Secretary-General Calls for New Era of Sustainable Development in 2015, as Economic and Social Council Opens Two-Day High-Level Event
With the global economy hampered by major geopolitical tensions and other unexpected shocks, the world must reorient finance patterns and better coordinate public and private investments to achieve the post-2015 development agenda, the Economic and Social Council heard today, as it began a two-day special high-level meeting with the Bretton Woods institutions, the World Trade Organization and the United Nations Conference on Trade and Development.
In the context of such shocks, strong, balanced and sustainable recovery required policies that identified and tackled the root causes of youth unemployment, United Nations Secretary-General Ban Ki-moon said, stressing the need to make available necessary resources at all levels.
Furthermore, he said, official development assistance (ODA) must continue and the trend of declining aid to least developed countries must be reversed. This year must be one of global action, “one that will be remembered as the dawn of a new era of sustainable development,” he said.
Participants from the major institutional stakeholders, civil society and the business sector illustrated an unprecedented level of cooperation that had engaged common efforts to formulate the new agenda.
Martin Sajdik (Austria), Council President, said financing and implementing the new agenda must be a concerted effort of all stakeholders at the local, national, regional and international levels. The drama of each migrant and refugee drowning in the oceans at different corners of the world reflected, “in the bitterest way”, the appalling multitude of unsolved economic and political problems in many regions, about which the international community must not be indifferent.
Calling for joint action in the fight against organized crime, he said a new global partnership on sustainable development must be based on equity, cooperation and accountability.
Delivering the keynote address, Ali Babacan, Deputy Prime Minister of Turkey, said a sustained recovery remained elusive even seven years after the global financial crisis. While recent signals from advanced economies were encouraging, the picture was mixed in emerging markets. Many reforms were needed in the sectors of labour, production, social security, investment and human capital accumulation, which fiscal and monetary policies alone would not help to achieve.
The convergence of key international conferences this year provided a unique opportunity to international institutions to step up action towards sustainable development, he said, noting that the development community’s current concern was the creation of a more inclusive partnership based on mutual respect. The current ODA framework was important but insufficient, he said, stressing the need to unleash other funding sources.
Xiaozhun Yi, Deputy-Director of the World Trade Organization (WTO), said the organization’s rules governing global trade had proved their worth in the Millennium Development Goals as a building block and as a buffer to protectionism. The WTO should continue to play that role through 2030.
He said the WTO could support United Nations processes through work on Aid for Trade and enhancing its engagement with least developed countries. The organization was helping developing countries integrate into the evolving trade system, he said, calling for global policy coherence in the sustainable development goals.
The morning session included a ministerial segment on the theme “World economic situation and prospects”, featuring the representatives of Armenia, Colombia, Sweden, Tunisia, Ethiopia and the European Union, as well as a representative of the Eurasian Economic Club of Scientists Association
Presenting statements from institutional stakeholders were representatives of UNCTAD, the World Bank, and the International Monetary Fund.
In the afternoon, there were two additional thematic debates: “Current challenges and emerging opportunities for the mobilization of financial resources and their effective use for sustainable development on the road to Addis Ababa” and “Renewed global partnership for development in the context of the post-2015 development agenda”.
Participants in those debates, including at the ministerial level, were representatives of the Netherlands, Guyana, Norway, and Mexico, as well as the United Nations Under-Secretary-General for Economic and Social Affairs and senior officials from UNCTAD, United Nations Development Programme, World Bank Group, and the Organisation for Economic Co-operation and Development (OECD).
Participating in the interactive segments were representatives of South Africa (for the Group of 77 developing countries and China), Ecuador (for the Community of Latin American and Caribbean States), Turkey, Benin, Canada, United States, Russian Federation, Switzerland, Azerbaijan, Armenia, Nepal and Bangladesh. Also speaking during the interactive dialogue were representatives of the International Labour Organization, the business sector and civil society.
The Council will meet again at 10 a.m. on Tuesday, 21 April, to continue its special high-level meeting.
Opening Remarks
MARTIN SAJDIK (Austria), President of the Economic and Social Council, said the international institutions gathered for the meeting today had been working closely together to chart a new era for sustainable development. Financing and implementing the new agenda must be a concerted effort of all stakeholders at the local, national, regional and international levels. The need for a renewed global partnership for the implementation of the post-2015 agenda had been highlighted over the past week, when Member States and a wide range of stakeholders had the first in-depth discussion of the zero draft of the outcome document of the Addis Ababa Conference on Financing for Development.
He said the world must promote a reorientation of investment patterns and better coordination of public and private investments to maximize their development impact. Furthermore, the rise of systemic global risks must be addressed and enabling national and international environments provided for sustainable development in an integrated manner. This year, the world economy started on a weak note following subdued growth in 2014. Whereas the economy was expected to strengthen in the next two years, it had been hampered by major geopolitical tensions, including the crises in Ukraine, Syria, Iraq, Libya and Yemen. The drama of each migrant and refugee drowning in the oceans at different corners of the world reflected, in the bitterest way, the appalling multitude of unsolved economic and political problems in many regions, about which the international community must not be indifferent.
