1. Why FfD is important to implement the BPfA?
Twenty years ago, the Beijing Declaration and Platform for Action of the Fourth World Conference on Women, recognized the impact of globalization trends, structural adjustment programs and privatization in women’s human rights and proposed measures that government should implement in order to revert these negative impacts. Also ways of generating public financial resources to tackle inequalities issues were considered, for instance, through the reduction “of excessive military expenditures” (para 143, b). Moreover, governments agreed to ensure that all corporations, the private sector, specially transnational corporations, “comply with national laws and codes, social security regulations, applicable international agreements, instruments and conventions, including those related to the environment, and other relevant laws (para 165, l)”.
Progress in the implementation of the Beijing Platform for Action have been slow and uneven. In the declaration adopted on Monday governments recognized that major gaps remain and that obstacles, including, structural barriers, persist in the implementation (Para 4 E/CN.6/2015/L.1*). However, governments missed the opportunity to assess the gaps and the structural barriers and promote measures to revert them.
From our perspective the Financing for Development process is key because some of the structural barriers for implementing Beijing are related with the Financing for Development agenda. Issues that ranges from the financiarization of the economy, the growing concentration of economic power by corporate elites, the weakening of multilateralism, to the lack of political will to tackle global imbalances and implement development policies based on human rights and equality.
Secondly, it is important because the debates on financing for gender equality commonly emphasize on women’s financial inclusion, gender budgeting or ODA for gender equality. However the FfD agenda address in a comprehensive way the quantity and the quality of different financing sources that can be allocated for gender justice and women’s human rights. For instance, for each dollar that entered to developing countries as Official Development Assistance in 2012, over US$ 10 came out as illicit financial flows. Moreover, the vast majority of illicit financial flows are due to trade misinvoicing (GFI 2014)[1]. So, we can’t only advocate for increasing ODA allocated to gender equality without linking with the discussion on how to tackle the opacity of the global financial system that allows these practices to happen.
2. Key issues at stake on the FfD negotiations and some recommendations to address them
At the first drafting session, the core issue has to do with who and how will pay the costs of the transition to a more sustainable and equitable development; and which reforms in the international economic and financial architecture would allow, a change in that direction.
So the first issue at stake refers on the whether to focus on private finance or public finance. The second issue is whether to focus on domestic action or international cooperation and systemic issues. Thirdly, refers to in which extent FfD is linked with the MoI discussion of the Post2015 Agenda.
A challenge is added to this issue: what does “development” mean and which is the place of gender equality and women’s rights. For instance, in the First Drafting Session of the FfD, governments from different regions have referred to gender equality and women’s empowerment as never before during this process. A statement on gender equality in the financing for development process was submitted on behalf of twenty countries.
Twenty years after the adoption of the it seems that the challenges in the debates on development are no longer the visibility of women and gender equality, but to avoid the instrumental approach and to face the structural obstacles that limit policies’ space to orientate development strategies towards gender equality and the respect of the rights of women and girls.
2.1 The Emphasis on Private Finance erodes State’s responsibilities
The European Union (EU), the United States, the United Kingdom, Australia, and Switzerland, among other developed countries stressed the promotion of the private sector in the FfD process. The role of the States in the creating an enabling environment for business to prosper is also highlighted[2]. The countries’ joint statement on gender equality states that the private sector is an important partner in advancing the gender equality and the women’s economic empowerment agenda since as employers they advance family friendly policies, equal pay and opportunities for promotion. Within this framework, foreign direct investment (FDI) and public-private partnerships (PPP) are promoted as the main finance mechanisms.
However, links between the private sector, jobs, gender equality, and sustainability are not automatic and it is necessary to resort to data supporting said assumptions. For instance, a recent ECLAC study shows that in Latin America, greenfield[3] investment represented 60% of inward FDI between 2003 and 2013. It is estimated that these investments only accounted for about 5% of net job creation in the region during that period. “For every US$ 1 million invested, only one job is created in extractive activities, while the same investment creates two jobs in natural-resource-intensive manufacturing. These sectors accounted for about 47% of amounts announced in investment projects during the 10-year study period” (ECLAC, 2014, 142). At the same time, “no evidence was found to confirm impacts on other aspects of employment quality, such as greater job stability or a greater participation of women in the workforce” (ECLAC, 2014, 143).
