FfD Analysis – Preliminary

(This piece was largely informed by today’s MFAN/Brookings event – many thanks to the organizers for a very useful discussion!)

ffd3_logo_700x323Washington DC, June 15, 2015:  Last month, the organizers of the upcoming Third International Conference on Financing for Development (FfD3) in Addis Ababa released a revised draft outcome document, which they are redrafting this week. FfD3 is a critical milestone in finalizing the Sustainable Development Goals in September.

The Hunger Project is hosting a side event at FfD3 on Wednesday, July 15th at 1:15PM at the Intercontinental Hotel with CONCERN WorldWide. In light of the draft outcome document and discussions around financing for implementation, we will  emphasize local partnerships and gender-specific, community-led approaches that  we have found to be the most critical investments to restore empowerment to the hungriest and most impoverished people to control their own lives and destinies.

One central transformation at FfD3 is Domestic Resource Mobilization. While official aid is still seen as important, it is seen as most important in building each country’s financial self-reliance: its ability to reduce corruption, and raise its own tax revenues and spend them wisely. A particular area of concern is strengthening the ability of the world to halt tax avoidance (para 20) by multi-national corporations that may be generating wealth in lower-income country but evading paying any taxes. This significantly reduces national revenue that can be allocated for development expenditures.

Here is our top-10 list, based on the current draft. Half are elements we would hate to lose in the upcoming negotiations, and half are areas where greater attention could be useful.

Five Points we love and would hate to lose

  1. Start with women: The draft wisely includes a strong commitment to gender equality and the empowerment of women and girls in its very first paragraph, and in para 6 calls for gender mainstreaming in the formulation and implementation of all financial, economic, and social policies and agrees to take concrete policy actions to ensure women’s equal rights, access and opportunities for participation and leadership in the economy. In para 12 it promises to substantially increase public investment in ending hunger, explicitly including promoting gender equality and the empowerment of women in that context. Para 18 calls for “social infrastructure and policies to enable women’s full participation in the economy.” These sections seek to meet the inalienable and inherent human rights of women as well as boost economy in placing development initiatives into the hands and empowerment of half of the world’s population.
  2. Ending hunger by empowering small-scale producers: The draft explicitly recognizes that ending hunger “will lead to rich payoffs across the SDGs.” . Para 12 recognizes that ending hunger depends on increasing incomes through higher smallholder productivity, and Para 14 therein calls for greater financial access to micro enterprises. This is fairly revolutionary, as it points to a bottom-up,  approach (the argument that economic growth leads to ending hunger). This bottom-up perspective has been bolstered by an IMF Report, released June 15, which states that “increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down.”
  3. Engage Local Governments: Para 31 is an explicit commitment to “scale up international cooperation to strengthen capacity” of local governments to achieve sustainability, “particularly in areas of infrastructure development, local taxation, sectorial finance and debt issuance and management, including access to domestic bond markets.” This paragraph has expanded quite significantly from the earlier draft, now listing a dozen other areas of capacity building.
  4. Integrated Approach: The draft commits to a “holistic strategy” (para 2) “integrating the economic, social and environmental dimensions of sustainable development” (para 10). It commits to delivering social protection and essential public services for all including spending targets on health, education and WASH. Ideally this will be implemented through coordination between ministries and multisectoral approaches.
  5. Data for the People: The focus on data and transparency has expanded a great deal in this draft, and it starts (Para 115) with emphasizing the role of data for smart decision-making, including at the local level. We specifically applaud this empowerment role of data, especially as  the draft goes on to make many statements about the due need for accountability.

Five points that ought to be stronger

  1. Youth Employment: The draft calls for developing a global strategy for youth employment by 2020. This is a very weak response to a huge and urgent economic challenge, as well as to the complex challenge of seizing the opportunity of the “demographic dividend” of the current youth bulge.
  2. Social Capital: Nowhere in the document is the recognition that people’s own energies  are an enormous resource for achieving the SDGs. Utmost capacity goes beyond allocated funds and paid positions; it includes sweat equity and pro bono assistance.
  3. Conditions for inclusive economic growth: Private business activity, investment and innovation are identified as major drivers of inclusive economic growth. While this is sometimes the case, it often has the opposite effect: increasing inequality. The document is missing an important opportunity to describe necessary policies and principles of practice that will make private economic growth at least sufficiently “inclusive.”
  4. Civil Society: While civil society appears in various lists of the “usual suspects”, nowhere does the draft identify the distinct roles that civil society plays in development (such as, for example, in points 6-8 above!). This includes catalyzing social accountability mechanisms to hold local governments to account, building effective partnerships between citizens and their local government officials, and capacity building through training and leadership skill development.
  5. Bottom-up Data: While the Post-2015 agenda called for a data revolution, the sections on data are not very revolutionary. The call to strengthen national statistical systems is more of a  solid 19th century recommendation at a time when 21st century technology offers huge new possibilities for aggregating lower-cost, higher-quality community-level data rather than attempting to disaggregate expensive, slow, national-level surveys and evidence.

 

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