16 March 2015: The Co-Facilitators of the preparatory process for the Third International Conference on Financing for Development (FfD 3) have issued the zero draft of the Conference outcome document. Geir Pedersen, Permanent Representative of Norway, and George Talbot, Permanent Representative of Guyana, note in a 16 March letter to UN Member States that the draft is intended to provide a holistic and forward-looking framework and concrete actions for the financing of sustainable development, in order to deliver the means of implementation (MOI) for post-2015 development agenda.

The draft outcome document, titled ‘Addis Ababa Accord,’ will be discussed by Member States during the Second Drafting Session for FfD 3, scheduled for 13-17 April 2015, in New York, US. The document contains two main sections on: a global framework for financing sustainable development; and the Addis Ababa action agenda.

The first section identifies a “threefold” task: following-up on commitments made in Monterrey and Doha; further strengthening the framework to finance sustainable development and the MOI for the post-2015 development agenda; and ensuring that the actions agreed are implemented and reviewed in an appropriate, timely and transparent manner. This section also notes “enormous” unmet financing needs for sustainable development, and acknowledges the needs of countries in special situations and the specific challenges facing middle-income countries (MICs). It contains a sub-section on mobilizing the means to implement the post-2015 development agenda, which calls for combining different modalities and instruments for achieving the Sustainable Development Goals (SDGs), and cites the key role of domestic public resources.

The second section includes eight sub-sections: domestic public finance; domestic and international private business and finance; international public finance; international trade for sustainable development; debt and debt sustainability; systemic issues; technology, innovation and capacity building; and data, monitoring and follow-up.

On domestic public finance, the draft calls for: improving the fairness and effectiveness of tax systems; strengthening national regulation and international cooperation to combat illicit financial flows, tax evasion and corruption, in order to substantially reduce such flows over the next 15 years; increasing transparency and participation in all aspects of the budgeting process; gradually eliminating harmful subsidies, including fossil fuel subsidies for production and consumption; working toward putting a price on carbon; considering the use of natural capital accounting; and recognizing the important role of national development banks in filling large financing gaps in areas crucial for sustainable development.

On domestic and international private business and finance, the text acknowledges the important role of private business activity, while calling on governments to develop regulatory systems to align business incentives with sustainable development. It agrees to create strong regulatory frameworks on environmental, social and governance practices, including mandatory integrated reporting for large companies “to be adopted by 20xx.” It also calls on countries to integrate remittances into their national financial inclusion strategies, specifying “no remittance corridors should require charges higher than 5 per cent by 2030.” It commits to ensuring access to formal financial services for all, and recognizes the important contribution of direct investment (including foreign direct investment), blended finance, pooled financing platforms and public-private partnerships.

On international public finance, the document urges all developed countries to allocate 0.7% of gross national income (GNI) as Official Development Assistance (ODA) to developing countries, with 0.15-0.20% of GNI to Least Developed Countries (LDCs) by 2020. It calls on donor countries to establish, by the end of 2015, indicative timetables to illustrate how they will increase their assistance and reach their goals. It addresses innovative financing, and the potential of multilateral development banks (MDBs) to support the SDGs. It also mentions the need to: further strengthen South-South cooperation and triangular cooperation; and meet existing commitments under international conventions, including on climate finance.

On international trade for sustainable development, the zero draft would have governments commit to work toward reducing fragmentation caused by international trade and investment agreements, and to strengthen regional cooperation and regional trade agreements. It also calls for: transparency in negotiating and implementing trade and investment agreements; and strengthening safeguards in investment treaties to protect the “right to regulate” in areas critical for sustainable development.

On debt and debt sustainability, the text invites the International Monetary Fund (IMF) and the World Bank to further strengthen their analytical tools for sovereign debt management. It also, inter alia: invites the Task Force on Finance Statistics to consider creating a central data registry, including information on debt restructurings; and agrees to work in the appropriate fora toward a global consensus on guidelines for debtor and creditor responsibilities in borrowing by and lending to sovereigns.

On systemic issues, the document would commit to a “revitalized and strengthened” global partnership for sustainable development. It encourages all international and national development finance institutions to align their business practices with sustainable development objectives, and invites relevant international institutions, as well as private rule-setting bodies, to undertake “coherence checks” and regularly publish reviews of the impact of their operations on the achievement of economic, social and environmental priorities, in particular the SDGs.

On technology, innovation and capacity building, the zero draft calls for: scaling up investments in science, technology, engineering and mathematics (STEM) education; enhancing technical and vocational education and training; increasing international cooperation and collaboration on innovation and scientific research; strengthening coherence and synergies among technology transfer initiatives within the UN system; and supporting the proposal of the UN Secretary-General to establish an online global platform, based on the recommendations from the structured dialogues on a facilitation mechanism to promote the development, transfer and dissemination of clean and environmentally sound technologies.

Finally, on data, monitoring and follow-up, the zero draft requests the UN Statistical Commission to facilitate enhanced tracking of data, and to regularly assess and report on the adequacy of international statistics related to financing for sustainable development. It also calls on the UN and international financial institutions to develop a metric of well being broader than the Gross Domestic Product (GDP) “as a sustainable development indicator;” requests the UN Secretary-General to convene an inter-agency Task Force to report annually on progress in implementing the Addis Ababa Accord; and considers the need to hold a follow-up international conference to review and further advance the implementation of the Addis Ababa Accord “by 20xx.”

According to the Co-Facilitators’ letter accompanying the text, the zero draft builds on the work of the preparatory process to date, including: the substantive informal sessions in November and December; the elements considered at the First Drafting Session in January 2015, and inputs submitted by Member States and other stakeholders. It takes also into “full account” the Report of the Open Working Group on SDGs (OWG), the Report of the Intergovernmental Committee of Experts on Sustainable Development Financing (ICESDF), and the UN Secretary-General’s synthesis report on the post-2015 development agenda. [Zero Draft and Co-Facilitators’ Letter]