Development Finance & Tax Justice - Archive

By Bodo Ellmers

The recent 2023 Annual Meetings of the World Bank and the International Monetary Fund (IMF) in Marrakesh received a lot of attention. It was only the second time that the two Bretton Woods Institutions met in Africa – the continent that is most dependent on their loans. Africa is also perhaps the continent that has suffered most from the policy conditionality and structural adjustment programmes associated with these loans. It was fitting then that World Bank reform [...]

The World Bank is considered to be the most important multilateral development bank (MDB). Since it was founded in 1944 at the United Nations Monetary and Financial Conference to finance the reconstruction of war-torn Europe, it has reinvented itself several times. The most significant change was the transformation from a reconstruction bank to a development bank. Today, the World Bank finances exclusively in countries of the global South, while continuing to be controlled by the economic powers of the global [...]

This expert discussion takes place as part of the Civil Society Policy Forum at the joint Annual Meetings of International Monetary Fund and World Bank Group in Marrakesh (Morocco). 

The objective is to discuss debt architecture reforms that are needed to address the new wave of debt crises, and how to take these reforms forward at the major multilateral institution-building opportunities that are upcoming.

Global Policy Forum Europe is co-organizing with a large coalition of debt specialist organisations and CSO [...]

By Bodo Ellmers

Countries around the world continue to lose almost US$ 500 billion every year to tax dodging and global tax abuse. At the request of United Nations Member States, the UN Secretary-General has now presented his report on “Promotion of inclusive and effective international tax cooperation at the United Nations”. The report recommends a major upgrade of the international tax architecture. In the best case, the gaping governance hole created by the absence of fully inclusive [...]

By Bodo Ellmers

The mid-term review of Sustainable Development Goal (SDG) implementation looks sobering. When heads of state meet at the United Nations (UN) headquarters in New York on 18 and 19 September for the SDG Summit, the central topic will be how to give the 2030 Agenda for Sustainable Development new impetus for the second half of the 15-year term. A key proposal for refocusing SDG implementation is the SDG Stimulus Package, which was unveiled by the [...]

By Bodo Ellmers

The much-hyped Summit for a New Global Financing Pact took place in Paris during the third week of June. Convened by French President Macron in loose cooperation with Mia Mottley – the Prime Minister of Barbados and the mother of the “Bridgetown Initiative to reform the International Financial Architecture” – the objective was to find new ways to fill the mounting gaps in cross-border development and climate finance.

In the run up to the Summit, two other [...]

By Bodo Ellmers

A fundamental reform of the international financial architecture is crucial for effective development financing and the fight against climate change. This is one of the greatest challenges of multilateralism.

Almost 80 years after the Bretton Woods system emerged from the catastrophe of World War II, the United Nations (UN) Secretary-General has taken up the issue and made a wide range of reform proposals in a recent policy brief. These include the modernization of existing institutions, such [...]

The United Nations Financing for Development Forum 2023, which was recently held over four days in New York, was dominated by multiple crises. Setbacks to the 2030 Agenda have increased political pressure to make substan­tial progress on financing for development. The chapters in the outcome document on taxation and debt issues were particularly vigorously negotiated. African countries in particular want to further strengthen the UN’s work on taxation. With the escalating debt crisis, it is also becoming more important [...]

By Bodo Ellmers

In November 2023, the UN passed a landmark resolution on international tax cooperation. It opens an intergovernmental negotiation process that many hope will lead to a UN tax convention of universal application. The special session of the UN Economic and Social Council on March 31, 2023, was the first diplomatic probing of the negotiating groups.   

Tax cooperation is perhaps the most poorly regulated area of global economic governance. A specialized International Tax Organization is as non-existent as [...]

By Bodo Ellmers

In the first week of March, the international community will gather for the 5th UN Conference on the Least Developed Countries (LDC5) in Doha. The conference takes place in the context of multiple crises that have hit LDCs far harder than richer and more resilient countries. It coincides with the SDG midterm, and by definition, no group of countries is as far from SDG achievement as LDCs. The conference presents a significant opportunity to mobilize more [...]

By Bodo Ellmers

Mia Mottley, the Prime Minister of Barbados, presented a comprehensive approach to development finance last summer. Developed in collaboration with the United Nations, the Bridgetown Initiative is a three-step plan to mobilize short-term liquidity for crisis response and long-term funding for sustainable development. Originally unveiled in the run-up to the UN climate summit in Sharm El Sheikh, it was not a flash in the pan, but is now being taken up by French President Macron as a [...]

As Agenda 2030 passes its mid-way point, ambitious reforms will be required during its second phase if the Sustainable Development Goals (SDGs) are still to be achieved. A lack of financial resources is one of the main reasons why their implementation has fallen so far behind. The UN’s latest Financing for Sustainable Development Report has identified the “financial divide”, i.e. the lack of access to funds at favourable interest rates for countries of the Global South, as a key problem [...]

