The Third International Conference on Financing for Development is coming to an end. Yesterday, the countries reached an agreement in Addis Ababa on the final outcome document. The Conference on Financing for Development has reportedly seen the presence of 27 heads of government and many more senior government representatives from the capitals. Representatives of UN Agencies, civil society, and the business community from across the globe were also taking part in the conference. While the UN reports that the “groundbreaking agreement” forms the “foundation of a revitalized global partnership for sustainable development that will leave no one behind”, civil society organizations are expressing disappointment. Particularly the fact that the final outcome rejects the proposal of establishing an intergovernmental UN body on tax matters is seen as a failure. But the criticism of the outcome document is not limited to the missing global tax body:
Coordination group for the civil society participation for the Third International Conference on Financing for Development:
Third FfD Failing to Finance Development
"We, members of hundreds of civil society organizations and networks from around the world engaged in the Third FfD Conference, would like to express our deepest concerns and reservations on the Addis Ababa Action Agenda, based on both our ongoing contributions to the process and the deliberations of the CSO FfD Forum (Addis Ababa, 10-12 July 2015)."
Women's Working Group on Financing for Development: Reaction to the Outcome Document of the Third International Conference on Financing for Development: Addis Ababa Action Agenda
Download the full reaction as pdf here.
The Women’s Working Group on Financing for Development (WWG on FfD) expresses its strong disappointment with the Addis Ababa Action Agenda adopted at the conclusion of the Third Financing for Development Conference that took place in Addis Ababa, Ethiopia, 13 to 16 July 2015. For feminists and women’s rights organizations, the Outcome document of the Third International Conference on Financing for Development: Addis Ababa Action Agenda (AAAA) fails to remove the global obstacles to development and to shift the balance of power in the international financial architecture in order to address systemic issues and create the conditions to respect, protect and fulfill human rights, in particular women’s rights. It fails also to acknowledge the macro-economic dimension of the unpaid domestic and care work and the need to reduce and redistribute it among the State, private sector, communities, families, men and women. Read the full reaction here.
Center of Concern (CoC): “Inaction agenda” from Addis Ababa Conference, criticized by CSOs
Find the statement here.
CSOs from all over the world criticized the limited ambition of the “Addis Ababa Action Agenda” adopted by the Third Financing for Development Conference in Addis Ababa (Ethiopia), with some calling it an “agenda for inaction.”
The conference “lost the opportunity to tackle the structural injustices in the current global economic system and ensure that development finance is people-centered and protects the environment,” CSOs said in a sharp statement issued after the adoption.
Speaking at the CSO press conference on July 16th, Center of Concern team member Aldo Caliari said “We have identified more than 20 areas in which this outcome retrogresses over the previous Financing for Development Conference Outcomes from Doha and Monterrey --from inequality to universal services, including debt, taxation and many others.”
“For months we have been hearing hyped –up rhetoric about ambition and the importance of this conference for supporting the post-2015 development vision. We are disappointed that this outcome does not provide the strong means of implementation required for such a vision to become reality.”
“I think we can be proud, however, of the role that we played as CSOs. The fact that it was our priority issues that became the stickiest ones in the discussion demonstrates that we have had an impact on the agenda. If there had been a fair and good faith process of negotiations, I’m confident we would have also had much more impact on the outcome.” He was referring to the hardest issue in the negotiations, namely, the call for an intergovernmental body to ensure universal participation in tax cooperation standard-setting, as well as the push for a stronger institutional follow up and the application of the Rio Principle of Common but Differentiated Responsibilities in financing sustainable development.
“The methodology of negotiations used this time sets a very bad precedent we really hope will not be used in a UN negotiation ever again,” he said. Learning the lessons from the negotiations process that led to this outcome will have immediate relevance for ongoing negotiations in the lead up to the Post-2015 development agenda Summit, which will be held in New York in September of this year.
CIDSE: The anti-climactic Addis Ababa Action Agenda
Read the full press release here.
