Domestic Resource Mobilization Essential for Financing Development, Speakers Note at Second Committee Dialogue with Regional Commissions
Regional frameworks could assist the mobilization of financial and technological resources, and “serve as a catalyst to strengthen the global partnership for sustainable development by facilitating access to science, technology and innovation, and enhancing knowledge sharing and capacity-building”, Sebastiano Cardi (Italy) told the Second Committee (Economic and Financial) today while chairing its annual dialogue with the Regional Commissions.
The dialogue, entitled “The Means of Implementation in Support of the post-2015 Development Agenda: Regional Perspectives”, was moderated by Alicia Bárcena, Under-Secretary-General and Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), and current Coordinator of the Regional Commissions. It featured presentations by Ms. Bárcena; Rima Khalaf, Under-Secretary-General and Executive Secretary of the Economic and Social Commission for Western Asia (ESCWA); Abdalla Hamdok, Deputy Executive Secretary of the Economic Commission for Africa (ECA); Andrey Vasilyev, Deputy Executive Secretary of the Economic Commission for Europe (ECE); and Shun-ichi Murata, Deputy Executive Secretary of the Economic and Social Commission for Asia and the Pacific (ESCAP).
Speaking in her capacity as moderator, Ms. Bárcena said that Regional Commissions gave Member States a space to voice their priorities for the new agenda and to forge common positions. As those Commissions were based on the ground, they were “in touch with the realities of the region”. Furthermore, States knew they needed to improve domestic resource mobilization but official development assistance (ODA) and external financial flows would retain a major role.
Speaking on domestic resource mobilization, Mr. Hamdok noted Africa’s great potential in that area. However, to take full advantage of it, tax collection systems must be enhanced, and the tide of illicit financial flows reversed. The latter were also mentioned by Ms. Khalaf, who said that they drained around $111 billion annually from the Western Asia region. At the same time, foreign direct investment (FDI) was low and focused on already prosperous economies, and intra-regional trade needed to grow.
The importance of increasing intra-regional trade was also highlighted by Ms. Bárcena, as it represented only 19.2 per cent of trade of the Latin America and the Caribbean region. Furthermore, fair trade and full access for developing countries to the markets of developed countries were crucial, and there must be a transfer of technology to developing countries on a concessional basis.
Addressing the issue of public-private partnerships, Mr. Vasilyev noted that they were often associated with transport projects but could also play a role in other areas, such as health, sanitation and the provision of drinking water. Similarly, Mr. Murata highlighted the importance of policymakers working with the private sector to develop more diversified and balanced sectors to finance sustainable development.
In the ensuing interactive discussion, Ms. Bárcena replied to Norway’s representative saying that public and private funding flows obeyed different logic and responded to different incentives. The pursuit of profit by private funders meant it was also a volatile source of financing, and public resources could potentially improve sectors that were not necessarily attractive for investment.
Also taking part in the interactive discussion were representatives of Ethiopia, Israel, Russian Federation, Thailand, Guatemala, Costa Rica (on behalf of CELAC), Bahamas, Brazil, Thailand, Peru and Mexico.
Earlier today, the Committee heard the introduction of 28 draft texts, as well as a statement by Mauritania’s representative (on behalf of the African Group) on Agriculture development, food security and nutrition.
The Committee will meet again at 10 a.m. on 10 November for the Pledging Conference.
Introduction of Reports
The representative of Bolivia, speaking on behalf of the “Group of 77” developing countries and China, introduced drafts titled “Permanent sovereignty of the Palestinian people in the Occupied Palestinian Territory, including East Jerusalem, and of the Arab population in the occupied Syrian Golan over their natural resources” (document A/C.2/69/L.33), “Information and communications technologies for development” (document A/C.2/69/L.11), “International trade and development” (document A/C.2/69/L.28), ”External debt sustainability and development” (document A/C.2/69/L.3), “Modalities for the intergovernmental negotiations and the adoption of a multilateral legal framework for sovereign debt restructuring processes” (document A/C.2/69/L.4), and “Follow-up to the International Conference on Financing for Development” (document A/C.2/69/L.6).
