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Financing for Development Conference kicks off in Addis Ababa
Thousands of delegates have gathered in Addis Ababa to attend the Third International Conference on Financing for Development themed: Invest ahead – for people and planet.
The Conference, hosted by the Ethiopian government in collaboration with the United Nations Economic Commission for Africa (UNECA), will be held from July 13-16, featuring plenary meetings, round table discussions, and nearly 200 side events.
The Conference seeks to assess progress in international development financing; address new and emerging issues in development; and reinvigorate the follow-up process of the previous Financing for Development conferences.
UN Under-Secretary-General for Economic and Social Affairs Wu Hongbo will serve as the Secretary-General for the Conference. High-level political representatives, including more than 50 Heads of States and Government, over 100 Ministers of Finance, Foreign Affairs and Development Cooperation, as well as more than 1,000 civil society and business sector representatives will attend the Conference.
Notable attendees include Prime Minister Hailemariam Desalegn, UN Secretary-General Ban Ki-Moon, World Bank (WB) Group President Jim Yong Kim, International Monetary Fund (IMF) Managing Director Christine Lagarde and World Trade Organization (WTO) Director-General Roberto Azevêdo.
The Third Financing for Development Conference comes after the 2002 Monterrey Conference in Monterrey, Mexico and the follow-up conference in Doha, Qatar in 2008.
The Monterrey Consensus and Doha Declaration on Financing for Development outlined six major aims for Financing for Development. Mobilizing domestic and international resources for development, including foreign direct investment (FDI) topped the priorities. Promoting international trade and addressing external debt and systemic issues in international financial systems were also declared major areas of focus.
A statement released by the co-facilitators of the preparatory process for the Conference explained that the upcoming conference “should address both the unfinished business of the Monterrey Consensus and Doha Declaration on Financing for development” and should be considered as “Monterrey plus,” adding new provisions, particularly relating to the Sustainable Development Goals (SDGs) adopted during the Rio 2012 Conference.
Financing for Development
Since the adoption of the Monterrey Consensus and the review of its implementation in the Doha Declaration, significant international development achievements have been registered.
According to the UN, public revenue in developing countries has more than doubled from USD 838 billion in 2002 to USD 1.86 trillion in 2011. FDI to developing and transition economies also rose twofold from USD 373 billion in 2005 to USD 750 billion in 2014. Efforts resulting from the Financing for Development Conferences have been major contributors to the growth in developing economies.
Still, the Intergovernmental Committee of Experts on Sustainable Development estimates that small and medium businesses require additional loan support in the amount of USD 2.5 trillion in developing countries and USD 3.5 trillion globally. Further, least developed countries, particularly those in Africa, received less than two percent of FDI flows.
The Monterrey Consensus and Doha Declaration also highlighted the urgent need to meet the Millennium Development Goals (MDGs). The decade following the 2002 Conference has been largely successful in meeting MDG targets. The 2015 Millennium Development Goals Report showed that extreme poverty in developing countries has dropped from 47 per cent in 1990 to 14 percent in 2015. Moreover, Official Development Assistance (ODA) to developing countries has increased by 66 percent since 2000, reaching USD 135.2 billion in 2014.
During the Monterrey Conference world leaders affirmed their commitment “towards the target of 0.7 percent of gross national product (GNP) as ODA to developing countries.”
Preparations for the Conference
From September 2014 to March 2015, the UN General Assembly conducted a number of substantive sessions as well as informal hearings with the business and civil society sectors. Drafting and consultation sessions for the outcome document of the Third Financing for Development Conference, the Addis Ababa Action Agenda, were also held in January, April and June 2015.
As co-facilitators of the preparatory process for the Conference, Ambassador George Talbot of Guyana and Ambassador Geir Pedersen of Norway led extensive hearings and consultations on issues expected to be addressed in Addis Ababa.
