South Centre co-organises retreat for governments on Financing for Development in New York
The South Centre co-organised (with the Friedrich Ebert Stiftung) an interesting retreat and expert meeting on Financing for Development near New York in January 2017. The meeting, attended by 34 governments and many international agencies, discussed the work of a task force that includes UN agencies, the IMF and the World Bank, and gave an opportunity for the UN Member States to dialogue with the task force. Below is a report of the meeting.
By Manuel F. Montes
More than 50 US-based attendees, augmented by government experts coming from their capitals participated at The South Centre and the Friedrich Ebert Stiftung-organized retreat and expert group meeting on financing for development held in Glen Cove, New York on 12-13 January 2017.
The meeting was to brainstorm on one aspect of the Financing for Development process—to have representatives of countries understand and give inputs into the work of the Inter-agency Task Force (IATF) on Financing for Development.
The IATF is the task force mandated by the Addis Ababa Action Agenda (AAAA), which was adopted by the 3rd UN Conference on Financing for Development held in 2015 in Addis Ababa, to report annually on progress in implementing the financing for development outcomes and the means of implementation of the post-2015 development agenda.
The task force also has the responsibility to advise the intergovernmental follow-up, including the identification of implementation gaps and recommendations for corrective action. Led by the Financing for Development Office (FFDO) of the UN Department of Economic and Social Affairs, the task force includes major institutional stakeholders notably the IMF, UNCTAD, the World Bank, the WTO, and UNDP plus funds, programs and specialized agencies of the UN system. The enthusiastic engagement of the participants provided an opportunity for substantive discussions between the Inter-agency Task Force and Member States of the UN.
The meeting was convened to (i) inform Member States on status of preparations of the 2017 Task Force report and its online annex; (ii) present findings from substantive Task Force work streams and thematic work, and (iii) elicit Member States’ views on the 2017 report and medium-term work programme for the Task Force, and on how to make the Task Force’s findings most useful and relevant to the intergovernmental process.
The meeting was organized around the proposed structure of the Task Force Report, including a session on the global context and its implications for implementation of the agenda, a quick overview of follow-up on the nine chapters of the Addis Ababa Action Agenda, including an introduction to the on-line annex, and a series of break-out sessions on thematic issues.
The IMF, UNCTAD, DESA/DPAD, and WTO presented their respective institutions’ views on the current economic environment and its impact on the FfD outcomes and the means of implementation of the SDGs. There was agreement across the four institutions that the international environment has become more challenging, risking derailing progress toward the SDGs. Two issues highlighted by speakers were risks and challenges emanating from the global environment and the potential role of investment in macroeconomic recovery. While the AAAA embodies very strong reliance on the private sector to play a leading role in economic recovery and long-term investments, the evidence, so far, shows weak private investment demand, despite the low levels of interest rates.
Participants at the retreat expressed their strong support for an analytical, evidence-based report as a key input to the success of the ECOSOC Forum on the follow up to Financing for Development (FFD). Many of them requested that the report provide a range of policy options for consideration by Member States. Many also noted that case studies would be useful to highlight what works in which circumstances, which could be used as a way to frame policy advice.
47 representatives from 34 Member States attended the retreat, including 12 participants from capitals, with developed and developing countries well represented. The Inter-agency Task Force was represented by the major institutional stakeholders of the FfD process, the IMF, the World Bank, UNCTAD, UNDP and WTO, as well as the Financing for Development Office, which coordinates the Task Force. Several other Task Force members and four external experts served as moderators and resource persons.
The IATF also presented progress in constructing the online annex of its report. FFDO staff demonstrated how the website will contain the full set of data and analysis across FFD action areas. Participants made a number of suggestions to make the report and the online annex most useful for Member States. Member States emphasized the potential value of country case studies and ways in which the online data could encourage peer learning. A representative from the Finance Ministry of Ethiopia presented Ethiopia’s national development strategy and associated financing plans in response to Agenda 2030 and the AAAA. It provided a useful case study and opened the potential for developing countries to present to the process not only on the scale of financing, but what kind of financing, they would require to meet their development goals.
The breakout thematic sessions included two sessions on cross-cutting issues (public-private financing of infrastructure and financing of social protection floors), and sessions on illicit financial flows, aligning capital markets with sustainable development, accounting for international public finance and debt and systemic issues. In each session, IATF members and country delegations debated the conceptual issues involved, the practical use of indicators that could be developed, and the possible part these topics could play in the outcome of the next FFD follow up forum.
Participants in the break-out session on infrastructure finance and public-private partnerships discussed a set of “Addis Principles” on PPPs, as well as a framework for analyzing the role of infrastructure in the agenda.
Participants at the session on financing social protection floors noted that a scoping paper on the full landscape of quick disbursing international credit lines would be a useful contribution by the Task Force, and also called for further work on state-contingent debt instruments – building on existing work in other fora such as the G-20 and the IMF – to help countries ensure sustainable financing for social protection.
The discussion on illicit financial flows emphasized the importance of taking action, finding a solution on a definition of the term, and agreed that the Task Force’s work on component-by-component estimation and analysis would be useful.
At a break-out session on aligning capital markets with sustainable development, participants suggested that the Task Force can deepen the analysis of the incentives in the investment chain, and also noted that discussions on this topic at the FfD Forum could be enhanced by including representatives of the private sector.
The discussion on systemic and debt issues emphasized ongoing work, and called on the Task Force to take stock of what was happening at national levels and to bring that together in a coherent report for Member States.
Finally, at the session on measurement issues in international development cooperation and the proposed measure of Total Official Support for Sustainable Development (TOSSD), the discussion emphasized both potential benefits from additional efforts to increase transparency and comparability of data, but also the political risks and mis-incentives that could be set by new measurement tools. Participants suggested that the Task Force should continue to provide updates on efforts to develop new tools.
At the concluding session, Member States expressed appreciation for the opportunity to have informal dialogues with each other and with Task Force members. They noted that the discussions set a positive tone, and called for follow-up discussions with the Task Force. Task Force representatives promised to keep Member States updated on progress in the Task Force’s work, including through briefings and other opportunities for dialogue and engagement.
