WUNRN
This document is not a quick and easy read, but highly significant. It provides analysis and interpretation of the covert AND overt sides of Financing for Development (which absolutely will affect women and girls collectively and individually). The document, women authored!, shows how the final Post-2015 Development Agenda and Financing for Development, will reflect the Power, Process, & Priorities of the rich countries and global financial organizations and international and regional institutions. The polarization of power and privilege is profound, even within countries. Thankfully, there will be skilled women representatives at Addas Abba to provide a gender lens on FfD3. But, most of the world’s women are trying to break the cycle of poverty, survive amidst conflict, cope with issues that exceedingly challenge them as land grabbing, climate change, natural disasters, health and reproductive rights, trafficking and irregular migration. They are a long way from Addas and FfD3, and yet their lives will seriously be affected by the Post-2015 documents. And, then there is the reframing of “aid” and “partnerships” which increasingly include the private sector and vested interests……
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Action Plan Without Much Action –
Financing for Development By Barbara Adams and Gretchen Luchsinger With pens still hovering over the Addis
Ababa Action Plan, the outcome agreement for the Third International
Conference on Financing for Development (FfD3), there is already a sense that
for all the recent talk at the UN about ambition and transformation, it is
falling short. For a financing document, the Action Plan includes an
impressive number of references to issues at the core of sustainable and
inclusive development, like social protection, essential services, decent
work for all and sustainable industrialization. There are multiple references
to consumption and production, a rebalancing of which, among the rich and the
poor, will determine the future of our world. But how do we get there? The Action Plan
has very little in the way of concrete steps and deliverables. It spends a
lot of time encouraging and incentivizing, and circling around inherent
contradictions. Rather than aiming high, it sets a low bar, perhaps in
anticipation of leaving room to maneuver towards the Paris climate change
summit at the end of the year. For some observers, this may fit the
narrative of UN negotiations as being of diminishing relevance, since they do
not do enough to take on weighty issues in the real world that, like debt,
trade and private sector activities, have profound impacts on people’s lives.
That’s all true. But on another level, deliberations like those at FfD3 very
accurately mirror what’s going on in the world today—in terms of the balance
of power. For all the rhetoric about leaving no one behind in the post-2015
world, the reality is not about using UN agreements to advance global
justice, but about minimizing disturbances of the status quo—which accepts
leaving people behind as an inevitable tradeoff. While there is often a temptation to
argue that “at least the line was held” or “it could be worse,” the
challenges in the world today exceed any justification for the retreat from
ambition. With growing inequalities and a planet in crisis, we have run out
of time–and we should have run out of tolerance—for tinkering.
Looking beyond particular issues in the
agreement, it can be useful to consider some of the assumptions that underpin
them. Is the assumption behind the strong emphasis on blended or private
sources of finance that the public sector is inherently unreliable or less
than fully trustworthy, even though blended and similar instruments have
relatively little evidence to support their efficacy? Instead of jumping
through hoops to work with corporations with incentive structures that focus
more on individual profits than collective well-being, why not just tax them
adequately and use the money for social protection, essential services for
all and so on? The UK’s Department for International
Development (DfID), for one, has championed partnerships with the private
sector as an “engine for growth.” Its financing of private sector firms has
skyrocketed to an estimated £580 million pounds, up from £68m in 2012. Yet a
recent report by the Independent Commission for Aid Impact gave the
watchdog group’s second worst rating to DfID’s work with businesses, noting
that much of it has taken place without much focus on targets or specific
benefits for people living in poverty. Most of the document’s references to
rights concern property, labour, women, children, migration and trafficking.
All valid—and important references in a financing agreement that might in the
past have considered rights references as less relevant. But why are there no
rights associated with trade and debt? Do these have no implications for the
rights of workers, women, children, migrants and so on? Many assumptions are made about existing
institutions and systems as adequate platforms on which to base financing for
the future. The International Monetary Fund, for example, remains integral to
an international financial safety net, despite its less than stellar record
in the 2008 global financial crisis. It is asked to take steps such as
strengthening analytical tools for sovereign debt management and improving
early warning of macroeconomic and financial risks. Developing countries, especially
the poorest, are to be assisted in developing capacities to benefit from
opportunities in international trade and investment treaties, despite all the
evidence that these do not fundamentally work in their favour. What would it
mean instead to help these countries develop capacities to question, shape
and negotiate/renegotiate treaties with clear benefits in terms of
sustainable development and human rights?
At its very beginning, the Action Plan
makes a promising start by committing to policy coherence and an enabling
environment for sustainable development. But coherent for what and for whom?