Tsigereda Tafesse, public relations coordinator for the conference at the Ministry of Finance and Economic Development (MoFED), told Capital that Ethiopia is expecting to host up to 7,000 delegates.
Tsigereda confirmed that over 300 international business leaders and CEOs, 200 foreign media outlets and approximately 50 Heads of States are expected to attend the Conference.
“The host country is covering all logistical operations for the Conference. The responsibilities and expenses of the Ethiopian government include ensuring security throughout the city, covering hotel costs for high-level delegates and providing adequate venues for side events,” Tsigereda noted.
Tsigereda explained that “Ethiopia hopes to capitalize on the Conference by opening doors to increased trade, promoting FDI opportunities and forging genuine partnerships with international organizations.”
“Given that Ethiopia is a major regional growth hub, which has been actively involved in negotiations leading up to the Conference, the Ethiopian government is optimistic that the Addis Ababa Action Agenda will be ratified and successfully implemented,” she added.
Rigorous security measures have been taken in the capital city. Roads, hotels and other infrastructure have adopted enhanced security protocols. A number of construction projects in the city have also been suspended until the end of the conference in order to address sound pollution concerns and ensure maximum security.
All attendees of the Conference have been given official ID cards in order to access event venues.
“We are confident that Ethiopia will be able to assert itself as a stable and secure nation with the capacity to accommodate such a large Conference,” Tsigereda noted.
What is the Addis Ababa Action Agenda?
The Addis Ababa Action Agenda will be the official outcome document of the Third International Conference on Financing for Development. A 31-page draft of the document listing post-2015 development goals was published on July 7 by the UN.
The draft Agenda outlined a comprehensive framework for development financing including anticipated action areas, major investment sources, international cooperation aspirations, debt sustainability issues, science and technology capacity building, and Agenda implementation strategies.
In order to develop energy infrastructure and clean energy technologies around the world, the Addis Ababa Action Agenda aims to “raise over USD 100 billion in annual investments by 2020 through market-based initiatives, partnerships and leveraging development banks”
Heads of States and high representatives also intend to “redouble efforts to substantially reduce illicit financial flows by 2030” and “strengthen national control mechanisms, such as supreme audit institutions.”
Among the promises made in the Agenda is the establishment of a new forum “to bridge the global infrastructure gap, including the 1 trillion to 1.5 trillion dollar annual gap in developing countries.” The document also urges developed nations to contribute a minimum of 0.20 per cent of their Gross National Income as ODA to the Least Developed Countries (LDCs).
The question of WTO membership also appears as a priority for the Agenda. The Financing for Development Conference outcome document seeks to “accelerate the accession of all developing countries engaged in negotiations for WTO membership.” The WTO currently has 161 members including 42 African nations. Ethiopia applied for accession to the WTO in 2003 and remains an observer of the WTO. The Working Party of the WTO is still examining Ethiopia’s foreign trade regime in order to accept its membership into the organization.
Finally, the document notes that an inter-agency Task Force that will be established during the Conference will monitor the implementation of the Agenda and publish yearly reports. The prospect of hosting a follow-up conference by 2019 will also be considered.
In the lead-up to the Conference, a number of international organizations, Heads of States and civil society and business sector stakeholders have expressed high expectations for the Conference.
In a public address published by the UN Department of Economic and Social Affairs (UNDESA), Prime Minister Hailemariam Desalegn declared the Conference a “historic” event that marks “a new era in international development cooperation”
“History has afforded us the opportunity to make a solemn promise that 15 years from now, we would no more talk of extreme poverty and hunger,” the Prime Minister declared.
“Let us all become part of a history of an important journey towards ensuring the future that we all want,” the address concluded.
In a press release published on July 10, the IMF announced that the multilateral development banks (MDBs) and the IMF plan to spend more than USD 400 billion in development financing over the next three years, in order to work towards the SDGs.
“Investment needs in infrastructure alone reach up to USD 1.5 trillion a year in emerging and developing countries. Meeting the staggering but achievable needs of the SDG agenda requires everyone to make the best use of each dollar from every source, and draw in and increase public and private investment,” the press release noted.
