Glee, relief and regret: Addis Ababa outcome receives mixed reception

Glee, relief and regret: Addis Ababa outcome receives mixed reception | Global development | The Guardian

UN secretary general hails Addis Ababa development finance summit a success but failure to establish new global tax body draws criticism.  

 

World leaders at the financing for development summit in Addis Ababa have reached agreement on an economic framework to support the sustainable development agenda. 

As the third and final day of negotiations in the Ethiopian capital stretched into mid-evening, countries rich and poor voted in favour of an outcome document that, nine months in the making, will shape development finance for the next 15 years. 

The agreement earned a mixed initial reception, with the UN hailing a “bold” and “groundbreaking” outcome even as other delegates complained of “a terrible precedent” and lack of moral leadership.

Funding an ambitious global agenda that includes ending poverty and achieving universal food security was never going to be easy, and progress in Addis was at times as tortured as the winding road that led there. 

Confusion among delegates about how countries were expected to debate the proposed text marked a slightly chaotic culmination to negotiations that will be remembered for a standoff over calls from the G77 to upgrade the UN expert committee on tax into a new UN agency giving all countries a seat at the table.

Tax was always going to be the biggest bone of contention in Addis, and when rich nations, particularly the US, UK and Japan, were accused of lobbying hard to block the proposed agency, civil society groups feared the talks would end in deadlock.

Those fears proved unfounded, but the outcome document rejected the idea of a UN tax body and instead proposed changes to the existing expert committee. Some rich nations, Sweden among them, recognised the need to reform existing agencies such as the Organisation for Economic Cooperation and Development (OECD) but maintained a new intergovernmental body was not the solution.

Ban Ki-moon, the UN secretary general, nevertheless welcomed the final accord. “This agreement is a critical step forward in building a sustainable future for all,” he said. “It provides a global framework for financing sustainable development. The results here in Addis Ababa give us the foundation of a revitalised global partnership for sustainable development that will leave no one behind.”

As delegates and civil society representatives spilled out of conference room two on Wednesday evening, the sense of relief that an agreement had been reached – and that the conference would therefore not be deemed a failure – was palpable. But not everyone shared Ban’s upbeat assessment of the summit.

“It was a painful moment to see the developed countries celebrating the fact that nothing will change,” said Tove Maria Ryding, policy and advocacy manager for tax justice at the European Network on Debt and Development, who had championed proposals for a new global tax body. “This sets a terrible precedent for the post-2015 and climate negotiations.”

Her sense of foreboding was shared by a G77 country representative who asked not to be named. “The battle is going to be tougher for the next global talks,” said the delegate. “The privileged countries have more power but they lack moral leadership.”

Others were more sanguine. Staffan Tillander, the Swedish special envoy for development finance, described the agreement as a good start, while the Indian finance minister Jayant Sinha also drew encouragement from the outcome despite his country’s support for a new tax body. 

“We made a very significant step from moving the formulation of global tax policy from the OECD to the UN, where it actually belongs,” said Sinha. “The fact that we will ensure equitable representation in the committee on tax matters significantly increases the role the developing world will be able to play, [but] I wouldn’t say any one of us is jubilant. International negotiations extend over long periods of time and there are significant steps that we still have to undertake, but the important thing is to continue to make forward progress.”

 

Manuel Montes, however, senior adviser on finance and development at the South Centre in Geneva and one of the architects of the financing for development process, felt developing countries had lost more than they had gained. 

“A study from May 2014 found that the rules of the current tax system were three times more costly for non-OECD countries,” said Montes. “What was at stake was setting up the rules so that everybody could have a fair deal. By not allowing this upgrade to happen, the OECD countries have violated one of the basic principles of Monterrey [the first FFD conference], which is good governance at all levels.”

But Ban’s special adviser on post-2015 development planning, Amina J Mohammed, called for civil society to remain hopeful. “Do we have enough doors open on every issue that we wanted? I think we do. Are they wide enough? No. We still have to fight the good fight, that’s the way the world works.”

Acknowledging that for many NGOs and delegates the outcome document was far from groundbreaking, Mohammed added: “People will say we’ve sold out, but they underestimate what the implications are of this. This is a world that has worked in different ways for north and south and for the first time we have a universal agenda that’s actually changed the equation on development.”