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Entwicklungsfinanzierung & Innovation

This is what can happen when you get 193 countries in 1 room

Ashley Campbell

Welp...that played out pretty much as I was expecting. This past week, the Third Financing for Development Conference in Addis Ababa, Ethiopia, took place, the first of three major summits this year (the other two being the UN General Assembly where the new Global Goals will be announced and the 2015 Paris Climate Summit) that are meant to provide concrete roadmaps for guiding the world toward a more sustainable, equitable future. As the first of the three, Addis was an important precursor. It has tested world leaders’ ability and will to come together and devise material, aggressive commitments needed to achieve the Global Goals.

But that’s not what was accomplished. Not even close. 

If you had read my “predictor” piece at the onset of the conference, you will remember I had expressed some concerns that the summit would under-deliver. Usually I love when I’m right, but in this instance...man, I wish I had been proven wrong.


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The Addis Ababa Action Agenda that was agreed by all 193 countries during the summit has lots of pioneering, beautiful language in it, which I definitely appreciate: 

To end poverty in all its forms everywhere and finish the unfinished business of the Millennium Development Goals, we commit to a new social compact. In this effort, we will provide fiscally sustainable and nationally appropriate social protection systems and measures for all, including floors, with a focus on those furthest below the poverty line and the vulnerable, persons with disabilities, indigenous persons, children, youth and older persons. We also encourage countries to consider setting nationally appropriate spending targets for quality investments in essential public services for all, including health, education, energy, water and sanitation, consistent with national sustainable development strategies. 

Wonderful! Now what are you going to do about it? Well, apparently not much…

The agenda finally acknowledges that the poorest, most marginalized groups--including girls and women and Least Developed Countries--need to be prioritized when it comes to sustainable development, but frankly it doesn’t tackle the structural inequalities in the current global economic system, aka the barriers that keep people poor. 

As the (scathing) official Civil Society Response to the agenda claims,"it is almost entirely devoid of actionable deliverables." The leadership, creativity, and ambition that are needed to address the scale and diversity of the world’s problems are simply absent. Pretty much what we were expecting, unfortunately. 


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So what went wrong exactly? The agreed Action Agenda fails to scale up existing resources for development and very few consequential commitments towards new financing mechanisms were announced. More important was the inability to meaningfully address systemic issues in “macroeconomic, financial, trade, tax, and monetary policies.” This might sound harsh, and it is, but the agenda is totally inadequate to support the operational Means of Implementation for the Post-2015 Agenda. All those sweeping claims for global reform and support of people and planet starkly clash with the lack of action on behalf of world leaders.  

The biggest disappointment of the conference was a failure to come to consensus on international tax policy and the creation of a new intergovernmental, transparent tax body. This was the major issue that prolonged negotiations up until the final moments. Essentially, developing countries wanted to significantly scale up the current UN international tax body so that all countries (instead of just rich ones) would have a seat at the table when deciding on international tax cooperation, illicit financial flows, tax dodging, etc. Developed countries blocked this proposal, claiming that such a solution would not be the most effective way of coming to concrete, actionable solutions to these issues (and I kind of have to agree with them). So the status quo on tax remains. Sigh...


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Developed countries also de-emphasized the role of ODA going forward. Although it will absolutely play a much smaller role proportionately to development post-2015, countries continue to shrug off commitments made 4+ decades ago to provide 0.7% of their national incomes to foreign aid. Yes, language urging countries to restate these commitments was in the final agenda, which is a success in itself, but there were no new pledges made or signs of follow-through for the near future. 

I’m going to ease up on the negativity for a minute and note a few positives that resulted from Addis. 

During the conference, the IMF announced it will increase its concessional (low-interest or interest-free) lending by 50%, which will provide a huge relief for poor countries who have trouble accessing cheap debt or repaying their loans. Additionally, the World Economic Forum, OECD, and ReDesigning Development Financing Initiative announced three new blended financing (public/private) initiatives aimed at unlocking hundreds of billions of dollars of investment for sustainable development. Lastly, the US, Netherlands, UK, and Germany announced an Addis Tax Initiative, aimed at doubling their support of developing countries’ ability to raise taxes within their own countries, increase transparency, and curb corruption. 

At the end of the day, the Addis Agenda failed to garner the leadership and action needed to achieve the Global Goals and beyond. The Agenda itself is certainly utopian and optimistic in discussing what it will take to create this “better world,” including achieving complete gender equality, a new social compact that supports the most vulnerable, and investing in climate-smart agriculture. Ultimately, its value lies in its role as a set of guiding principles and suggestions that will advise the private and public sector going forward. But guidelines without commitments are not enough to achieve creative, collaborative solutions for a post-2015 world. 

End of rant...