In order to mitigate those challenges, the world must strengthen international policy coordination and cooperation, he said, adding that joint action would also be needed in the fight against organized crime, as clearly demonstrated last week in Doha at the thirteenth United Nations Congress on Crime Prevention and Criminal Justice. A new global partnership of sustainable development must be based on equity, cooperation and accountability, he said, pointing out that the Council had unique strengths and advantages to promote a strong follow-up process. A revitalized special high-level meeting of the Council with the World Bank, the International Monetary Fund, World Trade Organization and the United Nations Conference on Trade and Development (UNCTAD) must remain the premier forum for addressing issues of coherence, coordination and cooperation in the context of the financing for development process.
BAN KI-MOON, United Nations Secretary-General, said today’s meeting was an important step in preparations for the upcoming Third International Conference on Financing for Development in Addis Ababa, as well as for the post-2015 Summit and the United Nations Climate Change Conference later this year. The participants from the major institutional stakeholders, civil society and the business sector today illustrated an unprecedented level of cooperation that had engaged common efforts to formulate a new agenda. The Addis conference would be a chance to devise a new international financial framework that was predictable and effective in achieving sustainable and inclusive development. He anticipated three key outcomes there: a cohesive and holistic financing framework for sustainable development; concrete deliverables, particularly in crucial areas such as infrastructure, agriculture, social needs, and support for small- and medium-sized enterprises; and a strong follow-up process, based on technical expertise and the participation of institutional stakeholders, to ensure that no country was left behind.
He said that the global economic recovery was hampered by new challenges, including unexpected shocks such as heightened geopolitical conflicts. Policies were needed to support a strong, balanced and sustainable recovery. The root causes of youth unemployment must be identified and tackled, and necessary resources for sustainable development at all levels must be made available. Noting that the zero draft of the outcome document of the financing for development process emphasized the importance of fighting illicit flows, including through domestic reforms and international tax cooperation, he said it also welcomed the contributions of the Group of Twenty (G-20) and the Organisation for Economic Co-operation and Development (OECD) in that area. However, those initiatives should be complemented by more inclusive deliberations at the United Nations.
Furthermore, he said, official development assistance (ODA) must continue and the declining trend of aid to least developed countries must be reversed. The draft also emphasized the importance of development banks, private finance, technology, capacity-building and incentives to promote greater private investment in sustainable development. It also highlighted the need for an equitable multilateral trading system, sustainable debt and more inclusive global governance. To deliver as one on the post-2015 development agenda, a revitalized and stronger global partnership for development was needed, as only a concerted effort by all stakeholders would permit success. This year must be one of global action, “one that will be remembered as the dawn of a new era of sustainable development”.
ALI BABACAN, Deputy Prime Minister of Turkey, said that seven years after the global financial crisis, a sustained recovery remained elusive. While recent signals from advanced economies were encouraging, the picture was mixed in emerging markets. Among the key challenges for countries was addressing the volatile exchange rates. Furthermore, there were many reforms needed in the sectors of labour, production, social security, investment and human capital accumulation, which fiscal and monetary policies alone would not help achieve.
He said his country, during its current presidency of the G-20, stressed the principles of inclusiveness, implementation and investment and would focus on enhancing women’s role in business and on the needs of low-income developing countries. If G-20 countries implemented their pledged reforms, they would add 2 per cent to the global economy. Turkey would focus on the implementation of those strategies and action plans based on a transparent follow-up template as well as on efficient investment mechanisms, including public-private partnerships. Sovereign and pension funds and other sources had trillions of dollars in potential investment, which could be mobilized if countries assured greater policy predictability, while asset-based and Islamic financing must be looked into more closely.
The convergence of key international conferences this year provided a unique opportunity to international institutions to step up action towards sustainable development, he said, noting that the development community’s current concern was the creation of a more inclusive partnership based on mutual respect. The current ODA framework was important but insufficient, he said, stressing the need to unleash other funding sources. The G-20 had its own development agenda with action-oriented priorities that were very much linked to the sustainable development goals. The current practice of pursuing humanitarian and development responses on separate tracks should be revisited in view of recent experiences, he said.
Ministerial Segment on Theme 1
VACHÉ GABRIELYAN, Deputy Prime Minister and Minister of International Economic Integration and Reforms of Armenia, said that the conventional approach to financing required updating. While public finance for development played an important role, that role was evolving. One of the more promising venues was public-private partnerships, especially for middle-income developing countries. The help of international institutions was also critical. Armenia was working with the World Bank, which he said would also be beneficial to others.
Noting that the McKinsey report indicated an undersupply of infrastructure in developing countries and emphasized that more efficient use of current resources could almost fill that gap, he said that Armenia was making efforts towards that end. As a landlocked country, it viewed transportation as crucial to development. Focused on making improved use of existing domestic transport infrastructure, he said the security difficulties on the border increased the challenge to cross-border infrastructure. However, he believed cooperation would prevail in the future. He commended the Economic and Social Council’s role on the outcome of development conferences, adding that 2015 must be “a year of opportunity, a watershed” towards a more sustainable world.
