Development finance is entering a new era, and in Addis Ababa, Ethiopia, civil society representatives remain unconvinced the new world of development cooperation holds more promise for the world’s poor than the old one.
Shifting ideas about aid, increasingly viewed as a tool to leverage private investment and not as a stand-alone funding stream for social services, have some pro-poor nongovernmental organizations feeling nervous about the outcome — and overall tone — of the third International Conference on Financing for Development, which kicks off Monday in the East African development hub.
“We have to be really strategic,” said Amy Dodd, director of the U.K. Aid Network, at a panel discussion Sunday. “I think we all know there’s been very little space for civil society in these conversations.”
PPPs are viewed as the ideal marriage between government and business to share risks and pursue a development agenda. But is the reward worth the risk? On the eve of the Financing for Development Conference a new report from a leading European civil society network says that the public sector often finds itself on the risky end of the deal and development impact are often questionable.
The CSO forum this weekend provided civil society groups an opportunity to narrow down their priorities and zero in on a few key issues to press negotiators on as the week of discussions unfolds. The Addis conference, the first since the Doha Declaration in 2008, is meant to produce an outcome document, which will outline the sources of development finance that can be drawn on to implement the sustainable development goals.
Negotiators have stumbled over a few contentious issues though, and civil society groups are rallying to shape the document in its final stages. Some have even questioned whether the document will be finalized — and agreed to — before the conferences closes Thursday.
While financing talks have emphasized the importance of domestic tax resources to fund sustainable development, CSOs remain adamant that cracking down on tax evasion and avoidance by multinational corporations represents an equally important outcome. NGO representatives hope the creation of an intergovernmental regulatory body to enforce global tax standards and stem illicit financial flows might find its way — albeit at the last moment — to the negotiating table.
“Instead of encouraging us to implement a document that is not agreed and that the member states say will have to be further discussed, shouldn’t we all seize this chance to get the tax body so that we can at least say we didn’t leave Addis without anything that’s really going to make a difference,” asked Tove Ryding, policy and advocacy manager at the European Network on Debt and Development.
“We read the document, we looked for ambition, and we didn’t find it,” she said.
CSOs are also pushing for more critical scrutiny of the role public-private partnerships and so-called blended finance arrangements can and should play in advancing inclusive economic growth and other pro-poor goals. At a time when most bilateral donors remain cash-strapped, the private sector’s burgeoning presence in developing markets has generated a lot of enthusiasm about new capital pools and value chains that can be tapped for development impact.
That swell of optimism has met a plea for caution and for hard evidence that PPPs and other attempts to use aid dollars as “leverage” for private investment actually serve as viable models for poverty reduction and other social services.
Some worry putting too sharp a focus on using aid as leverage risks neglecting the need for public funding to countries or sectors private investment is unlikely to reach. Fragile and conflict-affected countries, for example, rarely offer “business-friendly” investment climates. A number of NGOs are calling for the Addis outcome document to include a clear donor commitment to direct 50 percent of official development assistance to these and other least-developed countries.
The SDGs have been lauded for advancing the idea that global development goals ought to apply to developed and developing countries alike — the notion of “universality.” In the closing session of the CSO forum Sunday, representatives voiced concern that in the development of the outcome document universality has been misinterpreted to mean equal financial contributions to development finance. CSO representatives are pressing for the inclusion of language that acknowledges “common but differentiated responsibilities,” commitments that recognize the varying capability among countries to contribute financial and technical resources.
Questions also remain about the future of the financing for development process itself. On one side, some donor countries argue financing discussions ought to be more tightly folded into the post-2015 goal-setting process. Funding commitments, they argue, should embark from a clear list of sustainable development goals.
Developing country and civil society representatives, however, maintain that the two processes are separate, and should remain so. The financing for development process is an intergovernmental one, while the post-2015 sustainable development goals are United Nations-led. Confining financing talks to the specifics of the post-2015 agenda, some argue, could limit opportunities to discuss bigger, systemic issues related to development finance, or which fall outside the specific purview of the SDG process.
U.N. Secretary-General Ban Ki-moon addressed a full house of forum attendees in the closing hours of the civil society gathering.
“This meeting is one of the three top priorities of the United Nations — and top priorities for humanity,” Ban said. “I know that, as always in a multilateral forum, some views differ on the level of ambition. The stakes and expectations are very high. The negotiations were very difficult.”
Geir Pederson, permanent representative of Norway to the United Nations, urged civil society groups to support the finalization of an outcome agreement, despite the concerns they might harbor about its shortcomings.
“Continue your good work,” Pederson said, “in such a way that you don’t stop us from reaching an agreement at the middle of the week.”
Pederson pointed out that it is not enough for 130 countries to agree on the outcome document. All 193 member countries of the United Nations must endorse the outcome document that emerges from Addis deliberations.
“What will be the outcome, I don’t know,” he said.
For a process that seemed to be more or less settled prior to the conference beginning, a number of questions appear open for discussion. With few hours remaining for consensus to emerge, negotiators could be in for some long days in the Ethiopian capital.
Michael Igoe is a senior correspondent for Devex. Based in Washington, D.C., he covers U.S. foreign aid and emerging trends in international development and humanitarian policy. Michael draws on his experience as both a journalist and international development practitioner in Central Asia to develop stories from an insider's perspective.
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