FfD and post-2015 development agenda are distinct and complementary, says South

The exact nature of the linkage between the respective outcomes of the financing for development (FfD) and post-2015 development agenda negotiations in the UN has been a major subject of contention between developed and developing countries.

by Ranja Sengupta

NEW YORK: In a joint meeting of the intergovernmental negotiations on the preparatory processes of the third International Conference on Financing for Development (FfD) and the post-2015 development agenda, member states were particularly divided over how to deal with the outcomes from the two processes.

The meeting took place on 21-24 April at the UN headquarters in New York.

The developing countries, led by the Group of 77 and China, stressed the need for the outcome of the FfD conference – to be held in July in Addis Ababa – to be linked to, but as complementary to and independent of, the goal and targets on means of implementation (MOI) in the post-2015 development agenda. [The 17 Sustainable Development Goals (SDGs) meant to be incorporated into the post-2015 agenda include the standalone Goal 17 on MOI.] This was further supported by several groupings such as the least developed countries (LDCs), the Alliance of Small Island States (AOSIS), the Caribbean Community (CARICOM), the African Group and the Pacific Small Island Developing States (PSIDS).

On their part, the general view of developed countries was to import the FfD outcome document in toto into the post-2015 agenda as the goal on MOI.

The MOI discussions, especially in the context of the FfD process, have perhaps been one of the most contentious in the ongoing UN General Assembly talks on the post-2015 agenda, which is to be adopted at a UN summit this September.

The developing countries have also argued that the FfD document does not address non-financial MOI, which is critical for the post-2015 agenda. The discussion on technology is also weak in the FfD document, they stress. After repeated requests from developing countries, the April MOI session included a one-day discussion on a technology facilitation mechanism (TFM), an issue that has seen bitter battles and deep divisions in the past (see following article). The monitoring and review mechanisms for these two processes, whether separate or joint, were also an area of contention.

In sum, the developing countries expressed concern that fully overlapping the two outcomes (FfD and MOI of the post-2015 agenda) as per the developed countries’ recommendation will dilute the ambition level of the MOI of the post-2015 agenda. At the same time it will render the FfD process as nothing more than the 15-year framework of the post-2015 agenda when in fact the process has not only a longer but also a different, though overlapping, mandate.  

Ambition and universality

The 21-24 April session was led by the co-facilitators, Ambassadors David Donoghue of Ireland and Macharia Kamau of Kenya, who were joined by the co-facilitators of the FfD process, Ambassadors George Talbot of Guyana and Geir Pedersen of Norway. The week’s discussions had been preceded by the 13-17 April second drafting session in the run-up to the FfD conference.

At the beginning of the 21-24 April session, the four co-facilitators addressed the member states. Donoghue talked about the ambition of the post-2015 agenda and the notion of “universality with differentiation”, given the different country contexts that underpin the post-2015 agenda. He also suggested that the Addis Ababa FfD conference should build on the ambition of the SDG targets and the post-2015 agenda. He highlighted the need for an enabling policy environment, new institutions, new commitments, global partnerships as well as review and monitoring, which will all be needed to implement this new framework and to drive it forward.

Kamau highlighted how he felt ambition and universality represented itself in the world today. It is about ending poverty and inequality and promoting shared prosperity, he said. Drawing attention to the tragic deaths of 900 migrants while crossing the Mediterranean, as covered in that day’s news, Kamau reminded everyone of the real issues that the UN membership is seeking to address: inequality and poverty, and terrorism. The task, he said, is putting together a post-2015 agenda that seeks to address these issues, and also finding the means of implementation for it. He recognized the FfD and MOI challenge that has to be overcome before September.

Kamau also stressed that the ambition in the SDGs actually surpasses the development financial flows today and achieving the SDGs will mean going from millions to billions in resource flows. This requires a financial framework working at both national and global levels. It is doable and requires political will and technical capacity.

Kamau hoped that “we never again have to hear about the number of goals and targets of the SDGs”.

Talbot said the session offered the opportunity to step back and refocus. He suggested that the group was here for “you and your families.” He said that if the agenda is seen in terms of people – “ourselves and those connected to us” – all will become champions and accept the mantle of responsibility to bring change.

While agreeing that this is a doable challenge and failure is not an option, Talbot also cautioned that the process will not be smooth and there will be issues to work out. He said members have to build mutual understanding and confidence and demonstrate to each other and to the world that they are committed to this transformative, ambitious, universal agenda. The FfD and post-2015 development agenda are very connected in that process of transformation, he said. The ambition level of the SDGs has to be matched on the financing track.

