Economy

Civil society groups call for new UN body to set taxation norms

R Srinivasan Addis Ababa | Updated on January 24, 2018

oecd-addisababa

Developing nations urged to raise their own resources for achieving development goals

“If you’re not at the table, you’re on the menu” read a placard held by protestors outside the main hall, where 5,000 delegates representing governments, multilateral institutions and civil society organisations were discussing how to find the money to fund the ambitious Sustainable Development Goals, aimed at eradicating global poverty and hunger, combating climate change and driving equity by 2030.

The SDGs are supposed to replace the equally ambitious Millennium Development Goals, which were set in 2000 and were meant to be – but largely haven’t – achieved by this year. The protest highlighted a crucial area of divergence between developing and rich nations at the ongoing 3rd International Conference on Finance for Development: who will control international fund flows and who will get to set the rules.

The protestors, led by civil society organisations, were demanding the creation of a new UN body to set new norms for accounting and taxation. While such a forum exists, it can only discuss and suggest – the actual powers to make the rules are controlled by the OECD. This, the protestors argue, leaves developing countries at a disadvantage, and leaves them powerless to stem or recover illegal fund flows.

Since one of the key reasons for the failure to achieve the MDGs was excessive reliance on aid from rich nations, the focus has shifted to how poor countries can mobilise more resources to fund their development by capturing a larger share of the wealth which is being generated within their borders.

India is leading the grouping of developing nations in pushing for this change, a stand which has won it much appreciation. “We ourselves (India) can get what we want through the G20,” Jayant Sinha, Minister of State for Finance and leader of India’s delegation at the conference, said here today, “but we are pressing the case for all developing nations.”

In fact, developing nations and civil society representatives are banking on India to push through this demand, for which the protest served as a last minute reminder. With the draft outcome document of the conference reaching the final stages, the focus has turned almost exclusively to nitty gritties of funding – where the differences in positions are becoming more apparent.

“The era of the OECD, IMF and World Bank domination of the global development agenda is nearing its natural end,” Sinha said, adding, “this has caused some anxiety and even turbulence in these institutions.” This, Sinha said, was inevitable, as this was part of a “natural reordering of the world order.” He was speaking to media and civil society members from India on the sidelines of the 3rd UN Conference on Finance for Development currently under way in Addis Ababa.

One of the other sticking points is funding for fighting climate change. With growth slowing in the West, developed nations are shifting funds away from basic development funding to climate-linked projects.

“We are opposed to this,” said Sinha, “we believe climate change funding should be a supplement and not a substitute for official development assistance.” With just two days to go for a deal to be struck, all eyes are now on Sinha and his negotiating team to see whether the world financial order does indeed see a power shift.

(The writer is in Addis Ababa at the invitation of the UN)

Published on July 14, 2015

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