Commitment to Gender Equality, Global Partnerships among Items Highlighted, as Economic and Social Council Continues Financing for Development Forum
Entering the second day of its inaugural forum on financing for development follow-up, the Economic and Social Council held three round tables and a panel discussion today focused on the global framework for financing sustainable development, domestic and international public resources, global infrastructure forum, and private business and finance.
The first round table explored early actions taken towards the implementation of the Sustainable Development Goals and identified obstacles to policy action. Among other issues, panellists focused on measures undertaken by countries to address the gender equality and women’s rights commitments, as well as global partnerships, innovative sources of finance for education and the purpose of the forum.
The Addis Ababa Action Agenda contained a deterministic assertion to achieve gender equality and women’s empowerment, yet, to date, no country had achieved those goals, said panellist Lakshmi Puri, Assistant Secretary-General and Deputy Executive Director for Strategic Partnerships, Coordination and Intergovernmental Support Bureau of the United Nations Entity for Gender Equality and the Empowerment of Women (UN-Women). Describing inadequate financing as a challenge for the implementation of gender-responsive laws and policies, she urged that every iteration of the Addis Agenda keep “front and centre” the gender equality commitments.
Focusing on food security, Maria Helena Semedo, Deputy Director-General of Natural Resources of the Food and Agriculture Organization (FAO), underscored the need to increase rural income given that 800 million people continued to suffer from hunger. Social protection was a key investment and could be a “game-changer” to drive sustainable development. To address women’s limited access to land and productive resources, the FAO had proposed a two-fold approach that combined social protection with private investment.
Also this morning, the forum held a round-table discussion on domestic and international public resources. Peter Mullins, Deputy Chief of the Fiscal Affairs Department of the International Monetary Fund (IMF), said that, despite technical assistance to over 100 countries in the area of revenue mobilization, challenges persisted. In fact, between 2014 and 2016, around two thirds of countries had experienced a decline in revenues and higher fiscal deficits, he said, calling for improved coordination among international organizations.
Echoing that sentiment, Armando Lara Yaffar, Chair of the United Nations Committee of Experts on International Cooperation in Tax Matters, expressed the Committee’s interest in improving dialogue with developing and developed countries to determine their needs, and create and implement good fiscal policies.
Drawing attention to the other forms of resources such as foreign direct investments (FDI) and remittances, Mario Pezzini, Acting Director of the Development Co-operation Directorate of the Organisation for Economic Co-operation and Development (OECD), noted that they got less attention than domestic resource mobilization. While the amount of investments was crucial for effective policies, the quality of commitments required further attention.
The focus of the afternoon panel was the first Global Infrastructure Forum and its outcomes and was followed by a round-table discussion on domestic and international public resources. Panellists discussed the link between public policies and long-term private sector investments, reforms to encourage lending, private initiatives aimed at enhancing the sustainability of investments, and regulations and policies to develop public-private mechanisms to fund small and medium enterprises.
The forum will reconvene at 10 a.m. on Wednesday, 20 April, to conclude its session.
Round Table A
This morning, the forum held a number of round table discussions. The first was on the theme “a global framework for financing sustainable development”. Chaired by Ahmed Shide, State Minister for Finance and Economic Cooperation of Ethiopia, it was moderated by David Nabarro, Special Adviser on the 2030 Agenda for Sustainable Development. It featured the following panellists: Lakshmi Puri, Assistant Secretary-General and Deputy Executive Director of the Intergovernmental Support and Strategic Partnerships Bureau, United Nations Entity for Gender Equality and the Empowerment of Women (UN-Women); and Maria Helena Semedo, Deputy Director-General of Natural Resources, Food and Agriculture Organization (FAO). The lead discussant was Isabel Ortiz, Director for Social Protection of the International Labour Organization (ILO).
Mr. SHIDE, opening the session, said some of the round table’s objectives would be to take stock of early actions taken towards implementation of sustainable development and identify obstacles to policy action. Through the Addis Ababa Action Agenda, countries had agreed to a series of bold actions to finance sustainable development. That document put forth a comprehensive set of policy guidelines to transform the global economy and achieve the Sustainable Development Goals, help mobilize public finance and private sector investment, and align all resource flows with economic, social and environmental priorities.
