Next week, delegates will convene in Addis Ababa for the third Financing For Development conference in a bid to hammer out funding for the Sustainable Development Goals. In an interview with African Business, former World Bank vice president Frannie Léautier talks about her hopes for the conference, and rues a lack of African leadership.
Some people have felt that the upcoming conference wasn’t being taken seriously at a high enough level – what can make this a successful conference and what areas should we be focusing on?
I’ll agree with you to say that the African role so far has been disappointing. I had expected to have much more active African leadership. What has been in a sense positive is the role of the private sector in general globally, and particularly the role of the private sector in finance. They have actually organised to take a big role in shaping what the industry will do for the Sustainable Development Goals (SDGs). I think if we could get four things out of Addis that will be fantastic.
The first one is to get an alignment between Financing for Development and the SDGs, because right now these have been sort of two different parcels. The work on SDGs has gone ahead very well, in my view. On the other hand Financing for Development has not really followed a similar format. That means looking at how we fund sustainability issues including climate, the role of the private sector in capital markets and how they can be boosted to support sustainable development.
The second big area is agreeing roughly on the volume and the sources of where all that money is going to come from – how much from the public, how much from the private sector and what can we really expect from domestic resource mobilisation and international commitments. I think so far it’s not very clear how it will go.
On the third point, if we can get a good outcome on pooling resources to support SDGs I think that would be very good. If we can agree a global fund for health maybe we can agree on some of those global partnerships for education, and building on what are we doing with vaccines. We of course have the malaria, tuberculosis, AIDS which President Kikwete has been leading, and then public private partnerships, which is kind of a new area where we can define different ways to support sustainable technologies.
The last thing really is maybe the more difficult one because this is alignment of global and national rules around trade, around investment, around finance. So here we can look at how businesses report on their finances on the one hand but also on sustainability issues, tax co-operation and illicit flows.
What sort of agreement can we get out of Addis?
I think if we can agree on the key areas where we want that kind of coordination across different types of funders, if we agree on the volumes and what effort to put on each side at the local level and at the international level, and if we agree on common efforts to develop this monitoring system that incorporates reporting on the one hand but also tracking and attention on reaching those goals.
As I said I’m very pleased on the international front what the finance industry has already done, IFC has taken a big lead there working with civil society and other NGOs to bring in the investment community. Within London itself I think there’s a few key areas that are really key like there’s a bond market for instance in catastrophe bonds which would be very key for financing sustainability.
On the aid side I think so far Sweden, the US, UK and France are the four that have done maybe the most work in terms of thinking through how to bundle aid effectively between official development assistance and private flows and so on, yes so I think there’s a coalition of countries are forming and the ones playing a lead role. The UK and Sweden and the US have been experimenting with different pilots over a number of years so I think they would be ready to roll with new ideas.
What would the risk factors be?
Having 180-something countries agree is complicated and so there’s some alignment risks there, particularly around national and international objectives and methods for assessment. The other big risk is we fall short, that we don’t get the volume or the nature of funding that is needed, that I think still remains a big risk. Copenhagen failed because it fell short of what people were expecting. Then of course there is the risk that the rollout and the meeting of the timelines between now and September and December is missed. The last big risk is that we leave the citizens behind, there’s a huge risk that this happens even if we get everything right and then people just don’t know what it is for.
Is there a change in mindset and commitments for LDCs and new partners coming on board?
If it happens that will be a new and important outcome. If we can get that commitment from middle income countries who have never contributed previously as well as high net worth individuals, those two would be new avenues instead of pounding Europe and America for more money. That along with domestic resource mobilisation I think are the really key new areas.