COOPI COOPERAZIONE INTERNAZIONALE

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1 COOPI COOPERAZIONE INTERNAZIONALE CHANGE Una cooperazione che cambia per un mondo in mutamento MILAN0 15 APRILE 2015 THE POST-2015 AGENDA: GLOBAL PARTNERSHIP AND SDG 17 Gianni Vaggi

2 1. The evolution of the notion of development 2. The evolution of the notion of cooperation 3. Facts; the economy strikes back 4. The post-2015 agenda: negotiations and dialogue

3 1. The evolution of the notion of development

4 The evolution of the notion of development In the beginning it was economic growth: GDP- GNI per capita growth 1987 Bruntland Report, Our Common Future, UN-World Commission on Environment and Development Human Development Report Human development is a process of enlarging people s choices along and healthy life, to be educated and to enjoy a decent standard of living (HDR 1990)

5 The evolution of the notion of development 2000 MDGs and HDRon the Human Rights approach to Development is: We know what to do. multidimensional, holistic approach, not just income) aprocess of empowerment

6 2. The evolution of the notion of cooperation From aid effectiveness to development effectiveness and global partnership

7 The evolution of the notion of cooperation Rome First High-Level Forum on Aid Effectiveness 2005 Paris Declaration on Aid effectiveness 2008 Accra Agenda for Action 2011 BusanFourth High-Level Forum on Aid Effectiveness-Busan Partnership Agreement Development effectiveness, manage for results 2014 Mexico City, First High-Level meeting of the Global Partnership for Effective Development Cooperation

8 The evolution of the notion of cooperation-4 We know how to do it From aid effectiveness to development effectiveness and Global partnership and Country ownership

9 3. Facts; the economy strikes back The changing economic scenario, in particular since 2000 From G7 to G 20

10 : Two major economic facts Economic growth in East Asia Growing role of international finance

11 The economy, the nice side MDG1 SS Africa achieved because of China econ. growth after two decades of stagnation has been growing more than 5%, with some countries around 8-10% Convergence, distance between countries is reduced

12 The economy, but.the dark side Large unbalances, in foreign trade, neo-mercantilist situation. Secular stagnation? Summers, Krugman, Stiglitz Worsening income distribution, both in High income, and in many emerging economies. Very high concentration of wealth (Piketty 2013) Returns on capital are systematically higher than the growth rate.

13 International finance Financing for development Addis Ababa, July 2015

14 Finance, The Nice side Total net resource flows to developing countries, by type of flow, f (Billions of Dollars)

15 Finance, the Nice side A lot of possible sources for development finance, funds are there (UN-ICESDF 2014 and ODI, Kharas. H. et al. 2014) AIIB Asian Infrastructures Investment Bank, BRICS Development Bank Philanthropy funds, Sovereign wealth f., Dedicated or purpose funds (Climate etc.) Paris December 2015 Blended finance Even Low and Lower Middle income countries issue bonds Domestic financial resources

16 Finance, but.the dark side Many financial crises, since International financial markets Systemic risk Search for high yields and capital gains: buying cheap and selling dear Short-termism, even in long-term type of markets(bonds) International investment banks are becoming more and more powerful. Financial Mercantilism?

17 The paradox of finance Individual (micro) level: Inter-temporal allocation of consumption, over lifetime and beyond (longterm) Country/world (macro) level: foster growth (longterm) Asian model, self-financing, profit investment nexus Development is long-term

18 4. The post-2015 agenda: negotiations and dialogue

19 The Report of the High-Level Panel of Eminent Persons on the Post-2015 Development Agenda, May 2013 The five transformative shifts 1. Leave no one behind 2. Put sustainable development at the core 3. Transform economies for jobs and inclusive growth 4. Build peace and effective, open and accountable institutions 5. Forge a new global partnership

20 The Secretary General Synthesis Report, December 2014 Six essential elements 1. Dignity, end poverty, fight inequality 2. People, health, knowledge, gender 3. Prosperity, inclusive and transformative economy 4. Planet, protect ecosystems for all 5. Justice, safe and peaceful societies 6. Partnership, global solidarity for Sustain. Develop.

