South Centre holds side event at UN General Assembly
In a side event of the high level segment of the 72nd session of the UN General Assembly, developing country delegations carried out a lively discussion on the challenges confronting developing countries in the context of the new vulnerabilities created by the state of the global economy and the challenges of pursuing Agenda 2030.
The event, held on 21 September 2017 in New York, entitled “Rethinking Development in the Context of the 2030 Agenda,” was co-convened by the Permanent Mission of Tanzania to the United Nations and the South Centre.
Below is a brief report on the key issues of the South Centre side event prepared by Dr. Manuel Montes, Senior Advisor on Financing for Development of the South Centre.
By Manuel F. Montes
Dr. Manuel Montes, Senior Advisor on Financing for Development at the South Centre, welcomed participants by noting that the General Assembly is an important location for the setting of global norms and standards in multilateral development cooperation. Other multilateral venues, such as Geneva, Rome, among others are more appropriate for reaching agreement on specific applications of agreed standards and to complete their implementation.
Dr. Montes cited A/RES/69/319 which agreed on principles for sovereign debt restructuring in 2015. He also pointed to the July meetings convened by Rome-based UN agencies, including the Global Forum on Food Security and Norms, which introduced to New York delegations agreed norms over agriculture and trade suitable for SDG 2, ending hunger.
In opening the side event, Ambassador Modesto Mero noted that the Inter-Agency Task Force 2017 report on examining the scale of investment and the rate of economic growth in 2016 finds that the rate of growth is not sufficient to meet the ambitious goals of Agenda 2030. In rethinking development cooperation for the Sustainable Development Goals (SDGs) there are three areas that require focus: (i) the importance of national institutions in all countries for implementing the 2030 Agenda; (ii) attention to special challenges to implementation for developing countries and in particular least developed countries (LDCs); and (iii) how to make various international and local stakeholders engaged in supporting countries in the implementation of the SDGs.
The SDGs are vast and inclusive containing 17 goals that involve standard issues of energy, industrialization, trade, external debt, social development, macroeconomic issues, among others. The goals also include social and environmental issues. Obviously in the process of rethinking, new areas will emerge needed to support the implementation of the Agenda 2030. These include the Reform of the UN development system, international tax cooperation and, in addition, there is a matter of upgrading the scale of finance for Agenda 2030.
Ms. Nicola Barker-Murphy, Counsellor, Economic Affairs, Permanent Mission of Jamaica to the United Nations, discussed the challenges facing middle income states with the burden of external debt in raising their investment to meet the goals of Agenda 2030. Economies in this situation need to take serious consideration of innovative sources of finance. Jamaica is exploring new sources of domestic, international and private financing. Some of these include improving capacity for tax audits to address transfer pricing; exploring options for ‘green fees’, debt-for-nature swaps and diaspora bonds; facilitating social impact investment; and establishing a philanthropy platform.
Jamaica completed a map of its data capacity in relation to the SDG indicators. The mapping exercise concluded that out of 223 relevant indicators, Jamaica already produces 66 (29.6 per cent) and has data to produce 69 (30.9 per cent). The UN development system is yet to complete its transition from the MDGs to the SDGs, given that more than 50 per cent of its budget remains focused on the first six (6) SDGs.
Counsellor Barker-Murphy described the continuing threats represented by climate change. Investing in disaster risk reduction is a precondition for developing sustainably in a changing climate. The number of weather-related hazards has tripled, and the number of people living in flood-prone areas and cyclone-exposed coastlines doubled. The trend is expected to continue to increase. In the Carribean, one hurricane can wipe out progress built up over many years. She discussed the imperative of undertaking programs both to boost growth and employment and to build resilience to climate change.
Mr. Tarik Iziraren, Deputy Director for Policy and Strategic Partnership, UN office for South-South Cooperation, highlighted the potential for south-south cooperation to overcome many obstacles to sustainable development faced by developing countries. South-South cooperation involves concerted efforts among equals and among societies closer together in level of development.
Mr. Iziraren explained that the immediate challenge is to make sure that developing countries have the institutions to identify their needs and to access technology and resources from other developing countries. Building this capacity is a key effort of the UN office on south-south cooperation. He also explained that the office serves as a clearinghouse and assists in the maintenance of information to facilitate development cooperation among developing countries.
