Financing the future
2 July 2015
From 13 to 16 July heads of state, development ministers and finance ministers will meet at the Third Financing for Development Conference (FFD3) in Addis Ababa, Ethiopia, to agree on a financing framework to deliver the post-2015 development agenda.
2015 will see a set of Sustainable Development Goals (SDGs) agreed and, hopefully, renewed ambition to tackle climate change. This conference is the first critical milestone for the UK and the world to prove that they are determined to turn good intentions into ambitious actions.
Financing the Future outlines UK civil society's priorities for FFD3 – the areas where we expect the UK government to show leadership. In order to ensure that FFD3 marks a real turning point for sustainable development, and that it delivers a framework that is fit for the implementation of the SDGs, the UK needs to build on past successes and demonstrate strong commitments on aid and tax by:
1) Ensuring both the Chancellor of the Exchequer and the Secretary of State for International Development attend the conference in Addis.
Attendance by high level individuals is crucial if we are to ensure a meaningful outcome. More than 20 heads of state from the least developed countries (LDCs) and African governments have confirmed their attendance. The UK needs to send a strong signal to other countries about the importance it places on financing for development by sending the most senior representatives from the Department for International Development (DFID) and the Treasury.
2) Improving global tax governance and transparency.
Strengthening international tax governance is an integral part of improving domestic resource mobilisation. It is important that the UK supports the G77's key ask to strengthen international tax governance, including by committing to an adequately resourced intergovernmental UN tax body. All countries must be legitimately represented at the table and included in the decision making process - there should be no taxation without representation.
Financial transparency is another critical requirement to combat tax evasion, tax avoidance and illicit financial flows. In 2013, during the British presidency of the G8, the UK initiated a valuable dialogue on tax transparency. The next step is to support public country-by-country reporting by multinationals; public registers of beneficial owners of companies and trusts; and the universal use of open data formats.
3) Pushing for a global commitment to improve the effectiveness of all financial flows and provide 0.7% of effective aid – including to the poorest countries.
In 2013, Britain became the first G7 country to meet the UN target of spending 0.7% of its gross national income (GNI) on official development assistance (ODA) to fight poverty around the world. In March this commitment was enshrined in law - a strong sign of the UK’s determination to contribute to sustainable development.
Now, the UK government needs to play a leading role on the global stage, by negotiating a global commitment to 0.7% by 2020, including timetables at the national level that outline clearly how countries are going to meet their ODA targets. This needs to include a commitment to providing 50% of ODA to LDCs, in order to reverse the current trend which sees aid to the countries most in need in decline.
Equally important are strong commitments to increasing the effectiveness of all financial flows at the national and the international level. It will be vital to make clear, time-bound plans on how to implement effectiveness commitments particularly from Paris, Accra and Busan.
As organisations working to fight poverty, inequality and climate change, we are calling on the Chancellor of the Exchequer and Secretary of State for International Development to attend FFD3, and to bring about these crucial commitments. Read the full briefing for more detail on these and other important financing for development issues.
Download the full report.