Since the adoption of the 2030 Agenda on Sustainable Development, development finance has operated under conditions of low interest rates and high liquidity in global financial markets. This has changed with the recent turnaround in interest rates. This briefing paper describes the current trends, analyzes the implications for financing sustainable development in the Global South, and formulates policy recommendations on how countries in the Global South and their financing partners in the North can respond to the interest rate increases.

By Bodo Ellmers

The implementation of the 2030 Agenda has fallen massively behind. Insufficient development finance is a major reason for this, as the slowly subsiding COVID-19 crisis had led to a simultaneous collapse of all sources of finance. This year's UN High Level Forum on Sustainable Development (HLPF) should have been dedicated to building back better after the crisis. The title did retain the "building back better." De facto, however, the HLPF was overshadowed by a new wave of [...]

By Bodo Ellmers

The G7 summit in Elmau was the highlight of the German G7 presidency in 2022. Contrary to the original intentions of the German government, security policy and geostrategy dominated the process, due to the conflict in Eastern Europe. By contrast, the G7 largely abandoned its claim to coordinate global economic issues. Financial commitments to third countries were made primarily in the areas of food and infrastructure. However, the former do not seem commensurate with the scale of [...]

 

By Bodo Ellmers

Every spring, the UN publishes the Financing for Sustainable Development Report. It contains the latest data and analyses on various aspects of financing for development. In addition, policy recommendations on a priority topic, to be implemented in the UN's Financing for Development (FfD) process. In 2022, the report should shed light on ways and means to overcome the financial divide between North and South. This is because rich countries had considerable financial leeway to mitigate [...]

An unintentionally honest report on the state of EU development finance

With some delay, the European Commission has published the new "Investing in Sustainable Development Report".  A few years ago, the report replaced the older EU Accountability Report or so-called "Monterrey Package" of the EU, which originally reviewed the implementation of the UN agreements on financing for development in the EU and its Member States.

In the meantime, it is based primarily on self-reporting by the EU Member [...]

After two years of virtual WhatsApp diplomacy, the United Nations Financing for Development (FfD) Forum was held again this year in-person and in the presence of the public at UN Headquarters in New York. The stakes were high. While the world´s countries are slowly and unevenly recovering from the COVID-19 crisis, new challenges have emerged, such as interest rate shocks and massive price increases for energy and food, which are having a particularly devastating impact in countries of the Global [...]

A group of 17 CSOs has issued an open letter to G20 Finance Ministers, Central Bank Governors and the IMF calling for a new US$2.5 trillion issuance of reserve assets called Special Drawing Rights (SDRs), and reformed criteria for distributing them in a fairer way and according to needs.

Read the open letter here

Once in a decade, the UN convenes a conference on the least developed countries (LDCs) to negotiate a programme of action, consisting of political agreements and international support measures. Financing for development in all its dimensions is an essential component of these programmes. The process that led to the Fifth UN Conference on Least Developed Countries and the Doha Programme of Action took place under the difficult conditions of the COVID-19 pandemic. Given the limited financial space that LDCs had [...]

Livestream HERE

 

Special Drawing Rights (SDRs), the special reserve currency of the International Monetary Fund (IMF), have the potential to become a key mechanism for financing a just transition to climate-resilient economies and supporting the COVID-19 recovery. Following its historic allocation of $650 billion in SDRs in August 2021, the IMF has proposed a Resilience and Sustainability Trust (RST) to facilitate the re-channeling of these resources to vulnerable countries.

As a part of the 2022 IMF and World Bank [...]

This briefing paper gives an overview of the current challenges in different development finance action areas. In the second part, we give an overview of the UN’s FfD process and of the international agreements on Financing for Development. Based on our analysis, we identify 10 key levers for financing sustainable development. With these, Eu­rope can make a substantial contribution to financ­ing for development and thereby to the successful implementation of the 2030 Agenda for Sustainable Development worldwide.

On August 23 2021, the International Monetary Fund (IMF) performed the long desired payout of special drawing rights (SDRs) to the tune of 650 billion US dollars. Especially for countries of the Global South, the SDRs are a welcome cash injection. Unlike the EU and the USA with their economic recovery programs worth trillions, developing countries have so far only been able to mobilize few financial resources to cope with the impacts of the crisis, and for this reason too [...]

The G20 Summit in Rome takes place amidst heightened debt crisis risks. According to latest World Bank figures, the debt stock of low income countries (LICs), the world´s poorest countries, surged by a staggering 12% in 2020, reaching a new record high. Poor countries transfer an increasing share of their tax revenues to creditors, to service their debts. The situation will further deteriorate when the G20´s Debt Service Suspension Initiative expires in end of 2021 in addition to the resumption [...]

As the pandemic exacerbates multiple crises in developing countries, Special Drawing Rights (SDRs) are a crucial option to help finance the COVID response and hasten an equitable and inclusive economic recovery. With the SDR distribution being proportional to IMF countries’ quotas, the new allocation of US$650 billion does not ensure sufficient SDRs go to developing countries. 

This is why many have been calling for an allocation in the order of US$3 trillion. Moreover, advanced economies are in less need [...]