After Addis : Financing for development must address vulnerabilities

The first of three major meetings in this pivotal year for development, the United Nations Third International Conference on Financing for Development took place from 13-16 July in Addis Ababa, and was attended by more than 10,000 people.

The challenge was to establish a draft common framework for concrete, effective implementation of the new development agenda, the goals for which will be adopted in September at the United Nations General Assembly in New York.

Did the Conference achieve its goal? Before answering the question, let us remember that this goal was highly ambitious, given that the issues that sustainable financing for development must address are numerous and complex. Let us also bear in mind that the goal of such a conference, beyond the final declaration, also includes the passionate exchange of ideas that accompanies it. The paradox that results from this is a juxtaposition of diplomatic negotiations, official statements from delegations that have met in plenary sessions and, above all, a far freer flow of ideas that no longer impact on the Declaration but could affect how it is applied.

Adopted on the evening of 15 July by all UN Member States, the Declaration was the first crucial step taken in the implementation of the sustainable development agenda. It effectively acknowledges the roles of all actors, in particular those in the private sector, for whom public sector actors must create relevant economic incentives, often through financial innovation, so as to stimulate increasingly inclusive and sustainable development.

In addition to its analysis identifying the issues relating to financing for development, the Declaration stresses the difficulties in financing the most vulnerable countries and public goods.

In this respect, it reaffirms the importance of public action, particularly by highlighting the ongoing role of ODA in vulnerable countries, although sometimes this is still the subject of numerous debates that encourage looking beyond aid. There is considerable acknowledgement of the vulnerability of countries and their particularities in a now global agenda, and LDCs and other vulnerable countries are mentioned in around one third of the paragraphs in the Declaration. This is significant, given their underrepresentation in the initial preparatory documents. Related topics, such as consideration of the risks faced and shocks experienced by these countries, are also highlighted. Furthermore, the Declaration underlines the importance of moving beyond country classification to viewing the development process as a continuum, whereby emergence does not exclude vulnerabilities. FERDI has been a strong advocate of this approach in its research and from the beginning of the international discussions on the establishment of a new development agenda.

The subject of FERDI’s collective book published in June (Financing sustainable development: Addressing vulnerabilities, Boussichas & Guillaumont, 2015), addressing vulnerabilities sustainably through financing for development, was discussed at a side event organised by FERDI in partnership with Côte d’Ivoire and Niger on 14 July as part of the Conference in Addis Ababa. This event, led by Patrick Guillaumont, brought together the Ivorian Minister of Finance Nialé Kaba, two UN Under-Secretary-Generals Michel Sidibé (UNAIDS, author) and Gyan Acharya (UN-OHRLLS), Pierre Jacquet (GDN, author), Tandin Wangmo (Gross National Happiness Commission and representative for the Bhutanese Minister of Finance) and Barry Herman (author). The points mentioned by these individuals supported those mentioned above in the Declaration. Several well-known figures spoke from the floor during the event, including Frédéric Bontems (French Minister of Foreign Affairs), Yves Guicquero (French Development Agency – AFD), Aka Aouele (Vice-President of the Côte d’Ivoire National Assembly), and Jean-Marc Châtaigner (Deputy Executive Director of the French Research Institute for Development – IRD).

Of course, the Declaration of Addis Ababa is not without its faults when it comes to international compromise. Among the numerous topics that it addresses, one received special attention; the establishment of an institution responsible for tackling illicit flows and tax avoidance. This debate saw opposition between those who supported such an institution being part of the UN and those who supported the existing OECD committee. This reflected the wider debate on the global governance of development, and the degree of representation to which each country or country group is currently entitled. It also highlights the opposition between two conflicting visions; one favouring the legitimacy of the UN and the other calling upon the efficiency of a more focused system, the expansion of which now seems necessary.

Though the text inadequately addresses certain issues or approaches them in a way that at times appears contradictory to its own vision, it should be viewed as a common starting point for implementing the new development agenda in a more efficient and better coordinated manner rather than as a global manual of generic solutions. Solutions will essentially emerge from individual and joint initiatives, with this text providing a set of guidelines that should inspire the private and public sector actors involved in financing for development.