11 December 2014: UN Member States took up governance issues as part of the current and final round of substantive informal sessions of the preparatory process for the third International Conference on Financing for Development (FfD). Discussions convened in two large, moderated panel sessions on: ‘Closing data gaps and strengthening statistical capabilities; and ‘Enabling and conducive governance, including global economic governance.’

The co-facilitators for the FfD preparatory process, Geir Pedersen of Norway and George Talbot of Guyana, chaired the meeting at UN Headquarters in New York, US, on 11 December 2014.

James Manyika, Director of the McKinsey Global Institute, moderated the session on data gaps and statistical capabilities. Haishan Fu, World Bank, noted that data are an important “liquid asset” as they represent soft infrastructure for sustainable development. She further highlighted the need to: continue supporting the growth and transformation of national statistics institutions so that new resources could be leveraged and risks be better managed; continue investing in building countries’ capacities to gather relevant data in real time and spur innovation; invest more and smarter in development data and integrate development data in accounting.

Ranjit Tinaikar, Thomson Reuters, identified four areas in which Big Data can address barriers to development: 1) building confidence in fiscal and monetary management – by developing different analytical models that can help predict different economic scenarios; 2) finding new sources of capital for SDGs – by providing potential investors with transparency on the risks and returns of potential investments; 3) local debt markets – building innovative instruments to assess credit risks and probabilities for SMEs; and 4) transparency on governance and institutions to attract private investment.

Yesim Sisik, Central Bank of Turkey, explained, inter alia: the importance of timely, accurate, comprehensive and comparable data in the external sector statistics; the role of international initiatives in ensuring better international communication and coordination; the increased demand for more granulated data; the challenge of reconciling the need for timely data with data confidentiality; and the need for a sound framework for data confidentiality.

Ronald Jansen, UN Statistics Division, said public-private partnerships (PPPs) are extremely important for developing data. He said the private sector moves quickly and has other advantages that can be helpful in reporting. However, to make the data internationally comparable, partners must observe certain rules on how to report and what to include. He also stressed the need for financing for statistics, and the importance of independence for national statistics offices. He noted that the March session of the UN Statistics Commission will have a strong focus on the SDGs, and that a February meeting would address setting a monitoring framework and development of indicators for post-2015 development.

Ethan Weisman, International Monetary Fund (IMF), viewed international institutions as a facilitator in setting standards, within collaboration between public and private partners. Public sector actors can set standards and facilitate them, he said, while private actors can help implement them in a collaborative way. He highlighted the need for data to be comparable, integrated, standardized and transparent, and said the IMF uses data for evidence-based policy-making. Weisman also reviewed progress on the G20 Data Gaps Initiative, which he said has shown a great need for international collaboration among economies and institutions.

Papa Seck, UN Women, added that national statistics offices are very good at producing information within their mandate, such as labor force surveys, the private sector relies on this information for investment analysis. However, data are only useful when analyzed, and the private sector can produce analysis to help in devising policies. Sek cited increasing demand for gender statistics at both national and intergovernmental levels in recent years, showing an understanding of their importance for development. He noted that data on violence against women, unpaid care work, asset ownership, and women’s entrepreneurship are not adequate, and described a three-year project to generate data in such missing areas. A mid-term review of the project has recently been completed, with data collection to take place in mid-2015. He stressed the importance of resources to build countries’ capacity to collect gender disaggregated data.

Juan Manuel Valle Perena, Director of Mexican Agency for International Development Cooperation (AMEXCID), spoke on south-south cooperation, noting that eventually the GDP of developing countries will exceed those of developed countries, and developing countries will provide more and more resources in terms of sharing experiences, financial support, and others. Challenges for south-south cooperation, he said, including estimating the value of cooperation provided by public sector servants, developing information platforms to communicate cooperation data, and collecting information from a wide range of actors. On gender data, he noted Mexico’s “very aggressive policy approach,” and said that in general, countries with development challenges and high poverty levels must put statistics high on their domestic agendas.

During the discussion that followed the panel, UN Member States underlined the needs for: supporting developing countries in becoming participants in the data revolution; strengthening national statistical capacities; filling deficits in knowledge; using new sources of data; reconciling free access with the need to protect personal data or sensitive commercial data; non-financial data to measure wellbeing; multi-stakeholder approaches; open data; gender disaggregated data; and the independence of national statistical institutions. Civil society called for, inter alia: creating means for philanthropy to better engage and partner for SDGs; developing country-level structures that identify opportunities for philanthropic investment; and making available better data on philanthropy, city budgets and national budgets.

