1. law, govt and politics
2. legal issues
3. human rights

UN FINANCING FOR DEVELOPMENT
(FFD) PROCESS - BACKGROUND
29 APRIL 2015
Introduction .............................................................................................................................................. 2
Timeline .................................................................................................................................................... 3
The process so far ................................................................................................................................. 3
What’s next? The run up to Addis ........................................................................................................ 3
Parallel UN process on debt workout ............................................................................................... 4
Issues at stake........................................................................................................................................... 5
Situation analysis – further background ................................................................................................... 7
Momentum........................................................................................................................................... 7
Outcome of Addis ................................................................................................................................. 7
Developing countries ............................................................................................................................ 8
Europe .................................................................................................................................................. 8
The role of parliamentarians ................................................................................................................ 9
The USA ................................................................................................................................................ 9
CSO coordination .................................................................................................................................... 10
Acknowledgements ................................................................................................................................ 10
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Introduction
2015 will be a landmark year for the global fight against poverty, with three
crucial summits in just six months. The Third UN Conference on Financing for
Development (FfD) in Addis Ababa in July will be followed in September by the
UN Summit for the adoption of the post-2015 development agenda in New York;
and in December by the 21st Conference of the Parties (COP) on Climate Change
in Paris. A central issue is how to reform the global financing system to allow the
achievement of global sustainable development goals. On this issue, the FfD
conference will play a critical role.
The Addis Ababa conference is a follow up to the first FfD conference convened
in Monterrey in 2002, the second FfD conference in Doha in 2008, and is closely
linked to the 2009 UN Conference on the World Economic and Financial Crisis
and its Impact on Development in New York. The issues discussed in Monterrey,
Doha and New York continue to be of central importance.
The UN has historically played second fiddle to the IFIs on finance and economic
issues. ECOSOC, which should play the role now taken by the G20, has not been
powerful. However, the FfD process has allowed the UN to play a more central
role, and has helped push forward important agendas:
 2002 – Monterrey FfD conference (outcome document). Though CSOs
were not impressed with the Monterrey outcome, it did signal a shift in
discussions on FfD, putting the issues such as domestic resource
mobilisation and systemic change at the centre of the agenda, and raising
the profile of other issues, adding impetus to the debt relief, financial
architecture reform and the aid effectiveness agenda for example. This
was largely because middle-income countries took initiative and played a
major role.
 2008 – Doha FfD conference (outcome document)– Eurodad’s analysis
notes it was a disappointing follow up, though it did add illicit financial
flows and tax evasion, and climate finance to the agenda in a limited
manner. Efforts to ‘upgrade’ the UN tax committee were watered down –
the outcome just mandates ‘strengthening’ it – while tax havens were not
mentioned.
 2009 – UN Conference on the world financial and economic crisis
(outcome doc, analysis) mostly reiterated the promises of Doha, but went
further in some areas, particularly on IMF reform and reform of the global
monetary system. This was an attempt by the UN General Assembly to
take more control, producing the (excellent) Stiglitz report, but it was
undermined by developed countries and did not change the basic
dynamic of IFI / G20 dominance in this arena.
 The Monterrey and Doha summits were in fact the major events in a
series of six FfD meetings that the UN has hosted since 2002. The latest
‘high-level dialogue’ took place in October 2013 – see Eurodad’s analysis.
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Timeline
The process so far
The UN FfD Office has a webpage dedicated to the Conference. The key
documents mandating the process are:
 Resolution 68/204 (mandating the process and setting out the scope) and
 Resolution 68/279 (setting out the modalities, including that the Addis
Ababa conference: “… Shall be held at the highest possible political level,
including Heads of State or Government, relevant ministers, including
ministers for finance, foreign affairs and development cooperation” and
produce an ‘intergovernmentally negotiated and agreed outcome.)
 A draft of a second resolution on modalities is also currently under
negotiation.
Important inputs prior to the official negotiations had included the report of the
Intergovernmental Committee of Experts on Sustainable Development Financing
(Eurodad analysis), the report of the Open Working Group for Sustainable
Development Goals, the UN Secretary General Synthesis report for post 2015
(Eurodad response). The UN also held ‘substantive sessions’ to discuss key
issues in October, November and December last year.
Under the co-facilitation of the Norwegian and Guyanan Ambassadors, drafting
sessions – official intergovernmental negotiations – have taken place in January
(to discuss an “Elements Paper”) and April (to discuss the Zero draft) this year. A
useful summary of government positions is available here.1
What’s next? The run up to Addis
The table below highlights key dates. Governments will submit their views on
the Zero Draft until the end of April and a new negotiating text is expected in
early May. The next formal round of negotiations will take place in New York
from June 15-19. Before then, the co-facilitators are expected to convene
informal negotiations – dates to be confirmed (the current proposals are May 1113, May 26-29 and June 1-5).
We are expecting the next draft of negotiating text to appear very soon – possibly
before or during the conference. This may mean that we can use the conference
to very practically examine the latest state of play, which will help our
strategizing and response.
The European Commission’ February communication “A Global Partnership for
Poverty and Sustainable Development After 2015” gives an indication of current
EU positions (Eurodad response).
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3
Month
Date
Key Moment
Apr
29-30
Asia-Pacific High-Level Consultation FFD (Jakarta, Indonesia)
May
11-13 and
26-29 (tbc)
Informal FfD negotiations in New York
May
26
European Council Conclusions on FFD (Latvian Presidency)
Jun
1-5 (tbc)
Informal FfD negotiations in New York
Jun
15-19
3rd FfD drafting session in New York
Jul
13-16
Addis UN FfD Conference
Sep
15-28
Post-2015 Summit
Nov
30-11
COP 21 Paris
Parallel UN process on debt workout
On 9 September the UN General Assembly adopted a resolution to establish a
multilateral framework for sovereign debt restructuring processes promoted by
the G77 and triggered by the aggressive vulture funds lawsuits against
Argentina. This resolution could be a game changer for the way future debt crises
are managed as it has shifted the forum for political debate away from the
International Monetary Fund (IMF) towards the UN. Negotiations are on-going
in New York.
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Issues at stake
A position paper, endorsed by over 140 CSOs is the clearest summary of the key
specific demands being made by CSOs. The CSO response to the Zero draft is a
much longer, detailed examination, and is a useful reference to know where CSOs
stand across the range of issues. The response expresses strong reservations on
the capacity of the Zero Draft to offer a sound basis to advance the agenda for
sustainable development and heighten the level of existing commitments on
Financing for Development.
As we are expecting a new draft of the outcome document to appear very soon, it
does not make sense to summarise the state of play on the Zero draft here.
Instead we have selected some summary quotes on issues Eurodad has been
following, to give a flavour. Participants are encouraged to examine the full
document, and the preceding position paper, if they have not already done so.

