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Addis Abeba: Historic Deal at UN International Conference on Financing for Development

In many rural economies, the forest enterprises of families and communities are major contributors to local livelihoods. Photo: FAO/Giuseppe Bizzarri

In many rural economies, the forest enterprises of families and communities are major contributors to local livelihoods. Photo: FAO/Giuseppe Bizzarri

At the UN Conference in Addis Ababa, Countries agree on a bold set of strategies, which include the implementation of 17 goals and more than 100 concrete measures, to overhaul global finance practices and generate investments for tackling a range of economic, social and environmental challenges and expect full adoption of the agreement at the UN General Assembly in New York this September 

Called the Addis Ababa Action Agenda, UN officials salute the positive outcome at the Third International Conference on Financing for Development and marks it the first milestone of 2015. The aim of such an initiative is to address all three dimensions of sustainable development, zero in on all sources of development finance – public, private, domestic, international – and strengthen policy environments at national and international levels in order to provide a foundation for implementing the global post-2015 sustainable development agenda. 

Not only the United Nations Secretary-General Ban Ki-moon was awestruck at the victory, but also many other world leaders, due to discouraging results of several past negotiations. “I congratulate the Member States of the United Nations on the adoption of the Addis Ababa Action Agenda, the far-reaching outcome. This groundbreaking agreement gives us the foundation of a revitalized global partnership for sustainable development that will leave no one behind,” Ban said. 

The week-long conference, which started on Monday July 13 in the Ethiopian capital of Addis Ababa, was held at the highest political level and under the leadership of the country’s Foreign Minister, Tedros Adhanom Ghebreyesus. The UN’s 193 Member States attending, agreed on a range of issues such as technology, science, innovation, trade, capacity building, infrastructure, social protection, important policy commitments and key deliverables in critical areas. Among the most concrete deliverables is a solid commitment to official development assistance and the establishment of a new technology bank particularly for the least developed countries by 2017 and to work hard in ensuring that projects are environmentally, socially and economically sustainable. 

For example, Africa's long-term growth is at risk due to its lack of industrialization, therefore economic transformation of the entire continent was discussed. “Manufacturing has stagnated over the continent during the past decade and makes up a shrinking share of Africa's exports. There has been a struggle to create adequate jobs for its growing youth and the only way it's going to be able to do it is through industrialization,” said Carlos Lopes, the Executive Secretary of the UN Economic Commission for Africa (UNECA).” While on the other hand, Islamic finance offers a promising alternative to traditional sources of funding. The Islamic Development Bank made an announcement that it will double its development assistance activities from around $80 billion to more than $150 billion in the next 15 years to support programs and projects for the successful realization of the Sustainable Development Goals (SDGs) in its 56 member countries. “In mobilizing resources for the SDGs, non-traditional sources of financing need to be given due attention,” Savas Alpay, Chief Economist of the Islamic Development Bank, said.

This was the first of three major global events to have taken place this year and was filled to overflow, according to reports. Over 30 Heads of State and Government and Deputy Prime Ministers, more than 110 Ministers of Finance, Foreign Affairs and Development Cooperations, and approximately 1,000 representatives from civil society and the business sector were present. “We have now passed this first hurdle and must work ever harder for success in the summit on sustainable development as well as for an agreement on climate change,” the Secretary General commented. The second major event will occur in September at the General Assembly Summit for the adoption of a new set of sustainable development goals (SDGs) and the third event will be the December conference in Paris to reach a universal climate change agreement. 

Wu Hongbo, Under-Secretary-General for Economic and Social Affairs and Secretary-General of the Conference, echoed Ban’s statement by highlighting the fact that the Action Agenda provides a global framework for financing sustainable development means that it aligns all financing flows and policies with economic, social and environmental priorities. Countries also decided on the need to strengthen the financing for development (FFD) follow-up process, which means they have to produce an annual report on progress in implementing the FFD outcomes. “This marks a turning point in international cooperation that will result in the necessary investments for the new and life-changing sustainable development agenda that will improve the lives of people everywhere,” said Wu.

Other important themes reflected in the agreement are, domestic resource mobilization, the widening of the revenue base, improving tax collection, and combatting tax evasion and illicit financial flows. The importance of aligning private investment with sustainable development, and the handling of public policies and regulatory frameworks to set the right incentives were also highlighted. International cooperation for the financing of specific areas, such new infrastructures for energy, transport, water and sanitation, were also agreed to. Amina Mohammed, the Secretary-General's Special Adviser on Post-2015 Development Planning shared that a few years after the financial crisis, when conversations regarding this agreement began, “There was very little appetite for a discussion. Today we have a recommitment to it. We are really, really pleased with the outcome.” 

Upon successful negotiations and the closing of the conference, Ban added, “The agreement is a critical step forward in building a sustainable future and a world of prosperity and dignity for all for all. “It provides a global framework for financing sustainable development and will shape international cooperation for years to come.”  

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