Mr. NABARRO said that, at 2015 intergovernmental summits in Sendai, Addis Ababa, Paris and New York, the international community had constructed a “political manifesto” for the coming years. They had agreed to eradicate poverty, build resilient societies, properly address climate change and put the world on a path to sustainable development that would benefit future generations. That manifesto represented an essential ambition, as there was no “plan B” for people or the planet. Citing the key elements of food security, social protection and gender equality — which were closely interlinked — he stressed the need to focus on synergies. The panellists should address three questions: first, how the global partnership for sustainable development could support the implementation of an integrated and holistic agenda; second, how to reach the most vulnerable and marginalized; and third, what concrete measurements were needed to address gender equality and the women’s rights commitments outlined in the Addis Agenda.
Ms. PURI said it was crucial to harvest every normative gain and commitment on gender equality and women’s empowerment. The Addis Agenda contained a deterministic assertion to achieve gender equality and women’s empowerment, she said, adding that, to date, no country had achieved those goals. Inadequate financing currently hindered the implementation of gender-responsive laws and policies, and only 5 per cent of official development assistance (ODA) targeted gender as a principal objective. The Addis Agenda contained numerous references to gender-responsive budgeting and tracking, including in the context of ODA and national budgets. Through the outcome document of the sixtieth session of the Commission on the Status of Women, Member States had reaffirmed the pledge to significantly increase investment to close the gender resource gap and stressed the importance of strengthening national mechanisms for gender equality. She urged that every iteration of the Addis Agenda keep “front and centre” the gender equality commitments that had been made.
Ms. SEMEDO said that, through the 2030 Agenda, the world had committed to ending poverty and hunger. Around 800 million people were hungry today, she said, underscoring the need to increase rural income to end hunger and malnutrition. While the rural poor grew food, it was often not enough to feed themselves; they were also the hardest hit by climate change threats. Social protection in rural areas was a key investment and could be a “game-changer” to drive sustainable development. Describing a number of social cash-transfer programmes and related projects, she said that family farmers were critical to poverty and hunger eradication, as small farmers were in general more productive than large farms. Rural women were generally the poorest, with limited access to land, productive resources or services. To reverse those trends, FAO and other agencies had proposed in Addis Ababa a two-fold approach that combined social protection with private investment.
Ms. ORTIZ focused on financing social protection floors to leave no one behind. Even the poorest countries could fund social protection through the reallocation of resources and tax revenue; however, development aid was also necessary. While health and education had a high concentration of ODA, social protection remained severely underfunded, she said, calling on States to increase their support in that area. Those efforts needed to be complemented by innovative modes of financing, including financial transaction taxes, voluntary donations and others.
When the floor was opened for questions and comments, speakers shared national experiences with gender- and agriculture-related policies and described a number of national social protection systems. They also stressed that investing in those areas should be key priorities for any financing for development strategy.
The representative of Paraguay, noting that women had created his nation, said international attempts were being made to impose distorting protectionist policies. Such guidelines exacerbated challenges for family agriculture, he said, expressing his support for “fair and free trade”, especially in agriculture.
A representative of the International Trade Union Confederation made a number of recommendations, including the need to explore innovative funding modalities and provide technical support and capacity-building to Governments seeking to set up social protection systems.
The representative of Switzerland said gender equality and the inclusion of women and girls in the economic sphere was a prerequisite for sustainable development. Investing in institutions and policies aiming to ensure gender equality should become a priority for any financing for development strategy.
The representative of Portugal said the Addis Agenda was comprehensive and required working differently, across disciplines and incorporating gender equality, food security and social protection issues. Governments must take the lead in reconciling public and private interests and facilitating the engagement of different stakeholders. Financing sustainable development was not solely about numbers, but about promoting peaceful societies, good governance and human rights.