Talbot went on to say that the “zero draft” of the outcome document for the FfD conference seeks to provide a framework building on the outcomes of the 2012 Rio+20 sustainable development conference, but it also seeks to build a platform for specific deliverables. The deliverables are: “what are the critical investments that must be made; what are the critical lead actions that we as a global community take and support; and how will we unfold the work on implementation”. The fourth dimension needed here is political will, he highlighted. Critical investments should be made in key sectors such as health, education and energy. He drew attention to technology as a key focus area and said that significant transitions in technology need to be made.

Pedersen stressed on the need for urgency as there was less time compared to the Monterrey Consensus (the outcome from the first FfD conference in 2002). This is an enormous task but it is doable and political will is needed in the FfD process. “In 12 weeks we need to find solutions like we have never done before,” he emphasized.

Linkages and synergies

In the first statement of the session, the Group of 77 and China, represented by South Africa, said that the joint meeting enabled the member states to look at possible linkages and synergies of the FfD process and that of the post-2015 development agenda. This was timely in the context of the recently held second drafting session of the FfD process the week before.

The Group reaffirmed the holistic scope of the Monterrey Consensus and the Doha Declaration on Financing for Development. (The second FfD conference, held in Doha in 2008, reviewed the implementation of the Monterrey Consensus.) “In this regard, the Group’s position is to maintain the balance of the 2002 Monterrey Consensus and the 2008 Doha Declaration as reflected in their structures and should be the basis for the development of the Addis Ababa Outcome Document,” it said.

The G77 and China reiterated the following key points based on their February 2015 position paper.

First, the UN member states have agreed that the report of the Open Working Group (OWG) on Sustainable Development Goals – which comprises the set of 17 SDGs agreed to by the OWG following negotiations in 2013-14 – would be the “main basis” of the post-2015 development agenda intergovernmental negotiations as it integrates the MOI both as a standalone goal and also within other goals. In this regard, the G77 and China underlined the need for stronger synergies between the post-2015 development agenda and the FfD conference.

The Group also appreciated the scheduling of discussions on the technology facilitation mechanism and looked forward to a constructive deliberation on specific aspects related to the establishment of a TFM for the implementation of the SDGs.

Second, while the focus of the FfD conference should primarily be on its core mandate and scope, it should consider specific MOI for SDGs, taking into account and building on the MOI goal and targets in the OWG report and “without prejudging or precluding discussions on the MOI under the post-2015 development agenda track”.

Third, the Group highlighted the complementarity of, as opposed to exact overlap between, the MOI under the post-2015 agenda and the FfD process. “The FfD process should complement and support the elaboration of the post-2015 agenda. As such, it should provide a set of tools that will support the implementation of the post-2015 development agenda. However, FfD is a separate process and its scope goes beyond merely financing the SDGs. In a similar manner, the post-2015 development agenda will draw from the means of implementation contemplated in the FfD outcome in light of its adequacy and relevance towards the implementation of its goals and targets, but this will not exhaust its means of implementation, which go beyond those elaborated by the FfD outcome document.”

Fourth, the G77 and China also 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 and anchor for both completing the unfinished business of the MDGs [Millennium Development Goals] and implementing the post-2015 development agenda, taking into account the lessons learnt from the gaps in the implementation of MDG8 (on global partnership for development). The international community should provide enhanced and adequate means of implementation to developing countries, including through quantitative time-bound financing targets besides those established for ODA [official development assistance], debt relief and debt restructuring, trade, technology transfer and greater participation of developing countries in global economic governance”.

Next, the Group acknowledged the discussion of financing for climate change in the FfD process but said “the FfD process must recognize UNFCCC [UN Framework Convention on Climate Change] as the main multilateral platform for discussions on climate finance. Climate finance must not be double-counted as ODA and therefore must be considered as separate from and additional to ODA.”

Finally, the Group pointed to the urgent need to achieve an appropriate balance in the FfD and post-2015 processes between the roles and the responsibilities of the public and private sectors. The Group expressed concern over efforts to skew the balance heavily in favour of the role of the private sector in supporting development, describing these as “unacceptable” as they effectively amount to trying to privatize delivery on the global development agenda. “In the context of a much-needed strengthened and scaled-up global partnership for development, the private sector has a complementary role to play in supporting the implementation of the development agenda.”

This has also been a consistent demand from civil society groups worldwide.

