UN member states look beyond aid to fund ambitious new development agenda


by Lyndal Rowlands

UNITED NATIONS, Aug. 1 (Xinhua) — With UN member states poised to agree on an ambitious new development agenda, Lenni Montiel, UN assistant secretary-general for economic development, told Xinhua about how governments plan to fund their proposed commitments.

SUCCESSFUL CONFERENCE IN ADDIS ABABA

“I can unequivocally say that the Addis Ababa action agenda has been a success for the international community,” Montiel said in a recent interview with Xinhua, referring to an agreement reached by all 193 member states at the Addis Ababa Financing for Development conference which took place in the Ethiopian capital from July 13-16. “I think we have just seen that the conversation about how development is financed has changed.”

The conference saw the international community bring other forms of funding to the table, and a shift away from seeing aid and concessional loans — known as official development assistance (ODA) — as the only source of development financing.

“Official development assistance is important for international development, but it’s not going to be the only source of financing,” Montiel said, noting that wealthy countries have still recommitted to making ODA 0.7 percent of their gross national income — a goal only a handful of governments have so far reached.

Beyond aid, other forms of funding include the public funds of governments, which are expected to provide many of the services needed to meet the sustainable development goals (SDGs).

The SDGs are a set of 17 universal environmental, social and economic goals, at the center of the post-2015 development agenda which governments are currently negotiating.

“The conversation has changed because now there is more importance given to the question of domestic resource mobilization in each country,” Montiel said.

One way that governments and international bodies can address this issue is by addressing the funding that governments lose to tax avoidance and illicit financial flows. Montiel said that many countries are now calling for international financial flows to be addressed.

“We heard the call of many countries suggesting that we need to tackle international illicit flows and we need to be more consistent with the way that international companies behave in terms of their business in different countries without paying taxes in any of them,” he said.

However, aside from ensuring governments protect their revenues from these losses, Montiel said that there are many other means of financing which are now on the table.

“We have seen also the importance of international remittances (funds foreign workers send to their home countries), we have seen the value of foreign direct investment and private sector involvement in development efforts so all of these elements as part of the whole is new,” the senior UN official said. “We didn’t have this picture before.”

POSITIVE DEVELOPMENT

Meanwhile, Montiel saw these developments as positive because it expands the pool of sources for development financing and also moves away from a charity approach to development.

“I believe it is very positive; it gives opportunities for everybody who wants to contribute to contribute to the process and puts aside the question of relying only on a kind of charity approach to development.”

Another recent development — which Montiel said was relatively unanticipated — has been the Chinese-led establishment of the Asian Infrastructure Investment Bank (AIIB).

“The establishment of the Asian Infrastructure (Investment) Bank itself is a process that wasn’t even expected by major economic players in the world three or five years ago,” Montiel said.

The bank — which joins other multilateral development banks such as the World Bank and the Asian Development Bank — will provide financing for infrastructure projects, and will help support proposed SDG number 9: “build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation.”

However, while the Addis Ababa Action Agenda was adopted unanimously by all 193 member states and the UN also hopes to reach 100 percent agreement on the contents of the post-2015 development agenda, this doesn’t mean that countries have not had differences of opinion during negotiations.

One area that has been the subject for debate is the idea of common but differentiated responsibilities, a concept which emerged out of climate change negotiations.

“Common but differentiated responsibilities emerged as a concept in international law during the negotiations on environment and climate change; in fact this (concept) emerged in 1992 during the Rio negotiations,” Montiel said.

In the context of the post-2015 agenda, different countries have taken different positions on the roles that emerging versus developed countries have in funding and supporting sustainable development.

Broadly speaking, developed countries want to see emerging economies take more responsibility while developing countries argue that it is important to understand current levels of development within their historical context, Montiel said.

IMPORTANT CHINESE ROLE

Montiel also noted that countries like China have an increasingly important role to play both domestically and internationally in meeting the SDGs.

“China — as many other middle-income countries — have a great experience right now in addressing poverty and addressing inequality in their own countries; so going forward with the SDGs and the challenges ahead with the new development agenda it is unquestionable that middle income countries and among them China above all will have a fundamental role in continuing with these efforts,” he said.

He also highlighted China’s economic growth and recent environmental efforts.

“China is following a very successful path of development in human history. Let me give you one single fact; there has been no country in this world so far who have lifted more people from poverty than China in the last 15 years,” he said.

Montiel emphasized that it was too soon to know exactly how all of these issues around the post-2015 development agenda will play out, as the final decision rests with the world’s 193 governments in September 2015.

“As we speak member states are still negotiating the text of the document that is expected to be approved in the general assembly in September 2015,” he said, referring to the UN-led efforts to hammer out the SDGs, which is expected to be adopted by world leaders in September at the UN Headquarters in New York.

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