MAURICIO CÁRDENAS, Minister for Finance of Colombia, said his country had successfully developed socially and economically. In 2014, the economy had grown 13.4 per cent. Its investment rate represented 30 per cent of its gross domestic product (GDP), and by 2014, the country had managed to significantly reduce the poverty level from 40 per cent of the population in 2009. However the international economy presented two major threats: the drop in the price of mining and energy commodities, which had a positive effect on consumer countries but presented major challenges to producers, and the coordination of monetary policies in major economies, especially the expected increase in interest rates in the United States. The Addis summit should be analysed against that backdrop.
On domestic resource mobilization, particularly taxation, he noted that while those revenues represented 20 per cent of his country’s GDP, that rate was 34 per cent in developed countries. He was concerned at the erosion of the tax base, adding that the Third Conference on Financing for Development should address that. Developing countries needed capacity-building for analysis of tax issues such as evasion. Human resources investment was needed for greater efficiency in collecting tax revenue, which required competent and well-remunerated staff. Importantly, the tax system must be depoliticized. Further, informal-sector activities must be reduced and, towards that end, Colombia had slashed taxes on formal jobs. He also stressed the importance of private investment, both domestically and internationally through public-private partnerships. Recent strong progress in the Inter-American system through the creation of the Inter-American entity of the Development Bank would help the private sector. Still, domestic development banks should be strengthened as catalysts to other resources.
NEVEN MIMICA, Commissioner for International Cooperation and Development of the European Union, said that the decisions taken now would determine whether the next generation would succeed. The state of the global economy did not leave room for complacency. The European Union was pursuing an ambitious domestic economic policy strategy on three fronts: an investment plan for Europe that would unlock public and private investments in the real economy of at least 315 billion euros over the next three years; renewed commitment to structural reform across sectors; and greater fiscal responsibility. The Union was also committed to a successful outcome in international processes through the upcoming conferences and summits. Financing for development should address the full range of measures, including an enabling policy framework. Addis should mobilize action by all countries and stakeholders at all levels for a true global partnership. While the Union was committed to providing more development assistance, such aid should serve as a catalyst to engage and leverage other financial and non-financial means of implementing sustainable development.
The European Union, he went on, already provided over half of global ODA, but that would not be enough. The role of financial institutions was crucial and the paper delivered at the spring meeting of multilateral development banks gave a good indication of the contribution they could make. Indeed, unleashing the potential of private institutions was key. Addis should give a push to public-private partnerships and private partnerships for development and also unlock the potential of science, technology and innovation, while focusing too on domestic resource mobilization. He stressed the need to concentrate on trade as one of the most powerful means to promote sustainable development and growth as well. The Union, he noted, was the leading provider of Aid for Trade and granted significant unilateral trade preferences. Its “Everything but Arms” initiative gave duty-free and quota-free access to its market for all products from the least developed countries except arms and ammunition. When implementing the new development agenda, addressing inequalities and exclusion, especially of women, would be at the core of the Union’s efforts. The Addis outcome should be framed as the implementation pillar of the new agenda.
MAGDALENA ANDERSSON, Minister for Finance of Sweden, said that development looked different from different parts of the world, but that two challenges were universal: climate change and women’s empowerment and gender equality. Climate change would have a serious impact on the global economy if not addressed. To fight it, fossil fuel subsidies must be phased out and a price must be put on carbon. Now, when the oil price was low, was the opportune time. Sweden had more than 20 years of effective experience with the carbon tax. Since 1991, its GDP had increased by some 60 per cent and carbon emissions had been reduced by 20 per cent. Sweden was the largest per capita contributor to the green climate fund and hoped others would follow suit.
On gender equality, she asked, if talent and intelligence were evenly distributed between boys and girls, how much talent, intelligence and competence was left untapped? Tapping into the potential of girls and women would also increase GDP. Gender equality was a means of increasing resource mobilization, and the world could not afford to fail to make use of half the population. More domestic resources must also be mobilized. She welcomed greater tax use for revenue, while at the same time there was a strong need to address issues of tax evasion and capital flight, which reduced resources available for development. ODA was important, but, with limited financing for development, it should be directed towards those countries most in need. Sweden was committed to providing as much as 1 per cent of gross national income (GNI) to ODA. All stakeholders must contribute to the upcoming conferences if they were to succeed.
Mr. IBRAHIM, Tunisia, said the world was divided between net exporters and net importers that needed to pursue reforms based on specific contexts. Social and economic challenges were strongly linked to those of security, as terrorists and extremists took advantage of underdevelopment. Tunisia, after its revolution, had taken significant steps towards political and institutional reforms. However, the people were waiting for tangible progress in everyday lives. Accordingly, the Government had focused on economic reforms that promoted growth and reduced internal inequalities. Expressing gratitude to the international community for its support during the first phase of Tunisia’s transition, he said the challenges ahead would require further coordination and cooperation.
