ILO reiterates, “A renewed global financing for development framework” at the Fourth International Conference on Financing for Development.

The Fourth International Conference for Development has started in Sevilla, Spain, with Director-General, Gilbert F. Houngbo delivering the Welcome Note & emphasising the need for integrated financing strategies that enable countries to invest in people by strengthening social protection systems and floors and enhancing the creation of decent work, thereby contributing to sustainable and inclusive economic growth, along with renewing the global financing for development framework, building on the 2015 Addis Ababa Action Agenda.

He has also reaffirmed to uphold and advance all commitments in the 2002 Monterrey Consensus, the 2008 Doha Declaration, as well as the relevant commitments in the Pact for the Future.

KEY TAKE AWAYS OF THE FIRST DAY:

• At a time of profound transformation, serious geopolitical tensions, conflicts, increasing macroeconomic challenges and growing systemic risks. Progress in achieving sustainable development in its economic, social and environmental dimensions is severely hindered. Despite significant efforts by the international community to respond to recent multiple interlinked global challenges, the gap between our sustainable development aspirations and financing to meet them has continued to widen, particularly in developing countries reaching an estimated $4 trillion annually.

• Each country has specific responsibilities for its own economic and social development. National development efforts need to be supported by an enabling international economic environment and effective means of implementation that promote sustained, inclusive, and sustainable economic growth, and prevent external shocks from disproportionately affecting developing countries. ILO commit to align international support with national strategies, plans and frameworks, such as Integrated National Financing Frameworks (INFFs), and will respect each country’s policy space to pursue sustainable development while remaining consistent with relevant international rules and commitments.

• ILO will address the diverse needs and challenges faced by countries in special situations, in particular African countries, the least developed countries (LDCs), landlocked developing countries (LLDCs) and small island developing States (SIDS), as well as the specific challenges faced by middle income countries and countries in conflict and post-conflict situations, along with reaffirming the need to achieve a positive socio-economic transformation in Africa and the need to address the diverse and specific development needs of middle-income countries, including combating poverty in all of its forms, and dimensions, including extreme and multidimensional poverty. ILO commit to support and implement the relevant development agendas, strategies and programmes of action for countries in special situations including the Doha Programme of Action, the Programme of Action for LLDCs, and the Antigua and Barbuda Agenda for SIDS, and reaffirm our support for the achievement of the African Union Agenda 2063. ILO look forward to the elaboration of a specific inter-agency, comprehensive, system-wide response plan for middle-income countries by the United Nations Development System.

• Recognising discrimination in all its forms is a serious impediment to economic and social development. ILO will step up our efforts to promote tolerance, embrace diversity and combat all forms of discrimination, including racism, racial discrimination, xenophobia and related intolerance and all their abhorrent and contemporary forms and manifestations. ILO reaffirm the imperative of ensuring access to finance and economic opportunities for persons with disabilities, along with committing in developing an effective, accountable, and inclusive governance systems and democratic institutions at the subnational, national and international levels and ensure responsive, participatory and representative decision-making at all levels.

• Despite notable tax revenue increases in many developing countries in the first decade of the 21st century, recent years have seen stagnation and setbacks, amidst weak global economic growth. Additionally, existing international tax rules often do not fully respond to the diverse needs, priorities, and capacities of developing countries, especially the LDCs, LLDCs, African countries and SIDS, as well as MICs. To ensure that countries have the necessary resources, and that they are collected and spent transparently and efficiently to strengthen fiscal systems and align them with sustainable development. ILO encourage broadening of the tax base and continuing efforts to integrate the informal sector in a socially inclusive way into the formal economy, in line with countries’ circumstances, as well as focusing on undeclared income and wealth. ILO will promote progressivity and efficiency across fiscal systems to address inequality and increase revenue. ILO will promote progressive tax systems in countries, where applicable, and enhance efforts to address tax evasion and avoidance by high-net-worth individuals and ensure their effective taxation, supported by international cooperation, while respecting national sovereignty. ILO will also promote effective and equitable government spending.

• ILO will continue to engage constructively in the negotiations on a United Nations Framework Convention on International Tax Cooperation and its protocols and encourage support for the process, along with promoting inclusive cooperation and dialogue among national tax authorities on international tax matters, and take note with appreciation the work of the United Nations’ Committee of Experts on International Cooperation in Tax Matters, including its subcommittees. While recognising the ongoing implementation of Pillar Two of the OECD / G20, Inclusive Framework on Base Erosion and Profit Shifting, which intends to ensure that large multinational enterprises pay a minimum level of tax on the income arising in each of the jurisdictions where they operate. ILO call for country-based specific technical support to interested Member States upon their request in implementing the Global Anti-Base Erosion Model Rules and the Subject to Tax Rule under Pillar Two.