He introduced several draft texts on the issue of sustainable development, which were “Follow-up to the United Nations Decade of Education for Sustainable Development (2005-2014): Global Action Programme on Education for Sustainable Development” (document A/C.2/69/L.16), “Oil slick on Lebanese shores” (document A/C.2/69/L.21), “Towards the sustainable development of the Caribbean Sea for present and future generations” (document A/C.2/69/L.8), “Follow-up to and Implementation of the Mauritius Strategy for the Further Implementation of the Programme of Action for the Sustainable Development of Small Island Developing States” (document A/C.2/69/L.24), “International cooperation to reduce the impact of the El Niño phenomenon” (document A/C.2/69/L.17), “International Strategy for Disaster Reduction” (document A/C.2/69/L.18), “Protection of global climate for present and future generations of humankind” (document A/C.2/69/L.9), “Implementation of the United Nations Convention to Combat Desertification in Those Countries Experiencing Serious Drought and/or Desertification, Particularly in Africa” (document A/C.2/69/L.19), “Implementation of the Convention on Biological Diversity and its contribution to sustainable development” (document A/C.2/69/L.10), “Report of the United Nations Environment Assembly of the United Nations Environment Programme” (document A/C.2/69/L.7), and “Promotion of new and renewable sources of energy” (document A/C.2/69/L.20).
He also introduced drafts on “Implementation of the outcome of the United Nations Conference on Human Settlements (Habitat II) and strengthening of the United Nations Human Settlements Programme (UN-Habitat)” (document A/C.2/69/L.15), “Towards a New International Economic Order” (document A/C.2/69/L.22), “International migration and development” (document A/C.2/69/L.32), “Culture and sustainable development” (document A/C.2/69/L.27), “Second United Nations Decade for the Eradication of Poverty (2008-2017)” (document A/C.2/69/L.5), “Industrial development cooperation” (document A/C.2/69/L.29), “World Survey on the Role of Women in Development” (document A/C.2/69/L.23), and “Agriculture development, food security and nutrition” (document A/C.2/69/L.30).
Returning to the issue of sustainable development, the representative of Kazakhstan introduced a draft titled “International cooperation and coordination for the human and ecological rehabilitation and economic development of the Semipalatinsk region of Kazakhstan” (document A/C.2/69/L.2), and the representative of Israel introduced a draft text titled “Entrepreneurship for development” (document A/C.2/69/L.14).
The representative of Fiji introduced a draft title “Building capacity for the evaluation of development activities at the country level” (document A/C.2/69/L.35), related to operational activities for development.
Statement on Agriculture development, food security and nutrition
SIDI MOHAMED OULD BOUBACAR (Mauritania), speaking on behalf of the African Group and associating himself with the Group of 77 and China, said that agriculture was essential for the continent’s growth and for halving poverty by 2015. With sufficient investment in that sector, it could contribute to intra-African trade, industrialization and economic diversification, as well as job creation and prosperity. The continent had enormous agricultural potential due to its vast, non-exploited fertile land, significant water resources, and proximity to transport networks and regional markets. However, increased investment was needed in the sector, which is why African Governments had been mobilizing private and public resources as well as foreign investment. The ultimate goal of agricultural transformation was to help lift millions of Africans out of poverty, to guarantee food, good nutrition and health care for all, and to become a global exporter instead of a net importer.
Climate change was a major challenge to agriculture development in Africa, he said, and would have a multiplying effect on the current vulnerabilities: health care, food security, insufficient access to drinking water, and prevalence of diseases such as malaria. The 2011 drought in the Horn of Africa and torrential rain in Mauritius were just a couple of examples of its devastating impact. As part of the “Climate Smart” programme, the continent had launched initiatives to deal with climate change, aimed at improving resilience of the agricultural system and jobs in the sector, as well as at decreasing greenhouse gas emissions. Another concern for Africa was soil deterioration. To achieve sustainable development, the depleted soil must be recuperated, and action must be taken to ensure that land would be able to resist the negative impact of climate change in the future. There must be sustainable land management by empowering small farmers, particularly women. He concluded by highlighting the importance of partnerships and various types of cooperation.
SEBASTIANO CARDI (Italy), Chair of the Second Committee (Economic and Financial), said that the implementation of the sustainable development goals would depend on a global partnership for development with the active engagement of Governments, civil society, the private sector and the United Nations system. Means of implementation were critical for the achievement of the post-2015 agenda, and the mobilization of financing from all sources was crucial.
Highlighting the importance of the regional dimension of sustainable development, he said that “regional frameworks can complement and facilitate effective translation of sustainable development policies into concrete action”. They could also assist the mobilization of financial and technological resources, and “serve as a catalyst to strengthen the global partnership for sustainable development by facilitating access to science, technology and innovation, and enhancing knowledge sharing and capacity-building”. In view of the importance of the regional commissions for the monitoring and accountability framework, he looked forward to their continued support and contributions on the road towards the effective implementation of the new agenda.