The session on “Enabling and conducive governance, including global economic governance,” was moderated by Olav Kjorven of UNICEF.

Barney Frank, Former US Congressman, identified two essential questions: how to improve governance internationally, which implies states automatically giving up something of their independence; and how to continue ensuring wealthier countries provide funds for developing countries. He stressed that the point is for sovereign governments to do things they would not do on their own, otherwise he noted that cooperation is unnecessary. He further underscored two major problems: the disparity between economic growth and the degree to which the regular citizen enjoys that; and the inconsistency of the US military’s level of participation in the world with the US’ participation in development.

Simone Monasebian, UN Office on Drugs and Crime (UNODC), said addressing corruption is one of the key elements for making the post-2015 development agenda successful and stressed the importance of the implementation of UN’s Convention Against Corruption (UNCAC). Explaining how UNCAC’s review mechanism works, she noted that 173 states will be reviewed, over 50% of them having already completed the review. The review: allows the Convention to tailor technical assistance to the particular needs of the countries; engages multi-stakeholders; contributes to increased SSC cooperation and to the development of sets of reliable data; and has trained 1,500 anticorruption experts globally so far. She also stressed the importance of forming regional partnerships to address corruption.

Alexia Latortue, US Treasury, mentioned that conversation around fair representation in global governance usually focuses on voice, vote, and resources, when greater numbers and diversity of actors engaged in the conversation contribute also to the quality and the substance of the conversation. Noting the fragmented character of the multilateral architecture, she said it does not need to be monolithic, but only to have a common framework. She called for a sharper focus on directing ODA to areas where other funds do not go, and where it can catalyze other flows. As an example, she noted that while “everyone is rushing to finance infrastructure,” there is less interest in preparing the deals and other aspects of the work, which could be a role for the banks.

Roberto Bissio, Instituto del Tercer Mundo, stressed that public-private partnerships (PPPs) were at the heart of the financial crisis in OECD countries, as they had been used intensively to address infrastructure gaps . He further explained that PPPs become investor rights and when governments need to cut budgets they can not cut PPPs because they would become subjects to Investor-State Dispute Settlements (ISDS), therefore the budgets that end up being cut are those for vulnerable groups. Bissio cautioned against using PPPs in developing countries given that they failed in OECD countries and suggested adding another “P” to PPPs: people. Bissio added that the proposed SDGs represent the first time the UN is saying inequality is a problem, which the IMF recently also began to emphasize, and noted that an inspiring message can provide people with “great leverage” to make changes in their lives.

Aleksei Mozhin, IMF, said quota and governance reform is stalled due to refusal by the US Congress to ratify the 2010 reform package. He described the evolution of the quota determination process, which until 2008 consisted of five formulas that were “non-linear and non-transparent,” like a box to which you added new statistics and received results without any idea of how it happened. The current process uses one, linear formula with four variables: GDP (50%), openness (30%), variability (15%) and reserves (5%), he said, and highlighted some objections to the openness variable.

Eduardo Galves, Chile’s Ministry of Foreign Relations, said the need for good domestic governance is “a given,” but stressed the importance of the right global environment for trade and other goals. He urged Member States to “never allow things to be decided outside the multilateral process,” saying that no smaller group, no matter how “multilateral by clout” it is, should push the UN aside, because the results will be less legitimate. He added that the FfD is not a financial meeting, despite its name, but is about resources more broadly, cautioning against letting it become a “Monterrey Less.”

Taking the floor, Member States called for, inter alia: redressing the democratic deficit in global economic governance; reforming the international financial architecture to ensure the full participation of developing countries in norms-setting and decision-making; implementing the 2010 IMF Quota and Governance Reform; equality and effectiveness; transparency; accountability; strengthening institutions that promote human rights and rule of law at the national level; institutional capacity building; and curbing corruption and illicit flows. Romania noted that “Good governance is an important MOI and an objective in itself in the post-2015 development agenda.” The UK asked about practical steps in the FfD process for addressing corruption and stability for entrepreneurship, innovation and investment. Benin said each level of the post-2015 development agenda should be assessed based on its development impacts.

Civil society representatives: asked if the existing multi-stakeholder dialogue mechanism under FfD could be used to greater impact and further developed; and highlighted cross-border illicit financial flows, among other messages.

Kjorven thanked panelists for the “sobering realities as well as opportunities that lie ahead if there is political will” and asked Member States to be as ambitious as the times demand. The informal substantive sessions for the FfD Preparatory Process conclude on 12 December 2014. [IISD RS Sources] [FfD Preparatory Process] [IISD RS Story on 9 December Meeting] [IISD RS Story on 10 December Meeting]