Finance and development summit should be opportunity for economic justice, not corporate profits
From 13 to 16 July, Heads of State and Government, and Ministers of Finance, Foreign Affairs and Development Cooperation will gather for the third International Conference on Financing for Development (FfD3), taking place in Addis Ababa, to adopt an inter-governmentally negotiated and agreed upon outcome.
Whether it succeeds or fails in setting the right path towards establishing the just and healthy economies needed to make the Sustainable Development Goals possible, and form the basis for a world where gender justice and environmental sustainability are possible and in which the respect, protection and fulfillment of human rights are a lived reality for all people, is highly dependent on how the structural nature of the problems at hand will get prioritized and taken up.
FfD3 needs to ensure that global policy incoherencies and power imbalances are addressed including those in trade, global economic governance, illicit financial flows, and tax evasion, to just name few, all having gendered implications. Moreover, the Rio Principle of Common but Differentiated Responsibilities (CBDR) is indispensable for political legitimacy, as well as for the balance, coherence and impact of the FfD agenda and the larger post-2015 development agenda. Both, the broad FfD civil society organizations (CSO) group’s joint analysis of the previous draft, as well as the feminist and women’s rights one, stress this point.
Further, to achieve real structural transformation for economic justice the current dominant economic paradigm (enshrined also in the current draft), grounded in the legitimization of market-based development, must be redressed. This is a paradigm within which development is understood as economic growth, one that erodes the role and responsibility of the state while it entrenches privatization and liberalization,. Privatization of public services has dramatically reduced access to quality education, health care, water, and energy, with disproportionate negative impacts on women and girls around the world. The increasing dominance of the corporate sector and international financial institutions of both local and global public policy, including UN spaces, as well as the lack of transparency and public accountability for these actors are of major concern to AWID and many of our colleagues at other civil society organizations, including feminist and women’s rights ones.
The FfD process should not provide an opportunity for the corporate sector to strengthen its power over what should be the realm and responsibility of states for profit purposes. Also, strong regulatory frameworks, especially a legally binding treaty on Transnational Corporations and other Business Enterprises with respect to Human Rights, as the Women’s Working Group on Financing for Development (WWG on FfD) advocates, should be created to ensure that corporations can be held accountable to their actions. On human rights we further note that while the reference in the draft to women’s equal rights is welcome, it should acknowledge also women’s full human rights.
Public-Private Partnerships (PPPs) are increasingly being touted as a magic wand for achieving sustainable development. PPPs are, as the position paper initiated by Afrodad, Eurodad, Jubilee South Asia Pacific Movement on Debt and Development, Latindadd and Third World Network notes, in many cases, the selected mechanisms to implement infrastructure projects, but there are serious challenges with this approach as is evidenced for example in the evaluation by the World Bank’s Independent Evaluation Group (IEG) that shows that PPPs have major problems including:
- They are a very expensive method of financing, and have significantly increased the cost to the public purse.
- This cost is often non-transparent and not accountable to any stakeholders (States, the UN auditors, parliaments or civil society groups) other than the corporations own shareholders. According to the IEG report, hidden debts run up by PPPs are “rarely fully quantified” at the project level and “advice on how to manage fiscal implications from PPPs is rarely given”. Debt sustainability assessments do not currently take account of this cost as these are treated as off-budget transactions, thus perversely encouraging countries to use PPPs in order to circumvent agreed debt limits.
- They have also tended to be very high risk financing. Evidence from developed countries is that 25-35 per cent of such projects fail to deliver projects as planned, due to cost overruns, implementation delays or poor work specifications and bankruptcy or failure to repay.
From the WWG on FfD’s point of view there should not be an emphasis on scaling up investments in infrastructure without addressing the fact that private investment tends to go to sectors that generate the highest returns and rarely address the basic needs of people facing structural discrimination, most of whom are women, girls, and indigenous communities. They instead create pressure on infrastructure users, taxpayers, and the public sector to generate maximum levels of return. In fact, as illustrated already in the WWG on FfD’s analysis of the zero draft, AWID is deeply concerned that the draft outcome document embraces the private sector, which tends to encourage ‘outsourcing’ of government responsibilities to the market forces. During the 2nd drafting session, the UN Office of the High Commissioner for Human Rights (OHCHR) called for coherence between agreements on human rights and the draft outcome document, while urging incorporation of ex-ante and ex-post human rights assessments, language on businesses and human rights; and the obligation to protect people from harm. This is very welcomed by AWID and other CSO’s. Getting all the issues covered by the FfD agenda towards establishing just and healthy economies will consequently contribute to the human rights fulfillment of all people.
AWID strongly believes in the power of movements and coalitions. That includes our work within the FfD process which we continue to pursue through Rightingfinance, the Women’s Working Group on Financing for Development (WWG on FfD) and the broader FfD CSO group.
To join the WWG on FfD please visit: http://wwgonffd.org/howtojoin/
Anne Schoenstein is Lead Advocacy Associate at the Association for Women’s Rights in Development (AWID). The author wants to thank Nerea Craviotto for her contributions to this article.