In 2002, the global community came together in Monterrey, Mexico, to address key financial issues affecting global development. The International Conference on Financing for Development, the first United Nations gathering of its kind, resulted in a landmark global agreement in which developed and developing countries recognized their responsibilities in key areas such as trade, aid, debt relief and institution-building.
In less than two weeks, world leaders will gather once again, this time in the Ethiopian capital of Addis Ababa, to launch a renewed and strengthened global partnership to finance people-centred sustainable development. They will aim to ensure that resources go where they are needed most to promote economic prosperity and improve health, education and employment opportunities while protecting the environment.
The Third International Conference on Financing for Development comes at a critical time. Its outcome – still being negotiated by UN Member States – will be an important milestone on the road toward the adoption of a new sustainable development agenda in New York in September and a universal climate change agreement in Paris in December.
“The implementation and success of our new global agenda will rely on a robust financing framework, which will be adopted in Addis,” said Wu Hongbo, Under-Secretary-General for Economic and Social Affairs.
Mr. Wu, who is also the Secretary-General of FFD3, as the Conference is informally known, added that success in Addis will leverage strong political momentum for the September summit that will adopt the post-2015 development agenda and the UN Paris climate conference, known as COP 21, where Parties to the UN Framework Convention on Climate Change are expected to agree a new accord to keep global warming below 2°C.
“If we fail in Addis, the post-2015 development agenda cannot be successful,” he said in an interview with the UN News Centre. “If we fail both in the post-2015 development agenda and financing for development, I think the COP 21 negotiations will be adversely affected.”
Wu Hongbo shares his outlook for the Third International Conference on Financing for Development with UNTV. Credit: UN DESA
“As many of the ambassadors put it well, ‘we cannot afford to fail’,” he stressed.
The Addis Conference will engage countries and businesses to channel their investments to improve people’s lives while protecting the environment. It is expected to result in concrete commitments on finance, trade, debt, governance, technology and innovation for the next 15 years.
One of the most important issues discussed in Monterrey, as well as at the follow-up conference held in 2008 in the Qatari capital, Doha, was official development assistance (ODA), which remains crucial even today, especially for the world’s 48 least developed countries.
The ‘Monterrey Consensus’ urged developed countries to make concrete efforts towards the target of 0.7 per cent of gross national product (GNP) as ODA to developing countries. Five countries have exceeded this target – Denmark, Luxembourg, Norway, Sweden and the United Kingdom.
While net ODA flows increased significantly after Monterrey, from $84 billion in 2000 to about $134 billion in 2013, preliminary data for 2014 indicate a decline.
“We are really trying to encourage all the donor countries, both in the OECD [Organisation for Economic Cooperation and Development] and outside, to take a very serious look at what they’ve been doing in providing official development assistance and trying to scale up their efforts to meet their commitments as early as possible,” said Mr. Wu.
At the same time, given that ODA alone will not generate the necessary resources, additional or innovative sources of financing will be crucial to achieve global development goals. An example of an innovative mechanism is the international solidarity levy on air tickets, the funds from which help to develop drugs to treat HIV/AIDS, malaria and tuberculosis.
Experts believe the necessary financial resources do exist, with some $22 trillion a year in global savings, but the resources are currently not allocated adequately. The funds must be unlocked, mobilized, channelled and used more effectively for sustainable development.
“We are trying to help the Member States to find their own way to finance the sustainable development agenda,” Mr. Wu stated. “We are trying to tell the international community how to help those who are in need, who are most vulnerable, with the financial support.”
According to the Under-Secretary-General, the Addis Conference should produce three key outcomes: a holistic financing framework for sustainable development; concrete deliverables, particularly in areas such as poverty eradication; and a strong follow-up process that leaves no one behind.
He believes political and finance leaders must take the responsibility and “rise to the challenge” when they meet in Addis from 13 to 16 July.
“The Addis Ababa Conference on Financing for Development will be a test to make finance work for people and the planet.”