Economic and Social Council: High-Level Political Forum

Note:  A complete summary of today’s High-Level Political Forum meetings will be made available after their conclusion.

Interactive Discussion I

This morning, the Forum convened a round‑table discussion on the theme “Financing the Sustainable Development Goals:  Moving from words to action”, moderated by Courtenay Rattray, Permanent Representative of Jamaica to the United Nations and Co‑facilitator for the 2018 Financing for Development outcome document.  It featured presentations by Yongyi Min, Development Data and Outreach Branch, Statistics Division, United Nations Department of Economic and Social Affairs; Dag-Inge Ulstein, Minister for International Development, Norway; Vera Songwe, Executive Secretary, United Nations Economic Community for Africa; Thomas Gass, Head of the South Cooperation Department, Swiss Agency for Development and Cooperation; Zeid Ladhari, Minister of Development, Investment and International Cooperation of Tunisia; and Mahmoud Mohieldin, Senior Vice‑President of the World Bank Group.

Homi Kharas, Interim Vice‑President and Director of the Global Economy and Development Program, Brookings Institution, delivered a keynote address, while Iñigo Urkullu Renteria, Lehendakari (President), Basque government, Spain; and Lubin Wang, Chief Representative Officer, Industrial and Commercial Bank of China in Africa and Non-Executive Director Standard Bank Group served as lead discussants.

Ms. MIN emphasized that, despite an increase in pledges from developed countries, aid is falling, particularly to the neediest countries.  Donor countries are not living up to their promise to ramp up development financing which is affecting efforts to achieve development goals.  Remittances remain and will continue to be a large source of external financing in the neediest countries.  Trade tensions among the world’s largest economies meanwhile are reverberating, affecting producers and consumers worldwide, while demand for high‑quality and timely data is increasing, requiring countries to improve statistical capacity across their national statistical systems.  To meet statistical capacity objectives by 2030, current commitments must double, she emphasized.

Mr. KHARAS, delivering the keynote address, said it is time to move from discussing big global aggregates and to a much more granular discussion about the financing of specific problems facing specific people.  Government spending on the Sustainable Development Goals has reached upwards of $20 trillion and is due to increase.  “The problem is that almost all the current spending is done in high‑income and upper middle-income economies and very little spending is being done in low-income economies,” he asserted.  He emphasized the need to increase spending, noting that, as countries grow, they tend to have resources for sustainable development.  Significant gaps emerge between minimum spending needs and actual spending levels — the total, cumulative gap is at least $840 billion per year.

Therefore, he said, it is essential to ensure that funds are spent efficiently and effectively, and that the specific context of each country is considered.  The spending gap is heavily concentrated in lower middle-income countries, which also have the largest economies and populations.  Turning to domestic resource mobilization, he described current tax structures as more regressive than progressive, adding:  “The poor pay more than the ones better off in those societies.”  Achieving the 0.7 per cent target in official development assistance (ODA) could yield $200 billion more.  There is also ample scope for non‑concessional resources, he said, noting that multilateral development banks could unlock $1.4 trillion in lending with minimal incremental risks and could then mobilize private finance to achieve the required scale for transformative investments.

Mr. ULSTEIN described how Norway is assisting developing countries address tax gaps, noting that, when it comes to tax policy and administration, there is considerable room for improvement in most developing countries.  Taxation on natural resource-based industries remains a major challenge.  “No single methodology will provide a silver bullet,” he said, noting that Norway is helping tax authorities in the United Republic of Tanzania clear a large backlog of tax audits in the mining industry.  Civil society organizations play a vital role in securing company payments, while the World Bank, International Monetary Fund (IMF) and the United Nations help to rectify tax administrations and address specific challenges.  He urged development actors to collect and make accessible data that could help the international community promote development.

Ms. SONGWE said ODA and even foreign direct investment (FDI) has been dropping over the last three years, particularly in Latin America.  In Africa, $1.2 trillion is needed to close the gap between funds needed and financing provided.  For every dollar gained that comes into an African country, $2.50 flows out illicitly.  “So, these countries are actually getting poorer,” she said, also expressing concern over the manipulation of international trade.  “We need to standardize the processes for how we work with mining companies.”  The World Bank continues to combat such practices, but “if we are serious about combating illicit financial flows, we really need to come together as an international community”.  She drew attention to Senegal, South Africa and Mauritius among other African countries that have adopted standards and methods to combat illicit financial flows.