ABRAHAM TEKESTE, State Minister for Finance and Economic Development, Ethiopia, said the world economy’s growth would remain moderate and uneven. The unexpected economic and social shocks, heightened geopolitical conflicts, and increasing terrorist threats undercut the global economy. International commitment to a transformative and sustainable development agenda required a new level of global partnership, and effective implementation of the new goals required the utilization of financing sources — public and private, domestic and international. An environment must be created that facilitated the private sector’s meaningful participation, while international-level obstacles must also be overcome. International financial and trade institutions had a much greater role in sustainable development financing and they must also provide support for domestic resource mobilization, capital market development, foreign direct investment, capacity-building and technical assistance. The Addis conference should not only agree on a new financial deal for development but should also embark on a new journey forging a new partnership to achieve the new goals.
MURAT KARIMSAKOV, President of the Eurasian Economic Club of Scientists Association, highlighting the outcomes of a series of anti-crisis conferences held in his country, said a solid knowledge base had been developed, which culminated in a process of collaboration among leading institutions and organizations of the region. The World Bank, UNCTAD, the Food and Agriculture Organization (FAO), the United Nations Educational, Scientific and Cultural Organization (UNESCO) and other organizations had supported the World Anti-Crisis Plan, and he urged the Economic and Social Council to be actively involved in its coordination.
Interactive Dialogue
The representative of South Africa, speaking for the Group of 77 developing countries and China, said the group did not support a proposed revised text on the zero draft for the Third International Conference on Financing for Development. Rather, working on a compilation text going forward would assist in delivering an ambitious and actionable Addis Ababa outcome document, in particular with regard to achieving an appropriate balance between public and private-sector roles and responsibilities. As yet, there was no agreement on that matter. Skewing the balance in favour of the private sector for support to sustainable development was not in the interest of developing countries, especially in terms of existing business models. Instead, global partnership for development among Governments should be strengthened and scaled up, while at the same time “policy space” for national Governments must be respected. Domestic regulations on public domestic financing must be the prerogative of national Governments. Further, manner of incorporating additional financing forms must also recognize the role of Governments in regulating financing channels to fund development programmes being implemented in their countries.
Underscoring the consequences for development of the previous world financial and economic crisis, he stressed the need for urgent and fundamental reform of the Bretton Woods institutions, particularly their governance structures, based on full and fair representation of developing countries, to address their lack of democracy, lest their legitimacy remain questionable. He called for the immediate entry into force of the 2010 International Monetary Fund governance and quota reform, as well as a commitment to advance their more comprehensive reform process. He urged the IMF to provide more comprehensive and flexible financial responses to the needs of developing countries without imposing pro-cyclical conditions and while respecting their need for adequate policy space. Adequate, predictable and stable financing for development, technology transfer with preferential terms and capacity-building were central to a strengthened global agenda. In addition, ODA should be increased to 1 per cent.
The representative of Ecuador, speaking for the Community of Latin American and Caribbean States (CELAC), said that fiscal policy across the world should be more countercyclical, supportive of job creation and equitable. Further, it was critical to enhance transparency, supervision, regulation and good governance of the international financial system to assure global stability. Underscoring the important role of ODA to achieve international development goals, he encouraged consideration of indicators beyond GDP, such as multidimensional poverty, for allocation. The post-2015 agenda should include a well-designed framework to turn promises into effective commitments with time-bound quantitative targets covering trade, investment, migration, technology, the environment and global institutions, all critical to developing countries.
He said a responsible approach should be adopted for multi-stakeholder partnerships involving all Member States and the private sector, philanthropic entities and civil society. Consideration also should be given to transparency, coherence, ownership and intergovernmental oversight, with a focus on impacts, monitoring and accountability, among others. He reiterated the need to address the distortions in international trade, in particular non-tariff measures, the persistence of tariff peaks, agricultural export subsidies and trade distorting domestic support, which affected market access for developing countries. The Doha Round must be completed with a balanced, ambitious and comprehensive outcome. All those efforts should be coordinated with reform of the Bretton Woods institutions, he said, expressing disappointment at the lack of progress in implementing the 2010 IMF reforms. In addition, it was essential to the stability and predictability of the international financial architecture to ensure that agreements between debtors and creditors in the context of sovereign debt restructuring be respected. He thus encouraged all Member States and the international financial institutions to participate in forthcoming sessions of the Ad Hoc Committee established by General Assembly resolution 68/304.
A representative of the business sector said her constituents were looking forward to becoming an active partner in the achievement of the sustainable development goals. The International Chamber of Commerce was working actively with the G-20 on initiatives aimed at small- and medium-size businesses, she said, adding that the business community was involved the intergovernmental process in advance of the Addis conference.
