TWN Info Service on Finance and Development (Apr15/03)
14 April 2015
Third World Network

G77 and China critical of the substantive shortfalls of the Financing for Development zero draft

New York, 14 April (Bhumika Muchhala) – The second drafting session of the third Financing for Development (FfD) conference kicked off in the UN General Assembly in New York on 13 April.

The 5-day drafting session is part of the process that will culminate in a conference in Addis Ababa, Ethiopia on 13-16 July.

The discussions and negotiations are centered on the 16 March zero draft that was produced by the two FfD Co-Facilitators, Ambassadors George Talbot (Guyana) and Geir Pedersen (Norway).

The Group of 77 and China (G77), representing 134 developing countries in the United Nations, is chaired this year by South Africa.  The statement of the Group was delivered at the opening of the drafting session by Ambassador Kingsley Mamabolo, Permanent Representative of South Africa to the United Nations.

Process and Modalities

The first priority expressed by the G77 statement was that of process. The G77 requested further clarity on the proposed process to be followed during the current drafting session. This pertains, inter alia, to the timing around inter-sessional consultations and drafting sessions toward reaching an outcome in Addis Ababa. UN General Assembly Resolution 69/279 of the Modalities for the third International Conference on Financing for Development expressly provided for this possibility in Operative Paragraph (OP) 13.

The G77 recommended that the Co-Facilitators further explore the possibility of having additional consultations and drafting sessions between the second drafting session and the final Addis Ababa Conference. This would provide the time necessary to complete the important work of Member States towards finalizing a strong and meaningful outcome document for the third FfD conference, one that builds on the conceptual framework of the Monterrey Consensus and the Doha Declaration. The G77 is of the firm view that this is necessary, in order to deliver tangible and meaningful progress before delegations depart New York for the Addis Ababa conference.

The Group therefore calls on the Co-Facilitators to study the calendar of other UN meetings and propose an expanded programme of work, detailing additional inter-sessional consultations and drafting sessions to assist all Member States to carry out successfully the important mandate of ensuring that the objectives of the Conference can be achieved.

The G77 would like further clarity on the process to be followed during negotiations on the FfD zero draft. There is a need for Member States to be in agreement on how best to engage on the draft text to ensure that nothing is overlooked in terms of the key elements Member States would like to put forward to assist all countries, including developing countries, in their quest to make financing the development agenda meaningful at all levels, including addressing their local realities.

The G77 is of the firm view that the inter-governmental process should be the basis for these consultations and negotiations, therefore ensuring that the process is Member State-driven. The group requested the Co-Facilitators to undertake the work necessary to ensure that this important element would be respected. The G77 also stressed that Member State-driven negotiations of the outcome document should start as soon as possible.

Substantive Issues

The G77 emphasized that the integrity of the FfD agenda must be maintained in order for it to continue to be an over-arching process to address financing issues, especially for developing countries.

The G77 called for the chapeau of the FfD zero draft to focus on the economic pillar, the economic system and systemic issues, in order to elaborate in detail, the objectives of the FfD process. The issue of policy space for national governments must also be respected. 

Individual Member State regulations on public domestic financing must be the prerogative of national governments, in accordance with their own specific needs and objectives. The manner in which additional forms of financing are incorporated must also recognize the role of governments in regulating financing channels to fund development programmes that are being implemented in their countries, according to the G77.

[This statement is of particular significance in the context of developed country Member States asserting that public domestic financing should be the primary financing mechanism in the FfD outcome, which is to formulate a significant portion of the means of implementation that is to finance the Sustainable Development Goals (SDGs), which will be a core component of the post-2015 development agenda.  In response, developing countries repeatedly counter that the primary financing mechanism for the FfD and the means of implementation for the post-2015 development agenda should be first and foremost international public financing.]

The G77 proposed that the vision that was encapsulated in the Chapeau of the foundation UN outcome document of the financing for development process, the Monterrey Consensus, should be upheld by the current FfD zero draft.  The Monterrey Consensus boldly stated, “Our goal is to eradicate poverty, achieve sustained economic growth and promote sustainable development as we advance to a fully inclusive and equitable global economic system.”  This crucial sentence, which is conspicuously absent from the current text, needs to be reaffirmed and included up front.

The G77 also observed that the current Chapeau has not addressed pertinent issues with regards to official development assistance (ODA). The Group is of the firm view that ODA represents the major source of financing for the development of many G77 Members and further proposed that the unfulfilled ODA commitments on the unfinished Millennium Development Goals (MDGs) should be carried forward and the impact of the “ODA deficit” be assessed and estimated in the context of the review of the implementation of the Monterrey Consensus and Doha Declaration, as a matter of urgency.

