrity of the development finance agenda, retreating from commitments made on several issues at previous conferences' (Women's Major Group).
The FfD3 conference built on intense negotiations held over previous weeks at the UN headquarters in New York and which culminated in the Addis Ababa Action Agenda, officially endorsed and adopted during the conference. In the reality the space for negotiations and substantial discussion on the document in Addis was very narrow. 'The four days of the Conference were marked by an intense battle of will and power between the North and the South, where the USA, EU, and Japan allegedly exerted severe pressure on developing countries including several African countries to yield to their demand of sealing the document as it was' (Bhumika Muchhala and Ranja Sengupta, TWN 21 July 2015).
Ban Ki-moon put it clearly when he said 'Building a sustainable world requires more than fine words, it needs finance'. And the 'Addis Ababa conference can be the starting point for a new era of cooperation and global partnership'. However it is around the question of where to find the necessary resources that the desired cooperation among countries inexorably failed to synthetize a common response. 'The conference has basically failed to scale up existing resources and commit new financial ones' (CSO response to the Addis Ababa Action Agenda).
The outcome document reflects the limited political will to move the agenda forward and initiate real economic reforms, as was already evident during the negotiations. Although having a strong public finance (and taxation) base was recognized by many countries and parties as an important source of development funding (beyond foreign aid and investments), solutions towards encouraging a more transformative agenda through fighting corruption and evasion were firmly resisted, especially by the OECD bloc. Negotiations were characterized by a significant divide between the G77 and the OECD countries, on a number of issues: namely international tax cooperation and the Rio Principle of Common but Differentiated Responsibilities (CBDR), to name two among the most crucial. 'Negotiations concluded in bad faith as developed countries reject final hour proposals for improvements to the UN tax committee, let alone a global tax body' (Bhumika Muchhala and Ranja Sengupta, TWN). On common but differentiated responsibilities (CBDR), the document mentions it only in reference to climate change, otherwise there was a general reaffirmation of the Rio Principles as a whole instead of a specific reference to CBDR, as originally sought by the whole of G77 (Third World Network, 20 July 2015).
Moreover, the governments 'trend' of outsourcing their responsibility to the private sector was confirmed throughout the entire FfD3 process. The Addis Agenda gave lots of space to private sector activities, including public-private partnerships, with scant regard for accountability mechanisms to uphold human rights standards, including environmental and social safeguards (Awid). In the article ‘The corporate capture of development by corporate interests at the UN’ published a few days before the conference by Latindadd, the authors warned against the privatization of development through private public partnerships. They argued that many groups of most powerful countries in the world – which continue to be stuck in fiscal crises – see Addis Ababa as an opportunity for their large private companies to do new business. That is to say, to convert the UN Financing for Development (FfD) process into a mechanism to exit their own crisis. This commitment to privatize development implies that ODA flows would go to the private sector, instead of going directly to development projects. Also, that Public-Private Partnerships (PPP) would be consecrated, especially in infrastructure but also in services, as the solution to the global crisis. Mobilizing public funds to leverage private investment involves transferring the risk from the private to the public sector, ie the taxpayers, and creating new risks of public debt (on PPPs see the Eurodad Report What lies beneath?).
As if this wasn't enough, the International Monetary Fund continued to be considered as the only international safety net for global stability. Instead of strengthening the role of the United Nations in leading human rights based and pro-development policies, the Addis accord validates the IMF-led austerity measures without reflecting on the IMF's previous failures (CSO Response to the outcome documents).
The relationship between the FfD and post-2015 tracks was another key dividing element among countries, diluting the real discussion and derailing focus from the real FfD issues. The FfD mandate was to focus on debt, aid, foreign direct investments, financial flows, international taxation and to set the rules to forge macroeconomic, financial, trade, tax and monetary policies and relations among states, underpinning development for all and not allowing globalization to be the privilege of a shrinking elite. By becoming instrumental to the Post 2015 agenda and its MoI, the FfD agenda would simply kill itself, as it would lose any raison d'etre outside the Post 2015 agenda (Stefano Prato). Civil society and a few countries repeatedly asked to keep the two tracks separate - in the reality this divide also exercised some sort of impalpable pressure within civil society itself when it came to allocating priorities to the different sectors from a financial point of view. As the climate conference approaches (November-December 2015) and the Post 2015 process draws to a conclusion (September 2015), expectations will be flying high amidst a collective fear that battles will be lost due to lack of funding. However, FfD is not a global wallet and it is important that the many different constituencies in development don't compete against each other and stay united in stressing the inadequacy of the FFD3 outcome thus far and keep engaging with member states and the UN on how to achieve more.
If anything, the role played by civil society is the only positive sign that emerged out of Addis. It is thanks to the tireless action and advocacy of civil society that issues such as CBDR, global tax body, a follow up and review process became key elements in the agenda (see Aldo Caliari's article here). As stressed in the CSO response to the outcome document: We [ndr: the members of hundreds of civil society organizations and networks from around the world engaged in the Third FfD Conference] will continue to promote the vision of an economy at the service of the people and the planet, and advocate for the democratization of economic governance and the reaffirmation of the centrality of the United Nations against the governance clubs of the powerful.
By Angela Zarro, SID
Interview with Stefano Prato, SID Mangaing Director, on behalf of the Addis Coordinating Group, CSOs for FFD3 Forum
Joint Statement, Ms. Rama Salla Dieng (Women’s Group for FFD) & Stefano Prato (CSO FfD Group) Opening, 2nd Plenary Meeting 13 July 2015 Addis Ababa
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