Round Table B
The forum then held a round-table discussion on domestic and international public resources. Chaired by María Eugenia Casar, Executive Director of the Mexican Agency for International Development, it was moderated by Amar Bhattacharya, Senior Fellow at the Brookings Institution. On domestic public resources, it featured Armando Lara Yaffar, Chair of the United Nations Committee of Experts on International Cooperation in Tax Matters; and Peter Mullins, Deputy Chief of the Fiscal Affairs Department for the International Monetary Fund (IMF). The lead discussant was Khady Dia, Director of the Dakar Municipal Finance Programme, Senegal. The discussion on international development cooperation featured Mario Pezzini, Acting Director of the Development Co-operation Directorate, Organisation for Economic Co-operation and Development (OECD); and Subhash Chandra Garg, Executive Director for Bangladesh, Bhutan, India and Sri Lanka, World Bank Group. The lead discussant was Smita Nakhooda, Senior Research Fellow at the Overseas Development Institute.
Ms. CASAR, opening the discussion, noted that it was important to strengthen domestic resource mobilization. Such resources generated economic growth at the national level. Also vital was to tackle illicit financial flows by 2030, eventually eliminating them through the reinforcement of national regulation and cooperation.
Mr. BHATTACHARYA said that the most important means to achieve the Sustainable Development Goals would be domestic resources. Since Monterrey, both low- and middle-income countries had made advancements, yet there had been a high degree of variation across countries. Further, commodity prices were falling, and the drop in fiscal revenues was trillions of dollars.
Mr. YAFFAR noted that, since its creation, the Committee of Experts on International Cooperation in Tax Matters had aimed at improving dialogue with developing and developed countries to determine their needs. Expressing the Committee’s interest in supporting developing and the least developed countries, he underscored the need to create and implement good fiscal policies. While doing so, there must be cooperation among all stakeholders, he said, adding that round-table discussions would be organized to exchange views. The Addis Agenda had provided the Committee with new tools and resources, which would increase the number of meetings of subcommittees.
Mr. MULLINS stressed that the IMF had provided technical assistance to over 100 countries per year, focusing on revenue mobilization. Despite that, challenges persisted. Between 2014 and 2016, around two thirds of countries had experienced a decline in revenues and higher fiscal deficits. Recently, the Fund had issued a paper on tax incentives, identifying pros and cons through the estimation of costs. At the moment, the IMF was in the process of developing a tax policy analysis assessment framework, and soon, it would release a book on that topic. Most importantly, he said, the Fund was working closely with all international organizations in order to improve coordination and provide better support to developing countries.
Ms. DIA, stressing the need to act locally, noted that the involvement of local communities was vital for resource mobilization. For its part, the Dakar municipality was working with local communities and the Central Bank with a view to address the challenge of urbanization and meet the needs of society, while improving cash flows and investing in infrastructure.
Mr. PEZZINI said that foreign direct investments (FDI) and remittances were other forms of resources yet they got less attention than others. On synergies, he was convinced that ODA would be used in a smarter way, multiplying the volume of other resources. Further, South-South cooperation was key for development. While the amount of investments was crucial for effective policies, the quality of commitments was among the issues that needed attention.
Mr. GARG underscored the need to deliver efficiently in an optimized manner for the successful implementation of the Sustainable Development Goals. On ODA, he said that it would be effective for leveraging private resources. The financial conditions had changed substantially, he continued, drawing attention to the role played by multilateral development bank. He stressed that the time had come to establish a new South-South bank for the better delivery of resources.
Ms. NAKHOODA, emphasizing the link between the Sustainable Development Goals and the Addis Agenda, underscored the need for resource mobilization for adapting to the impacts of climate change. For their part, public and private financial institutions were stepping up efforts to address the implications of climate change and enable societies to deliver on the newly adopted Goals. Noting that it was encouraging to see climate resilient approaches, she underlined that developing countries were in the vanguard of the revolution.
During the ensuing interactive discussion, speakers provided varying perspectives on the issues of public financing for sustainable development — including tax-revenue collection, subsidy reform and the reallocation of resources — as well as ODA trends and the need for innovative sources of financing.
The representative of Italy said his country had worked on a tobacco tax initiative through the World Health Organization (WHO). It was also working to enhance capacity-building in a number of countries, including Ethiopia and the United Republic of Tanzania. He agreed with the need to explore synergies between the various financing sources for sustainable development.
The representative of El Salvador said public financing was necessary to improve equity and stability. She hoped the document emerging from the forum would assist countries in mobilizing predictable resources. While ODA continued to be critical, “we must fight against structural problems” and move towards new sources of financing, she said.