On follow-up and review, the G77 and China acknowledged the distinct nature of the two tracks and reiterated its firm view regarding the need for an intergovernmental follow-up for the FfD process under the auspices of the UN General Assembly. On the other hand, the Group recalled the central role of the High Level Political Forum (HLPF – the institutional follow-up of Rio+20 that replaced the UN Commission on Sustainable Development) in the follow-up and review of the post-2015 development agenda, including commitments emanating from the FfD conference as complementary means of implementation for the SDGs. The G77 and China expressed their firm support for a follow-up and review of the post-2015 development agenda “that encom-pass[es] all the 17 Sustainable Development Goals in a balanced and integrated manner, while giving priority for the implementation of Goal 17 and the MOI, specific targets under the other SDGs, as their cross-cutting nature is critical to the implementation of the entire framework of goals”.

The G77 and China statement was later endorsed by, among others, the LDCs, CARICOM, AOSIS, as well as several individual member states, including Brazil, Nigeria, Costa Rica and Lebanon, who spoke on the first day of the session.

Resource mobilization

CARICOM, represented by Belize, said that the post-2015 agenda and FfD are distinct in themselves but should be understood together as sustainable development should be their purpose, with the common point being the MOI. The FfD process should ensure that it addresses the mobilization of resources across the three dimensions (i.e., economic, environmental and social) of sustainable development, keeping resource mobilization aligned to development objectives and integrating the principle of universality of the post-2015 agenda.

The FfD outcomes should address the vulnerabilities and challenges of small island developing states (SIDS) with special regard to resource mobilization, CARICOM said. Appropriate emphasis is needed on a global partnership, balanced with the need for domestic resource mobilization. Climate finance requires its own MOI, according to CARICOM, which emphasized the need for adequate financing to address climate change and climate-resilient development and the special needs of SIDS. CARICOM asked for distinct follow-up and review mechanisms for the two processes.

Ecuador, speaking on behalf of the Community of Latin American and Caribbean States (CELAC), said the member states should commit to having sound policies on international tax cooperation, debt relief, capacity building and technology transfer. The MOI are a vital cross-cutting aspect of the post-2015 agenda requiring investment and coordinated efforts by member states. CELAC stressed the need for a responsible approach in terms of partnerships, particularly in participation by the private sector. There must be transparency, monitoring and accountability by all actors.

CELAC stressed that innovative financing for development is a complement to and not a substitute for financing for development. It believes in “investment in science and technology and in building capacity with women and men involved”. Underlining the importance of technology and infrastructure in sustainable development, CELAC said that technology transfer, knowledge building and capacity building are important.  Middle-income countries, which continue to have high levels of poverty and persistent inequality, need economic opportunity, for which strategies must be developed within this framework.

The Maldives, speaking on behalf of AOSIS, said that special focus must be placed on the diversity and particular needs of SIDS in all processes. “We recognize that challenges require a global partnership for development, trade, technology transfer,” the group said.  While acknowledging that finance from all sources is important, it underscored the critical importance of global international financing because the private sector, being underdeveloped in SIDS, is unable to provide adequate financing. Access to modern technology is also important so as to build knowledge capacity and increase the countries’ involvement in international trade. AOSIS also mentioned the particular challenge faced by SIDS in climate change and capabilities of data collection.

Benin, speaking on behalf of the LDCs, underlined the need to reach meaningful deliverables so as to achieve meaningful results, and so the means of implementation must work with the ambitions of the development agenda. The LDCs said states cannot go to Addis Ababa just to reconfirm commitments made years ago. In particular, the LDCs recommended: 0.25% of ODA for LDCs, reserving 50% of aid for trade for LDCs, a debt moratorium for LDCs, and allocation of 0.1% of ODA for the technology bank. In addition, they asked for specific strategies to build the capacity of LDCs such as investment in infrastructure, an international support centre for investment in LDCs, institution building and reform.

Tonga, speaking on behalf of the PSIDS, said that while the FfD and MOI tracks must be considered together, they are distinct. The FfD text should be explicit about what is being supported and, in particular, the MOI for the targets. The group asked for special considerations for SIDS and underscored the need for a global partnership.

Zambia, on behalf of the landlocked developing countries (LLDCs), said that the FfD process should not limit the post-2015 agenda but rather reinforce MOI in the latter. A complementarity between the two processes is critical to the attainment of targets of LLDC states.