A representative of Turkey said the meeting was aimed at ways of coordinating the development agenda and was not the forum for comments such as those made by the Deputy Prime Minister of Armenia. Normalization of relations in the South Caucasus would help foster regional development, for which all parties must contribute.
The representative of Benin, speaking on behalf of least developed countries, said delegates had convened today amid a grim economic climate. Strong regulatory measures to reduce risk-taking were raising the cost of borrowing for developing and least developed countries. The moderate economic recovery that had begun in 2012 had declined in 2014, he said, stressing that foreign assistance alone would not be help developing countries. Rather, there was a need for integrated policies and coherence on achieving the three dimensions of sustainable development buttressed by a transparent measurement mechanism.
Statements
LUIS MANUEL PIANTINI MUNNIGH (Dominican Republic), Vice-President, Trade and Development Board, UNCTAD, said the world continued to face an increasingly complex interdependence of events and processes. Thus, the international community had the combined responsibility to bring its institutional perspectives and mobilize intergovernmental machineries for prosperity for all. International trade was a key enabler for achieving the post-2015 agenda; optimizing its impact on development depended on greater coherence of trade policies with other policies.
He noted that UNCTAD had developed an action plan enshrined in six packages for a big investment push in the context of the sustainable development goals, especially by the private sector. Its Investment Policy Framework for Sustainable Development was also intended to help countries design effective policies. Work on harnessing trade as an engine of development remained a work in progress, he said, stressing that systemic coherence was a crucial challenge. The mobilization of resources for development needed to be firmly rooted in a global partnership aimed at yielding prosperity of all. In that context, there was a need to strengthen multilateralism and ensure the credibility and legitimacy of the system.
MAHMOUD MOHIELDIN, Corporate Secretary and President’s Special Envoy on Millennium Development Goals, the Post-2015 process, and financial development, World Bank Group, said the development community was at a critical juncture about the planet’s future. International institutions and organizations were also engaged in unprecedented partnership. During the Group’s recent Development Committee meeting, ministers stressed various priorities relating to the sustainable development goals, including robust performance monitoring. In that context, about 57 countries lacked household surveys, which made measurement of poverty a challenge. While multilateral institutions would play their part, those goals would not succeed without effective national ownership, he said.
CALVIN MCDONALD, Deputy Secretary, International Monetary Fund, and Acting Secretary, International Monetary and Financial Committee, said the global economic recovery was continuing, but it was moderate and uneven. Advanced economies were doing better this year, but growth was slower in most emerging economies, owing largely to falling commodity prices. Promoting balanced and sustained growth required an integrated package that bolstered today’s growth and seized the opportunities of the future. To buttress the economic recovery, the Fund helped members through financing and fiscal policy advice. It would also deepen analysis on monetary policy and financial stability and examine complementarities among reforms. There was a need for close cooperation with regional institutions for financial integration of dynamic economies. Achieving the sustainable development goals would require partnership among advanced, emerging and developing economies to ensure appropriate policies.
XIAOZHUN YI, Deputy-Director of the World Trade Organization (WTO), said that sluggish economic growth across the world was impacting trade. Indicators showed that even in 2016 it would remain below the 5 per cent enjoyed from 1990 until the economic crisis. While many policies had been tried to address the issue, with interest rates at historic lows and central bank efforts having run their course, Governments could stimulate market demand by removing protective policies. That should be kept in mind for the post-2015 agenda and sustainable development. Trade should be recognized as a development policy instrument.
He said that WTO rules governing global trade had proved their worth in the Millennium Development Goals as a building block and as a buffer to protectionism. The WTO should continue to play that role through 2030. The multilateral Trade Facilitation Agreement would enhance commerce worldwide, particularly smoothing the path for developing countries. Once fully implemented, it would, among other things, support new jobs, principally in developing countries. WTO was committed to find solutions to the remaining issues of the Doha Round by July. He hoped an outcome would be delivered at the tenth ministerial round to be held in Nairobi. WTO could support United Nations’ processes through work on Aid for Trade and enhancing its engagement with least developed countries. Noting the need to reduce trade costs, he drew attention to the problem of access to trade finance, much of which was subjected to financing or credit assurances. He had seen the inclusion of that topic on the Addis agenda, giving it its proper place in the financing for development debate. WTO was helping developing countries integrate into the evolving trade system, he said, calling for global policy coherence in the sustainable development goals.
Theme 2 Debate
LILIANNE PLOUMEN, Minister for Foreign Trade and Development Cooperation of the Netherlands, said the ongoing “from billions to trillions” discussions for the post-2015 agenda affirmed both the scale and reality of the international community’s collective ambition. Official development assistance remained of key importance for countries in special need, and the world should reaffirm the commitments it had made in that regard. On resource mobilization, national tax collection agencies must be streamlined in order to generate new revenue, while efforts must be made to revise bilateral treaties to prevent tax avoidance. All available resources, including the vast amount of private finance available, should be harnessed towards sustainable development.