ALICIA BÁRCENA, Under-Secretary-General and Executive Secretary of the Economic Commission for Latin America and the Caribbean (ECLAC), in her capacity as moderator, said the moment was crucial for the design and definition of the post-2015 development agenda. The means of implementation would be “the engine that will make the agenda move forward”. Without them, the agenda would “remain stagnant”. Regional Commissions gave Member States a space to voice their priorities for the new agenda and to forge common positions in consultations. The broad range of participants in such discussions agreed on the need for adequate means of implementation. Member States knew they needed to improve domestic resource mobilization but official development assistance (ODA) and external financial flows would retain a major role. The regional dimension could also catalyse and mobilize resources through South-South cooperation. Poverty eradication was possible by 2030 and should be central to the new goals, but the new agenda could also attempt to improve equality. Climate change had been highlighted in consultations, as had the possibility of employing the Commissions in monitoring. As the Commissions were not in New York but on the ground, they were “in touch with the realities of the region”.
Ms. BÁRCENA said it was important for the region that the principle of common but differentiated responsibilities should be part of the post-2015 agenda. Poverty should be at its heart, and there must be a transfer of technology to developing countries on a concessional basis. She also highlighted the importance of fair trade and full access for developing countries to the markets of developed countries. In terms of poverty, Latin America and the Caribbean had not seen progress since 2001, and was “the most unequal region in the world”. More than 29 countries were considered middle-income; however, most of them faced financial and structural gaps that made them particularly vulnerable. Furthermore, more than 20 countries were not eligible for the ODA. Despite fully opening up in financial and trade terms, they had not achieved the mobilization of financial resources, and ODA remained important. In addition to access to such assistance, trade and financial preferences must also be considered.
The region had tried to mobilize domestic resources, also through progressive tax reforms, but could not assemble the necessary funds, she said. Regarding the mobilization of external resources, foreign direct investment (FDI) and remittances had a great impact on gross domestic product (GDP), while ODA made hardly any contribution. However, FDI went to a very small number of countries, and must be directed towards strategic sectors in the destination countries. She also highlighted the importance for the region to increase its exports and to make progress in intra-regional trade, which represented only 19.2 per cent of its trade. On technology, the region was behind in terms of knowledge base, and its global share of copyrights issued in 2012 represented only 2.5 per cent.
RIMA KHALAF, Under-Secretary-General and Executive Secretary of the United Nations Economic and Social Commission for Western Asia (ESCWA), described her region’s diversity, with wide differences in resources, GDP, donation of and need for ODA, and performance on the Millennium Development Goals. Economic challenges such as low productivity were common across the region, as well as a lack of economic diversification and the heavy prevalence of informal labour. Socially, high unemployment, gender equality and social justice needed addressing, while water scarcity, land degradation and desertification, and food security needed addressing on the environmental front. Conflict and instability were also extremely common, with 41 per cent of Arab countries experiencing conflict between 2009 and 2013. Half of all refugees were Arabs and conflict produced “development in reverse”. The region was also home to the longest foreign occupation and its attendant devastation. The region’s instability helped account for the fact that it had the highest portion of GDP globally dedicated to military spending.
The region had reached a common position on the post-2015 agenda, she said, and was in agreement with the bulk of the outcome document, while feeling that it failed to address the issues of foreign occupation and refugees. The regional level was a vital tool for implementation of the new agenda as an important link between the national and global levels. Several gaps existed, including a financing gap. Better tax collection, remittances, funding from waqf holdings, and more local investment by sovereign wealth funds could help close that gap. Illicit financial flows drained around $111 billion annually from the region, while FDI was low and focused on already prosperous economies, and intra-regional trade needed to grow. An ESCWA technology centre was working to strengthen cooperation and technology transfer. Efforts were needed on corruption, government effectiveness, regulatory quality and rule of law. Key enablers of fulfilling the agenda would be peace and security; monitoring and accountability; and multi-stakeholder partnerships.
ABDALLA HAMDOK, Deputy Executive Secretary of the Economic Commission for Africa (ECA), said that the continent had made “great strides in various economic, social and political spheres”. With average economic growth rates of about 5 per cent per annum, it was among the fastest growing regions in the world. Three quarters of its growth were underpinned by factors such as improvements in governance and macroeconomic management; rapid urbanization and increasing domestic demand; increasing investment and trade ties with traditional and new partners; expanding regional markets; and diversification of production and exports. African countries had also made progress in human development and governance, accompanied by reductions in conflicts. “Africa is by every measure a continent on the rise”, he said, but warned that the Ebola crisis had seriously affected its socioeconomic development, and that progress had had little impact on poverty and employment.
