FINANCING FOR DEVELOPMENT
Comments on the Revised Draft Outcome

1. The International Council on Social Welfare (ICSW) is a democratic global alliance representing thousands of non-government organisations that are actively involved in promoting social welfare, social development and social justice at local, national and international levels. Our membership network comprises community-based and representative organisations in more than 70 developed and developing countries throughout the world.

2. This paper briefly summarises changes that ICSW suggests should be made in the Revised Draft Outcome being considered for the International Conference on Financing for Development. In doing so, it refers to ICSW’s principal paper on the FfD Conference which is entitled Financing for Development: Proposals for Action and contains ICSW’s proposals for the final Conference agreement. A Summary of those proposals is attached to these comments.

Overview

3. There are many good proposals in the revised draft, especially in relation to greater international cooperation. However, the content needs to be more specific, firm, action-orientated and succinct. It should adopt more of the proposals in the Zedillo and Secretary-General’s Reports, especially for greater international cooperation to help developing countries. The final FFD agreement should be a 1-2 page "political declaration" and 3-5 pages of specific action decisions. Our Summary of Proposals indicates the format and content that we suggest for the decisions but our comments below follow the format of the Revised Draft Outcome.

Confronting the Challenges

4. ICSW suggests that the core elements of the opening section of the draft should be

• commitment to a UN-led Campaign to achieve the nine specific, time-bound International Development Goals (IDGs) in para 19 of the Millennium Declaration;
  
• agreement that the centrepiece of that Campaign should be developing and implementing an International Anti-Poverty Pact that matches the nine IDGs with nine equally specific, time-bound commitments for resource mobilisation.

[See ICSW Proposals 1-3]

Domestic Resources

5. Paras 8-10 on governance should give greater emphasis to poverty eradication, equity and a strong civil society as essential for good governance on a sustainable basis.

6. Para 12 on fiscal sustainability should be explicit about the extent to which domestic tax systems suffer from international tax avoidance and evasion. It should also emphasise the adverse impact on productive investment, fair competition and economic efficiency. It should be much firmer and more specific about the need for international tax cooperation, with specific commitments to be added to later sections of the document. [ICSW Proposals 14-16]

International Private Investment

7. Para 21 should call for stronger international regulation of corporate governance and responsibility, especially in relation to multinationals, including through appointment by ECOSOC of an Independent Group of Experts to develop a draft UN Code on Corporate Governance and Responsibility. [ICSW Proposals 17-18]

8. Para 22 should be firmer about the need for more vigorous and balanced international cooperation in improving financial market stability and integrity, including through tighter prudential regulation, stricter limits on public bailouts, and coordinated reduction in tax privileges for speculative transactions. [ICSW Proposals 12-13]

International Trade

9. This section should call for more effective and equitable international cooperation to prevent inappropriately anti-competitive action by multi-national enterprises. In particular, ECOSOC should be asked to appoint an Independent Group of Experts to prepare proposals for a Multinational Enterprises Competition Authority. [ICSW Proposals 19-20]

International Financial Cooperation

10. Paras 33-35 should be modified to reflect the proposal we made above for an International Anti-Poverty Pact as the centrepiece of a Campaign to achieve the nine specific International Development Goals by 2015. [ICSW Proposals 1-3]. Para 34 should commit to a specified improvement in ODA by 2005, and full achievement of the 0.7% target by a specified date, as part of the Anti-Poverty Pact. [ICSW Proposals 21-22]

11. Para 38 should call for the Secretary General’s report on innovative sources of finance to propose a specific package that could be included in the Anti-Poverty Pact in order to finance improvements in ODA and debt relief and help meet the International Development Goals. It should explicitly suggest that the package might include, for example, specific international cooperation to reduce tax avoidance and evasion and to facilitate introduction of national taxes on carbon and currency transactions. [ICSW Proposals 25-26]

Debt Financing and Relief

12. This section should include agreement to an immediate moratorium on debt repayments by the poorest countries, with full cancellation by 2002. Either here or in para 53, ECOSOC should be requested to appoint an Independent Group of Experts to propose an international debt arbitration mechanism. [ICSW Proposals 23- 24]

Systemic Issues

13. Para 57 should call for extending representation of developing countries in the G20 and Financial Stability Forum and, either here or in para 59, greater emphasis should be placed on strengthening the role of the regular meeting convened by ECOSOC with the World Bank, IMF and other key international institutions. [ICSW Proposals 4-6, 11]

14. Para 58 should request ECOSOC to strengthen its existing Expert Group on International Tax Cooperation and begin convening an annual International Tax Forum. It should call for such initiatives to promote cooperation in reducing under-taxation, tax avoidance and tax evasion, with special reference to cross-border transfers, foreign bank and investment accounts, transfer pricing and currency speculation. [ICSW Proposals 14-16]

15. Paras 58 and 59 should call for greater recognition by key global institutions of regional groupings, especially of developing countries, and for their inclusion in an Annual Regional Consultation convened by ECOSOC. [ICSW Proposals 7-8]

16. Para 59 should call for ECOSOC to increase its capacity for high-level, timely and -intensive discussion of policy issues by strengthening its Bureau, making more use of high-level Special Working Groups and independent experts, and having briefer, more frequent meetings. In particular, ECOSOC should be asked to establish a Special ECOSOC Working Group on Economic Cooperation. [ICSW Proposals 4-6]