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Third International Conference for Development: Corporatizing Development; Bye, Bye Cooperation?

The year 2015 heralded the expiry of the Millennium Development Goals (MDGs), rallying the international community towards a new set of Sustainable Development Goals (“SDGs”) to be decided at this year’s UN General Assembly in September, as well as a financial framework that will guide how to fund and finance those goals.

Establishing post-2015 goals was an outcome of the Rio+20 summit in 2012, which mandated the creation of an open working group to come up with a draft set. Subsequently, 17 sustainable development goals (SDGs) have been drawn. Within the goals are a proposed 169 targets, “to put a bit of meat on the bones”. Proposed targets under goal one, for example, includes reducing by at least half the number of people living in poverty by 2030, and eradicating extreme poverty (people living on less than $1.25 a day). Under goal five, there’s a proposed target on eliminating violence against women. Under goal 16 sits a target to promote the rule of law and equal access to justice.

Rough calculations from the intergovernmental committee of experts on sustainable development financing have put the cost of providing a social safety net to eradicate extreme poverty at about $66 billion a year, while annual investments in improving infrastructure (water, agriculture, transport, power) could be up to a total of $7 trillion globally. The question is where will the money come from to achieve these goals?

The Third International Conference on Financing for Development (FfD3) held in Ethiopia from 13 to 16 July 2015 (Eritrea could not be represented at the appropriate Ministerial level because of the inappropriate venue) was expected to answer that question. The FfD3 concluded with the adoption of the Outcome Document of the Conference, the “Addis Ababa Action Agenda” (AAAA) focusing on a global framework for financing development post-2015 and action areas including: domestic public resources; domestic and international private business and finance; international development cooperation; international trade as an engine for development; debt and debt sustainability; addressing systemic issues; and science, technology, innovation (STI) and capacity building.

Commenting on the Outcome Document, UN Secretary-General Ban Ki-moon said the AAAA: is a major step forward in building a world of prosperity and dignity for all; revitalizes the global partnership for development; establishes a strong foundation for implementation of the post-2015 development agenda; and points the way for all stakeholders for smart investments in people and the planet “where they are needed, when they are needed and at the scale they are needed.”

Nonetheless, the FfD3 has met criticism from many quarters. The skeptics maintain that, lofty ideals aside, the Agenda has done very little in terms of finding funds for the SDGs. In a response statement to the conference declaration, the civil society forum on financing for development (a grouping of more than 600 civil society organizations) complained: “It is hard to be optimistic with the current draft, as it is almost entirely devoid of actionable deliverables….It is deplorable that a conference on financing has so far failed to scale up existing resources and commit new financial ones.”

Another hot point of division is the conference’s emphasis on the private sector’s role in the efforts to achieve the goals. Indeed, in conjunction with FfD3, the International Business Forum, with 800 participants, held a one-day meeting. The forum claimed that the occasion presented an “exceptional opportunity to underscore the role and success of the private sector and public-private cooperation in delivering development solutions.”

Additionally, World Bank Group President Dr. Jim Yong Kim re-iterated the commitment to boosting shared prosperity, moving from billions to trillions with the central task to align “profit with purpose”.

The statement above may seem benign at worst and commendable at best. However, it is doubtful that a “Sustainable Development Investment Partnership” including Citibank, Standard Chartered, and other big names will really become reliable partners in fulfilling all the development agendas. Rather, this stress on private involvement amounts to a “corporatization” of development.

A number of member countries and civil society organizations warned “the optimism towards private finance to deliver a broad sustainable development agenda is misplaced. Civil society and a number of Member States have consistently raised serious concern on the unconditional support for Private Public Partnerships (PPPs) and blended financing instruments. Without a parallel recognition of the developmental role of the State and clear safeguards to its ability to regulate in the public interest, there is a great risk that the private sector undermines rather than supports sustainable development.”

Moreover, the rich countries are being accused of running away from their moral responsibilities in contributing to sustainable development via aid and cooperation. Many have pointed out that the conference’s emphasis of South-South cooperation, Domestic Resource Mobilization or the Private Sector is a getaway plan for the developed countries.

Writing in The Guardian as the conference was going on, Jonathan Glennie stated that while South-South cooperation, domestic resources and the private sector are still important: “this refocus on domestic revenues could be accompanied by a reduced international responsibility for development progress. Some richer neighbours are tempted to holler, ‘Hey, poor countries, sort yourselves out’ in an attempt to get themselves off the hook.”

The conference also underscored the importance of increasing the tax revenues of developing countries and curbing illicit financial flows and capital flight, which according to Glennie “are facilitated by anachronistic aspects of our global financial architecture”. A planned “Tax Initiative”, which seeks to support developing countries’ attempts to raise tax revenues, is an example of how developed countries are shying away from commitments.

But commitment is not the only thing that western countries are ducking. Many developed countries are averse to the establishment of a new intergovernmental body to decide on global tax matters, which is currently a prerogative of the OECD and the G20.  The rich countries are invoking the excuse of “inefficiency” to preclude “inclusivity”.

The Civil Society Forum expressed its disappointment with the failure of the conference to address the shortcomings of today’s financial system saying: “We demand …attempts to create a new debt restructuring institution and a multilateral legal framework on sovereign debt at the UN initiated by the General Assembly…Instead of the profound reflection on the IMF’s failures pre- and post-crisis and its unwarranted austerity advice as a response, the Agenda calls for strengthening it and validates the insufficient governance reform process going on.”

Of course, it remains to be seen whether the SDGs will be adopted at the UN in September or the provisions of the Agenda will be employed to implement them.

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