7 May 2015: In an op-ed for the World Economic Forum blog, Alicia Bárcena, Executive Secretary, UN Economic Commission for Latin America and the Caribbean (ECLAC) explains why the year 2015 is critical for sustainable development, noting that three big events in 2015 – the Third International Conference on Financing for Development (FfD 3), the UN summit to adopt the post-2015 development agenda, and the Paris Climate Change Conference (UNFCCC COP 21) – share a common foundation: the call that emerged in the 1990s for more sustainable growth and development patterns.
Bárcena writes that, within the context of global paradigm shifts, the concurrence of three key global summits will “define the route and aspirations of this agenda for the coming decades.”
In the FfD track, she reports, governments are struggling over whether to rely on traditional public and concessional financing, or on a new enabling environment with innovative financing means, including more government coordination and increased private sector involvement. The Sustainable Development Goals (SDGs) process, meanwhile, aims to “leave no one behind,” she said, while the climate change track is calling for a “critical structural change in production and consumption patterns linked to energy and spatial use.” Bárcena said achieving the SDGs will require reassessing the manner in which resources are obtained, organized and allocated, including how to foster domestic resource mobilization, noting that much of the world is constrained by insufficient revenues, tax evasion and illicit flows.
Citing Latin America and the Caribbean (LAC), in particular, she writes that tax evasion remains high compared to international standards (between 17.8% and 37% of total revenue in LAC, versus 10% to 22% in OECD countries). In addition, the regions’s illicit flows surpass foreign direct investment (FDI) flows, while representing twice the amount of remittances and 15 times the amount of official development assistance (ODA) to the region.
Bárcena stresses that international cooperation on fiscal matters is critical, and that international and regional agreements should provide the basis for common international tax rules and standards to improve transparency and prevent the erosion of tax bases. She also expresses concern that public funding flows will be insufficient to implement the post-2015 development agenda, and must be complemented with private flows, which make up the majority of external financing for middle-income countries (MICs). Bárcena calls for an enabling external environment that: reflects the shift in global economic and political power towards developing countries and MICs; and enhances developing economy opportunities for market access, technology transfer and knowledge acquisition. She cites an ECLAC publication, ‘Financing for development in Latin America and the Caribbean: A strategic analysis from a middle-income country perspective,’ which addresses the needed role of private flows.
On climate change, she underscores that research and development related to a low-carbon economy is expected to come mainly from the private sector, in coordination with governments, and academic and research centers. She notes opportunities in LAC in such areas as intelligent urban public transport and traffic management, solid waste and wastewater treatment, low-carbon and low-energy buildings, and making the most of the digital, technological and data revolutions.
Bárcena says that overall, the new development agenda must be converted into “a powerful catalyst of a renewed equation between state, market and society, in which all actors are able to establish new rules of engagement and complementary partnerships for the common good.” [Op-Ed] [Publication: Financing for development in Latin America and the Caribbean: A strategic analysis from a middle-income country perspective]