Prioritizing the involvement of the private sector in the provision of services and infrastructure might have negative impacts. As it has already been widely documented, the profit-driven nature of the private sector can threat the availability, accessibility, adaptability, acceptability, and quality of infrastructure and social services, increasing inequalities, including territorial and gender inequality[4]. This can be due to three facts: firstly, because to provide services in rural, remote areas or informal settlements is not “cost-efficient”; secondly, because women are overrepresented in low-income households and are most affected by increased tariffs; and thirdly, because women absorb the cost of adjustments by increasing the burden of unpaid care work. The increase of women’s unpaid care work also impacts their possibility to engage in economic, educational, social or political activities.
Regarding PPPs, several civil society organizations have warned about the risks of this finance method. An OECD (2014) report that includes lessons learned on the implementation of PPPs in Europe was quoted several times. This report states that private participation in infrastructure can be complex, slow, and subject to frequent renegotiation and restructuring, which is bad for the public part of the partnerships. If certain modalities have been a great failure in OECD countries, then it would be necessary to perform a careful analysis to establish if they could be successful in less developed countries, where costs recovery is more difficult[5].
During the session, DAWN pointed out that if empirical evidence regarding the positive effects of PPPs is minimum and specific under certain variables[6], it cannot being promoted in service delivery, specially in providing education and health, including sexual and reproductive health and rights services as the privileged financing mechanism. Strong criteria for eligibility as well as dismissal for the private actor should be put in place. Additionally, regulation and accountability mechanism should be put in place in order to ensure accessibility, affordability and quality of the services[7].
2.2 The Emphasis on Domestic Issues dilutes the Principle of International Cooperation and Common but Differentiated Responsibilities[8]
Most developed countries emphasised the need to focus of domestic resource mobilization while developing countries strengthen the importance of implement measures related to international cooperation in terms of allocation of 0,7% of GDP to ODA, mobilization of additional funds to face climate change, advancing in technology transfer under mutually agreed terms, reduction of agricultural subsidies, flexibilization of intellectual property rules, and democratization of economic governance on finances, debt, trade, investments, and taxes.
Regarding domestic public resource mobilization, some governments referred to the need to expand the tax base, including the formalization of the informal sector. However, from an equity and human rights perspective, tax base should be expanded in a progressive way while avoiding gender bias. On this regard, it is important that governments referred to gender responsive tax and budgeting[9].
These recommendations must be included in the draft of the Addis Ababa Document. However, it is important to go back to the Monterrey Consensus, which recognizes interconnections at different scales of globalization, and, as a result, show that domestic public resource mobilization can only be increased at a great scale if some global rules that limit national policy space are addressed.
In this sense, it is very important to point out that the Elements Paper includes a measure regarding the commitment to human rights impact assessment of all trade and investment agreements and the elaboration of binding environmental, social and human rights standards as a way of aligning investment agreements with sustainable development policies and plans. This measure should be promoted as one of the core recommendations towards Addis Ababa.
Additionally, the twenty countries that signed the joint statement on gender equality agreed on the recommendation of the CSW 58 to work towards ensuring that global trade, financial and investment agreements are conducive to the promotion of gender equality and the empowerment of women and the human rights of women and girls (paragraph 42 jj, CSW 58). This is great progress but should be operationalized by specific measures:
For instance, there is a need to support the strengthening of international tax cooperation through upgrading the UN Tax Committee, providing it with gender expertise and mandating it to review national, regional and global tax policy according to gender equality and human rights obligations. The UN Tax body should promote the adoption of country-by-country reporting standards for all transnational corporations, automatic exchange of information between all tax authorities, and to review tax incentives and structures in compliance with human rights obligations, gender equality and environmental standards.
Moreover, an internationally legally binding instrument for TNCs to monitor their compliance with HR and environmental standards should be created, in line with the resolution approved by the Human Rights Council on this regard[10].
To establish an open, transparent and participatory intergovernmental space for oversight, monitoring and review of any partnership developed in the name of the UN. CSOs should be enabled to monitor the Global Compact, the United Nations Partnerships Facility, and the voluntary initiatives promoted by the United Nations Secretary-General.
