“We have managed to forge a global consensus on some very crucial issues related to the need for balanced development, and also managed to ensure a commitment of 0.7 per cent of GDP from developed nations towards official development assistance (ODA), so the overall outcome has been quite successful,” Minister of Finance Jayant Sinha, who is leading the Indian delegation to the so-called ‘Addis Ababa Action Agenda’.

Part of the United Nations-backed Third International Conference on Financing for Development, the ‘Agenda’ was to outline measures to generate funds to finance the ambitious Sustainable Development Goals, the successor to the Millenium Development Goals (MDGs) that expire this year. Negotiators reached an agreement late on Wednesday night.

India had spearheaded negotiations on behalf of developing nations, which argued that norms on issues like transfer pricing — or shifting of profits generated in one location to lower tax locations — currently works to their disadvantage and robs them of legitimate tax revenue.

“ODA globally is $135 billion, whereas various estimates by the UN and other bodies estimate tax revenue lost to poor countries at over $300 billion annually, so the importance of tax revenues far exceeds the potential of ODA to tackle development,” Sinha said. “The tax-to-GDP ratio in developed economies is 25 to 35 per cent, while it is only 10-20 per cent in poor countries,” he added.

Asked whether the outcome could be seen as a win for rich nations, Sinha said the outcome should not be seen in terms of a win or a loss, but by the gains made. He listed the 0.7 per cent GDP commitment to ODA, the reaffirmation of the principle of ‘common but differentiated responsibilities’ and the agreement to strengthen the current UN tax body as significant advances.

On the tax issue, Sinha said the move to give the current UN body on taxation issues a more governmental representation and ‘equitable’ geographical representation will greatly strengthen the voice of developing nations.

“The story does not end here. We will continue to push the agenda at other fora like OECD and G20, where India has a significant voice,” he asserted.

India’s stand has been backed by the thousands of civil society organisations who have gathered at the summit.

“Yes we have had a setback, but seeing developing countries push hard for a seat at the table makes us more motivated,” said Pooja Rangaprasad, policy coordinator for the Financial Transparency Coalition.

In a statement, UN Secretary-General Ban Ki-moon said, “This agreement is a critical step forward in building a sustainable future for all. It provides a global framework for financing sustainable development.”

The Conference is the first of three crucial events this year, the other two being the proposed sustainable development agenda to be adopted in New York in September, and the UN climate negotiations in Paris in December.

The Addis Ababa Action Agenda contains more than 100 concrete measures addressing a range of issues including technology, science, innovation, trade and capacity building.

The outcome document also underscores the importance of aligning private investment with sustainable development, along with public policies and regulatory frameworks to set the right incentives. A new mechanism that will facilitate financing for new technologies for developing countries was also agreed upon.