What next after the Addis Ababa Action Agenda?Why the build up around it?

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Public policies, mobilisation and effective use of domestic resources, underscored by the principle of national ownership, are central to all countries’ common pursuit of sustainable development, including achieving the sustainable development goals.

This is the position of civil society groups’ consultative meeting after the third International Review Conference on Financing for Development otherwise known as 3FfD that took place in Addis Ababa July 13-16.

The high level forum that brought together Heads of State and Government and High Representatives affirmed their strong political commitment to address the challenge of financing and creating an enabling environment at all levels for sustainable development in the spirit of global partnership and solidarity.

Before the political forum, a 3-day consultative pre-conference had been taking place for the voice of the civil society to be heard. The CSOs had during the consultations agreed on an outcome document to be presented to the governments for negotiations particularly sustainable development goals. The outcome document of the conference dubbed Addis Ababa Action Agenda (AAAA) which is a conclusion on Financing for Development (FfD) will form a substantive agenda at the United Nations General Assembly in September.

This is one of the current debates and negotiations taking place globally besides the Post 2015 Agenda which comes into play after the expiry of the Millennium development Goals (MDGs).

FfD is an important instrument and as it determines the way forward on models of financing for sustainable development goals more so for developing countries. First we go back to where the whole discussion began.

In 2002, Over 50 Heads of State and two hundred Ministers of Finance, Foreign Affairs, Development and Trade met in Monterrey, Mexico with only one agenda.

Financing for development and the outcome document was termed as the “Monterrey Consensus”. This would be a blueprint to guide on the approach to Financing for development and it embraced 6 keys areas; Domestic resources mobilisation, Mobilising international resources for development: foreign direct investment and other flows, International Trade as an engine for development, Increasing international financial and technical cooperation for development, External debt and lastly addressing Systemic issues like enhancing coherence and consistency of the international monetary, financial and trading systems in support of development.

Six years later, there would be a follow up meeting in Doha, Qatar, to review the Implementation of the Monterrey Consensus. Attended by some 40 Heads of State and Government, 9 Deputy Heads of State and Government, 50 ministers and 17 vice-ministers of foreign affairs, finance, development cooperation and trade, as well as other high-level officials of 170 States and major institutional stakeholders.

Following intense intergovernmental negotiations, two key messages were included in the final outcome document:

  1. A strong commitment by developed countries to maintain their Official Development Assistance (ODA) targets irrespective of the current financial crisis.
  2. A decision to hold a UN Conference at the highest level on the impact of the current financial and economic crisis on development among other messages.

Other main issues that also came out of the Doha Declaration include, Domestic resource mobilisation which stated the importance of national ownership of development strategies and of an inclusive financial sector, as well as the need for strong policies on good governance, accountability, gender equality and human development.

Mobilizing international resources for development also stating the need to improve the enabling environment and to expand the reach of private flows to a greater number of developing countries.

International trade as an engine for development, External debt which clearly states the need to strengthen crisis prevention mechanisms and to consider enhanced approaches for debt restructuring mechanisms. Last but not least Addressing systemic issues: the need to review existing global economic governance arrangements, with a view to comprehensive reforms of the international financial system.

One of the key outstanding issues that played out clearly at the FfD conference was whether developing countries should have a seat at the table when the global taxing standards and policies are being developed.

This is important as it seeks to strengthen the future course of global tax systems. If a deal is struck on this, it could dramatically contribute to financing poverty eradication, education, women empowerment, agriculture and environmental protection, securing development priorities for the next 15 years among other things.

Michael Oloo, Chairman Board of Governors, Tax Justice Network-Africa (TJN-A) says developing countries have a right to sit at the table when global tax standards are decided.

“Aware that they are losing billions of money in international tax dodging through practices such as price mis-invoicing or mis-pricing than the aid they receive. Fundamental reforms have to be put in place to determine the way global standards for cross border taxation and financial transparency are decided,” Oloo explains.

He goes ahead to say that developing countries are calling for a global body on tax cooperation under the auspices of the UN. Today global tax standards are decided behind closed doors at the organization for the Economic Cooperation and Development(OECD) also known as “rich countries’ club”.

According to a report by Former South African leader, Thabo Mbeki-chaired High Level Panel on Illicit Financial Flows, Africa loses as much as $50 billion per annum in illicit financial flows. Which is double what Africa receives as Official Development Assistance ODA from Western donor nations.

Debt issues and Vulture funds will also play a key role in the debate. The Thabo Mbeki report concludes that the illicit financial flows make Africa “a net creditor to the world rather than a net debtor, as often assumed”.

African CSOs were and are pushing for mechanisms to resolve the current debt problems of developing countries, particularly for African countries, the least developed countries, either through cancellation of bilateral and multilateral debt in accordance with UN General Assembly resolution 68/224.

Stefano Prato, Managing Director at the Society for International Development (SID) and one of the leading actors in the draft document on FfD says: “The FfD process obviously relates to providing the financial means to implement the new post 2015 agenda.”

Stefano Prato, Managing Director at the Society for International Development (SID) and one of the leading actors in the draft document on FfD

Stefano Prato, Managing Director at the Society for International Development (SID) and one of the leading actors in the draft document on FfD

However, Prato adds it also includes other important issues such as the systemic reform of the financial and monetary system and the democratisation of economic governance.

The two agendas (post 2015 and FfD) therefore feature a significant but not complete overlap. This is the reason why they need to maintain their respective identities, he notes.

Luckystar Miyandazi, the tax power Africa coordinator for ActionAid Internationals adds that “It is high time that developing countries levelled up the playing field by getting a sit at the table-equal voting rights on tax policies that mainly affect them”

The Addis Ababa conference represents a great and once in a lifetime opportunity for African countries to speak as one on taxation issues and take a landmark decision on the establishment of an intergovernmental body on tax that will ensure their interests are represented in global tax policies.

Tax is the most sustainable source of domestic resource mobilisation in most of the African countries and our government’s need to ensure that they collect their fair share of tax revenue from many multinationals that dodge taxes through existing loopholes in tax policy and the secrecy that exists in the international tax system.

Miyandazi observes, the money lost would have gone to provide public goods and services such as; quality education, health care, better security and infrastructure for millions lacking these essential services.

However, the conference showed which governments are lowering ambition and which ones want to move forward. It will also present a chance for the hundreds of developing country governments that are not normally included in OECD and G20 meetings and don’t have a strong position in the World Bank or IMF.

According to Women’s working Group representing more than 600 women’s groups from over 100 countries, the outcome document of the third international conference on FfD is a disappointment, stating that the conference failed and that it is not in accordance with the demands of developing countries.

The group nonetheless, goes on to say that if the document is implemented it is likely to improve the lives of the world’s poorest women and girls or facilitate sustainable development.