One reference is clear on this: “We will continue to strengthen international
coordination and policy coherence to enhance global financial and macroeconomic
stability.” Stability, while sound in theory, in practice has often been
defined—by powerful international institutions—in a manner that ends up to
stripping people of jobs and services. Is that coherent with sustainable
development? With human rights? The calls for inclusive and sustainable
industrialization and promoting small and medium enterprises are good
elements. Yet is this coherent with current trade rules, which have done much
to block the process of restructuring economies, and to prevent new
industries and businesses to emerge and move up global value chains? Trade
and investment language has very little to say on what one forthcoming UN
report refers to as a spaghetti bowl of bilateral and other agreements
deliberately being used by some rich countries to keep themselves high on
global value chains, while corporations deploy dispute mechanisms to, for
example, shut down the kinds of national industrial policy that allowed the
Asian economic “miracles” to happen. Might more “miracles” undercut the
steady supply of cheap labour and raw materials on which consumption by the
rich everywhere has come to depend?
The references to the United Nations
throughout the Action Plan are encouraging, if mixed. The UN, often sidelined
in global economic governance—despite being the only multilateral forum that
is universally owned and mandated to uphold internationally agreed principles
including human rights—is called to the table on issues such as combatting
illicit financial flows, continuing work on standards for credit ratings
agencies and coordinating activities related to international trade law. The
Action Plan “takes note” of UNCTAD’s principles on responsible sovereign lending and
borrowing—if in lower case letters to denote the more diffuse area
of work rather than the principles themselves. But real “empowerment,” as it were,
remains with the powerful, including the international financial
institutions—and not just in traditional economic arenas. For example, the
Action Plan gives the Global Financing Facility (GFF), housed at the World
Bank, a key role on health issues, as reported in a recent Global Policy Watch. It is being cited
as a model for SDG implementation. The GFF’s working group comprises some UN
agencies, as well as twice as many northern as southern governments. All
foundations and NGOs involved are from the United States and United Kingdom.
Does that pattern bode well for the future? And there is the Bank itself. An
independent evaluation of its support for public-private partnerships found
that these tended to measure success as profitability, with lesser
consideration for social and other safeguards. Or, as one Bank insider
confirmed in the case of Tunisia, the Bank was content to lend money before
its recent revolution, even knowing that corruption and human rights
violations had reached horrific proportions, because the returns were
consistently good. One of the final sticking points in
negotiating the Addis Action Plan involved scaling up the current UN expert
body on taxation to a more powerful UN commission. Most countries agree that
international tax cooperation is a good idea, but rich countries fought hard
against the idea of doing it within the UN, preferring business as usual at
the OECD and the IMF. In a side event during the June negotiations, a rich
country delegate acknowledged that his government would never go for a
commission, because the UN already has too many, it would cost more money,
and besides, if the commission became a really robust review mechanism,
countries would drop out, as has happened with climate change. Tax avoidance is now an issue of global
proportions. Many countries cannot effectively tax the hugely wealthy
transnational corporations that operate within their borders. As stated in
the recent report by the Independent Commission for the Reform of International
Corporate Taxation (ICRICT), half of global trade now occurs
within related corporate structures, a strategy companies use in part to
avoid taxation. In the Action Plan, three OECD initiatives are singled out in
talking about international tax cooperation, despite the fact that its members
include some of the world’s foremost tax havens and are home to most of the
largest tax-avoiding transnationals. The fox appears not only to be in the
hen house, as the saying goes, but also to own it, to set all the rules and
to oversee compliance. What does it mean for the Action Plan to
then also promise to “make sure that all companies, including multinationals,
pay taxes to the governments of countries where economic activity occurs and
value is created, in accordance with national and international laws and
policies?” How likely is that to happen, particularly with the amount of
corporate money now flooding some political systems? For developing countries, the initial
emphasis in the Action Plan is on modernizing national tax systems and integrating
the informal sector—default workplace for the poor. Beyond the obvious equity
issues, how much will be collected from them? And, if so many tax issues are
outside national borders, how much will “technical improvements” actually
achieve? The recent G7 communiqué echoes the same message, with a commitment
to helping developing countries build their “tax administration capacities.” The Action Plan as a whole gives the
private sector a major pass, continuing the tradition from earlier FfD
rounds. It suggests “regulatory frameworks to better align private sector
incentives with public goals,” but this is to be done through incentives,
without specifying that these probably need to involve consistent legal
requirements backed by stringent enforcement that, at least in the past, have
had the most notable impact on shifting corporate behaviour. As it stands,
current profitability perspectives are too short-term for change to reliably
work any other way. Within a single paragraph, the Action Plan mentions international
labour standards and the UN Guiding Principles on Business and Human Rights,
both positives, but then also fits in the UN Global Compact, widely viewed as
an example of how the UN has allowed itself to be used for corporate
publicity objectives, with minimal, if any, meaningful changes in behaviour. A call for increased transparency and
accountability for private philanthropic organizations is nice, but how,
exactly? And why just “encourage” philanthropic donors to manage in some
cases billion-dollar endowments through impact investing that takes social
and environmental considerations on board? Since many benefit from special
tax provisions, why not require them to do this? How much policy coherence is
involved if a foundation can fund health programmes on one hand, and invest
in a global conglomerate producing products undercutting rural livelihoods
(while avoiding taxes) on the other?
