31
Jul
FEW people besides diplomats find it useful to master the art of interpreting the dry and often purposefully vague communiqués produced at large international meetings. This is unfortunate because it means we often fail to recognise and exploit the opportunities buried in them.
The Addis Ababa Action Agenda, adopted at the recent Third Financing for Development Conference, illustrates the point. At first glance, its 134 paragraphs, covering such diverse topics as taxes, international finance, science and technology and data gathering, seem to offer very little. Its few specific commitments are unlikely to generate much new “financing for development”. Rich countries repeat their 45-year-old commitment to allocate 0.7% of their gross domestic product to development assistance.
Nevertheless, dismissing the Addis Ababa Action Agenda would be a mistake. It contains some provisions, dealing with inclusive growth, responsible and sustainable investing as well as improving global economic governance, that could help Africa’s efforts to promote its own development.
It calls for a new “social compact” focusing on the needs of vulnerable groups and the poor, and for stakeholders to support the women’s empowerment principles developed by governments and businesses. At a minimum, this should stimulate debate on governments’ and businesses’ role in promoting inclusive development and on how they can be held accountable for their actions.
The document also emphasises the importance of remittances to financing inclusive development and the need to lower their cost. This is a veiled reference to the unintended adverse effect of global regulatory reforms on the cost of remittances and on international correspondent banking relations. It should help Southern Africa, which has high remittance costs, push global financial regulatory bodies to pay more attention to the effect of their work on those parties who cannot participate in their deliberations.
Noting that both governments and the private sector make important contributions to sustainable development, it encourages governments to respect the rights of investors, and investors to respect governments’ need for policy-making space. It also calls on investors to respect international standards, such as those set out in the United Nations (UN) guiding principles on business and human rights. The text, therefore, provides support for the South African government’s contention that foreign investment laws and bilateral treaties should protect both investor rights and the host state’s ability to execute policy reforms.
The Addis Ababa Action Agenda says arrangements for global economic governance are in urgent need of reform but provides limited support for such reforms.
It implicitly acknowledges the validity of developing country and civil society concerns about the leading role of the Organisation for Economic Co-operation and Development (OECD) in developing new global tax standards.
Unfortunately, it did not endorse proposals to move the discussions to an empowered and more representative UN committee of experts on co-operation in tax matters. SA, given its excellent reputation in the tax area, can help the stakeholders find a compromise that ensures that universally appropriate standards are developed through a more inclusive process involving both the UN and the OECD. This effort could positively affect other South African international initiatives, such as efforts to gain a third African chair on the International Monetary Fund’s board of directors.
Although the Addis Ababa Action Agenda is unlikely to generate much new financing for development, it can contribute to African development, provided our diplomats, policy makers, civil society and businesses effectively exploit the opportunities it has created as soon as possible.
Source: http://www.bdlive.co.za/opinion/2015/07/31/action-agenda-can-take-africa-forward