“On debt sustainability and debt restructuring, the zero draft treats progress in different
forums in an unequal way. In fact, the draft blatantly ignores four key areas where the UN
has ongoing work (the UN ad hoc committee on a multilateral framework for sovereign
debt restructuring, the UNCTAD - convened working group on sovereign debt workouts, the
Guiding Principles on Foreign Debt and Human Rights and the Principles on Responsible
Sovereign Lending and Borrowing)”

“The role of private finance is omnipresent, without an accompanying emphasis on need and
the responsibilities of the state to regulate private international capital flows. There is a
clear and a critical endorsement given to the G20's Financing for Infrastructure (via
public-private partnerships) agenda, including the extent of integrating infrastructure
financing into national budgets. This is problematic on several counts, particularly through
the socialization of risks and costs and privatization of resources and wealth.”

“The ODA language, along with many parts of the zero draft, place a disproportionately
strong emphasis on promoting the role of the private sector. Such an approach undermines
the prospects of getting more developed countries to deliver on 0.7%, untie aid and ensure a
robust commitment to poverty eradication and sustainable development. Moreover, the
principles of effectiveness are confined within the boundaries of international public
finance, which fails to grasp the agreed principles of ownership, inclusiveness, transparency
and accountability with a focus on results that are inherent to a global partnership for
sustainable :development.”

