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View on Africa: Is development financing better off?
Date: 22 July 2015

The issue

The Third International Financing for Development Conference was meant to figure out development priorities for the next 15 years and, more importantly, how to pay for them. But the talks were difficult and the final agreement reached in Addis Ababa fell short of what developing countries were hoping for.

Most importantly, the agreement doesn’t contain any significant reforms of the global tax system, which was a major goal for both the G77 and civil society organisations ahead of the conference. While this is a setback, there are still positives to be drawn from the document, as the same players will head to New York in September for the negotiations on the Sustainable Development Goals.

 

This week’s View on Africa posed the question: Is development finance better off? ISS senior research consultant, Simon Allison said no - and here's why.  

Key points

  • The context in which the conference took place is important, especially because it is the first of three conferences that are supposed to determine the future of international development through the sustainable development goals.
  • Among the financing options available to delegates (overseas development assistance, foreign direct investment and domestic resource mobilisation) – domestic resource mobilisation is the only viable way to raise the vast sums necessary to finance the sustainable development goals. However, the conference failed to unlock meaningful pathways to make this happen.
  • The failure to create a new intergovernmental body to make global tax regulations is egregious – this leaves control of global tax law in hands of the developed countries, who continue to benefit from the status quo.
  • Therefore, development finance is not better off after the Addis Ababa conference – it is effectively in the same position. This is not the best outcome, but also not the worst. It is significant that developed countries pledged to maintain their current levels of overseas development assistance, which was by no means guaranteed.

What to watch

The tax issue is now on the global agenda, and civil society hopes that this will create normative pressure to effect change in the future.

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