The G77 asserted that the current chapters of the FfD zero draft of 16 March lack precise, actionable goals. It is not clear how developing countries would benefit from the current zero draft. It would therefore be critical to raise the level of ambition in terms of the goals Member States want to set for their ability to attain financing for development.  

There is an inter-linkage between the domestic and international actions as far as financing issues are concerned. The G77 is also conscious of the fact that governments at the national-level have a role to play in addressing development issues and would require the necessary policy space and enabling global environment in fulfilling their obligations in this regard.

With regard to possible linkages and synergies of the FfD process with the other processes, particularly on the means of implementation in the context of the post-2015 development agenda, the G77 made the folllowing four points:

• First, Member States have agreed that the report of the Open Working Group (OWG) on the Sustainable Development Goals (SDGs) would be the “main basis” of the post-2015 development agenda’s inter-governmental negotiations, as it integrates means of implementation both as a stand-alone goal and also within each goal. In this regard, the G77 underlined the need for stronger synergies between the post-2015 development agenda and the third International Conference on Financing for Development. 
• Second, in the context of the linkages, while the focus of the FfD Conference should primarily be on its core mandate and scope, as contained in General Assembly Resolution 68/204, it should consider the specific means of implementation for SDGs, taking into account and building on the means of implementation goal and targets as contained in the report of the OWG SDGs without prejudicing, pre-judging or precluding discussions on means of implementation under the post-2015 development agenda negotiation track. 
• Third, the FfD process should complement and support the elaboration of the post-2015 development agenda.  As such, it should provide a set of tools that will support the implementation of the post-2015 development agenda. However, at the same time, FfD is a separate process in its own right and contains a scope that goes well beyond merely financing the SDGs. In a similar manner, the post-2015 development agenda would draw from, but not be limited to, the means of implementation contemplated in the FfD outcome, in light of its adequacy and relevance for the implementation of its goals and targets. However, the FfD outcome will not exhaust the available resources and means of implementation for the post-2015 development agenda, which go beyond those that will be elaborated by the Addis Ababa outcome document. The Group would also like to stress that financing for development should not be replaced with financing for sustainable development.
• Fourth, the G77 called upon developed countries to agree and commit to a new phase of international cooperation through a strengthened and scaled-up global partnership for development, which should be the centrepiece for completing the unfinished business of the MDGs and implementing the post-2015 development agenda, taking into account the unfortunate, hard lessons learnt from the gaps in the implementation of MDG8. Global partnership should be based on Common but Differentiated Responsibilities (CBDR) and the unfinished business of MDG Goal 8 should continue. (MDG 8 is on the global partnership for development.)
  
  The international community should provide an enhanced and adequate means of implementation to developing countries, including through quantitative time-bound financing targets, besides those established for ODA, debt relief and debt restructuring, trade, technology transfer and greater participation of developing countries in global economic governance.
  
  The G77 reiterated that North-South Cooperation is still the core of global partnership for development. South-South Cooperation, triangular cooperation and the private sector are complements rather than substitutes of North-South Cooperation.

The Group further stated that it is imperative that the structure and holistic approach of the Monterrey Consensus and the Doha Declaration be retained, to ensure continuity of purpose and commitment, as member states are not starting from scratch, nor working in a vacuum, as far as the financing for development process is concerned. In that regard, the titles and respective substantive focus of each of the chapters of the afore-stated two important international meeting outcomes needs to be retained. The Group shall await further comments from Member States with regard to possibilities to expand the scope of the Addis Ababa meeting outcome and would need to be convinced on the way to proceed based on a clear rationale and understanding that is in the best interests of all countries, including developing countries.

Preparations of governments for the Third International Conference on Financing for Development take place in a critical context, with many least developed countries continuing to lag behind in meeting most of the internationally agreed development goals, including the MDGs. The G77 therefore re-emphasizes the need for the full and effective implementation of all commitments contained in the Programme of Action for the Least Developed Countries (LDCs) for the Decade 2011-2020, as contained in the Istanbul Programme of Action. 

As preparations for the review of the Istanbul Programme of Action proceed, the Group also stresses the critical need to realize expeditiously a renewed and strengthened global partnership for the LDCs in order for them to overcome structural challenges affecting them, eradicate poverty in all its forms, achieve the internationally agreed development goals and enable the halving of the number of the LDCs to meet the criteria for graduation from the category by 2020.

The G77 also expressed that they intend to speak to the specific paragraphs and content of the 16 March FfD zero draft, in order to address some of the challenges and gaps that developing countries have observed within the zero draft. This would be done in the coming sessions of this week’s plenary.

The G77 will deliver follow-up interventions accordingly, in order to further engage constructively and positively in ensuring that the concerns of developing countries are understood and incorporated appropriately in a revised draft.

The Group is of the firm view that this is the only way to ensure that member states all move in the same direction in guiding the FfD process forward, for the full and effective implementation of previous international commitments on financing for development.+