Tax – “While we appreciate that the FfD Zero Draft recommend to upgrade UN Tax Expert
Committee to an intergovernmental committee, we see some potential problems with the
wording of [paragraph 28]. (1) This paragraph might in reality be suggesting that an
intergovernmental body should not be established before the mandate of the current
committee has expired in 2017. (2) “Upgrading” might exclude opportunities to increase the
funding available for the committee’s work, which is currently extremely limited.
(3)“Upgrading” might exclude the possibility of expanding the membership of the
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committee, which currently only includes 25 countries. Therefore, we would like to further
strengthen this commitment into the full establishment of a well resourced
intergovernmental body on tax under the auspices of the UN” with universal membership.

On women’s rights “ we raise serious concerns over the contradicting tendency towards
the instrumentalisation and commodification of women to improve profitability and
competitiveness of business (para 42), as a source of tax (para 20, 22) or to promote
market access for financial services (para 41, 42, 43) and ITC (103). This
instrumentalization is a dangerous departure from recognizing the inherent
entitlements of women as full and equal citizens and subjects of human rights.”

In addition, the CSO response picks up many other critical development issues, which there is
not space to examine here. For example, Eurodad has been following the critical issue of
social protection, which is integrated throughout the CSO response, which points out that
“the language of this “new basic social compact” [suggested by the zero draft] obscures the
fact that they are already under an obligation to fulfil the human right to social security
enshrined in the Universal Declaration on Human Rights and ICESCR, and that States have
committed to “comprehensive systems of social protection that provide universal access to
social services” in the past”.
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Situation analysis – further background
Momentum
2015 is designed to be a year of “domino-breakthroughs” in the United Nations
(UN), and as Secretary General Ban Ki-Moon put it, the 3rd Financing for
Development conference in Addis Ababa will be “a major stepping-stone for the
Summit on post-2015 in September next year”. The climate summit in Paris at the
end of the year is also important to keep in mind, since agreements in the UN are
very often made as a number of trade-offs between developed and developing
countries tied together in larger “political packages”. Because of this, and
because much is at stake in the post-2015 process and the climate Summit, the
Addis Ababa conference on Financing for Development will have a high degree of
political leverage and importance, which we can use to create major steps
forward.
The conference also comes at a time when it has become clear to citizens that the
current financial system is prone to large scale crises and the classic neoliberal
solutions have not been able to provide real solutions for ordinary people nor
eradicate poverty. After years of financial crisis and austerity, citizens all over
the world are open to new solutions and radical change.
The links to the post-2015 process also bring challenges, not least the strong
pressure to shift the focus of the FfD process from “development finance” to
“sustainable development finance”. While this agenda creates new opportunities
to address the redirection of funds from development to environmental
protection as well as to develop consistency in international finance issues, it
also complicates the negotiations because two large UN negotiating tracks – the
Rio convention track and the FfD track – which have developed quite differently,
are now being brought together. This adds a new level of complexity to the
negotiations and furthermore means that ministries, UN offices and interest
groups that have never worked together suddenly risk ending up in turf wars.
Lastly, if the concept of ‘sustainable development finance’ becomes the new
standard, there is a risk that it will become more difficult to distinguish between
development finance and environmental finance – such as, for example, financing
for climate mitigation or biodiversity – in the future.
Outcome of Addis
The outcome of the FfD conference will not be a legally binding agreement but
rather a political declaration, and it will therefore in itself not have any strong
power. In order to create large-scale and long-term change, Addis has to be the
start of something – a process or institution - that carries the issues forward
(such as for example an intergovernmental body on tax). Therefore, outcomes
such as processes have much higher value than political statements in
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themselves. The Addis outcome document can also be a key place to get
recognition of issues that have not previously been recognized internationally.
Developing countries
In the Financing for Development negotiations, many (but not all) civil society
positions are generally closest to those of the developing countries and our
support for their positions puts pressure on European governments and helps to
create breakthroughs in the negotiations.
In the UN, developing countries have a majority and their primary negotiating
group – the Group of 77 (G77 – actually a group of 134 countries) – often
