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Ireland's political and cultural magazine
70September/October 2015
and environmental degradation. His-
tory may well look back on this as a
pivotal moment when state-based mul-
tilateralism caved in spectacularly to
transnational private interests.
The dawn of a new stream of
“plurilateralism” has emerged.
The Addis Conference was the third
such conference hosted by the UN since
. The FfD process was established
in . It was comprehensive, mean-
ing that it had the mandate to look at
ALL areas of global finance and eco-
nomic governance necessary to deliver
on the ambitious Millennium Develop-
ment Goals. It was not restricted to
issues of aid, but could make recom-
mendations on tax, debt, trade, and the
private sector as well as systemic issues
such as economic-governance reform.
This was truly revolutionary.
During that first conference in ,
through strong civil society action, for
example, the proposal for a financial
transaction tax, which had been ridi-
culed before, gained formal recognition.
Issues of human-development-based
debt sustainability were put on the
table, as was the idea of a new global
economic governance council under UN
auspices to temper the power of ad hoc
groupings such as the G and the OECD.
Since then, however, the FfD process
T
HE historic UN Summit on the
new Sustainable Development
Goals is only weeks away. Eve-
rything is all but agreed. The
final-outcome document has
been in wide circulation since early
August and all that remains now is a
photo shoot with world leaders and a
massive corporate party in Central Park
to usher in a new era of global peace and
prosperity.
Ireland, as co-facilitator of this proc-
ess, has achieved an almost impossible
task in pulling the rabbit out of the hat.
The problem is that for all the prom-
ises to take “bold and transformative
steps” to ensure that “no-one is left
behind”, it is increasingly hard to see
how this new agreement can achieve
anything significant. While “Trans-
forming our World: the Agenda for
Sustainable Development” abounds in
ambition – goals and targets in
total - it is very weak on the necessary
measures to turn this agenda into
reality.
The means to implement the new
goals were meant to be decided at the
third Financing for Development (FfD)
Conference, which took place in Addis
Ababa in July. This event delivered little
in terms of the resources needed to
address extreme poverty, inequality
PPPs sideline radical
financial reform at Addis
preparatory meeting,
with Irish support.
By Lorna Gold
Multinationals outmanoeuvre
UN’s sustainability agenda
INTERNATIONAL Sustainability
all the Addis action was
in the side meetings
History may
well look
back on the
July Addis
conference
as a pivotal
moment when
state-based
multilateralism
caved in to
transnational
private
interests
“
September/October 2015 71
Lorna Gold is Head of
Policy and Advocacy
with Trócaire
Development Goals, no new commit-
ments were made.
The focus of most wealthy countries
was not even in the main conference
room. As has become the pattern at such
UN conferences, the main action was
happening elsewhere in the many hotel
conference suites surrounding the con-
ference venue. The private side-events,
many of them invitation-only (though it
was not hard to get in if you could find
them), represented the main focus of
attention. Here the transnational pri-
vate sector and governments joined
forces to launch new ‘blended financing
initiatives’. At such events, initiatives
can simply be announced rather than
agreed.
The ReDesigning Development
Finance Initiative backed by the World
Economic Forum announced several
new initiatives which have the potential
to re-shape the development landscape.
Whilst the initiatives may have been
dressed up in their best sustainable-de-
velopment rhetoric for the occasion,
they are far from sustainable. In reality,
they are essentially about replacing the
role of public finance with new unsus-
tainable cycles of international debt.
The new “collaborative development
financing model”, backed by the online
Convergence Platform, describes itself
as “a new global platform that generates
a flow of credible investment opportuni-
ties in emerging and frontier markets
from a network of leading investors and
financiers. Convergence allows private
and public funders to blend their capi-
tal, creating more financially attractive,
high-quality deals”. It aims to harness
$bn in blended finance towards
public private partnerships in the devel-
oping world.
The scale of these initiatives, and the
effective absence of any alternatives,
makes them a serious threat to sustain-
able development in the future. The only
‘show in town’ for poor countries wish-
ing to provide their public services is
now to buy into one of these new public
private partnership initiatives and
reshape their economies to meet the
conditionalities in the process. Such
initiatives, as shown in numerous stud-
ies from the UK experience, tend to be
difficult to manage, highly costly to run,
and transfer the risk from the private to
the pubic sphere.
