The International Conference on ‘Financing Sustainable Development – Curbing Illicit Financial Flows (IFFs)’ resulted in the Beirut Consensus on Financing for Development, which notes that the current levels of international private inflows remain insufficient to fill the SDG investment gap.
Participants express hope that the current and upcoming G-77/China presidencies will consider the document and propel it through the different FfD processes and milestones to take place in 2019, as well as within the repositioning of the role of regional commissions within the reform of the UN development system.
29 November 2018: The UN Economic and Social Commission for Western Asia (ESCWA) organized a conference to crystalize its input to the 2019 High-level Dialogue on Financing for Development (FfD) and the UN High-level Political Forum on Sustainable Development (HLPF). The resulting ‘Beirut Consensus on Financing for Development’ calls for redirecting attention from incentivizing the private sector towards addressing de-risking practices and the loss of corresponding banking relations, as well as towards the use of innovative ways to bridge the small and medium enterprises (SME) funding gap.
The International Conference on ‘Financing Sustainable Development – Curbing Illicit Financial Flows (IFFs)’ took place from 28-29 November 2018, in Beirut, Lebanon. The outcome document notes that current levels of international private inflows remain insufficient to fill the SDG investment gap: foreign direct investments (FDIs) have become more volatile and risk averse, at times falling short of generating employment and investment multipliers. According to the text, efforts to ensure sustained long-term flow of private investments are giving way to harmful competitive practices and fiscal conjectures that are further eroding the tax base, while multinational corporations are paying “significantly lower tax rates” than before the 2008 financial crisis.
The outcome also notes that developing and least developed countries (LDCs) are facing tighter global monetary conditions, which exacerbate capital outflows and raise debt distress levels as well as the cost of securing financing. The document observes that trade and investment protectionism are challenging the multilateral trading system and threatening developing countries’ terms of trade.
The text remarks that sustainable development is not currently a priority in the global trading system or its rules. Instead, sustainability is dealt with obliquely. As the debt bubble continues to rise to unprecedented levels, the document urgently calls to urgently establish a multilateral debt workout mechanism to restructure the sovereign debt of countries in crisis.
The Beirut Consensus remarks that, while official development assistance (ODA) has been increasing in nominal terms, larger portions are being redirected to cover refugee costs and humanitarian assistance in donor countries. Noting that ODA remains essential for many countries, it emphasizes the need to make progress towards meeting the ODA commitments of the Addis Ababa Action Agenda on FFD. By the text, some participants caution against investing ODA in blended mechanisms, saying ODA should be directed to strengthening domestic resource mobilization and tax collection capacities.
Finally, participants express hope that both the current and upcoming presidencies of the Group of 77 and China (G-77/China) will consider the document and propel it through FfD processes and milestones in 2019, as well as into the repositioning of the role of regional commissions, as part of the reform of the UN development system.
In 2019, the annual meeting of the UN Economic and Social Council’s (ECOSOC) Forum on FFD Follow-up (FFD Forum) will take place from 15-18 April, and the UN General Assembly will hold a High-level Dialogue on FFD, on 26 September. The dialogue is mandated in the Addis Ababa Action Agenda (para 132), which calls for it to convene back-to-back with the HLPF’s UNGA-level meeting every four years. The HLPF’s UNGA-level meeting will take place from 24-25 September 2019. [Conference Website] [Conference Documents] [Beirut Consensus on Financing for Development]