Global Policy Forum

A ‘universal’ financing for development agenda?

GPF_Logo_4CkFor the first time, the international development agenda, through the FfD3 and post-2015 processes, is considered universal, applying to every country. Current deliberations, however, reveal different understandings of what universality means. To some, the concept overshadows the principle of ‘common but differentiated responsibilities’ (CBDR), agreed in the Rio Declaration and reaffirmed by subsequent global and international documents—a concern voiced by the Indian delegate among others during Financing for Development talks.




April 15, 2015 | Global Policy Forum

A ‘universal’ financing for development agenda?

by Wolfgang Obenland, Global Policy Forum

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For the first time, the international development agenda, through the FfD3 and post-2015 processes, is considered universal, applying to every country. Current deliberations, however, reveal different understandings of what universality means.

To some, the concept overshadows the principle of ‘common but differentiated responsibilities’ (CBDR), agreed in the Rio Declaration and reaffirmed by subsequent global and international documents—a concern voiced by the Indian delegate among others. CBDR roots governments’ obligations in their capacities to solve a given problem, as well as their responsibility for creating it (e.g., historic CO2 emissions).

Wealthier countries in particular often use ‘universality’ to imply that every country is equally responsible for its own development. But this approach does not factor in differentiation. It ignores a far-from-level global playing field, and discounts the spillover effects of domestic choices, such as tax policies that advantage corporations. It leads towards basing international financing on principles of voluntarism and ‘enlightened’ self-interest, rather than responsibility and solidarity. It blurs classifications of sources of finance, implying, for instance, that development finance should come from all sources including from rich countries, emerging economies, corporations and philanthropy.

Looking through a different lens, the policy paper “Goals for the Rich” by the Civil Society Reflection Group on Global Development Perspectives points at an alternative understanding of universality: domestic policies, with possible detrimental effects on the policy space of other countries, should be included in international debate and reporting. FfD3 should be about more than calculating financing commitments from the rich and determining policy concessions by poor countries; it should focus also on issues of trade and intellectual property rights, as well as spillover checks of domestic policies, particularly of the rich. Just think of the effects ‘quantitative easing’. Or think of how secrecy jurisdictions and tax havens are draining urgently needed funds from countries around the globe. And then take a look at where these tax havens/secrecy jurisdictions are situated.

‘Universality’, should also take on a very different meaning when it comes to policy-making processes. Many issues today are decided within non-universal or even exclusive formats of governance. Examples are the role of the OECD in setting de-facto global tax standards or that of G20 on financial regulation. This approach is one “of expecting developing countries to implement all the decisions made by the developed countries” and “appears to be somewhat patronising and should be avoided. Steps must be taken to involve the developing countries in all decisions that are made.”[1] FfD3 could be the process to rectify some of these practices. One key proposal involves taxation—a matter of national sovereignty as well as international responsibility. It calls for establishing a UN Tax Commission to move critical discussions on these issues outside the OECD and into a body with universal membership.[2]


[1] See here for India’s answer to a questionnaire by the UN Financing for Development Office.

[2] See, for example this position paper by the Global Alliance for Tax Justice or §115 of the UNSG’s Synthesis Report.

 

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