Such Private Public Partnerships in
developing countries, where
accountability systems are already
weak, are likely to be disastrous. The
overwhelming impact of such initiatives
is to narrow the space that national gov-
ernments have to raise revenues and
implement policies on behalf of their
electorates and to be accountable to
those electorates. In the absence of sov-
ereign debt work-out mechanisms or
adequate human-rights and environ-
mental safeguards, bankrupt countries
which are bailed out and then beholden
to private finance institutions and tech-
nicians, who then ‘buy up’ public assets
are a real possibility.
For those who believe in a debt-driven
world, where global private finance
transfers risk to the public purse, and
call it development, the Addis Accord
was a huge success. The launch of the
Canadian blended-finance initiative on
the last day of the conference was testa-
ment to this. The evangelism of the new
approach was intoxicating, as the Cana-
dian launch, attended by five ministers,
heads of state, heads of agencies and
CEOs of multinationals demonstrated.
The holy grail of development finance
has apparently been found.
In Addis Ababa, the international
community, it seems, has finally thrown
off the shackles of the messy, awkward
business of substantive, detailed multi-
lateral negotiations and cut to the chase
with a new world order dominated by
public private blended finance, where
issues of human rights and environmen-
tal sustainability are tangential, despite
the rhetoric.
As Helen Clarke, UNDP Administra-
tor, said at an OECD event at the Irish
Embassy during the Conference refer-
ring to the explosion of side events and
private launches: “people are voting
with their feet”.
What happened in Addis Ababa needs
to be the cause for some soul searching
by NGOs and civil society in general.
Despite the presence of thousands of
NGOs, more organised than ever before,
there needs to be a recognition that the
forces of international capital have the
power to simply work around the formal
multilateral processes.
In this brave new world of ‘plurilater-
alism’, there is a need for a new analysis
of power.
One has to ask how much effort
should be spent focusing on interna-
tional agreements when the driving
forces are elsewhere? •
has been dogged by the same political
obstruction which has hampered other
major international reforms. It was seen
as a serious threat to the power of
wealthy nations, who prefer to discuss
finance behind closed doors in institu-
tions such as the World Bank, WTO, IMF
and OECD. They have, therefore, sought
to undermine the process at every turn,
divesting it of any real power to tackle
issues of financial reform, especially
issues of economic governance and
taxation.
Despite these efforts, the issue of tax-
ation made it to the top of the agenda for
the Addis Ababa FfD Conference.
Former South African Prime Minister
Thabo Mbeki launched a report showing
that African countries have lost the
same amount in illicit financial flows as
they have received in aid in the last
years. Annually they lose $ billion in
tax through these illicit financial flows.
Multinational corporations based in
rich countries, who also set the tax
rules, are by and large responsible for
this through tax dodging schemes such
as transfer mis-pricing. If development
is to be funded through domestic
resources, this massive haemorrhage of
capital needs to be stemmed. As Mbeki
said, “we need to stop the bleeding”.
The conference heard calls on the
part of the G and of civil society for
the establishment of a global tax body
under the auspices of the UN. Such a
body would enable all countries to have
an equal say in setting tax rules. This
was backed by the report of the Inde-
pendent Commission on the Reform of
International Corporation, headed by
Nobel Prize winner Professor Joseph
Stiglitz.These calls, however, were bla-
tantly ignored as rich country after rich
country, including Ireland, was at pains
to state that they prefer to talk about tax
in the OECD, a club for rich nations, not
the UN.
Ireland’s intervention at the confer-
ence was, for the most part, very weak.
Despite pressure from civil society in
advance to use this opportunity to lead
by example and re-interate its commit-
ment to meeting the .% target on
development aid by , the govern-
ment preferred to hide behind the weak
EU position. On other controversial
issues, such as taxation, it was clear that
it shared the broad OECD consensus.
Despite its prominent role in the UN
process for new Sustainable
Mbeki
launched a
report showing
that African
countries have
lost the same
amount in
illicit financial
flows as they
have received
in aid in the
last 50 years
“
