Addis Ababa development finance summit: all you need to know

The world’s development agenda is about to become more expensive than ever. At the UN’s Third Financing for Development conference, in Addis Ababa, Ethiopia, between 13-16 July, world leaders will look for ways to pay for the ambitious and costly sustainable development goals (SDGs), which include ending poverty and achieving food security in every corner of the globe by 2030.

Addis is about moving from billions in financing commitments to trillions.

The specific targets for each goal, which have not been formally agreed yet, will take over from the millennium development goals (MDGs) at the end of the year. According to UN estimates, for the new goals to be met will require as much as $11.5tn a year, $172.5tn over the 15-year timeframe.

A draft outcome document was released on Tuesday 7 July after a series of late-night negotiating sessions in New York.

The sweeping ambitions of the post-2015 agenda are apparent:

“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’s 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.”

Campaigners say financing must reflect this ambition. This is what the outcome document says:

“Solutions can be found, including through strengthening public policies, regulatory frameworks and finance at all levels, unlocking the transformative potential of people and the private sector, and incentivizing changes in financing as well as consumption and production patterns to support sustainable development.”

There are also strong words on gender equality, but these will need to be matched, campaigners say, with firm funding commitments:

“We recommit to adopt and strengthen sound policies and enforceable legislation and transformative actions for the promotion of gender equality and women’s and girls’ empowerment at all levels, ensure women’s equal rights, access and opportunities for participation and leadership in the economy and to eliminate gender-based violence and discrimination in all its forms.”

The summit comes at a crucial time, just months before the UN general assembly in September, when the SDGs will be formally agreed. Agreement on financing for environmental programmes will also be vital ahead of the conference of the parties in December, where governments are expected to produce a global climate agreement up to 2030, and potentially beyond.

But the SDG targets will not be formally adopted until March 2016, meaning that the conference will have to decide on financing before figuring out how progress will be measured.

Domestic investment accounted for a third of all funding currently available for developing countries in 2012, while foreign aid made up just 0.4% 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, director of European Network on Debt and Development (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.

• Raising new development finance through domestic resource mobilisation, mainly by increasing tax collection, private finance, international public finance
  
• 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
• Reducing illicit financial flows by 2030, with a view to eventually eliminating them. 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 resource
• Pushing to bridge the global infrastructure gap – including $1trn to $1.5trn annual gap in developing countries
• Setting out a new social compact to provide “fiscally sustainable and nationally appropriate social protection systems and measures for all”
• Financing for low-carbon and climate resilient development. The draft outcome document says: “Public and private investments in innovations and clean technologies will be needed, while keeping in mind that new technologies will not substitute for efforts to reduce waste or efficiently use natural resources.”

The world’s increasingly volatile financial outlook means that finding the money to pay for the SDGs will be difficult. The Greek debt crisis, China’s economic slowdown and a host of pressing humanitarian emergencies, including Syria’s civil war and Europe’s migration crisis, are clamouring for donors’ attention.

And the stakes? As the words used repeatedly to describe the summit – critical, key, historic – indicate, they could not be higher.

In a video pep talk for world leaders posted on YouTube in May, UN secretary general Ban Ki-moon said, “This year, we can make history by adapting an ambitious, sustainable development agenda and a universal climate agreement. But without the right financing and policies, we cannot achieve our ambitions… Addis Ababa can be the starting point for a new era of global partnership.”

• The role of the private sector in sustainable development. This area is particularly controversial, with some campaigners fiercely arguing against public-private partnerships, while others seeing their potential
• The role of official development assistance (ODA). Donor countries are urged to commit to spending 0.7% of their gross national income on ODA by the end of the year
• Owning your own development policy. The draft accord says, “Each country has primary responsibility for its own economic and social development and the role of national policies and development strategies cannot be overemphasised.” International systems do have a role to play, though, through trade, monetary and financial systems, and strengthened global economic governance
• Guidelines for debtor and creditor responsibilities in sovereign borrowing and lending
  
• Improved data to monitor impact of development spending and progress toward goals
• Particular measures to help least developed countries, landlocked developing countries and small island developing states