UN Conference on Financing for Development in Addis Ababa: The Future Decides the Contribution of the Final Document

From 13 to 16 July, the third UN Conference on Financing for Development took place in Addis Ababa, Ethiopia. The final document of the conference, the Addis Ababa Action Agenda (AAAA), has been called both a historic document and a disappointment. However, what determines AAAA's contribution to the global development agenda is not the negotiated wording of individual paragraphs. AAAA's contribution is determined by its implementation, writes Annie Sturesson who works at the Ministry of Finance in Uganda.

A historic and courageous document according to UN Secretary-General Ban Ki-moon. Representatives from the G77 and civil society organizations are weak and immoral. Opinions are clearly divided on the final document of the third UN Conference on Financing for Development in Addis Ababa, also known as Addis Ababa Action Agenda (AAAA). The purpose of the conference was to agree on a framework for sustainable financing of the new global development agenda. For months, the final document's wording on tax laws, debt relief and development assistance targets has been negotiated in New York. From 13 to 16 July, the debate and 4 delegates - diplomats, development economists and representatives of civil society and the private sector - were transferred to Addis Ababa. Four days of plenary sessions, panel debates and 000 side events. All this in order to adopt a final document, or as my colleague at the Ministry of Finance in Uganda put it bluntly:

"4 people are here to negotiate two paragraphs."

I was one of those 4 delegates. Based on my impressions from the conference, and my experiences from the Ministry of Finance in Uganda, I would like to share a number of reflections on factors and conditions that will affect the final document's contribution to the global development agenda.

G77 countries - no homogeneous group

The work within the UN, let alone on human rights or disarmament issues, is increasingly characterized by increased contradictions between the G77, the developing countries' negotiating group at the UN, and richer countries. The Addis Ababa Conference was no exception. The division between the G77 and the western countries is slowing down work on several levels. How well one succeeds in reaching "cross-bloc" agreements will be crucial to the global development agenda.

In recent years, however, it is not only the tensions between the G77 and other groups that have increased, but also the tensions within the G77. In several areas, the economic and political agendas differ between the BRICS countries and the group's poorer African members. At the conference in Addis Ababa, South Africa, the current chairman of the G77, had a difficult task trying to keep the group together. At the final negotiations, it was unclear whether South Africa even had a mandate to speak on behalf of the group.

Uganda, one of the group's poorer members, has the position of standing behind G77. At the same time, Uganda is open to cooperating with smaller like-minded groups on certain specific issues. Private sector development and foreign investment are issues that divide the G77. Uganda is therefore trying to pursue these issues together with its more like-minded East African neighbors. Uganda also sees itself as a mediator, who could help reduce the gap between the G77 and Western countries.

Western countries should therefore not treat the G77 as a homogeneous bloc, but instead try to build strategic alliances with like-minded groups within the G77. The various internal agendas within G77, e.g. for private sector development, should be used by Western countries in a constructive way in order to reach broader agreements and advance the global development agenda.

Tax issues need to be pursued at the national level

Tax issues were discussed extensively at the conference in Addis Ababa and are central to the new development agenda. Capital and tax evasion from Africa is estimated to amount to $ 50 billion annually, which corresponds to about 40 percent of all official aid from donor countries. In order to better regulate these flows, strong voices within the G77 have pushed for the issue of upgrading the UN Tax Committee to an intergovernmental body. Richer countries, including Sweden, have opposed the proposal with reference to the ongoing tax work within the OECD. From the G77's perspective, however, the OECD is an exclusive club to which only the richest countries have access. The creation of a UN body for tax issues, in which all countries can participate on equal terms, is therefore more of a political than a technical issue.

Uganda is highly affected by tax evasion, the country is estimated to lose over $ 500 million a year. However, my colleagues at the Ministry of Finance in Kampala do not believe that a new UN body is the solution. First, few countries are ready to delegate the right to decide on tax rules to an international forum. Secondly, there is much that needs to be resolved at national level first. Uganda, for example, needs to review tax breaks and agreements with multinational companies and trading partners. This requires both technical expertise and political will. Conferences on development finance can in the long run contribute to new agreements on global tax rules. Donors such as Sweden can also support partner countries such as Uganda through capacity building and information exchange. But first and foremost, tax issues need to be pursued at the national level.

New financiers - new challenges

The Addis Ababa conference aimed to increase access to development finance by involving new actors; business, investors, new donors and philanthropists. Great trust is placed in new partnerships to meet the great financing needs of developing countries. The 200 side events in Addis Ababa clearly illustrated the hopes for new and increased funding: "Financing for gender equality", "Financing for climate change", "Financing for malaria elimination" and "Innovative financing for humanitarian action ”. Every side event had the answer ford which should be funded but gave less clear answers the and off Who.

Pension funds, investors and multinational companies were frequently highlighted as the new financiers. At least as often, however, the challenges of matching projects in developing countries with the new financiers' risk analyzes, investment priorities and time horizons were emphasized. With regard to the funding mechanism for public-private partnerships, so-called PPPs, there was a demand for more transparency and clearer guidelines regarding the division of risks and benefits, and respect for human rights.

The transition from a development agenda dominated by aid flows and traditional donor-recipient relations to a new business model with investors and companies at the forefront will not take place without friction. The Addis Ababa conference contributed to a refreshing debate on new funding mechanisms and partnerships. The challenge is to bring together the interests and financial instruments of the new players with a sustainable development agenda.

To go from word to deed

Multilateral diplomacy is about compromises. About finding formulations that no one is completely happy with but also not too dissatisfied with. The Addis Ababa conference is a good example. In the debate that followed the adoption of the AAAA, countries barely had time to express their support for the final document before listing their reservations. In his closing remarks, the conference chairman emphasized that negotiations are like a marathon. Addis Ababa is only the first milestone. Like a traveling circus company, delegates will travel to New York in September to adopt the sustainable development goals, and to Paris in November for a new climate agreement. In this context, the main contribution of the conference is less its final document, and more its contribution to long-term dialogue and increased consensus on the new development agenda.

At the same time, high-level conferences, be it in Addis Ababa, Paris or New York, aim to make a difference for the world's poor. "Addis must avoid becoming just a conference of speeches and instead becoming a conference of action", said Grete Faremo, Executive Director of UNOPS, in a panel discussion.

Whether AAAA is a historic agreement or a disappointment is not determined by the wording of individual paragraphs, but by its actual implementation. There is now a huge amount of work left to put words into action - work that does not take place in international conference halls, but at national level.

Annie Sturesson

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