The Millennium Development Goals (MDGs) are set to expire in December this year with a mixture of success and shortcomings especially in income equality, gender balance and poverty eradication.
Hence, leaders the world over have taken upon themselves the grail to have better ‘sustainable development goals (SDGs)’ that will yield equitable growth for all 195 countries, close trade finance gaps prevalent in Africa and Asia, ensure that women and children are not left behind by the pace of development, feed each of the Earth’s nearly 7 billion inhabitants and maintain the planet as a clean sustainable habitat for generations to come.
The problem is that to achieve such ambitious goals requires money, truckloads of it – estimated at as much as US$11.5 trillion a year or US$172.5 trillion over the 15-year time frame. Finding a Good Samaritan to fork out even a fraction of that bill is tougher than finding a needle in a haystack. Everyone has to chip in, including the private sector, argue the rich countries. Those controlling the purse should re-consider the manner in which the purse strings are loosened for the sake of the countries with lesser means, counter-argue the emerging and poor countries.
Finding a workable solution requires a gathering on common ground – more so when the bickering between the richer countries and emerging and poor countries started months before – hence the world’s leaders, together with ministers of finance and foreign affairs, business leaders and heads of non-governmental organisations, decided to lock themselves in a room somewhere in Ethiopia’s capital Addis Ababa, from July 13 to 16 to sort out the issues through plenary meetings, round tables and nearly 200 scheduled side events.
By yesterday [July 14], on the second day, the conference was deliberating on how reducing gaps in the provision of trade finance would accelerate growth and development in Africa and Asia.
“We have identified trade finance as a key issue here. Up to 80 per cent of global trade is supported by some sort of financing or credit insurance. But developing countries are still suffering from the consequences of the 2008 crisis.
The supply of credit has not yet returned to normal levels. And so we are seeing big financing gaps, particularly in Africa and Asia,” said World Trade Organisation (WTO) Director General Roberto Azevêdo yesterday.
“The estimate for the value of unmet demand for trade finance in Africa is between US$110 billion and US$120 billion. By bridging this gap, we would unlock the trading potential of many thousands of individuals and small businesses across the continent. The smaller the business, the bigger the gains,” said Azevêdo.
Already before the Addis Ababa summit, richer countries had been in heated debate with emerging and poor countries over how to incentivise infrastructure spending to include the private sector, and on equitable disbursement of financial aid.
“If you set the menu, have you got the dollars to pay the bill? That is what Addis is about,” said Amina Mohamed, the U.N. Secretary General’s Special Adviser on Post-2015 Development Planning, about the importance of the SDGs of the Addis Ababa conference.
UN Secretary General Ban Ki-moon asked world leaders to put aside “narrow self-interest” to break a deadlock over how to finance the United Nations’ bold new global development agenda and called for “flexibility and compromise”.
In a world where growth is slowing, foreign assistance budgets are shrinking and scepticism towards aid and multinationals is growing, finding the resources to achieve the ambitious goals will be tough.
And the UN’s agenda for beyond 2015 is indeed ambitious as encapsulated in the encompassing goal statement: “Our goal is to end poverty and hunger, and to achieve sustainable development in its three dimensions through promoting inclusive economic growth, protecting the environment and promoting social inclusion. We commit to respect all human rights, including the right to development. We will ensure gender equality and women and girls’ empowerment. We will promote peaceful and inclusive societies and advance fully towards an equitable global economic system where no country or person is left behind, enabling decent work and productive livelihoods for all, while preserving the planet for our children and future generations.”
“They really want to have the momentum going the right way,” said Lynn Wagner, an expert on international negotiations with the International Institute for Sustainable Development.
The conference is meant to set ground rules for investing in the post-2015 SDGs that will be launched at the UN General Assembly in New York in September 2015. Further, the SDG targets will not be formally adopted until March 2016, hence the conference is meant to decide on financing before figuring out how progress would be measured.
Kolleen Bouchane, the outspoken director for policy and advocacy at the US Global Coalition for Education, this week noted: “The end of poverty may be able to trace some of its roots to this week’s meeting in Addis Ababa – to subsequent reforms in regulatory frameworks, financial and tax systems, trade policies, consumption and production patterns, technology, transparency, rule of law and the fight against corruption and hopefully to far greater investments – but this will not happen without a more targeted focus on equitable development through every single one of these different pathways and beyond.”
“Equity in outcomes should be the guiding principle behind all development work. We must throw the best of our intellectual and political weight and increased financing at the challenge of reaching the most vulnerable people in the most complex situations,” she writes in her blog.
The European Network on Debt and Development (Eurodad) says domestic investment accounted for a third of all funding currently available for developing countries in 2012, while foreign aid made up just 0.4 per cent of the total.
“Domestic resources that developing countries raise themselves will be the largest single resource for funding development in most countries,” said Jesse Griffiths, the director of Eurodad.
This funding is being “tragically undermined” by international tax evasion and avoidance, which cost developing countries hundreds of billions of dollars every year, Griffiths said.
Thus the main items on the agenda include raising new development finance through domestic resource mobilisation, mainly by increasing tax collection, private finance, international public finance and improving international tax cooperation.
Some countries are pushing for a global tax body, arguing that it would help the poorest nations earn more through tax revenues. Campaigners have long noted that such illicit flows coupled with aggressive tax avoidance, repatriation of profits and debt repayments are depriving developing nations of much-needed resources.
– Additional reporting by Reuters