Ms. Shari Spiegel, Chief, Policy Analysis and Development Branch, Financing for Development, UNDESA, noted that because of Agenda 2030 the UN in New York has ratcheted up its role in global norm setting, particularly in issues that used to be decided in the Bretton Woods institutions. The design of monitoring systems and some monitoring activities themselves are being undertaken in New York. She emphasized the domestic resource mobilization challenges facing developing countries, including questions about illicit financial flows and tax cooperation.
There is a great variety of actors in the private sector (not one uniform private sector), both domestically and internationally, and mobilizing finance from this source will require that developing countries become more involved in international discussions in designing principles and norms over private finance. This includes the question of how decisions on allocating public resources to subsidize private development finance will be made.
In his own presentation, Dr. Montes shared recent analysis from the South Centre that indicate the increased vulnerabilities of developing countries especially with the prospect of the tightening of international liquidity, particularly those with heightened international private liabilities. Developing countries must rethink the manner of their international integration. Emerging and developing countries must confront the situation that the global economic governance – referring to the international trading and financial architecture – needs restructuring so as to discipline beggar-thy-neighbor polices of major economic powers, to reduce exposure of the global South to external shocks, and to introduce adequate mechanisms for the prevention and effective management of financial crises with international origins and consequences.
Dr. Mariama Williams, Senior Program Officer, the South Centre, presented the main channels of climate change-related financing, particularly those related to the obligations of developed countries stemming from the UN climate change framework convention. The Paris Agreement re-affirmed the developed countries’ commitment of $100 billion, per year, by 2020 to developing countries’ climate adaptation and mitigation actions, extended the time period to 2025 and urged scaling of climate finance from the $100 billion as a floor beyond 2025.
However, all estimates of the scale of climate finance needed by developing countries, especially the over $4 trillion ( or approximately $349 billion per year) financing cost estimated in the Nationally Determined Contributions of some developing countries, show that the available announced quantum of financing is inadequate for meeting the climate finance need of developing countries. The implementation of the public aspect of this climate finance is clouded with uncertainty on many fronts, including how the resources will be raised and the channels through which the financing will be made available.
What exists under the UNFCCC financing mechanism is the approximately US$10 billion committed to the Green Climate Fund (GCF). The Board of the GCF, which comprises 12 developing country and 12 developed country board members, has set up the operational and institutional structure for the flow of funds to developing countries. These include readiness and preparatory support of US$1 million per year, per country, for countries to set up their own domestic processes to interface with the GCF and to directly access the fund’s resources, a one-time US$3 million adaptation planning and preparedness grant and assorted project preparation facility. However, developing countries must rapidly build their capability to make concrete plans to meet their climate change commitments and enhance their capacity to generate country funding programme pipelines. The GCF board must urgently and effectively tackle the unfortunately bureaucratic process in the Secretariat that is creating the slow disbursement of funds to developing countries with approved projects.
In the open discussion, participants highlighted the complicated and slow process in which countries have experienced to obtain climate finance. Many developing countries are gearing up quickly to shape their development plans to realize Agenda 2030, including projects in mitigation and adaptation. As part of South-South cooperation, governments can share experiences in seeking climate finance among themselves to accelerate their learning processes.
There was a discussion of the question of enhancing and defending multilateral action in a time of heightened economic interdependence and climate change. How can productive multilateralism require accountable actions on the part of states whose policies generate spillovers and systemic impacts, while preserving adequate scope for national action so that all states can faithfully fulfil their sovereign duties to the people they represent?
Related documents:
Report: Approaches by Developing Countries to Reforming Investment Rules; South-South Dialogue and Cooperation is available here: https://www.southcentre.int/wp-content/uploads/2016/09/Ev_160720_UNCTAD-XIV-Investment-Side-event-Report_EN.pdf
Report: Inaugural Annual Forum Developing Country Tax Policies and Cooperation for Agenda 2030 is available here: https://www.southcentre.int/wp-content/uploads/2017/10/Ev_1612_Inaugural-Annual-Forum-Tax-Cooperation-Report_EN.pdf
