Reflections on the Financing for Development Zero Draft: The Accord

Waking up to find a copy of the zero draft for Financing for Development was not as welcome as you might think I had other plans for today but perhaps reading it in bits was better than in one sitting.

I don’t intend to comment on updated sections relating to the traditional Monterrey Consensus - there are a number of organizations that are focusing on that. I will keep as I have in previous blogs to the ‘sustainable development finance side’. After all this conference acknowledges that it is focusing on ‘A global framework for financing sustainable development and mobilizing the means to implement the post 2015 development agenda’ in the proposed Addis Ababa Accord.

The zero draft for those that have not read it is broken into two:

• The Addis Ababa Accord, and
• The Addis Ababa Action Agenda

Todays blog will focus on the Accord a following blog will focus on the Action Agenda.

The Accord

As you might imagine it is a short and intended to be a visionary document – only sixteen paragraphs to set the scene for those Heads of State and Government and High Representatives that will gather in July in Addis Ababa.  It recognizes that the ‘current policy, financing and investment patters are not delivering the future we want’. It recognizes that there are enormous unmet financing needs for sustainable development and that estimates show a significant shortfall.  

In 1992 Maurice Strong the Secretary General for the Earth Summit was asked by governments to request figures from the UN system for implementing Agenda 21. The estimate came back at $625 billion a year $125 billion from developed to developing countries. The request should be asked again now. How much will it cost to implement the SDGs per year? Countries should be requested to report on how they are then meeting those targets.  I would like to see an SDG part to all budgets presented to parliaments.

The Accord sees the solution to this being three things: strengthening official finance; unlocking the transformative potential of people and the private sector. In terms of ODA the UK has been the first and only G7 country to reach the 0.7% GNI there is clearly still much to be done within the other G7 countries, the US gives 0.19% GNI. In 2013 ODA rose to its highest level, around $135 billion came from the 28 members of the OECD Development Assistant Committee (DAC) around $135 billion in 2013. In addition to this a further $15.9 billion came from the European Commission and non-DAC countries gave an additional $9.4 billion.  In the area of unlocking the transformational potential of people this is a great idea which we can all support but very difficult to measure. On the private sector it of course vital to access the considerable funds available through the capital markets but this must be done through a robust, transparent and accountable regulatory framework.  The Accord does ‘reaffirm’ ‘the importance of freedom, peace, security, good governance, rule of law, sound economic policies and solid democratic institutions at national and international levels’ – it also talks about recognizing that effective policies, regulatory framework and appropriate incentives at all levels are essential to a shift towards sustainable development. As much of the money being identified will come from the capital markets then it isn’t enough to recognize but fundamental to ‘ensure’ that regulation is in place.

The Accord approaches the issue of the global partnership for development with exactly the right focus that it is ‘fundamentally’ the responsibility of governments. As it also points out other stakeholders will have roles in helping to ensure this agenda is realized.

The Accord does commit to a ‘new basic social contract to guarantee nationally appropriate minimum levels of social protection and essential public services for all.’ There is a nod towards the idea of global funds similar to the Global Alliance for Vaccines and Immunisation (the GAVI Alliance), the Global Polio Eradication Initiative (GPEI) for areas under different goals. This is something I suggested in the paper I did for UNDESA on the ‘Multi-stakeholder partnerships: Making them work for the Post-2015 Development Agenda.’

In the area of investment in rural development and sustainable agriculture it recognizes that agriculture is primarily financed by the ‘private sector’ not sure what small scale food producers would see themselves described like that. It recognizes that increased private sector investment should be in accordance with the Committee on World Food Security’s Principles for Responsible Investment in Agriculture and Food Systems.’  Principles are good but we need are regulatory frameworks to back up the Principles. The next 15 years are going to be enormously challenging as the world seeks to feed an extra billion people with an increasing water shortage in many developed and developing countries to enable them to deal with competing demands a stronger hand of government will be needed and this should be recognized in the Accord.

One of the other challenges of the next 15 years will be the rapid urbanization of the world with 60% of the world’s population living in urban areas by 2030. This will bring great stress on our resources both natural and human.  Investment in infrastructure that supports an inclusive and sustainable industrialization and innovation is recognized in the Accord.

Finally it was  good to see in the Accord the support for ‘implementing environment, social and governance (ESG) reporting frameworks for the private sector to contribute to transparency and accountability’ – something that many of us called for at Rio+20 and which has been supported by two Secretary general Panel Reports.

So these are my comments on the Accord and soon I will follow them up with a look at the sustainability elements of the Action Agenda.