The Common African Position on the post-2015 development agenda and its Accountability Framework served as a tool to guide and monitor implementation at the national, subregional and regional levels, he said. Data collection and management was key, and regional initiatives aimed at building the capacity of national and regional statistical centres. Concerning financing, domestic resource mobilization must be improved. Africa had great potential in that regard, but it required tax collection systems to be enhanced, and the tide of illicit financial flows to be reversed. ECA was part of the pan-African institutional landscape, and its recent programmatic activities included the establishment of a high-level panel on illicit financial flows, and holding of a forum in Marrakech on Innovative Financing for Africa’s Transformation. He concluded by saying that the continent was gaining traction as a business destination of choice.
ANDREY VASILYEV, Deputy Executive Secretary, Economic Commission for Europe (ECE), stressed that ODA was not only important in terms of quantities given but in terms of the quality and that the ECE would play a vital role. It was key to strengthen partnerships and explore new forms of cooperation while being innovative. He addressed public-private partnerships, which were often associated with transport projects but could also play a role on health, sanitation, provision of drinking water, and many other areas. Greater investment was needed in infrastructure to fulfil the post-2015 agenda. With estimates that the developing world would need to increase its spending from $0.8 trillion now to $2.3 trillion by 2020, it would be vital to un-tap private sector financing. He stressed the importance of such partnerships boosting mobility and access, focusing on the poor and vulnerable and being environmentally sustainable. He noted that public-private partnerships were no longer restricted to the North-South context and that the ECE was working with other regional commissions to help facilitate South-South cooperation.
He said that it was important also to develop norms, standards and practical tools to translate the sustainable development goals into concrete action. Standards based on good practice could contribute to reaching targets in related goals, and the Commission had been especially active on transport, with projects on road safety, vehicle regulation and dangerous goods transport. As well as noting involvement by the ECE in setting environmental standards, he said his Commission had a long history of work on trade facilitation, which could be important to implementation of the new goals. A project launched with the Greek Government and the European Commission saw Greece improve its trade facilitation ranking by eight positions. Work was also ongoing on the vital issue of data and monitoring alongside other commissions and the Department of Economic and Social Affairs statistical office. A framework for measuring sustainable development and climate change-related statistics were among efforts made. “Big Data” and geospatial information could offer major opportunities. He also stressed the importance of an accountability framework to success in the post-2015 agenda.
SHUN-ICHI MURATA, Deputy Executive Secretary of the Economic and Social Commission for Asia and the Pacific (ESCAP), said that his presentation would have a more action-oriented focus than an analysis of issues. He noted that the Gini Index in Asia-Pacific was moving into inequality status, and that growth might not mean that wealth was equally distributed. Many recommendations had been formally adopted by the Commission at its seventieth session. Means of implementation in Asia and Pacific included science and technology, as well as innovation, financing for sustainable development, accountability and monitoring.
ESCAP members were working towards agreements on several issues, including initiating work on inter-island shipping and an Asian energy highway as well as an Asian information superhighway. Meeting Asia-Pacific sustainable development gaps would require $2.5 trillion a year, and policymakers needed to work with the private sector to develop more diversified and balanced sectors to finance sustainable development. Capital markets needed to be broadened and strengthened to encourage the development of domestic institutional investors. ESCAP built on a track record of support to member States, capacity-building, technology transfer, and other initiatives.
Interactive Dialogue
During an interactive discussion that followed the presentations, Mr. HAMDOK responded to a question from the representative of Ethiopia about ODA, saying he did not wish to give the impression that he did not think it was important. The Addis Ababa Conference should confirm what had been agreed at Monterrey and Doha, and donors should continue aiming to commit 0.7 per cent of GDP to ODA.
Ms. KHALAF responded to the representative of Israel stating that her presentation had focused on the prevalence of conflict and instability throughout the region. She had also highlighted the impact of the occupation on development. She said professionalism meant being honest and she had used the most conservative numbers that were undisputed. She added that she interpreted impartiality and neutrality not as standing midway between right and wrong.
Ms. BÁRCENA responded to the intervention of Norway’s representative saying that public and private funding flows obeyed different logic and responded to different incentives. The pursuit of profit by private funders meant it was also a volatile source of financing, and public resources could potentially improve sectors that were not necessarily attractive for investment.
In response to a question by the representative of the Russian Federation, Mr. MURATA reiterated his commitment to cooperation. He also responded to Thailand’s delegate saying that he was preparing for an event on disaster risk reduction in the Asia-Pacific context.
Mr. VASILYEV welcomed a point about realism made by the representative of Guatemala. Regional commissions could play an important role. The ECE did a great deal of work on energy, trade facilitation and public-private partnerships that focused on best practice, assessing successes and failures of real projects.
Also taking part in the interactive discussion were representatives of Costa Rica (on behalf of CELAC), Bahamas, Brazil, Thailand, Peru, and Mexico.