Financing for Development: CSOs makes case for framework underpinned by economic and social justice

As the third Global Financing for Development summit (FFD3) which is currently underway in Ethiopia’s capital Addis Ababa takes shape, Civil Society representatives have called for a concerted effort by all development partners to ensure that the new development framework is underpinned by economic and social justice for all.

 Mr. Bernard Anaba, a policy analyst at ISODEC- Economic Justice Unit, writes:

The 3rd World Summit on Financing for Development (FfD) is underway in Addis Ababa from Monday the 13th- 16th of July 2015. The world and especially developing countries like Ghana will be watching and hoping a new leaf is turned where global leaders and finance ministers at this summit are expected to make ambitious but firm commitment to financing fairly socio-economic development around the world.

The FfD summit is significant because it is coming ahead of the UN General Assembly meeting in September this year and the Climate Change summit, COP21 in December 2015. These are all game changing summits that should eventually decide the fate of our world for better or bad.

The FfD summit will come up with the global financing framework for which technical and financial resources will be made available in financing development around the world.

The UNGA summit in September 24th 2015 will outdoor the post 2015 agenda by affirming the new Sustainable Development Goals (SDGs), which will in turn be affected by the commitments in Addis Ababa during the FfD summit.

The Climate Change summit, COP21 would come off in Paris later this year in December 2015. Countries are gearing up for a tough negotiation process to come up with a framework for financing the ever threatening climate change menace.

It is for this reason that the FfD in Addis Ababa is so crucial as it is heavily linked to these other summits (the UNGA and COP21). The first ever Financing for Development conference, the Monterrey Consensus was held in 2002 followed up with the Doha Declaration in 2008, has since grown in stature as one of the most important global congregations for development. The FfD process and forum has since become the arena for negotiating and deciding on the framework for financing development in the world by various global stakeholders and interest groups including Civil Society Organisations(CSOs), Governments at two levels ( developing and developed) private sector actors, regional blocks etc.

The Monterrey Consensus and the Doha Declaration in 2002 and 2008 respectively set the background on which the FfD summit had evolved. The Monterrey Consensus particularly set the parameters of negotiation and agreement in 6 key areas of Financing for Development:

Mobilizing domestic financial resources for development.

Mobilizing international resources for development: foreign direct investment and other private flows.

International Trade as an engine for development.

Increasing international financial and technical cooperation for development.

External Debt.

Addressing systemic issues: enhancing the coherence and consistency of the international monetary, financial and trading systems in support of development.

Particularly for CSOs around the world, developing countries as a whole, African countries and regional blocks in developing countries the world over, the demand generally is a call for a framework that is underpinned by economic and social justice for all. These demands include:

The call for a fairer tax system and reform of the global institutional systems that unfairly funds and subsidies big business such as Transnational Corporations compared to funding social programmes around the world. For the African Union, this call is to reverse the systemic anomalies that make African countries become net exports of capital to the rest of the world through illicit financial flows to the tune of about $50 billion a year. 

The call for African countries to develop local capital and improve on value added activities and move away from commodity export dependence etc.

The call to urge developed economies to recommit to delivering on the promise of 0.7% of their Gross National Income (GNI) to developing countries and the 0.15-0.2% earmarked to Least Developed Countries.

These and many other demands will be negotiated and where agreed upon would be included in the final text of the outcome document of the conference.

It was at the Monterrey conference that developed countries pledged to commit 0.7% of their GNI to Official Development Assistance (ODA). Also at the conference one important issue was debt and systemic problems curtailing the African continent’s socio-economic development. All these concerns have not seen any significant improvement despite some actions over the last decade; most developed countries have failed to live up to their promises to commit 0.7% GNI to ODA but apart from a few in northern Europe including the UK, many including the USA have not come good. Likewise the debt issue still remains as global systemic issues do not allow developing countries like Ghana, Zambia etc, to sustain modest gains made after debt cancellations in the early to mid 2000s.

For African countries, domestic resource mobilisation and international private financial flows for economic transformation has not lived up to expectation. The continent still wallows in unsustainable progress with international private capital flowing in and out with the speed they came in. To reverse the commodity dependence and improve value addition of African exports requires a meaningful systemic change and structural transformation supported by the FfD outcome framework in Addis Ababa.

As key stakeholders in this process, CSOs contributions throughout the world have called for development consensus and to strengthen the call by regional blocks in developing countries including African governments for a more cautious approach to private financing of development and the need to ensure that excess economic surpluses are shared equitably amongst society and private sector especially, Transnational Corporations.