The work of the 30-member Intergovernmental Committee of Experts on Sustainable Development Financing is critical as it is tasked to assess financing needs, consider the effectiveness, consistency and synergies of existing instruments and frameworks, and evaluate additional initiatives on financing sustainable development. All the global effort involving governments, CSOs and other development actors and stakeholders towards defining sustainable development goals post-2015 will be for naught if resources are not raised, effectively utilized, and equitably managed to support implementation.

 

IBON International along with other CSOs following the financing for development processes are deeply concerned that the Committee’s first session from 28-30 August was conducted as an exclusive, closed-door meeting, denying participation and input from civil society. IBON strongly urges the Committee to be more inclusive in its future deliberations and to truly hold open discussions with stakeholders such as CSOs throughout its work that is expected to conclude by 2014.

 

Part of the Committee’s mandate is to prepare a report proposing options on an effective financing strategy to facilitate the mobilization of resources and their effective use in achieving sustainable development goals. Aside from needs assessment, it intends to look into public, private and blended finance; resource mobilization; and institutional arrangements. It will be to the Committee’s benefit to gather different stakeholders’ perspectives on these areas and CSOs are an important source of relevant and substantive input.

 

On the substance of its work, IBON calls on the Committee to carefully consider not just the financing strategy but also the reforms needed in the international financial system to truly promote sustainable development for the billions of poor and marginalized.

 

According to UN General Assembly Acting President Enrique Román-Morey, a key responsibility of this Committee is to develop an understanding of and propose improvements to the currently fragmented development financing landscape. But beyond this fragmentation is the challenge of reforming the international financial system that impacts the achievement of sustainable development. The development community is well aware of the destabilizing nature of volatile and short-term investments, the imbalances caused by frantic accumulation of foreign exchange reserves, the debilitating effects of massive debt burdens – and how these undermine any prospect of sustainable development for poor countries.

 

IBON thus reminds the Committee that pro-poor, sustainable development financing necessitates the implementation of democratic and pro-developing country reforms of the global financial system such as strong regulation of private capital flows to ensure stability, channel finance to productive sectors, and promote access for the poor. A just system of sovereign debt workout must also be pursued as countries burdened by debt spend huge amount of public resources for debt servicing that could otherwise go to social services and development goals.

 

A financing strategy for sustainable development should also be able to recognize developing countries’ sovereignty over their development, give adequate policy space, and promote self-reliance. IBON recommends that the Committee give more attention to encouraging domestic resource mobilization (DRM) rather than reliance on external financing such as aid and foreign investments. Overdependence on foreign investments has resulted in massive loss of government revenue due to excessive tax incentives, profit and capital repatriation, and financial speculation. Official development assistance (ODA) on the other hand has been falling and is expected to stagnate.

 

DRM especially in the form of taxation has great potential in raising the needed funds for development goals. Examples are effectively taxing extractive industries like mining and logging, as well as establishing tax regimes to penalize polluting industries. Such taxation schemes serve not only as revenue generators but also as regulatory tools for developing country governments to promote sustainable development.

 

Promoting DRM, however, should not be an excuse for developed countries to forsake their historical responsibility for today’s unsustainable production, consumption and extraction patterns. Thus there is a need to reverse ODA’s decline as it remains an important source of public financing. Likewise, climate finance and other forms of development financing must be scaled up based on common but differentiated responsibilities.

 

As the Committee organizes its work for the coming months, IBON calls on it to take immediate steps to ensure that the consultations and deliberations allow multi-stakeholder participation and input. IBON recommends that subsequent sessions as well as the conduct of the Committee’s work in between be carried out in open, inclusive and dynamic engagement with civil society and that timely information is made available to the public.