• Reaffirmed its commitment to a full and effective implementation and enforcement of existing obligations under the UNCAC including by supporting a transparent, inclusive, and efficient ‘Mechanism for the Review of the Implementation of the UNCAC’ to assist State Parties to the UNCAC in preventing and combatting corruption. Furthermore, ILO commit to scale up technical assistance and exchange of best practices for the implementation of the UNCAC upon request. It further commits to ensure that assets confiscated pursuant to UNCAC are returned to countries of origin, in accordance with the provisions of UNCAC, and are used ILO will strengthen international cooperation in asset recovery including through the Stolen Asset Recovery (StAR), a joint initiative of UNODC and the World Bank.

• ILO will identify, assess and act on money laundering risks, including through effective implementation of the Financial Action Task Force standards on anti-money laundering / counter-terrorism financing. ILO encourage the FATF to continue to mitigate unintended consequences of AML/CFT measures and ensure meaningful inclusion of developing countries in its decision-making processes, to ensure that their voices are heard and that the work and processes of FATF take into account the unique contexts and capacities of developing countries; Furthermore, promoting measures to eliminate safe havens, aggressive tax practices, and loopholes that create incentives for illicit financial flows. ILO commit to take effective steps to prevent IFF from entering our jurisdictions transparently.

• It has pledged to advance efforts to reduce structural constraints, challenges, barriers and systemic inequities that hinder MSMEs’ access to finance, particularly for MSMEs in developing countries, including women-led businesses. ILO will promote MSMEs’ access to affordable financing by strengthening the financial infrastructure, the MSME ecosystem, including through microcredits, local banks, credit unions, national development banks, and other financial institutions, and creating credit lines targeting those enterprises. By enhancing access to capacity-building, digital government and business services, and leveraging digital financial tools to expand inclusion for MSMEs, ILO encourages DFIs, including the IFC, to continue promoting finance for these enterprises, including through guarantees or national guarantee facilities, on-lending via domestic financial institutions and enhanced local currency financing.

• While, acknowledging the urgency of undertaking sustained efforts to reverse declining trends in ODA and urge developed countries to scale up and fulfill their respective official development commitments, including the longstanding commitment by most developed countries to achieve the targets of 0.7% of ODA / GNI to developing countries, and between 0.15% and 0.2% of ODA / GNI to the least developed countries.

• It has invited IFIs, MDBs and international organisations to consider the use of the Multidimensional Vulnerability Index (MVI), as a complement to their existing practices and policies, to inform their development cooperation policies and practices. ILO commit to provide support for countries graduating to higher income per capita status, particularly countries that are highly vulnerable to shocks and disasters, to avoid disruptions in development trajectories, including by making efforts to avoid abrupt reductions in concessional and non-concessional official finance, developing strategies that take into account pre-graduation and post-graduation needs and facilitate tailored, coherent and integrated approaches to financing, and to integrate these into national development strategies.

• It has called for a swift, full and effective implementation of the Kunming-Montreal Global Biodiversity Framework under the Convention on Biological Diversity and emphasise the importance of urgently increasing financial resources from all sources. ILO welcome the establishment and operationalization of the Global Biodiversity Framework Fund as well as the launch of the Cali Fund for the Fair and Equitable Sharing of Benefits from the Use of Digital Sequence Information on Genetic Resources (DSI). ILO look forward in establishing the permanent arrangement for the financial mechanism envisioned under Article 21 of the Convention on Biological Diversity and assessing and improving the mobilisation of finance from all sources to address the global biodiversity finance gap by 2030. In this regard, ILO call on parties to the convention to deliver on the milestones envisioned in previous outcomes without delay.

• In order to restore countries to a path of debt sustainability and continue to work toward debt restructurings being timely, orderly, effective, fair, negotiated in good faith, predictable, and coordinated; ILO encouraged the G20 to further strengthen the Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative, building on ongoing efforts, by rendering it more predictable, timely, orderly, and coordinated, including by building on lessons learnt from individual country cases. The G20’s was further pledged to consider incorporating temporary suspensions of debt service by borrower countries during negotiations, on a case-by-case basis; providing a guide for borrower countries on indicative timelines and main steps of debt treatment, building on the Global Sovereign Debt Roundtable playbook for country authorities on sovereign debt restructuring; developing a guide for assessing comparability of treatment and refining tools for enforcing comparability of treatment; promoting information sharing and early engagement between IMF and World Bank and the official bilateral creditors. ILO further encourage the expansion of coordinated debt treatments to countries not covered by current initiatives, including middle-income countries, on a case-by-case basis.

ILO will implement the “Compromiso de Sevilla”, with the aim of achieving sustainable development and reaffirming trust in multilateralism.

Team Maverick