The plans for financing post-2015 SDGs: an update

by Cordelia Lonsdale

On Friday 18 July, the co-chairs of the Intergovernmental Committee of Experts on Sustainable Development Finance (ICESDF), Ambassador Majanen and Dr Mansur Muhtar, held a short briefing to update civil society and governments on the Committee’s work on financing the Sustainable Development Goals (SDGs). As there have been limited opportunities for civil society input to the Committee’s work, this was a welcome update on progress and an opportunity for dialogue – though not yet a chance to see a draft of the report.

For those who missed the briefing, here’s a blog to share my key takeaways.

Key themes of the report

  • Ending poverty is possible

The co-chairs explained that they began their work by assessing global needs and potential sources of finance to meet them. They emphasised that while the challenge (close to 1 billion people still living in extreme poverty) is huge, that meeting this challenge head-on is achievable. There is enough money in the world to end poverty and drive sustainable development.

  • Working in a new world

The co-chairs emphasised the changed and still-evolving global financial environment, since the Millennium Development Goals were agreed, and noted the need for a holistic and multi-stakeholder approach to financing that recognises the roles of all actors including  the domestic public and private sector, transnational corporate actors and development banks.

  • Growth is not enough to end poverty: we need targeted social investments

It was good to hear the Committee emphasise that in many developing countries, economic growth – even when it’s happening fast – is just not enough to drive poverty eradication. Nationally, policy and financing measures are still needed to support poor people who may not feel the benefits of growth. This stark reality is apparent in many East African countries, including Uganda, an issue we’ve blogged on before. Dr Muhtar emphasised that the Committee has discussed the need to use official development assistance (ODA) for fighting poverty, to call for donor countries to meet 0.7% commitments and to allocate more ODA to less developed countries (LDC). He noted that better targeting of ODA for ending poverty has also been discussed.

  • Domestic resources and policies will be drivers of progress

It’s clear the report will focus heavily on domestic resource mobilisation, and tackling illicit flows. In particular, it will look at how donors can support partner countries to strengthen institutional capacity to collect tax revenues – an area of development cooperation which we at DI would strongly agree needs increased effort, harmonisation and coordination.

Report structure and substance

Ambassador Majanen explained that the report will be grounded in 4 ‘pillars’:

  • The Millennium Declaration principles of peace, equality, gender, human rights
  • The Rio Declaration and Rio+20 outcome, The Future We Want
  • The Monterrey Consensus, in particular the emphasis on use of all forms of financing in a holistic manner, ensuring value added of different instruments and mechanisms
  • The multi-stakeholder dialogues that the Committee has convened already

9 “strategic approaches” will underpin the Committee’s recommendations. I’ve paraphrased these below:

  1. Each country is responsible for its own development. As the sustainable development goals (SDG) will be realised at the national level, the Committee will come up with ‘universal priorities’, but implementation must be country specific. However, national efforts need to be complemented by international public support and an ‘enabling international environment’.
  2. Effective national government policies are the “linchpin of success”. Effective institutions and policies are essential for deploying resources and unlocking additional value from existing resources.
  3. The SDGs, and financing for them, should be mainstreamed in national budgets including specific budget lines to enhance monitoring and reporting on progress. This is the only way the post-2015 framework will be realised. Synergies across dimensions must be explored.
  4. A “people-centred approach” is essential to achieve tangible results
  5. All finance flows should be used holistically, recognising the wider context and characteristics and strengths of different flows, maximising advantages, and building on optimum interplay of different instruments.
  6. Quality/effectiveness of finance matters. Let’s not deal with quantities alone.
  7. Financial instruments and resources should be matched with appropriate projects.
  8. The impact of international public finance needs to be maximised (this is something our Executive Director, Judith Randel, spoke to recently at the 2014 Development Cooperation Forum)
  9. Transparency and accountability of finance both nationally and internationally must be underlined (great- and we’d like to see some concrete recommendations on how– see below)

Useful points from the Q&A:

  • Q: Parallel processes. How will they ensure coherence, and frame a single holistic financing framework for post-2015, with the SDGs ‘Means of Implementation’ discussions still underway – and in the lead up to Addis 2015?
  • A: The Committee’s recommendations will draw directly from the finished report of the Open Working Group (since it will have enough time to do so before its next meeting). They had also earlier stated that they see the Monterrey Consensus as a pillar of the report that should hopefully drive coherence. (The synthesis report of the Secretary General’s office later in the year ,will have a similar challenge; we’ll have to wait and see).
  • Q. Ongoing ODA reform issues: The report may well recommend that donors re-commit to providing 0.7% of ODA and a specific percentage to LDCs. But ODA itself is also undergoing a complex review process at the OECD DAC, which could affect both ‘what counts’ as ODA and which countries are eligible for it (also, who gives it in future). We asked how the Committee is interfacing with the OECD DAC to inform the report.
  • A: The Committee has met with the OECD DAC and is continuing dialogue. They will not be making any recommendations about ODA reform and what ODA should be for (such as whether it should be redefined away from ‘promoting economic welfare and development’ and towards targeting poverty – something we’ve been recommending) . They wish not to interfere in each others’ work.

Some outstanding questions

Practical steps for transparency: What about IATI?

While EITI got a mention, it would be equally relevant and applicable to consider the International Aid Transparency Initiative (IATI) standard as a practical reporting mechanism, something which could help achieve transparent and accountable post-2015 financing. A recommendation on IATI could make the report truly transformative for stakeholders in developing countries who want better data on development activities and who funds them. (Want to know more? Check out our recent blog series on what we found out about DFID spending, using IATI data.)


Where’s the green?

It’s concerning that discussions about financing for sustainable development, coming directly out of the Rio track, don’t (right now) seem to be very focused on the importance of financial mechanisms that can help to sustain the environment and preserve the world we live in. Green bonds and green banking; climate finance; carbon taxes, encouraging sustainable resource use in trade and industry; none of these ideas seem central to the report. (Did I miss it? Leave a comment!)

Roles…but what about responsibilities? It’s disappointing, given that the co-chairs “recognise both the roles and responsibilities of private actors” in sustainable development, to hear them state that it’s unlikely they will recommend reporting requirements for private actors on their social/environmental impacts. They mentioned the need to create positive incentives rather than making reporting mandatory, and held up the UN Global Compact as an example. Yet it seems this issue is still on the table within the Committee, so let’s hope for something more concrete and ambitious emerging in the final report.

What’s next? Process

The Committee meet for the final time 4–8 August. The possibility of another open dialogue day with stakeholders was mentioned, likely in the beginning of that week.

No specifics on whether they will release the draft report for comments or input from stakeholders in advance of August, but it seems unlikely. (Update: I’m told by CSO colleagues that it definitely won’t be released, but that informal channels of communication with Committee members are still open.)

Questions? Comments? Find me on Twitter @Claudie_L