When the UN Third International Finance for Development Conference (FFD3) began in Addis Ababa this past Monday, the agenda had not yet been finalised and a number of developing nations and Civil Society arrived with high hopes for an intergovernmental tax body. During the drafting sessions in New York preceding FFD3 a number of compromises had been made weakening the first draft of the Addis Agenda. However, in spite of this, discussions concerning the intergovernmental tax body remained open, a final point on the agenda which might have led to a meaningful outcome document. The outcome document entitled the Addis Ababa Action Agenda (AAAA) was agreed upon yesterday and has led to disappointment amongst civil society for a number of reasons... Read the full press release here.
Global Alliance for Tax Justice: Financing for Development outcome rejects a key tax justice measure for ending poverty and inequality
Read the full statement here.
On 15 July 2015, at a summit of world government representatives in Addis Ababa, Ethiopia, the Third International Conference on Financing for Development final outcome text was concluded. A key proposal was rejected to set up an inclusive United Nations intergovernmental global tax body, where every country would have a seat at the table and equal say in reforming global tax policies. This measure had been advocated by many G77 countries and strongly backed by Global Alliance for Tax Justice members and allies. Establishing such a political body on tax within the UN was seen as an effective way to ensure developing countries could increase domestic resource mobilization through fairer international tax policies.
Instead, only a few minor tweaks have been made to the existing UN expert committee. The United States and the United Kingdom were among the developed countries pressuring to ensure that the “the rich countries club” of the OECD remains the only intergovernmental body that sets global tax standards for all.
No specific debt relief initiatives are contained in the FfD outcome document, while privatization and private finance are heavily promoted as ‘solutions’ to financing for development. The problem of illicit financial flows was strongly debated, but final language around the issue remains weak, with no clear measures for implementation. Member states are simply urged to “redouble efforts to substantially reduce illicit financial flows by 2030, with a view to eventually eliminate them, including by combatting tax evasion and corruption through strengthened national regulation and increased international cooperation.” Read the full statement here.
ActionAid reaction to the decision on a UN global tax body
The third international Financing for Development conference in Addis Ababa, Ethiopia, has failed to agree on the creation of a UN global tax body. Commenting on the outcome, ActionAid’s international tax power campaign manager, Martin Hojsik, said:
“The decision is an appalling failure and a great blow to the fight against poverty and injustice.
“It means that developing countries, which are losing billions of dollars a year to tax dodging, are not being given an equal say in fixing unjust global tax rules.
“This lost money could have gone to the provision of education, healthcare and other poverty-reducing public services. While the multinationals prosper, the poor and marginalized will suffer.
“The fight for a fair global tax system should not and cannot falter.”
Press Statement from the European Network on Debt and Development (Eurodad):
Tonight, the Addis Ababa outcome was closed. The final outcome rejects the proposal of establishing an intergovernmental UN body on tax matters, and instead introduces some minor changes to the existing UN expert committee. This means that the OECD will remain the only intergovernmental body that adopts global standards on tax matters.
Tove Maria Ryding, Policy and Advocacy Manager for Tax Justice at the European Network on Debt and Development (Eurodad) said: “After three days of bullying, developing countries were finally run over. The consequence of the Addis Ababa outcome is that more than 100 developing countries will remain excluded from decision making on global tax standards.
“This is not only a tragic day for the world’s developing countries, who will now have to accept that global tax standards will get decided in a closed room where they are not welcome. It is a tragic day for all of us, because a global tax system where half of the world’s countries are excluded from decision making will never be effective. As long as our governments keep failing to cooperate on tax matters, multinational corporations will be able to dodge taxes. At the end of the day, the Addis Ababa failure will impact us all.
“It was a painful moment to see the developed countries celebrating the fact that nothing will change and everything will remain the same. This sets a terrible precedent for the post-2015 and climate negotiations. This was never a negotiation in good faith, and the developed countries have consistently refused to even discuss the issues on the table.”