manages to pressure the EU and the US to change positions. The G77 also has a
very strong influence on China, who usually tries to coordinate its position with
the G77. Within the G77, as well as in the UN as a whole, smaller developing
country groupings such as the Least Developed Countries (LDCs), the Africa
Group and the Alliance Of Small Island States (AOSIS) have occasionally also
managed to set the agenda, in particular when standing up as victims speaking
out against injustice. Thanks to the relatively high transparency of the UN, and as
a result, the ability of media to capture such “protests” from vulnerable groups,
smaller developing countries sometimes have the power to exert political
pressure on the powerful countries.
The Latin American region includes many of the most active governments who
also can be important allies. Africa, on the other hand, is traditionally in the
middle between Latin America and the European Union, who have often tried to
use donor relations and other political pressures to force African governments to
follow the EU’s agenda. However, although individual developing governments
are very vulnerable to this kind of pressure, their negotiating groups – and in
particular the G77 – normally offers a high degree of political protection.
Europe
In terms of influencing Europe, the environment remains challenging, not least
due to Europe’s attitude in international negotiations, which since the outbreak
of the crisis has been “no new commitments” and “it is time for the others to
deliver”. However, the fact that FfD is linked to post-2015 and the Climate
Summit gives important leverage. Moreover, both the European governments
and the EU institutions seem divided. Depending on the specific issue, certain
European governments can be considered progressive and others have the
potential to become champions. Internally in the European Commission, DEVCO
clearly plays the most progressive role.
A specific problem with the EU’s current position is that they don’t even have a
separate position on FfD. Since they see FfD as a small sub-part of the post-2015
agenda, they only have a position on “Means of Implementation” (MoI) or “Global
Partnership”, which in their view is the same as FfD. This approach misses the
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point that FfD has always been a stand-alone agenda with a holistic approach to
the issue of finance, whereas MoI is narrowly focused on mobilization of finance
for the activities of the post-2015 agenda and the Global Partnership is a very illdefined concept that can mean anything from intergovernmental cooperation to
public private partnerships.
The role of parliamentarians
In the lead up to the FfD conference, parliamentarians can play a key role in
questioning and influencing the position of their government on FfD. According
to the draft program, there will also be a parliamentary hearing in Addis in the
lead up to the conference.
The USA
The relevance of the FfD Summit and the implementation of its political
commitments, will depend on whether the outcome is endorsed by finance
ministries (not just by development ministries), by IMF and World Bank (which
are co-hosts) and whether these actors accept to play a constructive role in a
process led by the UN.
As a key economic and financial power is also important that the US engages as
much as possible in the FfD agenda. While the US negotiator has so far expressed
strong support for FfD, the country is known for playing a very unconstructive
role in international negotiations and often failing to implement agreed
outcomes. There are several examples of how to deal with the US in international
negotiations. One option is to pressure the US to change its position. One
example of this is the climate negotiations in Bali in 2007, where Papua New
Guinea challenged the US to “lead or get out of the way”.
Another option is to move forward without the US and either count on them to
catch up and adapt as the rest of the world develop joint standards, or simply
acknowledge that a global system without the US is better than no global system
at all. This has been the approach of the UN Convention on the Law of the Sea, the
UN Convention on Biological Diversity, Kyoto Protocol, and many other
international agreements. Some international agreements – such as the Nagoya
Protocol – also provide developing countries the option to deny American MNCs
access to their territory unless the US complies with the international agreement.
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CSO coordination
Listservs:
 International = Global Social Economy (coordinated by Matt Simonds
[email protected]).
 European – CONCORD FfD list
Addis Ababa CSO Coordination Group
 A CSO Coordination Group has been created with the mandate to serve as
interlocutor between the CSO community and UN official instances
regarding the Third International Conference and its preparatory process.
For more info contact Jean Saldanha ([email protected]).
Acknowledgements
This report has been produced with the financial assistance of the European
Union and the International Labour Organisation (ILO). The contents of this
publication are the sole responsibility of Eurodad and can in no way be taken to
reflect the views of the European Union or the ILO. The responsibility for the
contents and opinions expressed rests solely with Eurodad, and publication does
not constitute an endorsement by the ILO or European Union of any opinion
expressed.
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