GEORGE TALBOT (Guyana), co-facilitator of the preparatory process for the Third International Conference on Financing for Development, specified three challenges ahead: change, skill, and response. In terms of change, sustainability had been defined as a foundation for the future within a universal framework based on differentiated reality. The Millennium Development Goals were narrowly defined and on the social side of the equation, while the sustainable goals had exponentially expanded the scope. That brought the challenge of effectively implementing a concept that integrated three dimensions with enormous synergies. It was necessary to be able to credibly define the quality of response at all levels from all actors. In addition to a credible framework, the Addis conference must focus on critical deliverables with cross-cutting relevance and impact.
GEIR PEDERSEN (Norway) co-facilitator of the preparatory process for the Third International Conference on Financing for Development, stressed his agreement with the previous speaker, and asked those present to leave their comfort zone to achieve important results. New ideas were needed to move “from millions to billions”. He asked the private sector to commit to change and adopt a responsible attitude.
MUKHISA KITUYI, UNCTAD Secretary-General, said the scale of the post-2015 challenge required trillions of dollars annually, and, therefore, the international community aimed for a comprehensive financing framework of sustainable development at Addis Ababa. That meant reiterating commitments made at Monterrey and Doha and also strong international action to mobilize domestic public and finance. The Addis agreement needed to stress the interlinkages among the various actions. The current discussions treated international trade in relative isolation from the rest of the proposed financing action, whereas trade and investment played a crucial role in such critical areas as raising domestic resources, improving tax revenues, transforming the structure of poor economies and providing livelihoods to the impoverished. In the new reality of the twenty-first century, trade and investment agreements must inform the journey to Addis, which meant recognizing those important interlinkages.
WU HONGBO, Under-Secretary-General for Economic and Social Affairs and Secretary-General of the Third International Conference on Financing for Development, said the Addis conference was a unique opportunity for financing and implementing the post-2015 agenda. Last week, Member States produced a zero draft, and new discussions would start tomorrow. The issue also dominated the recent session of the World Bank and IMF where there was strong support and ownership among the parties. Regional consultations emphasized the importance of domestic resource mobilization and reforms at the national and international levels to curtail illicit financial flows and to prevent tax avoidance. ODA and the role of migrants in mobilizing finance were also discussed during those consultations, as was the imperative of greater participation by developing countries in multilateral institutions. As Secretary-General of the conference, he pledged to do his utmost to ensure its success.
Interactive Dialogue
The representative of Canada said that ODA should be used to motivate the private sector. He described two projects in which Canada was working with public and private partners. The first, on redesigning development finance, was an initiative that aimed to scale up public-private models in a consistent way. The second initiative was developing a global financing exchange to serve as a marketplace and finance broker and which would harness the skills and expertise of the public, private and not-for-profit organizations, among other activities. Those were just two examples of the types of innovation needed.
The representative of South Africa, also speaking for the Group of 77 and China, said that throughout the post-2015 goals, developing countries would continue to require ODA. The post-2015 agenda should be built on the unfinished business of the Millennium Development Goals and ensure that countries could support their poverty-stricken populations. In addition, a timely, effective and fair solution to developing countries’ sovereign debt problems was needed, for which crisis-prevention mechanisms were needed. The current lack of a fall-back mechanism should be remedied. The role of the United Nations and the international financial institutions, through their respective mandates, must support developing countries. International trade was a spur to development, and, in that regard, meaningful trade liberalization was needed.
The representative of the United States said the fundamental issue was that countries owned their own development. Domestic resources, effectively mobilized and transparently resourced, were critical. “It’s important that we get this right.” Taxation was vital. Noting that 1 per cent of his country’s tax revenue provided all of its ODA, he said that domestically, taxation was important as a political issue and internationally as a development one. Enumerating challenges, he said the first and most important was political will. Tax regimes and rules were needed. Then there was the problem of enforcement without which the revenue would not be there. Principles, including tax fraud and evasion, also played their part. Robust and fair global rules on taxation were needed. However, what ultimately drove citizens to buy into trust in their Governments was transparency and the use of tax revenue in ways that supported populations. There was an enormous opportunity for donors to invest in building capacity to create tax regimes that raised revenues and facilitated technology transfer. Monterrey should be the basis to make the financing of the new sustainable development goals “actual”. He said the resources “are out there. That is how to end poverty.”
A representative of the World Bank said climate finance and development finance were separate tasks and needed to be accounted for separately. On carbon pricing, each country was free to make decisions. However, there was no global consensus that would inform a binding agreement. On fossil fuel subsidies, he said they had declined substantially. Subsidies in all sectors had the same fiscal impact, which meant they should be looked at beyond energy.
The representative of the Russian Federation said that the outcome of the Third Conference on Financing and Development should be based on the Monterrey Consensus and the Doha Declaration. Both domestic and outside financing-for-development sources were needed to achieve sustainable development, and the private sector should play a more active role. However, those resources should only be complementary to ODA and the private sector should act consistent with corporate social responsibility. He also favoured a just and balanced global trading system based on the equality of all participants in intergovernmental decision-making bodies. In addition, it was crucial to implement the decisions taken at the WTO conference in Bali in 2013 on simplifying trade conditions, agricultural development, and seeking global added value chains.