The FfD process, as one of the many components, should feed into MOI and should reflect specific needs of LLDCs. The LLDCs need financial and technical assistance and technology facilitation in order, for example, to have secure transport infrastructure for reducing trade costs. The LLDCs also need to have diverse production and build resilience to climate change and other economic and social shocks. MOI should cater to the specific needs of LLDCs such as timely, predictable ODA, increased aid for trade and market access, increased foreign direct investment, increased technical assistance, innovative sources of funding and increased public-private partnerships.

Indivisible SDGs

Brazil stressed on the need to ensure adequate means to implement the SDGs, which are “balanced and indivisible”. It is important to note that Brazil, throughout the session and in presentations made at other parallel smaller meetings, has been highlighting the indivisibility of the SDGs and therefore the need to ensure that all goals and targets, including the MOI, are implemented and none left behind. Brazil emphasized that the standalone Goal 17 on MOI and MOI specific targets are part and parcel of the SDG framework and must not be left behind like Goal 8 of the MDGs.

Brazil also said that for an effective integration of FfD and the post-2015 agenda, two elements are needed, namely, a clear understanding of what MOI are needed for the new agenda; and concrete mechanisms and policies such MOI provide. The Addis Ababa conference is not just a pledging process and must try for indicative pledges.

Brazil also stressed that the FfD and post-2015 processes must complement but not compete with other pledges in other processes. So for example, the Green Climate Fund (GCF) under the UNFCCC has renewed the call for $100 billion per year by 2020, but these pledges must not count as ODA.

Brazil highlighted as well the non-financial aspects of MOI, saying that MOI go beyond finance to cover technology development and dissemination. Brazil pointed to the need for review and monitoring of both the frameworks under the HLPF. The new agenda includes important new aspects of sustainable development, such as health and sustainable production and consumption, it said.

Complementarity

Nepal asked for a complementarity between the post-2015 and FfD processes. Increased resource requirements will also lead to increased taxes and increased cost of development, which needs to be balanced by ODA and trade, it said. Access to markets and capacity building for market linkages and value chains must be supported at all levels.

Nicaragua said that the FfD and post-2015 processes should be made complementary. It pointed out that national development strategies are crucial for developing countries as they need additional resources and an international environment favourable to development, and that ODA must be marked specifically for LDCs and SIDS. Implementing the Monterrey Consensus is essential. Real changes in the financial system, transfer of technology, capacity building and debt issues must be part of the post-2015 agenda. Developing countries need space to address social infrastructure. The new framework should be aligned to the needs of developing countries and look at resource mobilization and take account of shared responsibility.

The European Union pointed to the different views shared by several developed countries. The EU said the Addis work should be comprehensive and be able to address the full MOI for the SDGs and the post-2015 agenda. (This was in stark contrast to the position taken by the developing countries.)

The EU also agreed to the need to move from FfD to “financing for sustainable development” and said there is a need to clarify the relationship between Addis and the post-2015 development process, again saying that the Addis outcome should be framed as the comprehensive MOI for the SDGs. The EU also expressed its support for a single process for review and monitoring of the two frameworks.

According to the EU, the Addis outcome should include the FfD framework covering all the goals and targets, including non-financial means. It recommended that the Addis outcome be drafted in a way in which it can easily fit and be included in the post-2015 agenda. Another option is to agree in Addis that a condensed version of the outcome document be included in the post-2015 package, the EU suggested.

The United States said the FfD process and the post-2015 agenda have the same purpose, which is to end poverty and promote sustainable development. It said that the previous week’s discussion (the second FfD drafting session) had reaffirmed the Monterrey Consensus and the Doha Declaration, and also provided an agreement on domestic mobilization and combating illicit finance. The US argued that ODA must focus on those most in need and underscored the importance of capacity building, inclusion and gender equality. It acknowledged the widespread calls for science, technology and data as key enablers for development to trigger the growth of knowledge-based economies, and also pointed out that there are areas that need improvement.

Australia said that the Addis outcome must build on the Monterrey framework in order to succeed and must have a defined outcome on how to attain financing goals. In order to achieve the SDG outcomes, the Addis outcome document must have the MOI, a simple monitoring and follow-up mechanism, and strengthened global partnership. Australia acknowledged that ODA has an important role to maximize impacts catalytically. A global partnership includes other actors, founded on mutual respect, trust and capitalizing on expertise. Strong coordination and sequencing between the post-2015 and FfD-Addis processes must form the MOI outcome, it said. 

This article was written with inputs from the Women’s Major Group at the UN.

Third World Economics, Issue No. 592/593, 1-31 May 2015, pp21-24