Broad support for policies and actions that will generate resources in support of the implementation of a new sustainable development agenda emerged from the United Nations Third International Conference on Financing for Development convened on 13-16 July in Addis Ababa, Ethiopia. The Conference resulted in the adoption of the Addis Ababa Action Agenda, a comprehensive framework to guide policies that will mobilize financial resources, as well as the launch of new initiatives to finance the achievement of the proposed sustainable development goals, including on social welfare, access to clean energy, and greater cooperation on tax issues.
The conference in Addis Ababa was the first of three milestones in the year 2015. It will be followed by the Summit on Sustainable Development in New York in September, where countries will adopt a new sustainable development agenda, and the Paris Climate Conference in December.
The framework provided by the Addis Ababa Action Agenda includes more than 100 concrete measures that will, if implemented, result in policies that will enable and direct financial investments by the public and private sectors to meet an array of challenges. Areas of sharp focus include a commitment to direct financial resources to social protection, infrastructure, technology, assistance to the poorest countries, cooperation on tax issues and the need to address illicit financial flows that take resources away from development. Notably, in the Action Agenda, countries committed themselves to pursue the equal rights and opportunities of women and girls in the economy.
Taxation matters, including those related to corporate profit-shifting were among the most hotly debated issues during the negotiations preceding the event as well as at Conference proper. Developing countries and many advocacy groups were pushing for establishing an intergovernmental UN body on tax matters, aimed, among other things, at increasing transparency and tackling tax avoidance by transnational companies. These proposals happened to be controversial and had even temporarily stalled the negotiations. The final outcome document, to the disappointment of many, rejected the proposal for a new global body. As a result, the Organization for Economic Co-operation and Development (OECD) will continue in its pre-eminent role in setting global standards on tax matters.
One of the key messages that transpired from the outcome document was that a global framework for financing sustainable development is dependent on domestic mobilization of financial resources through taxation as well as private investment, and not so much through foreign aid.
Some achievements of the Conference on Financing for Development went beyond the agreed negotiated outcome. Six multi-stakeholder roundtables and almost 200 side events resulted in the announcement of new initiatives aimed at implementing the sustainable development agenda. These include:
1. Tax: Three major initiatives on were launched in Addis – Tax Inspectors Without Borders (UNDP and OECD); the Addis Tax Initiative (18 developed countries to double official development assistance for tax capacity) and a joint World Bank/IMF initiative. In addition, building on successful networks in Latin America and Africa, a regional network of Asian tax administrators will be convened by UNESCAP.
2. Development banks: Existing national, regional and multilateral development banks took action, with vows to provide hundreds of billions of dollars in resources over the course of the next several years, in particular for infrastructure and small and medium enterprise financing. These come on top of commitments made by developing and developed countries to set up new development banks
3. Social needs: New financing partnerships were launched to tackle health and nutrition issues, including a $12 billion Global Financing Facility for women’s and children’s health; a $2.5 billion fund by the Gates Foundation and the Islamic Development Bank; and UNITLIFE, an innovative financing mechanism aimed at channeling a portion of the royalties from extractive activities towards nutrition interventions in Africa. In the lead-up to Addis, the G-7 announced its commitment to lift 500 million people out of hunger and malnutrition by 2030.
4. Environmental concerns: The Sustainable Energy for All initiative launched a report by its
Committee on Scaling Up Finance for Sustainable Energy Investments, which identifies the potential for catalyzing $120 billion of incremental annual investment in sustainable energy by 2020. Initiatives to increase access to renewable energy were also announced.
5. On 27 July the UN General Assembly endorsed the outcome document of the Addis Ababa conference.
For the full agreement, see http://www.un.org/ga/search/view_doc.asp?symbol=A/CONF.227/L.1