21 Last but not least SDG 17 Strengthen the means of implementation and revitalize the global partnership for sustainable development, 19 sub-goals

22 Last but not least: ends and means Sub-goals Finance 5 Technology 3 Capacity building 1 Trade 3 Systemic issues -Policy and institutional coherence 3 -Multi-stakeholder partnership 2 -Data monitoring and accountability 2

23 The leading principle: Re-balancing We have started with one aim, economic growth, now we have plenty, may be too many; hence more negotiations and decisions will have to be taken. But how? This will be the real test of Global Partnership policies and means to Re-balance negotiating capacities

24 Suggestion 1 Country ownership With a lot of goals and targets each country will have to decide its priorities Partners should accept, this is not so simple, no donors driven programs at the country level, 17.15

25 Suggestion 2 Triangular (at least) policy dialogue Policies coherence by old... and new donors Engage new donors in policy dialogue Old donors New donors Developing countries Other stakeholders, International finance?

26 Triangular policy dialogue, (17.6, 17.9) Main areas: Trade, Special and Differential Treatment (10.a) Industrial policies: Export, Taxes, Investments, exchange rate Decent work, Migrations (8.8, 10.7, 10.c) Public finances and budget: tax system, subsidies Social protection (Welfare) systems (1.3) better than floors or safety nets.

27 Careful Management of Development Financing Addis July 2015 Concessional flows, still very important FDI-avoid race to the bottom -remember profit repatriation The real issue is with private portfolio flows Control capital inflows - favour long-term finance - lock-in capital flows PPP ok but attention to public fund leverage Beware of easy borrowing, debt sustainability(17.4)

28 Careful Management of Development Financing Economic performances related funds GDP/Commodity indexed bonds Special and Differential Provisions control of capital account debt swaps/restructuring mechanisms Gradual opening to Int. Fin. Markets Development is for long-term, non speculative investments African countries are now issuing bonds in dollars Separate markets; Glass-Steagall Act. Separate markets; Glass-Steagall Act.

29 On July 2014 a vulture fund Themis Capital and Des Moines won a case against the Democratic Republic of Congo which should now repay 18 million dollars of an original debt plus 70 million as interest (The Financial Times, 27 th November, 2014)

30 Suggestion 3 Institution and capacity building This requires policy space (17.15) for developing countries, fiscal, trade, industrial, social, may be even political p.s. Good governance, accountable to people Institutional and administrative capacities

31 Goal 16 Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels

32 Some references ILO(1976), Employment, Growth and Basic Need: A One-World Problem. ILO, Geneva. Helliwell, J., Layard, R., and Sachs, J. (2013). World Happiness Report, The Earth Institute, Columbia University, New York. Kharas. H, PrizzonA. and RogersonA. (2014), Financing the post-2015 Sustainable Development Goals. ODI London Seers D. (1969), The Meaning of Development, International Development Review, 11(4): 3-4. Sen A. (1999). Development as Freedom, Oxford, Oxford University Press (2006). Identity and Violence: The Illusion of Destiny, New York, W. W. Norton (2009), The Idea of Justice, Harvard University Press & London: Allen Lane.

33 Some references Stiglitz, J., Sen, A., and Fitoussi, J. P. (2008). Report by the Commission on the Measurement of Economic Performance and Social Progress. UN-OWG (2014), Open Working Group for Sustainable Development Goals, 19 July, New York. UN-SR (2014), The road to dignity by 2030: ending poverty, transforming all lives and protecting the planet, Synthesis report of the Secretary-General on the post-2015 sustainable development agenda, 4 December. UN-ICESDF (2014), Report of the Intergovernmental Committee of Experts on Sustainable Development Financing, draft amended 17 December. World Bank (2014). World Development Indicators. Washington D.C.