CIDSE reacts to the European Commission Communication on Financing for Development and Means of Implementation of SDGs – CIDSE

CIDSE reacts to the European Commission Communication on Financing for Development and Means of Implementation of SDGs

European Commission Communication on Financing for Development and Means of Implementation of Sustainable Development Goals: Where is the leadership? Where is the urgency?

The European Commission’s Communication “A Global Partnership for Poverty Eradication and Sustainable Development after 2015” released on 5 February 2015 provides the basis for the EU’s position on the Third UN Financing for Development Conference in Addis Ababa in July and the Means of Implementation of the Sustainable Development Goals.

An analysis of specific policy issues follows a commentary on the main messages conveyed by the Communication.
See also CIDSE planned activities in the run up to the Addis FfD Conference.

Financing for Development is dead! Long live Post-2015!
The very first paragraph gives away the total disregard for the International Financing for Development agenda. It calls for the Third Financing for Development Conference (FfD3) and the “UN summit for the adoption of the post-2015 development agenda to build upon earlier initiatives, “in particular the MDGs and Rio+20.” It does not mention the Monterrey Consensus (outcome of the first FfD Conference) or the Doha Declaration (the outcome of the second FfD Conference). There is also not a single mention of the pledges the EU had made at the first FfD Conference in Monterrey (the Barcelona Commitments). This despite the fact that this Communication is supposed to form the basis for the EU position for FfD3.

We do, if you do!
Even in areas that overlap with the EU’s Barcelona Commitments to a certain extent: mobilisation and effective use of domestic and international public finance; mobilising the domestic and international private sector and stimulating trade to eradicate poverty and promote sustainable development, there is a dramatic shift from the past. To paraphrase the new position, the EU says it will do its share provided others do so too. The annex proposing concrete actions to be committed starts with a list of proposed actions for all to take and is only then followed by a list of EU actions. A clear example of “we do if you do” is the proposed commitment on Official Development Assistance (ODA) (4.1. iii): “The EU would be ready to go further and make quicker progress (to set timelines for reaching 0.7), provided the above mentioned countries (high income, upper middle income and emerging countries) are also willing to take similarly ambitious commitments).”

You do because we do
The Communication does not propose any new commitments or actions to be put on the table. Rather, the actions listed are those already being undertaken that the EU would like other “high income countries, middle income countries and emerging economies” to also undertake. For instance, on Policy Coherence for Development (PCD), it highlights the EU’s legally binding commitment to take development cooperation objectives into account in policies that the EU implements which are likely to affect developing countries (though not specifying the impact of its PCD commitment on actual EU policy). However it starts of by saying “all developed, upper-middle income countries and emerging economies should commit to set up systems to assess the impact of adopting new policies on poorer countries. Similarly, in the section on trade in the annex: “All developed countries and emerging economies need to provide, as the EU already does, duty-free and quota-free access to all products from all LDCs, except arms and ammunition.” For a communication that proposes the EU position on financing for development and means of implementation for a new Universal agenda, it is interesting that it does not propose any action that the EU will undertake to combat unsustainable consumption and production within its borders and how its own companies and policies influence unsustainable patterns of consumption and production in other countries. Neither does it propose action to enhance the sustainable development impacts of European financial markets and actors or tackle problems. It would not have taken much for a Financial Transactions Tax to be put forward, for instance, given that 11 EU member states are currently jointly discussing its implementation under the auspices of an EU initiative.

Emerging economies need to do as much as we are doing
The predominant message of the Communication is to call on emerging economies to step into line:
On ODA: Upper middle income countries and emerging economies should commit to increasing their contribution to international public financing and to specific targets and timelines for doing so.
On Trade: All developed countries and emerging economies should grant duty free and quota free access to their markets to LDC products, increase their Aid for Trade to LDCs and provide it according to development effectiveness principles.
This is a surprising negotiating line to propose given the potential to polarise the discussion. Even more so given the failure of the communication to address global governance reform.

Glaring absence of global governance issues
For a communication titled “A Global Partnership for Poverty Eradication and Sustainable Development,” little is said about the current global partnership and the need to reform current imbalances in global governance. There is not a single mention of the call to establish a new intergovernmental tax body within the UN to correct today’s international tax governance set-up still led by the OECD, an institution owned and controlled by industrialised countries. Similarly, there is not a word about the need to reform the structures and bodies that currently control sovereign debt issues and put in place a multilateral legal framework to deal with sovereign debt restructuring as called for by the UN General Assembly.

Questions also arise about the exact nature of the new “multistakeholder partnerships” that the communication calls for that need to operate “at all levels and involving the private sector and civil society..” The specific focus on needs and issues related to the private sector in particular and the lack of any specific recommendations on creating an enabling environment for civil society, in particular those representing or defending the rights of marginalised persons and groups is concerning.

Gender issues only marginally addressed
Gender justice issues are similarly sidelined by the Communication. While the Communication calls for exclusion and inequality, including on the basis of gender, to be addressed, the annex that proposes concrete actions is disappointingly weak. Beyond a call to include “gender equality” as one of the principles in policy and the need to address “gender-issues” in the workplace, the annex does not set out any actions that could enhance gender justice.

Analysis of specific issues
1. Taxation: Country by country reporting is repeatedly raised an important measure to be taken to enhance transparency of Transnational Corporations. Despite this, the annex of proposed actions only lists the review of the Transparency and Accounting Directive which set country-by-country and project-by-project transparency requirements for large TNCs engaged in logging and extractive industries and registered in EU member states’ jurisdictions. The proposed action does not set out whether the objective of the review should be to enlarge or reduce the scope of the country-by-country reporting requirements! Disappointingly, it fails to list the enlargement of transparency requirements to other sectors in line with those applied to banks by the Capital Requirements Directive IV as a proposed action.
2. Natural Resources: For a communication that sets out the EU agenda of action to implement sustainable development, the attention paid to the issue of natural resources is disappointingly weak. It only considers natural resources as a “driver for development.” However it at least calls for greater effort to promote legal, responsible, sustainable and transparent sourcing, trade and use of natural resources and raw materials including through legislation. The reference to the European Commission’s proposal on responsible mineral sourcing from conflict-affected and high-risk areas is welcome. However it does not appear in the annex as a proposed action to be taken.
3. Climate change and climate finance: Climate change features but only weakly. It is mostly addressed in relation to climate finance and migration. With regard to climate finance, the Communications limits itself to stating that the “EU has decided already for the period 2014-2020 to dedicate 20% of its budget- including for external actions- to climate-related projects and policies.”

Contact person: Jean Saldanha, Senior Policy Advisor: saldanha(at)cidse.org

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