Last week's UN conference in Addis Ababa saw countries agree on a series of bold measures to revamp global finance practices and generate investments for tackling a range of economic, social and environmental challenges. The Third International Conference on Financing for Development (FfD) was held at the highest possible political level, including Heads of State or Government, relevant ministers – ministers for finance, foreign affairs and development cooperation – and other special representatives.
The agreement called the Addis Ababa Action Agenda, provides a foundation for implementing the global sustainable development agenda that world leaders are expected to adopt this September. The agreement was reached by the 193 UN Member States attending the Conference, following negotiations under the leadership of Ethiopian Foreign Minister Tedros Adhanom Ghebreyesus.
The outcome document also underscores the importance of aligning private investment with sustainable development, along with public policies and regulatory frameworks to set the right incentives. A new mechanism that will facilitate financing for new technologies for developing countries was also agreed upon.
The Addis Ababa Action Agenda includes important policy commitments and key deliverables in critical areas for sustainable development, including infrastructure, social protection and technology. There were agreements for international cooperation for financing of specific areas where significant investments are needed, such as in infrastructure for energy, transport, water and sanitation, and other areas to help realize the proposed sustainable development goals.
Technology—Countries agreed to establish a Technology Facilitation Mechanism at the Sustainable Development Summit in September to boost collaboration among governments, civil society, private sector, the scientific community, United Nations entities and other stakeholders to support the sustainable development goals.
Infrastructure—Countries agreed to establish a Global Infrastructure Forum to identify and address infrastructure gaps, highlight opportunities for investment and cooperation, and work to ensure that projects are environmentally, socially and economically sustainable.
Social protection—Countries adopted a new social compact in favour of the poor and vulnerable groups, through the provision of social protection systems and measures for all, including social protection floors.
Health—Countries agreed to consider taxing harmful substances to deter consumption and to increase domestic resources. They agreed that taxes on tobacco reduce consumption and could represent an untapped revenue stream for many countries.
Micro, small and medium-sized enterprises—Countries committed to promote affordable and stable access to credit for smaller enterprises. They also pledged to develop and operationalize a global strategy for youth employment and implement the International Labour Organization Global Jobs Pact by 2020.
Foreign aid—Countries recommitted to achieve the target of 0.7 per cent of gross national income for official development assistance, and 0.15 to 0.20 per cent for least developed countries.
A package of measures for the poorest countries—Developed countries commit to reverse the decline in aid to the poorest countries, with the European Union committing to increase its aid to least developed countries to 0.2 per cent of gross national income by 2030. They also agree to adopt or strengthen least developed countries investment promotion regimes, including with financial and technical support. Governments also aim to operationalize the technology bank for this group of countries by 2017.
Taxation—The Agenda calls for strengthening support for the work of the UN Committee of Experts on International Cooperation in Tax Matters to improve its effectiveness and operational capacity, and the engagement with the Economic and Social Council. It emphasizes the importance of inclusive cooperation and dialogue among national tax authorities.
Climate Change—The Action Agenda calls on developed countries to implement their commitment to a goal of jointly mobilizing USD100 billion per year by 2020 from a wide variety of sources to address the needs of developing countries. Countries also committed to phase out inefficient fossil fuel subsidies that lead to wasteful consumption.
For the full agreement, see http://www.un.org/ffd3/