Further, he said, the needs of countries in special circumstances must be taken into account in the new agenda. In that context, the Vienna Programme of Action, among other outcomes, should be a priority in plans to increase the effectiveness of national and international efforts for those countries. Thus, he supported the removal of trade and investment barriers, the creation of long-term partnerships and the synchronization of Government efforts on economic regulation. The outcome of the Addis conference must fully adhere to the principle of common but differentiated responsibility without infringing on the sovereign right of States to conduct their own financial and economic policies in line with national priorities.
A representative of the business sector said there were many funds, risk mitigation instruments and project development facilities, but they were under-utilized. Public sector regulations guided what the private sector did. “We have to do something we haven’t done before,” she said, by placing the focus on projects. That required a change in thinking. Development aid must be targeted at the project-centric model and those projects must be sustainable as part of a sustainable plan. Project-based monitoring methods should be established to track sustainability and bankability. Capacity also should be localized and target-focussed. For example, that required also working with banks which were not accustomed to making loans on a project basis. So capacity-building was needed for all financial services.
A representative of civil society said there was some progress in multilateral tax collection, but there were worrying ambiguities. Multilateral institutions should be fully aligned with established standards adhered to national Governments. There was no conclusive evidence that trade could be construed as an engine of growth, he said, and voiced concern over the reliance on the private sector as a financing source. The focus on big projects was also misguided.
A representative of Switzerland, stressing the need for a new global partnership, said all stakeholders inside and outside the United Nations system must be part of implementing, monitoring and reviewing the post-2015 agenda. Multilateral development banks played a vital role in building knowledge, freeing capital flows, and engaging with the private sector.
A representative of the International Labour Organization said the jobs challenge had been slightly underweighted between the morning and afternoon sessions. The majority of the world’s poor were dependent on self- and wage employment, he said, adding that the jobs crisis persisted. The poor not covered by significant social protection in developing countries would accept any job, thereby creating the phenomenon of the “working poor”. The high level of women in the ranks of unremunerated workers would also have to be addressed.
In her concluding remarks, Ms. PLOUMEN described Addis as not an event but a lifestyle, which must have a tangible progress on the ground. Mr. TALBOT said the issues raised during the session underscored the importance of a holistic approach and would inform deliberations on the way forward. The trade-investment link, the jobs challenge, ODA, and scepticism of the private sector underscored the need for closer partnership among the different partners.
Mr. PEDERSEN said it was important to build on the consensus reached in Monterrey and Doha, which focused on economic growth. The deliverables from Addis would need to be developed further, he said, welcoming Member States’ inputs. Mr. KITUYI said job creation must be at the heart of the sustainable development agenda, adding that moving people up the production value chain would contribute immensely. Mr. WU said that Government ministries and departments were accustomed to working in silos, and it would take a change of mind-set to make meaningful progress. The sustainable development goals enjoyed a strong sense of ownership at the national level, which bode well. ODA and technology transfer remained important, he said, adding that multilateral development banks were fully supportive of the new agenda.
Theme 3 Debate
HERVÉDE VILLEROCHÉ, Co-Dean of the Executive Board and Executive Director, World Bank Group, said the challenge was to concretize the vision for the coming years. Innovative methods and ambitious plans were needed. The joint document of the banks on moving “from billions to trillions” was coherent and complete, he said, encouraging all to read it. The new paradigm should use leverage, public-private partnerships and other measures. While the need for ODA persisted, creating policies that were clear and sustainable was critical. If those policies were sustainable, development would be too. Only through using all available resources could the situation be improved. The global character of the challenges related to others such as climate change and public health, which required coordinated action before and after Addis Ababa.
JUAN MANUEL VALLE PEREÑA, Executive Director, Mexican Agency for International Development Cooperation, said the former Millennium Development Goals paradigm, heavily dependent on the donor-recipient model, would not work for the sustainable development goals, except through partnerships with clearly delineated responsibilities. Multiple sources of resources and knowledge were needed. Middle-income countries could share public policies that had proven successful. He provided several examples from his country’s experience, among them civil society collaboration on oversight of important development projects. He also spoke of private-sector contributions, which ranged from support for projects through foundations to changes to their practices. But all those initiatives must work in cooperation. Partners must be politically and technically prepared. Without political will, the global partnership would be a platitude, and without the technical ability to realize plans, harm could be done.
MAGDY MARTINEZ-SOLIMAN, Assistant Administrator and Director of the Bureau for Policy and Programme Support, United Nations Development Programme (UNDP), said that Member States agreed that the post-2015 agenda would require structural changes. Technology would play a role in those transformations, but not as great as that of political will and inclusive participation. In Addis, the international community would need to take action on areas where Monterrey implementation had been weak. The gap-filling approach of the Millennium Development Goals would not work. Rather, the sustainable development goals would require moving large sums, moving “from billions to trillions”. Those would have to be appropriately targeted, he said, noting that the flow to least developed countries was declining.