Managing Director of the IMF Christine Lagarde announced that “In this pivotal year, we have targeted areas where providing additional support will have strong payoffs: we have just increased access to all our concessional loan facilities by a full 50 percent.”
WB President Jim Yong Kim also stated “We need trillions, not billions, of dollars” to meet the Financing for Development goals. In its Post-2015 Development Agenda, the World Bank notes that “achieving the proposed SDGs will require the best possible use of each available grant dollar, beginning with USD 135 billion in ODA from governments and also including philanthropy, remittances, South-South flows, other official assistance, and foreign direct investment.”
Meanwhile, other stakeholders voiced their opinions about which issues merit prioritization.
UN Women expressed its hopes for progress in gender equality through the Conference by Tweeting “We’re calling on countries everywhere – Invest in women & girls!”
Owen Barder, Senior Fellow at the Center for Global Development, on his part, explained in an interview with The Guardian that “Developing countries would rather have jobs than aid, though many will need both for a while. A key challenge is to help countries attract investment and growth so they can create jobs and income, and increase tax revenues to pay for public services.”
On Saturday, July 11, tens of thousands of people in over 70 cities worldwide took part in the action/2015 initiative’s mobilizations on the Global Day of Action. Citizens from around the globe demanded that governments meet their Financing for Development promises, including cracking down on tax evasion.
Highly anticipated events
The United Nations Conference Centre will serve as the main venue for the conference while official side events will be hosted at Capital Hotel, Elilly Hotel, Hilton Hotel, Intercontinental Hotel, Jupiter Hotel, Radisson BLU Hotel and Sheraton Addis Hotel.
On Sunday July 12, UNECA will host the Ethiopian Village and Exhibition following a ceremonial raising of the Ethiopian flag, unofficially kicking off the Conference. Press Relations Coordinator Tsigereda Tafesse explained that the event will promote the fertile business and investment climates in Ethiopia.
“The exhibition will showcase achievements in the agricultural and tourism sector and demonstrate that the service sector is robust enough to support increased FDI,” Tsigereda told Capital.
Prime Minister Hailemariam Desalegn will also host an event titled “Ethiopia Rising” at the Sheraton Addis Hotel on July 14. Presided by Special Advisor to the Prime Minister Dr. Arkebe Oqubay, WB President Jim Yong Kim and Managing Partner at EYEthiopia Zemedeneh Negatu, the forum intends to highlight economic growth, booming entrepreneurship and investment opportunities in Ethiopia.
Later on Tuesday, the Prime Minister will host a dinner for high level dignitaries including heads of the UN, the WB, the African Union Commission, the World Health Organization and the UNDP in a launching ceremony for the National Strategy and Plan of Action for Pharmaceutical Manufacturing Development in Ethiopia.
“Billions to Trillions: Ideas to Action” is another widely anticipated side event hosted by the World Bank taking place on July 13. The meeting will discuss the World Bank’s Post-2015 Development Agenda and will critically examine the discussion note produced by the MDBs and the IMF titled “From Billions to Trillions: Transforming Development Finance.”
On Tuesday, July 14, the Hilton Hotel will host the International Business Forum organized by the Business Sector Steering Committee. The business forum seeks to connect stakeholders in international trade and sustainable development from across the world and aims to announce new partnerships and concrete initiatives.
Harnessing Innovative Financing for Nutrition in Africa, Global Tax Reform to Finance the SDGs, Financing Health for Development, Financing of Sustainable Infrastructure, Climate Finance: Investing in the Most Vulnerable, The Investment Case for Education, Women as an Economic Force: Investing in Women for Greater Development Returns, and The Role of Science, Technology and Innovation in a Post-2015 World are among other notable events.
Secretary-General Ban Ki-Moon is expected to officially open the Conference on Monday, July 13.