The representative of Indonesia agreed that improving national taxation systems could improve the mobilization of resources. Challenges remained, however, including illicit financial flows and difficulties in taxing Internet-based companies operating outside his country.
A representative of the World Bank Group agreed that illicit financial flows were a serious impediment to raising the funds necessary for sustainable development. The Bank was uniquely placed to galvanize partnerships to prevent the adverse consequences of illicit financial flows on sustainable development.
Delegates also painted a broader picture of early efforts to implement the 2030 Agenda.
The representative of Norway said that, due to the international economic climate, “we are off to an extremely bad start” in implementing the 2030 Agenda. He asked panellists as to what could be done to speed up the Agenda’s implementation over the next 15 years.
The representative of Belgium provided an overview of the Development Cooperation Symposium, held in Brussels in early April, saying that the meeting had focused on the importance of national institutions for implementing the 2030 Agenda, special challenges facing least developed countries and how to make international institutions more fit for the 2030 Agenda era. Concessional financing should be prioritized to those countries most in need and least capable of raising the funds required for sustainable development.
Mr. YAFFAR, in concluding remarks, underscored the need to integrate people currently working in the informal sector.
Mr. MULLIN agreed with the idea of subsidy reform, and spotlighted the need for transparency and capacity development.
Mr. PEZZINI said that the OECD was committed to having countries respect ODA commitments, and that more could be done to stem illicit finance flows.
Mr. GARG said the world would need a major growth engine to achieve the 2030 Agenda targets, and that South Asia was one of the regions that could serve that purpose.
Also participating were the representatives of France, Myanmar, Switzerland and Chad.
A number of representatives of civil society organizations and private sector businesses also spoke.
Panel Discussion
In the afternoon the forum held a panel discussion on the Global Infrastructure Forum. The panellists included Pablo Pereira dos Santos, Manager of the Infrastructure and Environment Sector, Inter-American Development Bank; Thomas Barrett, Corporate Director for the European Investment Bank; Craig Steffensen, Representative to the North American Representative Office, Asian Development Bank; and Laurence Carter, Senior Director of Public-Private Partnerships, World Bank Group. The session featured a keynote address by Joaquim Levy, Managing Director and Chief Financial Officer, World Bank Group.
Mr. LEVY briefed on the Global Infrastructure Forum, which had been held recently in Washington, D.C. The event’s overarching theme had been the need for more spending on infrastructure, as well as better and more effective spending. Its more than 600 participants had discussed improving the quality and quantity of infrastructure, including through long-lived infrastructure assets that were resilient given the impacts of climate change. Better project preparation and better policies were needed to improve the way funds were spent, and there was a commitment to doing more, including with the new multilateral development banks. “We have to look at finance and mobilization, especially in a time of weaker capital flows to developing markets,” he said, underscoring the need to close the gap between what developing countries could achieve on their own and the remaining financing that was needed.
Mr. PEREIRA DOS SANTOS said the Inter-American Development Bank’s clients were all in Latin America and the Caribbean, a region with a diverse set of countries and challenges. Presenting the outcome of a breakout panel held during the Global Infrastructure Forum, he said the panel had brought up the political sustainability dimension of infrastructure programmes, noting that the region was faced with political instability and weak institutions. It had explored a number of ideas to address those challenges, including bringing sustainability elements into projects in order to build resilience, reduce risks and draw in private investors.
Mr. BARRETT said multilateral development banks could bring expertise and an ability to create organizational capacity to bear on infrastructure development. The banks worked with national bodies, institutional investors and entrepreneurs. Describing several areas of major innovation, he said one breakout session of the Global Infrastructure Forum had addressed the question of investment in infrastructure as an asset class and the question of risk-sharing between public and private sectors, among other key issues.
Mr. STEFFENSEN said the Asian Development Bank was a $20 billion-a-year financial institution, and its lending was increasing. Describing its core areas of investment — transport, energy and water — he said the Bank would continue to support infrastructure development through the promotion of public-private partnerships, the use of technology to achieve sustainability goals and work to achieve the 2030 Agenda. The Bank’s president had participated in the Global Infrastructure Forum and believed that infrastructure was an important component of the Sustainable Development Goals.
