Second drafting session for the Addis Ababa Conference on Financing for Development (FfD3) – days 3 & 4

(based on reports by IIED)

Sections of the zero draft on international public finance; international trade for sustainable development; and debt and debt sustainability were considered on Wednesday 15 April.

Overseas development assistance (ODA)

Developing countries urged retaining the Monterrey Consensus section title of “Increasing international financial and technical cooperation for development” on international public finance, instead of “International public finance”, as it indicated the need to scale up finance. They called for scaling up official development assistance (ODA) to 1% of Gross National Income. Others opposed specific targets and timetables, focusing on ODA quality. The EU and others called on all countries to contribute to international public finance commensurate with their respective capabilities, in a transparent manner. Some countries supported the use of innovative financial mechanisms such as global taxes as international public finance, although others were opposed. The modernization of the definition of ODA was also discussed. The G77 & China opposed its inclusion in the text, while the EU called for a transparent and inclusive process under the Organisation for Economic Co-operation and Development (OECD) to consider the issue, as well as the development of a new metric of “Total Official Support for Sustainable Development”.

International trade for sustainable development

Countries also discussed international trade for sustainable development, with many Member States saying that trade-related issues should be considered by the World Trade Organization (WTO) to avoid pre-judging the outcomes of the Doha Development Agenda. They underscored the need to implement the Bali Package that includes trade facilitation and addresses least developed country (LDC) issues. Several developed countries highlighted the critical role of domestic enabling environments in supporting trade. Developing countries supported a more flexible interpretation of the WTO Agreement on Trade-related Aspects of Intellectual Property Rights, including for access to essential medicine, and for mitigation and adaptation technologies.

Countries across the board welcomed the call to support the few remaining heavily indebted poor countries on debt and debt sustainability, and assisting other vulnerable countries facing potential debt crises. Once again, developing countries wanted to retain “External Debt” as the title for this section, as in the Monterrey Consensus. They supported a bigger role for the UN through the UN Conference on Trade and Development’s principles on sovereign lending and borrowing, and the UN’s ad hoc committee on sovereign debt restructuring processes. Developed countries supported the role of the International Monetary Fund and the World Bank in debt management, and called for, inter alia, more responsible lending and borrowing practices, and stronger language on budgeting and auditing processes.

Delegates discussed on Thursday, 16 April, the following sections of the zero draft: systemic issues; technology, innovation and capacity building; and data, monitoring and follow-up.

Systemic issues

On systemic issues, developing countries called for strengthening the voice and representation of developing countries in the governance of international financial institutions, as well as greater flexibility in the policies of the International Monetary Fund to ensure sensitivity to developing country needs. They called for language supportive of more domestic policy space, with some developing countries calling for effective surveillance of policies in developed countries that have disproportionate impacts on the global economy. Developed countries, on the other hand, called for much stronger language on the importance of domestic enabling environments in this section.

On technology, innovation and capacity building, developed countries opposed language on flexibilities in the WTO’s Trade-Related Intellectual Property Rights regime to create conducive policy environment for technology development and dissemination. They pointed to the necessity of rule of law, governance and private property rights for innovation to flourish. Developing countries favoured the inclusion of language supportive of creating a UN technology facilitation mechanism, and called for an intellectual property regime that supports the achievement of the Sustainable Development Goals. A few developing countries expressed concern over the shift in focus to science, innovation and domestic actions in developing countries, at the expense of greater international cooperation to facilitate technology development and transfer.

On data, monitoring and follow-up, developing countries supported the establishment of a subsidiary body under the UN Economic and Social Council (ECOSOC) or using arrangements under the UN General Assembly for monitoring and follow-up, instead of entrusting the High-Level Political Forum (HLPF) with this task. They also called for the standardization of data pertaining to international resource mobilization, including ODA, and deleting ‘full’ from full stakeholder participation to retain the intergovernmental nature of the process.

Means of implementation and monitoring and follow up

The EU noted that progress and implementation of the post-2015 development agenda should be carried out in conjunction with all means of implementation (MOI), while supporting a comprehensive framework for tracking financial and non-financial MOI, both national and international. On monitoring and follow-up, the EU and other developed countries emphasized using the HLPF to review implementation of all outcomes, and opposed the creation of a new inter-agency taskforce, or a separate FfD track, that would duplicate efforts.

For further information see: Day 3 and Day 4 of iisd's website on the Second Drafting Session on the Outcome Document of the Third International Conference on Financing for Development