This last decision adds to a long list of disappointments.
Maria Jose Romero, Policy and Advocacy Manager at Eurodad, said: “This agreement opens the door for the private sector to use development money to generate profits, while the standards to ensure that companies comply with human rights remain non-binding guidelines. It also fails to recognise the many problems associated with public private partnerships, which can land developing countries in severe financial problems."
Bodo Ellmers, Policy and Advocacy Manager at Eurodad, said: "While several countries are already in debt crises and many suffer from high debt burdens, no concrete debt relief initiatives have been agreed at the Addis Ababa Summit. The agreement makes vague references to principles for sovereign debt restructuring but it did not make much progress on developing a multilateral debt restructuring framework that is still missing and badly needed to prevent and manage future debt crises. The escalation of the Greek crisis that dominated the news during the summit has proven how harmful unresolved debt crises are for development, but decision-makers did not take the necessary steps.
"This job must now be done by the UN General Assembly and its Debt Restructuring Committee that will meet in late July in New York."
Third World Network:
The Third Conference on Financing for Development: Outcome document adopted without intergovernmental tax body or new financial commitments
Read the full statement here.
Negotiations conclude in bad faith as developed countries reject final hour proposals for improvements to the UN tax committee, let alone a global tax body.
(15 July 2015, Addis Ababa - Ranja Sengupta and Bhumika Muchhala)
The final outcome document for the 3rd international Financing for Development conference was accepted on Wednesday 15th July evening by the Main Committee of the conference, taking place this week in Addis Ababa. The outcome document will next be accepted by the Conference on Thursday 16th July afternoon.
The South African chair of the G77 group of developing countries, alongside Ethiopia as host country of the conference, had proposed some key improvements to the language on the UN Committee on tax experts. However, this proposal was rejected from the outset by developed countries, namely the U.S., the EU, Japan and Canada. This proposal included re-designating the Committee as the Intergovernmental Committee of Experts on International Cooperation in Tax Matters as well as increasing the provision of resources.
The proposal also decided that members of the committee will be directly nominated by governments through respective regional groups and appointed by ECOSOC, to be drawn from the fields of tax policy and tax administration, and will continue to act in their expert capacity. The most important language in this proposal was the invitation to ECOSOC to finalize, no later than at its 2016 Special Meeting on International Cooperation in Tax Matters, further proposals for turning the Intergovernmental Committee of Experts into a universal body with equitable participation of developing countries.
To the disappointment of many developing countries, as well as civil society and many in the UN agencies that supported the objectives and aspirations of developing countries in seeking for a democratization of global tax governance, the tax paragraph adopted remains the exact same as the 7 July text that was presented to Member States in the last New York plenary.
There is an addition o only two rather toothless sentences, which are, "The Committee members shall be nominated by Governments and acting in their expert capacity, who are to be drawn from the fields of tax policy and tax administration and who are to be selected to reflect an adequate equitable geographical distribution, representing different tax systems. The members shall be appointed by the Secretary-General, in consultation with member states."
The outcome document of Addis Ababa presents no new financial commitments aside from a standard reinstatement of existing aid commitments. This includes the failure both scale up ODA and ensure new and additional ODA. The language pertaining to debt, trade and systemic issues is for the most part a retrogression from the agreements made in Monterrey in 2002 and Doha in 2008. The private finance section also misses a critical opportunity to highlight safeguards, standards and accountability measures over public-private partnerships and private finance schemes such as blended finance.
However, there are two beacons light. The outcome document establishes a Technology Facilitation Mechanism in the UN that supports the achievement of the Sustainable Development Goals, as well as a follow-up forum for FfD that will at least allow for some issues of systemic importance to the international financial system and development financing to be regularly discussed in an intergovernmental fashion. Read the full statement here.
Trade Union reaction to the Addis Ababa Action Agenda (AAAA) on Financing for Development (FFD3)
Download the statement as pdf here.