Mr. CARTER thanked those who had been involved in the Global Infrastructure Forum and echoed calls for it to become a continuous platform for the sharing of experiences and ideas on infrastructure development.
During the ensuing dialogue, delegates and civil society representatives discussed the role of the private sector and multilateral development banks in promoting the Sustainable Development Goals, climate financing and gender dynamics in infrastructure projects.
The representative of Egypt, sharing national experience, noted that his country’s Government had increased its investment in infrastructure by 42 per cent while reducing the budget deficit. He urged other States to develop similar tools and share knowledge and best practices.
The representative of Guatemala asked a question about measures to mitigate the impact of disasters.
The representative of Brazil noted that the participation of multilateral development banks in financing for development was critical and achievable. The risk of political discontinuities might impede financial mobilization, he underlined.
The representative of Australia inquired about the engagement of citizens in projects, and asked panellists to elaborate on gender elements in the infrastructure sector.
The representative of Paraguay noted that his country had recently approved its national development plan. As a landlocked country, Paraguay was ready to receive more financing and was in favour of implementing the Vienna Programme of Action.
Mr. CARTER recognized the suggestion to strengthen the role and visibility of national and regional development banks. The role of the private sector in global infrastructure would be incorporated into the next forum.
Mr. BARRETT underscored the need to recognize the leadership and ownership of national development banks. Without their partnerships, multilateral development banks would not function.
Mr. PEREIRA DOS SANTOS favoured including national development banks in the discussion. In Latin America and the Caribbean, Inter-American Development Bank partnered with Governments and other international organizations to determine and address countries’ needs. Regarding the risks posed by natural disasters, the Bank initiated resilience projects.
Mr. LEVY, expressing support to the panellists’ concluding remarks, noted that at the World Bank, projects mapped out how the money would be spent.
Round Table C
The day’s final round table addressed the theme “domestic and international private business and finance”. Chaired by Christian Leffler, Deputy Secretary-General for Economic and Global Issues of the European Union, it was moderated by Marilou Uy, Executive Director of the International Group of 24 Secretariat. Panellists on domestic private business and finance included Gavin Wilson, Vice-President of the International Finance Corporation and CEO of its Asset Management Company, and Fiona Reynolds, Managing Director of Principles for Responsible Investment. The lead discussant was Steve Waygood, Chief Responsible Investment Officer of Aviva United Kingdom.
Panellists on international private business and finance included Keiko Honda, Executive Vice-President and CEO of the Multilateral Investment Guarantee Agency, World Bank Group, and Richard Kozul-Wright, Director of the Division on Globalization and Development Strategies, United Nations Conference on Trade and Development (UNCTAD). The lead discussant was Bill Streeter, Senior Finance Adviser of Global Clearinghouse for Development Finance.
Mr. LEFFLER said the theme of the panel was at the heart of the successful implementation of the Addis Agenda and the 2030 Agenda. The former established the primacy of domestic action and contained the necessary links with the latter, he said, adding that it placed enabling policy environments and a strong, supportive international climate at its heart. The European Union was committed to revisiting the basis of its own development policy and had begun to implement the Addis Agenda and elements of the 2030 Agenda, he said, describing efforts to collect more and spend better. Private sector investment needed to be married with responsible conduct and social responsibility. No company could allow itself to ignore the risks and challenges of unsustainable investments and value chains, and there was a need to build on existing frameworks, such as the social compact agreed in Addis Ababa.
Ms. UY said an important element of the Addis Agenda was the recognition of the role of the private sector in achieving the 2030 Agenda. The existing financial system, however, had been unable to support long-term development goals. The Addis Agenda provided for incentives in areas such as labour, environment and health. Public-private partnerships could also be encouraged. She asked the panellists to spotlight policies and reforms to those ends, and asked what it would take to put in place an encouraging framework to convince the private sector to invest in responsible ways.
Mr. WILSON said the private sector was the generator of jobs; however, for it to thrive, it needed growth capital. Describing benefits associated with domestic capital, as opposed to international capital, he said those funds tended to be more stable and lacked the mismatch associated with foreign exchanges. The building blocks of investments were the regulatory environment, market infrastructure, investors and the issuers of the projects themselves. International financial institutions could provide advice, underwrite specific transactions and identify and create bankable opportunities in order to promote domestic investment in growth.