2.3 The Emphasis on the Need of Synergies between the FfD Process and the Post-2015 Development Agenda versus the mandates of each process
As we stated in the negotiation session, the FfD agenda is more than the means of implementation of the post-2015 development agenda, and not all means of implementation of the post-2015 development agenda can be covered in the FfD negotiations.
The resolution on the modalities clearly states that the Monterrey Consensus and the Doha Declaration provide the conceptual framework, including in the context of the post-2015 development agenda, for the mobilization of resources from a variety of sources and the effective use of financing required for the achievement of sustainable development (paragraph 4, resolution A/RES/68/279)
FfD is the only process within the United Nations that deals with systemic issues, a pre-condition to achieve SDGs, to establish the right financing framework for the implementation of the post-2015 agenda, but also to generate the structural conditions for the implementation of other agendas that are part of the United Nations and cannot be reduced to the 17 objectives approved, among them, the Human Rights Conventions, the Beijing Platform for Action, the Cairo Action Program on Population and Development, the Small Island Developing States (SIDS) Program, the Least Developed Countries Program, etc.
On the other hand, the inclusion of non-financial means of implementation in the FfD discussion can be problematic. This proposal goes beyond the mandate of the Addis Ababa conference, and, besides diverting attention from financial issues, there is a risk of negotiating an agreement that ends up debilitating commitments in both parts. So, it is necessary to find synergies observing the corresponding mandates and expertise of each process as a way to double, and not reducing, commitments in both processes.
Thank you very much.
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[1] Trade misinvoicing is a method for moving money illicitly across borders which involves deliberately misreporting the value of a commercial transaction on an invoice submitted to customs. According to the GFI report “In 2012, ODA (for the developing countries included in this report) was measured at US$89.6 billion, according to the World Bank. As this report has found, illicit outflows from the developing world amounted to US$991.2 billion in that same year. That means that for every development dollar coming into the developing world in 2012, over US$10 flowed out illicitly” (GFI 2014, 12). From 2003 – 2012, US$6.6 trillion left developing country economies illicitly (GFI 2014, 25).
[2] See report: http://www.iisd.ca/vol23/enb2307e.html.
[3] Greenfield investment refers to completely new investments, such as the creation of new plants. It is important to remark that the FDI concept also includes the privatization of public companies, as well as mergers and acquisitions of firms of domestic capitals that only imply a change in assets’ property.
[4] According to WHO, globally, about 150 million people suffer financial catastrophe annually from paying for health care, while 100 million are pushed below the poverty line. (World Health Report, 2010). In 2011, private consumers in developing countries paid over US$34 billion out-of-pocket for family planning, reproductive health and HIV/AIDS-related expenses. (Table 2) UNSG report E/CN.9/2013/5, 2013
[5] Official Support for Private Sector Participation in Developing Country Infrastructure, Advisory Group on Investment and Development, May 28, 2014, DCD/WKP (2014)2. Available at: http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=DCD…
[6] Organization for Economic Cooperation and Development (OECD) (2014). Official support for private investment in developing country infrastructure. Independent Evaluation Group of the World Bank (IEG-WB) (2012). World Bank Group Support to Public-Private Partnerships: Lessons from Experience in Client Countries, FY02–1202–12. Hildyard, Nicholas (2014). Public-Private Partnerships, Financial Extraction and the Growing Wealth Gap: Exploring the connections. The Corner House.
[7] For more information on criteria, see Statement by Righting Finance at https://dawnfeminist.org/feminist-resources/sites/default/files/articles/r….
[8] The Common But Differentiated Responsibilities principle was proclaimed in the Rio Conference in 1992 (Principle 7 of the Declaration) and it can be applied to negotiations on finance. As it is clearly stated in the joint document of the civil society, this principle captures the duality of universality and differentiation, which implies that the FfD agenda must be developed around the universality of the issues and the differentiation in the action. See the civil society response, page 3: https://csoforffd.files.wordpress.com/2015/01/cso-response-to-ffd-elemen….
[9] Advocating for sexual and reproductive health and rights budget allocations will be needed in order to secure the full implementation of the comprehensive SRHR package while ensuring quality, accessibility and affordability.
[10] Resolution entitled “Elaboration of an international legally binding instrument on transnational corporations and other business enterprises with respect to human rights” (A / HRC / 26 / L.22), adopted on June 26, 2014 in the UN Human Rights Council in Geneva.