Commissions, committees and consensus – a prelude to UN financing for development negotiations next year?

Added 22 May 2014

The Intergovernmental Committee of Experts on Sustainable Development Financing may be an important influence on UN negotiations on financing for development over the next year: but will they live up to the standards of their illustrious predecessor, the 2009 Stiglitz Commission?

First, let’s remind ourselves what the Intergovernmental Committee is for. It’s a group of 30 ‘experts’ – largely government officials - tasked with providing a report, by September this year, which will input into both the process to agree post-2015 sustainable development goals, and the UN summit on Financing for Development (FfD) - the follow-up to the 2002 Monterrey summit and the 2008 Doha summit. [Note: The new FfD summit will probably take place in June 2015 but the date is still being haggled over at the UN. Developing countries back June 2015, but many developed countries are opposed. They know this will increase the pressure on them to make commitments on financing in advance of the post-2015 goals conference in September next year. We’ll find out the result of this mini-battle next month.]

Though the Committee has encouraged inputs from civil society groups and others, it meets in secret, and has so far refused to release any drafts of its report, or its three background ‘cluster’ reports, for public comment. I gave a presentation to the committee in New York last week, (based on Eurodad’s submission) but they gave nothing away about the scope of their ambition, or the specific recommendations they will eventually make.

So in the absence of transparency from the current committee, it’s worth examining again the excellent analysis and recommendations produced by its high-powered predecessor, chaired by nobel laureate Joseph Stiglitz in 2009. While the current committee is largely composed of little known bureaucrats, the 2009 Commission was a stellar cast of economic heavyweights, including economics professors, former Ministers of Finance and central bank governors.

The report is long and detailed – but worth reading in full – and I can’t do it justice in a short blog post. However, its recommendations are covered under three main headings. A lengthy chapter on “Reforming Global regulation” (which includes the full host of financial sector reforms on banking, capital controls, credit ratings agencies among many issues), is followed by another with detailed proposals for reform of International Financial Institutions (proposals include a Global Economic Coordination Council to replace the G20 involving all countries, and double majority voting for the IMF). The final chapter proposes “international financial innovations” and includes calls for a global reserve currency to replace the US dollar, and an International Debt Restructuring Court to make lengthy and damaging sovereign debt crises a think of the past. Heady – but eminently sensible – stuff.

So, what should we hope the 2014 Committee can do? Eurodad’s submission proposes concrete but transformative proposals.

In summary:
• Preventing illicit finance and improving tax collection through: introducing country-by-country reporting for multinational enterprises; public registries of beneficial owners of companies, trusts and other corporate structures; and creating an intergovernmental committee on tax matters to tackle automatic information exchange and base erosion and profit shifting.
• Supporting domestic resource mobilisation and policy space by reforming World Bank procurement advice; radically improving the quality of aid; ensuring new and additional funds for climate finance and further debt reductions for heavily indebted countries.
• Improving the quality of private finance and the financial sector including by: strengthening UNCTADs principles for lending and borrowing to include private actors; and introducing a financial transactions tax.

Unfortunately, the 2009 Commission suffered from poor follow-up of the UN General Assembly conference, into which it inputted. The 2014 Intergovernmental Committee’s main hope for avoiding the same fate is to ensure that it matches the far-sighted quality of its most recent predecessor, and includes the kind of practical yet transformative proposals highlighted above.