Frozen in diplomacy

By Jens Martens, Global Policy Forum

versión en español

To avoid the failure of Addis Ababa the global North has to make concessions

The debt crisis in Greece dominates the news in Europe but a significant related event lacks public attention – the 3rd International Conference on Financing for Development (FFD3). This is being held in Ethiopia from 13 to 16 July and is designed to come up with proposals on how to shape international financial relations more equally and to  finance efforts to advance sustainable development. FFD3 deals with vital issues such as the mobilization of domestic resources and reform of tax policies, the role of private finance, debt and debt sustainability, trade, and reforms in the international financial system.

FFD3 sets the tone for two other major international summits coming up during 2015. In September, governments want to adopt a new 2030 action agenda for sustainable development including universal sustainability goals, and in December a new climate agreement needs to be signed in Paris. But for these conferences to have any hope succeeding, their financial aspects must be dealt with in Addis Ababa.

As things stand now, however, things look bleak. The draft for an outcome document of the Addis Ababa conference, at the moment being called Addis Ababa Action Agenda, is full of rhetoric but little action. The mistrust between the global North and South seems overwhelming.

Undermining multilateral action in the UN

The global North has given the developing country government caucus (G77) many reasons not to trust it. For example, a few EU members and others voted against the overwhelming majority of the UN General Assembly (GA) on a resolution aiming at creating a legal framework on sovereign debt restructuring, a framework that would be helpful in addressing cases like Greece. The EU and the USA have been boycotting the working sessions of the GA committee.

In the Human Rights Council, governments of the global North voted against taking up negotiations towards a legally binding instrument on business and human rights. When the open-ended intergovernmental working group established by the Council met for the first time in the week just before Addis, the EU and the USA refused to participate constructively in the deliberations.

And that most governments of the global North have reneged on their promise to increase ODA to 0.7 percent of GDP by 2015 and offer only vague assurances of commitment without showing evidence of their seriousness, certainly did not increase the trust of the G77.

Another issue surfacing during each and every international gathering at the moment is the question of how to deal with the principle of “common but differentiated responsibilities” (CBDR). This principle, enshrined in the Rio Declaration of 1992 and operationalized in the Kyoto Protocol, attributes problem solving obligations to countries according to their respective capabilities as well as their contribution to creating the problem. While the G77 is eager to also apply this principle beyond environmental considerations, the EU, USA and their allies reject this categorically. They prefer to talk about shared responsibilities, with the clear aim to shift more burdens on to the shoulders of the countries with emerging economies.

Ways out of the stalemate

In order to overcome the political stalemate, trust-building measures are needed. The EU, the USA and their allies have to take responsibility and demonstrate a spirit of compromise in the negotiations.

First, they should accept the general principle of CBDR as a cornerstone for every international agreement to come. This should, however, not mean that countries get locked in categories of the 1990s for ever. Rather, a compromise should be sought on what different responsibilities mean in different policy areas, what factors into the calculation of capabilities and (historic) responsibilities and how this can be adapted regularly.

Second, all governments of the global North should at least show concrete plans to live up to their commitments to official development assistance and climate finance. Specific milestones and timetables should be adopted in order to show true commitment. Also, the global North should show more interest in using innovative means of finance, like a financial transaction tax and levies on air travel to actually finance those promises.

Third, the North should finally accept that global problems need global solutions resulting from global deliberation. It should refrain from boycotting and slowing down international processes on important issues like debt resolution, human rights obligations for companies, and international cooperation in tax matters. For the latter, governments are discussing how to strengthen the UN in this regard and there are proposals to create an intergovernmental body on tax cooperation to complement the technical work already underway.

Only if the vicious circle of collective irresponsibility can be broken, will governments ensure winners not losers at the end of three vital international conferences.

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