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Addis finance talks: Some positives, but ultimately a victory for vested interests, says Christian Aid

July 16 2015 - The Addis talks on how to pay for poor countries’ development asked all the right questions but failed to provide clear answers to some of the most pressing questions facing the world, Christian Aid said today.

While acknowledging that the final text contains some positive text on gender, inequality and corporate transparency, the charity expressed disappointment that the key questions of global economic governance, such as sovereign debt, and global tax governance were not answered.

The outcome document also saw the establishment of a formal mechanism to follow up on discussions in Addis, which is a step forward from previous conferences

“The agenda discussed in Addis includes some of the most pressing concerns the world faces,” said Sorley McCaughey, Head of Advocacy and Policy at Christian Aid Ireland.

“The need for effective global systems that can respond to the big issues of tax, trade and debt, and linking these concerns with sustainable development results and human rights frameworks has never been greater- and not just for developing countries as the situation in Greece showed.

“It is critical that governments now use the newly established mechanisms to follow up this agreement with clear commitments to specific actions.”

However imperfect, an agreed outcome will at least provide some positive momentum for the two other major international events this year, the Sustainable Development Goals in New York in September, and the Climate talks in Paris in December.

Ultimately, though, the Addis conference was "a victory for vested interests", as far as potential reforms against multinational tax dodgers and rights abuses are concerned.

“The creation of a new United Nations Global Body on tax was one of the most contested issues in Addis. It is the world's best chance of moving toward the fundamental changes needed to stop multinationals dodging tax.

“But rich countries, including Ireland fought any significant change to the status quo, whereby global tax rules are made overwhelmingly by the OECD - a club of rich countries.

“Instead they proffered more help to poor countries fighting tax-dodging multinationals, with the Addis Tax Initiative, which offers to double existing support to strengthen their tax collecting systems. This is certainly of value, but is no substitute for the major reforms that are essential to close loopholes and provide rules that actually work for the poorest.”

“Developing countries have fought hard for this body but today’s agreement will do nothing but keep them in a patronizing system where a group of 34 countries hold all of the power,” said Pooja Rangaprasad of the Financial Transparency Coalition, a Christian Aid partner. “Rich countries decided to maintain a system where money goes from south to north, but the rules follow the opposite route.”

“This is a dangerous failure of multilateralism and a triumph for a few,” said Jorge Coronado, President of the Latin American Network on Debt, Development and Rights, and Christian Aid partner. “The agreement will simply continue to allow the powerful to dictate rules for the entire globe.”

The outcome document also sees a shift towards a greater importance of private financing. “It endorses the UN Guiding Principles on Business and Human Rights, ILO labour standards and environmental treaties, but we have lost an opportunity to create binding commitments on human rights and labour rights and environmental treaties,” said Matti Kohonen, Christian Aid's Principal Private Sector Adviser.

He added: “There is instead a misplaced optimism on incentivising investments based on subsidy schemes such as public-private partnerships (PPPs) that do not have a proven track record or clear accountability mechanisms to contribute towards sustainable development.”

The Agenda also failed to mainstream women’s rights beyond economic participation by ignoring the importance of fiscal and labour policies in addressing wider issues such as unpaid domestic and care work.”

The summit also did not go far enough in failing to call for the removal of fossil fuel subsidies – a source of finance that could and should be taken out of high-emission sectors to allow greater investment in sustainable development.

Ends

 

If you would like further information please contact Florence Mutesasira on fmutesasira@christian-aid.org or call (+353) 086 160 9405.

For more information about the work of Christian Aid, visit www.christianaid.ie or follow Christian Aid Ireland on Twitter: twitter.com/christianaidirl.

 

 

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