Addis Ababa, 16 July 2015
FFD3 OUTCOME LACKS AMBITION AND COMMITMENT: the Addis Ababa Action Agenda (AAAA) is empty of ambition and achieves little in terms of identifiable and concrete commitment, especially in the areas of international cooperation on tax, financial, trade and systemic issues. Trade Unions regret the failure to strengthen and upgrade international cooperation on tax matters within the UN system. The removal of a moderate clause calling for the review of the investor-state dispute settlement from the final text is another demonstration of lowered ambition. Without a change of paradigm in the global economic and financial system, it will be impossible to deliver on the SDGs agenda.
BUSINESS WORSE THAN USUAL: Trade Unions still have deep reservations with the uncritical support of the private sector in the AAAA, and is not matched by a recognition of the role the State to define and implement development strategies. Further there is little in the text which will guarantee business accountability for development, by aligning the AAAA with existing binding commitments and only calling for a vague mix of “voluntary and mandatory rules”. Unconditional criteria is needed to ensure that private sector intervention is in line with the public interest, especially where public resources are used to support the private sector. We still insist essential public services including water and sanitation, health and education, should be excluded from PPPs, blended finance and trade agreements.
SOCIAL DIALOGUE DEFICIT: Trade Unions appreciate the mention of Decent Work and Social Protection Systems, but we regret that the important linkages with domestic resource mobilisation were not recognized and maintained, as with earlier versions of the text. Trade Unions fail to identify concrete commitments to fight inequality, such as decent wages, extension of social protection coverage and improvement of fiscal regulation at national and international level (including through the introduction of a Financial Transaction Tax). Along the same lines, Trade Unions regret that the social dialogue and the role of the social partners are not mentioned. It unfortunately demonstrates a failure to recognize rights-based means which underpin democracy and development. A shift from the culture of privilege to the culture of equality is needed. While the Action Agenda aims to leave no one behind it only succeeds in perpetuating a culture of exclusion.
FFD3 FOLLOW-UP? Trade Unions appreciate the commitment for a follow-up despite a lack of clarity on how it will link with the SDGs. We maintain that FFD3 follow-up remains distinct from follow-up on the Post-2015 agenda, recognising that the two are interconnected. Follow-up mechanisms like the Technology Facilitation Mechanism should be inclusive in order to ensure that Trade Unions’ points of view are given adequate consideration, as social partners on equal footing with the business sector.
Ein schwacher Start in eine starke Zukunft?
MISEREOR kritisiert mangelnden politischen Willen bei Konferenz für Entwicklungsfinanzierung in Addis Abeba.
(Addis Abeba/Aachen, 16.Juli 2015) MISEREOR hat sich enttäuscht über die bisherigen Ergebnisse der UN-Konferenz für Entwicklungsfinanzierung geäußert. In der äthiopischen Hauptstadt Addis Abeba hatte sich die Staatengemeinschaft am Mittwochabend auf einen Aktionsplan geeinigt. Er soll die systemischen Reformen der globalen Finanzarchitektur vorantreiben und vor allem zusätzliche Mittel mobilisieren für die Umsetzung der Post-2015 Agenda und der globalen Nachhaltigkeitsziele.
"Der vorliegende Aktionsplan ist ein Plan fast ohne konkrete Aktion", kritisierte Pirmin Spiegel, Hauptgeschäftsführer von MISEREOR am Donnerstag. "Der geringe politische Wille, der aus dem Dokument spricht, ist eine Hypothek zum einen für den erfolgreichen Abschluss der laufenden Verhandlungen über eine zukunftsweisende globale Nachhaltigkeitsagenda und zum anderen für die Klimakonferenz in Paris. Das ist enttäuschend angesichts der gewaltigen globalen Herausforderungen, um die es geht: die Armut endgültig zu überwinden, soziale Gerechtigkeit durchzusetzen und die natürlichen Lebensgrundlagen zu bewahren." Read the full article here.
Download the article as pdf here.