However, he said, the post-2015 agenda was much larger than aid. There was a need for public investment in climate change mitigation, and public funding for development and climate needed to add to each other. It was essential for future business results to contribute directly to the sustainable goals beyond corporate responsibility and philanthropy. The financing for development concept needed to be adapted to a world where instability and more frequent shocks had become the new normal. Communities needed to build resilience, for which a more sophisticated framework was needed.
BRENDA KILLEN, Deputy Director of the Development Co-operation Directorate of the Organisation for Economic Co-operation and Development (OECD), said the promising post-2015 sustainable development agenda also presented challenges. Those included coordinating actions across diverse actors, sustaining political momentum, marshalling the necessary resources, and changing attitudes and behaviours. Collaboration and cooperation had been a hallmark of OECD’s work over the past 50 years. The joint work with the United Nations to support the Global Partnership for Effective Development Cooperation had created a dynamic community of practice. Other international policy platforms hosted by the OECD were unique forums for sharing best practices and enhancing mutual accountability on critical areas for the sustainable development goals. The peer review mechanism had been adapted to fit the needs and goals of diverse groups all over the world and held much promise for strengthening accountability for the effective implementation of the goals. Key to success were securing high-level leadership and country-led and context-specific partnerships, agreeing on principles, targets, implementation plans and enforcement mechanisms, and maintaining a clear focus on results.
Interactive Dialogue
The representative of Azerbaijan said it was critical to mobilize new resources for the new challenges, stressing that the post-2015 agenda must be implemented in partnership with all stakeholders. As a young donor country, Azerbaijan was playing its role. Its landlocked nature presented significant challenges, which were exacerbated by problems posed by Armenia, she added.
The representative of Armenia said the Council was not the proper forum for Azerbaijan to raise political issues that were being addressed through other appropriate mechanisms. She urged Turkey to withdraw the blockade that had been impeding her country’s development.
The representative of Benin, on behalf of the Group of Least Developed Countries, thanked the panel for their insightful comments, and stressed the need to pursue new ways of promoting the group’s development. Their increased awareness of mobilizing internal resources met the reality of fragile tax bases of many Member States. Therefore, there was a need for better access to ODA and private-sector resources. The strategies of international financial institutions must respond to the new paradigm.
The representative of Nepal said the imperative of raising domestic resources as part of the new agenda also meant that the development costs would go up for least developed countries. Nepal had contributed negligibly to climate change but suffered immensely in the form of melting glaciers and flash floods. In such a situation, development assistance could not be construed as assistance per se but as an investment in rebuilding the planet.
A representative of civil society described sustainable development as a critical economic and moral issue. The world had the financial resources to eradicate poverty, hunger and other scourges provided that those resources were deployed efficiently. Global financial institutions needed to be open and transparent, she said, adding that privatization of profits and socialization of losses could not be tolerated. The United Nations should lead the reform of international financial institutions in an inclusive manner.
The representative of Bangladesh, associating with the statements of Benin and Nepal, said that if the sea level rose, his country would lose one third of its land, forcing its inhabitants to find shelter in neighbouring States. While Bangladesh had seen some improvement from the Millennium Development Goals, greater resources would be needed to implement the sustainable development goals, and he asked the international community to provide them. Implementation of the new goals would provide the country with growth and decent jobs.
Responding to the interventions from the floor, Mr. VILLEROCHÉ said the World Bank Group continued to undergo reforms to carry out its activities. Among those efforts, it had been active in the Ebola sector and had tried to focus on climate change and the problem of emissions.
Mr. VALLE PEREÑA stressed the need for all parties to work together on a common framework. Countries must lead but all must work together. Data was important, as was accountability by all parties. Those things and more must be in place to realize the challenging agenda of the next 15 years. If all actors worked independently, “We would not be successful in our goals,” he said.
On the human rights framework, Mr. MARTINEZ-SOLIMAN said that some thought it was esoteric, but its principles of inclusiveness, peace and security were also fundamental to realizing the sustainable development goals. Recognizing that there was a role for emerging donors as well as for extra resources, he said that news of new development actors and banks was welcome. However, aid effectiveness must be the commitment of every actor.
Regarding maintenance of aid levels and sufficient sustainable development financing, Ms. KILLEN said the OECD was committed to holding its members to account. Working with partners, it tried to ensure that countries got the right financing at the right time. She stressed that the quality of aid and of finance for development was important, and asked what it looked like “in country”. Answering that question highlighted the great need for data. She noted that the OECD had tools to help with accountability and invited all to make use of them.
SUNG-SOO EUN, Executive Director of the World Bank, said that working with the United Nations was critical. The Secretary-General had helped the Bank at its recent meeting to understand the importance of the sustainable development goals. Many at the Bank were more focused on immediate issues, such as whether the United States would raise the interest rate. He suggested that the Bank could use further outreach to civil society and young people for experience on the ground.