How should civil society react to the outcomes of the UN-led Financing for Development (FFD3) conference in Addis Ababa last week? International NGOs came out both with cautious praise and deep disappointment around the UN-proclaimed “historic agreement.”
Civil society – both international and in the developing countries – should indeed cheer at the sharp spotlight that the FFD3 process shines on large-scale systemic issues we all must resolve before the necessary resources to wipe out poverty can be mobilized.
These systemic issues are there because people benefit from them– those with only their self-interest in mind, or those who lack the political will to commit resources to the most vulnerable. Some are guilty of even more – including systemic and personal corruption and gaming of the international tax system.
Thanks to the FFD3 discussion, “illicit financial flows” (IFFs) has been added to our lexicon. These IFFs are largely invisible to civil society as we struggle to deliver health care, girls’ education, clean water, and to meet other Sustainable Development Goals (SDG). And yet we learn that $1 trillion annually (according to Global Financial Integrity) is being syphoned out of developing countries, much of it through trade mis-invoicing. Imagine what $1 trillion for innovative solutions could do to support on-the-ground local organizations that are providing services in education, healthcare, social protection, and critical infrastructure? Why is this happening, who is benefiting, and how can we stop it?
The good news is that IFF – like corruption – is now in the center of discussions about obstacles in the way of ending poverty. The bad news is that FFD3 did not deliver a key to solving the IFF challenge: having raised the issue, it provided few solutions. And, that’s because solving IFF requires shifting the rules and behaviors for a lot of well-resourced interest groups.
Civil society, which knows how to say “the emperor has no clothes,” is in a delicate position. What happens when an important issue is raised, but without the commitments needed for resolving it? Do we applaud that the discussion has begun, or go home in disgust due to lack of progress?
Unfortunately, there is urgency. The 17 SDGs – due to be released in September – can’t wait until developing country leaders have both the internal political will and the external global tax system that provides the right incentives for reform. Can the SDGs be achieved without this kind of reform? And what happens in the meantime if reforms take decades or longer?
Civil society is right to expect more than FFD3 was able to deliver in terms of urgent global commitments for the short-term. Do we continue to work without adequate domestic or international resources, in the face of only incremental progress on the larger systemic issues? That’s hard to stomach.