Will the Addis financing summit make a difference?

Romilly Greenhill and Paddy Carter
10 July 2015
Comment
The Addis Ababa Accord will be announced on Thursday, and although a handful of issues remain to be agreed, the draft outcome document from 7 July is not expected to change materially.

As it stands, there is not much in it to set pulses racing. And while there may be a few initiatives to surprise us announced at side events, what we know is underwhelming. The Addis Tax Initiative, for example, is a worthy enterprise, but really only a minor change to something donors are already doing.    

In the run up to this event, leaders gave many speeches warning that failure at Addis would imperil the Sustainable Development Goals (SDGs) and even the climate summit this December. In the absence of a last minute breakthrough, are we looking at a failure?

It is hard for outsiders to know what to make of UN proclamations like this. At the back of the mind lurks the question: what difference does any of it make? Even insiders have a hard time with that one. After months of negotiations, the world’s governments agree on ‘the desirability of good things’. Judged by the ambition and clarity of its commitments, as it stands the Addis Accord is set to disappoint.

In truth this no surprise. Many rich countries are looking to scale back their contributions to international development and resist new commitments. Emerging economies may have ambitious development strategies, but they did not want to step forward for fear of letting the rich countries off the hook.

The SDGs may be universal but developing countries, as represented by the G77, wanted Addis to be about the rich world doing the right thing by the poor. Bold new commitments were also not on the cards because the G77 is (understandably) keen to preserve sovereign policy space. Developing countries even expressed some discomfort around the emphasis on domestic resource mobilisation lest the impression was given that they can finance their own development needs.

Maybe it was naïve to hope for bold new commitments. Perhaps the Accord was never going to do more than pave the way for concrete action, and should be judged on the direction of travel. Things happen in the real world when like-minded countries get together and decide to act; highly politicised inter-governmental negotiations are the wrong place to look for action.

There is some merit to this idea. Seen in this light, the Addis Accord looks more successful: it bends the path of development cooperation towards important issues like sustainable infrastructure and gender equality, and keeps the SDG process on track.

Which is all very well, but raises the question of how far governments will travel down the path that the Addis Accord has laid out.

One of the shifts in direction reflected in the Addis Accord is increased attention to development policy beyond aid, and there are undoubtedly some big steps to be taken in areas like migration, trade rules and international taxation. Even in the poorest aid-dependent countries, the path to prosperity is via trade, investment, and taxation.

But what can the international community do to encourage these things? The answer often comes back to aid: aid for trade, for tax reform, technical assistance to help reform economic institutions, and so forth. And of course there is the urgent need to deliver basic social services in poor countries – the idea of a basic social compact is one of the most laudable aspects of the Addis Accord.

But domestic resources in the poorest countries fall far short of what is needed to make that a reality, meaning that donors need to step up to the mark.  

So whichever way you come at it, the cornerstone ambition of the Addis Accord and the SDGs – to leave no one behind – will go unfulfilled unless governments find ways of delivering more and better assistance to those countries that need it most.

Donors could not even agree on committing half their aid to the least developed countries ahead of Addis. But this should not stop some going it alone – we need to find ways of achieving in practice what the UN process failed to deliver.

The true test of Addis is not what happens in the conference halls next week, but what steps individual governments take in the months ahead to remake development finance for SDG era and deliver the global ambition to leave no one behind.

Romilly Greenhill and Paddy Carter