17 October 2014: UN Member States held their first substantive informal session of the preparatory process for the third International Conference on Financing for Development (FfD), on 17 October 2014, in New York, US. Delegations considered the proposed road map and annex circulated by the co-facilitators before the consultation, and exchanged general views on the Conference and related issues.

The FfD Conference will take place in Addis Ababa, Ethiopia, in July 2015. The preparatory process is being co-chaired by George Talbot, Permanent Representative of Guyana, and Geir Pederson, Permanent Representative of Norway.

Opening the session, UN Secretary-General Ban Ki-moon said the outcome of the Conference will be a key stepping stone for the post-2015 development agenda, as financing will be at the heart of the political agreement that governments have to reach. He said the Conference should address the major challenges that have emerged since the Monterrey Conference on FfD, such as the impact of the financial crisis, the growth of middle-income countries, and the additional costs of climate change mitigation and adaptation. Ban also announced his designation of Wu Hongbo, Under-Secretary-General for Economic and Social Affairs, as the Secretary-General of the Conference to coordinate the UN’s support to the intergovernmental preparations.

UN General Assembly President Sam Kutesa noted that the discussions will be guided by the 2002 Monterrey Consensus and the 2008 Doha Declaration on FfD, the outcomes of the Intergovernmental Committee of Experts on Sustainable Development Financing (ICESDF), the Open Working Group on Sustainable Development Goals (OWG on SDGs) and the forthcoming Secretary-General’s synthesis report on the post-2015 development agenda. He stressed the need for fulfilling official development assistance (ODA) commitments especially for the Least Developed Countries (LDCs), and to find ways to enhance domestic resource mobilization including through improved taxation, incentivizing the private sector and prudent fiscal and monetary measures. He further said the Conference should address issues like: combating corruption and illicit financial flows; public-private-partnerships; measures to improve the investment climate to increase foreign direct investment (FDI) flows; debt sustainability; trade; systemic issues, including the reform of global governance and the international financial system; and North-South, South-South and triangular cooperation.

Tekeda Alemu, Permanent Representative of Ethiopia, stressed that his country seeks a “Monterrey plus.”

Wu Hongbo noted that a successful outcome will depend on strong participation from: Member States, including Ministries of Finance, Trade, Foreign Affairs and Development Cooperation; the major institutional stakeholders involved in FfD, such as World Bank, IMF, WTO, UNCTAD and UNDP, with the support of the whole UN system; civil society; and the business community.

Regarding the road map for the Conference preparatory process, the US expressed its support for the number of days but suggested grouping the days in two blocks of four days to ensure the level of engagement necessary for success. Japan questioned the purpose of the sub-theme on environmental finance\climate finance within the session on international public finance on 12 November 2014. Benin said the process should include extensive and stand-alone discussions on a mutual accountability framework and on means of implementation such as ODA, debt relief, investment, domestic resource mobilization, technological cooperation, innovative sources of finance, remittance and the systemic issues. The EU proposed that the discussion on 9-11 December 2014 should focus on effective institutions and systemic issues, and include domestic and international policy environment, institutions, trade, technology and capacity building. He added that data and transparency deserve greater prominence in the road map.

Benin for LDCs said that SDG 17 on Means of Implementation (MOI) is the weakest link of the OWG outcome, as Member States could not substantively engage in the discussions on MOI in the OWG process because they were waiting for the ICESDF recommendations, which he noted have now been finalized. He stressed that the report references various sources of finance but does not articulate how to navigate there, and said this is an important missing link that should be addressed by the Conference. He noted that the financing package must be ambitious, significantly strengthened and widened, predictable and time-bound, with a robust mutual accountability framework and the responsibility of each actor clearly articulated. He also stressed that the discussions should be based on facts and figures and that Member States need to see a concrete stocktaking of the status of implementation of the Monterrey Consensus, Doha Outcome Document and the Istanbul Programme of Action.

The Group of 77 and China underlined that public international finance remains the core of international cooperation for development, and that ODA remains an essential instrument for development. He said developed countries should bear the primary FfD responsibility and fulfill their ODA commitments of 0.7% for developing countries and the 0.15 to 0.20% for least developed countries. He added that the need to reinforce coherence and coordination and to avoid duplication of efforts with regard to the financing for development process does not imply the need to stop other processes.

The EU stressed that domestic public resources already exceed international public finance 20-fold in developing countries as a whole, although they remain weak in some of the poorest countries, and declared that its Member States remain committed to supporting increased domestic resource mobilization and the capacity building of partner countries in the area of taxation. Noting that it is difficult to separate the financial and non-financial MOI, the delegation underlined the need to find a balance in addressing the finance and policy aspects of implementation and called for aid and development effectiveness to be included as a systemic issue.

Pedersen called on delegations to combine enthusiasm with political will. He reminded participants that the third FfD conference will be the first in a series of important events in 2015, and stressed that its success is essential for setting the stage for the other 2015 events.

The preparatory process is expected to resume with the second informal consultation on 10-13 November 2014. [Statement of the UN Secretary-General] [Statement of UNGA President] [Co-facilitators’ Letter, Road Map, Programme of Work] [FfD Webpage] [IISD RS Sources]