Ms. REYNOLDS said progress had been made by the Principles for Responsible Investment in the decade since its inception to help incorporate environmental, social and governance issues into private sector investment. Investors were becoming increasingly aware of the need to become sustainable, while providers of capital, including pension funds, were also recognizing that environmental, social and governance issues would inevitably impact their long-term investments. Principles for Responsible Investment had spotlighted the Sustainable Development Goals to the investors it worked with, and collected the largest amount of private sector sustainability reporting in the world.
Mr. WAYGOOD said Aviva’s 34 million clients sometimes asked if their investments were helping to make the world a better place, and it was not always possible to look them in the eye and say “yes”. Sustainable Development Goal 12.6 was the only Goal to speak directly to companies, he said, noting that the related indicator undermined that goal by calling only for standalone reporting. There was not yet sufficient depth in incentive structures aimed to reshape financial markets to capitalize solutions for the Sustainable Development Goals. Additionally, there was a need for corporate benchmarks in such areas as climate change adaptation and human rights.
Ms. HONDA said Member States were now more focused on attracting private sector investments and examining how to incentivize private investment. The Multilateral Investment Guarantee Agency, as part of the World Bank Group, worked with $14.3 billion of private sector investment, she said, describing some of the Agency’s work to bring investment to fragile and developing nations. Among other things, multinational companies brought valuable knowledge transfer, vocational training and jobs to their host countries; at the same time, investors had to live up to their own sets of responsibility vis-à-vis environmental, social and related issues.
Mr. KOZUL-WRIGHT agreed that there was a massive financing gap facing the 2030 Agenda. Many people believed that Governments would be unable to fill that gap, he said, stressing the need to incentivize the private sector to bridge it. In the past, Governments had created economic space through a combination of large spending and extensive consultation with the private sector. The model of financial engineering plus self-regulation had not been working for the last three decades, he said, adding that FDI — often thought of as the “good kind of investment” — came out of the corporate strategies of the developed world and had both benefits and drawbacks.
Mr. STREETER said foreign capital could be the “icing on the cake”, but the cake had to be domestic capital. Describing some of his recent work, he said infrastructure projects were still few and far between. Many of the big pension funds in North America were playing currencies to boost yields, and institutional investors tended to avoid situations of reputational risk, such as infringements on indigenous rights. The Addis Agenda was doing some interesting things in the area of investment; among other elements, it called for adequate investment plans and addressed risk insurance and guarantees.
During the ensuing interactive discussion, speakers provided varying perspectives on the issues of risk mitigation, the role of multilateral development banks, domestic resource mobilization, the availability of bankable projects and public-private partnerships.
The representative of Chad noted that the private sector was not interactive enough with local businesses, and inquired about potential measures. Drawing attention to the lack of FDI in the least developed countries, he stressed the need for capacity-building.
A representative of civil society stressed the need to recognize that public-private partnerships should not substitute efforts to use domestic resources. He noted that the Addis Agenda underscored the centrality of tax revenue and tax policy to address inequalities.
A representative of the business sector suggested focusing on pilot efforts to establish successful public-private partnerships. The goal should be value added and benefit the public.
The representative of Switzerland noted that unlocking funding depended on improved reporting by relevant actors, institutional transparency and environmentally responsible investments.
Mr. WILSON, responding to a question on risk mitigation, noted that it could be done by ensuring transparency and initiating good policies and regulations.
Ms. REYNOLDS underscored the need for Governments to restructure domestic pension funds in order to get things done.
Mr. WAYGOOD stressed the need for the internalization of external costs. Turning to question on transparency, he noted that it could be done through performance benchmarks.
Ms. HONDA noted that, over the past decade, States had made progress in welcoming the private sector.
Mr. KOZUL-WRIGHT warned against statistical problems with FDI numbers. With regard to investment in the least developed countries, he encouraged all to be more optimistic and look at success stories, including Japan and the Republic of Korea.
Mr. STREETER acknowledged successful local projects that attracted international investments.
Also participating in the dialogue was the representative of France.