IMF's Lagarde and World Leaders Will Attend Historic Ethiopia Summit
The United Nations, International Monetary Fund (IMF), World Bank and finance ministries are meeting in New York to finalize an agreement for the Financing for Development Conference (FfD) to be held in Addis Ababa, Ethiopia, in July. The summit seeks to tackle global poverty and features the IMF's Christine Lagarde, heads of state, business leaders and humanitarian groups such as Jubilee USA Network. Pope Francis has committed to attend the Sustainable Development Goals Conference to follow up on the commitments from the Financing for Development process.
"These negotiations are critical for billions of people living in poverty," said Eric LeCompte, executive director of the religious development organization, Jubilee USA Network. LeCompte and Jubilee USA are involved in negotiating the FfD outcome document. "This is a rare opportunity to create a binding global plan to drastically diminish poverty in our lifetime."
This summer's conference is the third Financing for Development summit. The first summit was held in 2002 in Monterrey, Mexico. It produced the "Monterrey Consensus," which laid out six areas of development financing. The 2008 summit in Doha, Qatar, led to commitments from developed nations to continue aid to developing nations and to address a number of systemic global economic concerns that contribute to global poverty such as debt, trade and tax issues. As the United Nations Millennium Development Goals expire, current negotiations continue to focus on these "systemic" issues in the form of domestic resource mobilization, or supporting developing countries to raise more revenue in their countries.
"The Financing for Development outcomes can curb corruption, tax evasion and unsustainable debts in the developing world," noted LeCompte, who serves on UN expert groups that focus on global finance. "If we succeed in changing tax, trade and debt policies, we can raise trillions of dollars to address poverty."
Poor countries pay several times as much on debt payments as they receive in official aid. There are also efforts to address so-called "illicit financial flows" through the FfD process. Developing countries lose nearly $1 trillion each year to these flows, which include corruption, tax evasion and crime, according to the research organization Global Financial Integrity. The recent Africa Union high-level panel led by former South African president Thabo Mbeki noted that Africa loses $50 billion annually to such flows. Another aspect of "domestic resource mobilization" is transparency and accountability in the budgets of countries. The United Nations Conference on Trade and Development (UNCTAD) developed principles for responsible lending and borrowing. The final agreement in Addis Ababa could standardize such accountability principles across the globe.
"Lending, borrowing and budget transparency is key," said LeCompte, who helped UNCTAD develop the principles. "Adopting responsible lending and borrowing raises billions of dollars and costs nothing."