Interestingly, while the current power
configuration seeks to maintain its vice-like grip, an end-run around the
blockage to progress has gathered momentum, although it is happening in fits
and starts, and with no guarantees. Witness the creation of the new
Chinese-led Asian Infrastructure Investment Bank and the staunch opposition
by some rich countries, even as others opted to sign up. Or Greece putting
debt relief to a public referendum beyond the sole purview of a handful of
rich creditors—a move endorsed by UN human rights experts. They
pointed out that not only are debt repayment obligations at stake, but so are
respect for human rights, human dignity, equality and solidarity, all
foundational principles of the European Union. A court in the Netherlands, based on a
suit by a climate change NGO, set a new precedent by drawing a link between
poor domestic emissions reduction policy and climate damages, and requiring
the state to achieve scaled-up emissions targets. In Indonesia, a court
annulled water privatization because excessive price increases would violate
of people’s rights to water. And the Pope condemned carbon trading as part of
the same market mentality that led to climate change in the first place. Around the world, some forms of
insecurity could be read as protests against a world order viewed as unfair.
Upholding the “rule of law” has become an increasingly common refrain, yet
better laws, court systems and the like will only go so far as long as the
root causes of injustice remain, and as long as the rule of law is applied
primarily to individual countries, and not to all the activities that cut
across them and deepen inequities. Inside the UN, during the last round of
FfD3 negotiations, as rich countries attempted to join forces around removing
a reference to the Framework Convention on Tobacco Control, which has been
endorsed by nearly every country, a delegate from a small Pacific country
took the floor with an informed and impassioned plea. He reminded delegates
that the same conversations had already taken place to negotiate the
convention, that tobacco use has a profound impact on health and national
health care costs, and that this was about the lowest-hanging fruit around. His willingness to take such a visible
stand required determination. The powerful US Chamber of Commerce is not only
a regular contributor in UN “partnership” forums, but also among the last remaining supporters of selling tobacco products
outside the industry itself. The United States is one of only a couple of
countries that have not signed the convention.
One reason for optimism in both FfD3 and
post-2015—beyond the fact that the latter really will be transformative if
implemented the way it has been intended—has been the consistent call by
developing countries to apply the principle of common but differentiated
responsibility. Rich countries accept this principle on environmental issues,
but no further, arguing that the world has moved on since the principle was
agreed at the Rio conference more than two decades ago, that there is more
wealth in more countries, and that the old colonial era divides no longer
hold. We are all now universally responsible. But the new wealth remains concentrated
in relatively few hands, and it will be states who bear the primary
responsibility for financing development. Even countries with now thriving
economies face disproportionately large numbers of people whose basic needs
and essential services are not being met. Legal systems often define equality as
treating equally those who are similarly situated, and treating differently
those who are differently situated. So, either the world is already equal, or
we have to respond to its differences. Since the first case is clearly
impossible to make—and, interestingly, is never made in terms of the UN
Security Council or global economic governance, at least by those who control
these and are selectively willing to assume “differentiated
responsibility”—only the second case remains. Responding to current differences
requires all efforts to balance needs and responsibilities, and to factor in
often big gaps in capabilities—in other words, common but differentiated
responsibility. This principle is fundamental to any notion of global
partnership, and should be applied on both international and national levels. Without common but differentiated
responsibility, in the context of FfD3, universal “responsibility”
essentially gives rich countries an exit from financing commitments. But so
far, this does not also involve a retreat from dominance of trade, debt and
international economic governance rules and forums that undercut the
abilities of developing countries to develop and become “responsible” on the
same level. Up until almost its final draft, the
Action Plan ended with a dismaying penultimate paragraph that the agreement
does not “create rights or obligations under international law.” UN
agreements, no matter how critical their concerns, cannot work without a
spirit of common commitment and solidarity. Undermine that, and we are left
with a world with even less responsibility and ever deepening divides. www.globalpolicywatch.org
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