05.02.2014 | Alliance Sud

Post-2015 Agenda

flowery rhetoric, little substance

by Nina Schneider

At its core, the Post-2015 Agenda will interlink sustainability and the fight against poverty and hunger in a single framework binding on all countries. Compared to the Millennium Development Goals (MDGs), the Sustainable Development Goals (SDGs) shall now also guarantee peace and security, a democratic say, the rule of law, equal rights as well as human rights. So far, so good. As regards principles – such as the «common but differentiated responsibilities» of States – the UN consensus also coincides with the demands of international civil society. However, a «but» follows immediately, in that no concrete proposals for solving global crises are anywhere to be found in the final declaration. It omits any mention of the need to transform financial, trade and economic relations for the benefit of poor countries and to reduce glaring inequalities. Not to put too fine a point on it, after four UN reports, two years of deliberations and hundreds of consultations with business, academia and civil society, the morally and ethically inspired goals have elicited just a couple of roughly outlined implementation proposals. That betrays scant political will to tackle the problems at the root and dare to make real change.

The roadmap

UN consultations on the new development goals have been put on ice until late summer 2014. Until then, two bodies that emerged from the Rio+20 process will be sitting. The Open Working Group (OWG) on SDGs comprising 30 government representatives is tasked with working out a set of future objectives and better financial and economic conditions for sustainable development. Many countries share a seat, as does for example Switzerland with France and Germany. In contrast, the Intergovernmental Committee of Experts on Sustainable Development Financing (ICE) composed of 30 high-ranking financial, development and environmental experts representing the five UN regional groups is charged with mobilizing resources for funding the SDGs. Its Co-Chairs are Nigeria's Mansur Muhtar, World Bank Executive Director and former Minister of Finance, and former Under-Secretary of State for Development and Cooperation of Finland, Pertti Majanen. This body is tasked, in cooperation with regional and international financial institutions, with assessing existing financing instruments, drawing up regional and thematic needs analyses and formulating recommendations for the regulation of trade, finance and debt, and for stemming capital and tax flight.

Switzerland is not present at this table, although when it comes to global tax justice, it could contribute substantially to the regulation of financial flows. This Committee of Experts had planned to deliberate behind closed doors. After international protest, NGOs finally succeeded in obtaining a hearing for half a day at all five of ICE’s meetings.

In early September, a UN committee will condense all reports from the post-MDG and SDG process, country proposals and consultations into a negotiating proposal for the 2014 UN General Assembly. This will lay the groundwork for intergovernmental negotiations until 2015.

Dubious ideas for funding

A sustainable global development agenda does not come cheap, but will still cost comparatively less than financial crises or climate disasters that have not been prevented. One crucial question will therefore be whether the funding matches the goals. But for now the rich countries are attempting to dodge financial obligations, because after five years of crisis or economic stagnation, their tills are «empty», which is still not preventing them from spending billions for their own purposes. Instead they wish to hold others accountable. From their discourse, they favour three funding sources:

Private sector – a Pandora's box

First the private sector. To date, global industrial companies and banks have not really been seen to be in the vanguard of development or ecological change. The extent to which enterprises could play an enhanced role in this regard will depend on policy prescriptions that apply to all. But western governments have been avoiding any such thing for a long time now. In the future, they wish instead to treat their companies' foreign investment as a contribution to international burden sharing or even to use State aid (funded from development budgets) to help those companies secure better market access.

Globally dependent and yet alone to blame

Second, developing countries themselves. They should mobilize more of their own funds through fiscal reform. There is nothing wrong with this. In this respect they have made appreciable headway over the past ten years. Much remains to be done in the way of effective measures to counter legal and illegal capital outflows from developing countries, which are being facilitated by the network of western offshore financial centres and well-established tax avoidance constructs used by transnational corporations.

What do remittances have to do with development funding?

Third, remittances. Western governments now also want to count private remittances by 232 million people living and working far from home as their contribution to the costs of development. As a concession to migrant workers, they do nevertheless plan to advocate the lowering of transaction costs to five per cent. This is an old demand, and an old promise, yet the past eight years have brought a mere one per cent reduction. Offsetting this is a new 5-per cent pay-out fee being charged locally by a growing number of banks, in addition to the average nine-per cent transaction costs in place today. In real terms therefore, 14 of every 100 francs remitted are being siphoned off, thereby reducing the cash value of remittances.

Yet with remittances running at some 400 billion dollars annually, migrants are transferring to their poor home countries four times as much as all OECD donors together. They are usually tiny portions of after-tax wages, rarely more than 100 dollars per month, for which they have had to scrimp and save. Back home, the remittances are a crucial financial support for procuring basic necessities, often for enabling children to attend school any at all, or for making a doctor’s visit possible. Migrants are therefore contributing more to poverty alleviation than many programmes under the MDG agenda.

These are the three funding sources for global tasks being put forward by western Governments. The envisaged sustainable development agenda cannot be funded from these sources – what western countries are merely trying to do is to pass off already existing financial flows as their own accomplishment. Instead they should be moving forward on «innovative financial instruments» such as the financial transaction tax or resource consumption taxes, which have long been under discussion