The Financing for Development conference that took place in Addis Ababa last month has been met with mixed reactions. Some welcome the adoption of the outcome document, hailing it as a milestone for development finance, whilst others are more critical and even disappointed that, at the conference, aid commitments from ‘donor’ countries were seen to be drying up. Instead, the promotion of the private sector as the world’s answer to the development question prevailed.
Progressio has kept a keen eye on the reactions emerging from the conference. We align our concerns with those who are sceptical that the decision to further erode state commitments to development assistance and replace them with private sector activity is the best way to bring about long term, sustainable development that puts the poorest people first.
UK leadership evident in the international development arena
We were pleased to see Justine Greening, Secretary of State for International Development, leading the UK delegation. She showcased the UK as a leader committed to the 0.7% aid pledge which was recently enshrined in UK law with cross party consensus. Greening has made it clear that she is keen to see more countries implementing this commitment, which is only upheld by a handful of European countries, and we echo her desire.
The conference was an opportunity to set down an economic framework to support the Sustainable Development Goals which will be announced in September. Achieving the goals is set to cost trillions of pounds over the next 15 years and securing finance for their implementation is vital to their success. But the issue is not simply about the quantity of money channelled into the goals, it’s also about the quality of that money and the vehicles through which it’s spent.
The ever increasing role of the private sector
Therefore, Progressio wanted reassurance that development funding would be channelled through organisations that have a proven track record of delivering effective development that changes lives permanently. But Addis seemed to further open the door to public-private initiatives and to Foreign Direct Investment rather than focusing on holding donor countries to account on their Overseas Development Assistance commitments.
Many organisations have commented on the conferences favouritism of the private sector over the public.
Oxfam said: “The Addis Action Agenda has allowed aid commitments to dry up… It has merely handed over development to the private sector without adequate safeguards.”
The European Network on Debt and Development also commented saying that the agreement “opens the door to the private sector to use development money to generate profits, while the standards to ensure that companies comply with human rights remain non-binding guidelines.”
Whilst this continued trajectory to channel development assistance through the private sector is worrying to Progressio and many other International Development organisations, we, as others have, welcome the fact that a deal was struck which does mark a crucial and "critical step forward" as the announcement of the goals draws closer. However, private sector interests and indeed their imperative to create a profit should not be forgotten or overlooked. Progressio will continue to work hard to influence the rules by which businesses are able to operate and to do all we can to ensure people are put before profit both now and in the future.
You can read the Addis Ababa Action Agenda that was agreed here.
Written by Jenny Vaughan - Campaigns Officer