Mr. GASS said development partners need more information from developing partners because development is a joint investment.  “Countries owe it to their populations because if we want the 2030 Agenda [for Sustainable Development] to become a reality, it needs to become a social contract between Governments and their people,” he added.  Stressing that not enough FDI is flowing into the least developed countries, he said more can be done with the private sector, “but must be done in accordance with principles”.  Such decisions are not simply about money — giving money or investing money; they concern the efficiency and effectiveness with which that money is invested.

Mr. LADHARI said Tunisia’s development strategy is based on investments, taxation, saving and international financing.  The corporate tax has been reduced, as have import taxes.  Tunisia also has changed its income‑tax‑collection policy on low-income households.  It is reviewing the lump-sum taxation system, as well as various categories for taxpayers in order to improve the business environment.  On savings, he said Tunisia has taken measures to eliminate purchasing credits and changed exemptions for foreign currency savings.  Another course of funding is private-public financing.  Due to volatility in Tunisia’s currency, the Government faces challenges in accessing international funds.

Mr. MOHIELDIN noted the decline of ODA, particularly to developing countries in Africa.  In addition to mobilizing new resources, it is equally important to address the gaps and leakages in the current system.  Because of the universality of the Sustainable Development Goals, being more granular in problem solving is more vital than ever.  Data allows development partners and aid recipients to be more targeted in their approach.  “It is no surprise that when income increases so does spending geared towards sustainable development,” he said, underscoring the need to do more with the private sector, particularly in fragile and low-income countries.  He also emphasized the need to support female entrepreneurs.

Mr. IÑIGO URKULLU RENTERIA said the European Union has 28 member States and 29 budgets, as it recognizes the Basque government’s budget within the bloc.  The Basque government focuses funds on policies for social protection, environment, water management and renewable energy, while its sustainable development plan has been welcomed throughout the region.  “We are based on values and are making progress based on social cohesion, including by living together with migrants,” he continued.  “The Basque model shows that self-government is a synonym for well-being.”   The 2030 Agenda shows that there is nothing as powerful as an idea ripe for picking.

Mr. WANG said the Industrial and Commercial Bank of China has financed large projects in 30 African countries, focusing on construction and energy.  The Bank’s total commitment to Africa has reached billions of dollars and its projects have generated many jobs.  The Bank has promoted inclusive development, he continued, noting the difficulties many African countries face in accessing funds and information.  Recently, the Bank invented new online platforms for people living in remote and isolated areas, so they can have access to data and deposit money to earn interest.

In the ensuing discussion, representatives of least developed countries and developing countries alike described various difficulties in work to achieve the Sustainable Development Goals.  The representative of Burkina Faso stressed that, for many developing countries, plans are challenged by security concerns.  When there is a gap in security, development becomes less of a priority, he explained.

The representative of South Africa said resources are critically needed, objecting to continued and emerging conditionalities which tend to punish developing countries and “leave them behind”.  It is also essential to empower young people as they are the agents of change.  “Get up, stand up, developing countries, show your leadership, fulfill your commitments,” he urged.  Echoing that sentiment, Morocco’s representative underscored the need to act, especially as there are only 11 years until 2030.

The representative of Germany meanwhile stressed the need to create value through vocational training and quality jobs.  “Move from words to action,” he said, “realize a more sustainable future.”  On that point, the representative of Portugal said the 2030 Agenda summit in September must be the turning point.  “Each one of us has to make concrete efforts for change,” he said, drawing attention to Portugal’s national and international initiatives, including its aid to sub-Saharan Africa.  Along similar lines, Denmark’s delegate said that, for 41 years, his country has delivered on the its ODA pledges.  “It is a lonely club of only five countries,” he said, stressing the need to support development policy to bankable projects.  Ghana’s delegate said one way of closing the development gap is to have multinational companies pay taxes in countries where they operate.  Unless this happens, there will be no way for least developed countries to achieve the 2030 Agenda.

A representative of the women’s major group called for a power shift that addresses violence against women and girls in conflict, women refugees and against gender non-confirming people.  It is time to stop trade in weapons that are used to abuse women and girls.

Also participating in the discussion were representatives of Canada, Ethiopia, Russian Federation, Philippines, Spain, Nigeria, New Zealand, Kenya, Pakistan, Sweden and the European Union, as well as from the World Trade Organization (WTO), workers and trade union major group, stakeholders group of persons with disabilities and several other members of civil society.