The Summer of Sustainable Development

September is perhaps the best month to visit New York City. That’s when the Big Apple turns pleasant after its peak summer. If you are reasonably well off, you would mind less that the city has become costlier and consider attending the month’s numerous attractions including the US Open (tennis), Fashion Week, art fairs and festivals of film, dance and music. September also changed NYC, like never before, 14 summers ago. The 9/11 attacks shocked not just the Americans but people across the world. It sparked debates—incidentally still relevant—on terrorism being a ‘war without borders’, religious fundamentalism, misuse of technological and financial market advancements, foreign policy flaws, globalization, politics of alienation and authoritarianism. But this coming September will be a special month for the megalopolis as it is set to host the annual United Nations General Assembly meetings (September 25-27) where the UN member states are expected to “adopt a new (post-2015) sustainable development agenda”. The agenda will take forward the Millennium Development Goals (MDGs), set in 2000, through the Sustainable Development Goals (SDG) meant to succeed them. There were eight MDGs and 21 ‘anti-poverty targets to be achieved by 2015’. Through an ‘Open Working Group’, a process more inclusive than what helped in arriving at the MDGs, a report has already been prepared with a proposal for 17 SDGs and 169 targets. This is obviously much more ambitious than the eight MDGs and 21 targets. The September event is billed by the UN as one of “the three milestones in 2015”—the other two being the Paris Climate Conference in December and the just concluded UN Third International Conference on Financing for Development (or FFD3) in Addis Ababa. Giving a sense of the mammoth task ahead for funding the SDGs and targets, the ‘Government Spending Watch 2015 Report’ said “government spending is falling one third short of MDG needs,” adding that “$22.5 trillion in additional finance will need to be mobilized over the lifetime of the SDGs.” In February this year, UN General Assembly President Sam Kutesa said, the additional funding required to eradicate extreme poverty ranged from $135 billion to $195 billion every two years, while investments required in critical infrastructure projects spanning transport, energy, water and sanitation are estimated to cost between $5 and $7 trillion per year. Kutesa added that that the resources required remained “enormous” and would have to be “mobilized from all sources”—domestic and external to public and private. A crucial source of finance for poor countries is the Official Development Assistance (ODA) from rich nations. As per the Organization for Economic Co-operation and Development (OECD), ODA makes up more than two thirds of external finance for least-developed countries. But a major concern in this regard is the insufficient ‘net ODA’ from the OECD Development Assistance Committee (DAC) member countries (comprising the United States, most European Union member countries, Japan, Korea, Canada, Australia, and New Zealand). In 2014, only “five of the DAC’s 28 member countries—Denmark, Luxembourg, Norway, Sweden, and the UK—continued to exceed the United Nations target of keeping ODA at 0.7% of Gross National Income (GNI),” the OECD said in its report in April. Though net ODA from DAC members was $135.2 billion in 2014, it was just 0.29% of their GNI and significantly, the U.S. contributed only 0.19% of its GNI. “ODA remains crucial for the poorest countries and we must reverse the trend of declining aid to the least-developed countries. OECD ministers recently committed to provide more development assistance to the countries most in need. Now we must make sure we deliver on that commitment,” said DAC Chair Erik Solheim in the OECD statement. George Soros, the head of the Soros Fund Management and the founder of an international foundation network supporting open societies, in his book ‘On Globalization’ says, “It is not by accident that international resource transfers are running so far below the 0.7% of GDP target or that the U.S. stands lowest among the developed countries.” He adds, “There is a strongly held belief, particularly in the U.S., that foreign aid is ineffective and sometimes even counterproductive. What is worse, this concern is without foundation.” Arguing that the effectiveness and impact of foreign aid could be substantially improved if administered differently, Soros says a new paradigm is emerging, backed by institutions such as the World Bank and the OECD. “It (the new paradigm) is built around giving the recipients a greater sense of ownership and participation in the programs that are supposed to benefit them, as well as reinforcing success.” Meanwhile, many experts have criticized the 17 SDGs and 169 targets as unrealistic, lacking clarity (therefore, prone to manipulation) as well as tough to supervise and appraise. Several agencies across the world are working on simplifying these targets in a bid to make them more effective. For instance, the think tank Copenhagen Consensus Center in a report published recently, citing an expert panel, said that it is important to “prioritize 19 targets (including lowering chronic child malnutrition by 40%, eliminating violence against women and girls, phasing out fossil fuel subsidies, reducing trade restrictions by completing the World Trade Organization’s Doha Round negotiations and increasing girls’ education by two years) instead of the UN’s 169 targets.” It added that these 19 targets are “so effective that focusing on them first would effectively quadruple the aid budget without any extra spending, and providing phenomenal social, environmental and economic benefits at a cost of $140 billion-plus per year.” These efforts would definitely come in handy to the member states adopting the post-2015 development agenda at the September Summit. Meanwhile, a global framework for “financing sustainable development and developing sustainable finance” was provided by the ‘Addis Ababa Action Agenda’ and adopted during the ‘July 13-16 FFD3’. The Agenda has over 100 measures to help focus on “commitment to direct finance to social protection, infrastructure, technology, assistance to the poorest countries, cooperation on tax issues and the need to address illicit financial flows that take resources away from development.” Though Ethiopia’s Prime Minister Hailemariam Desalegn, who was the President of the FFD3 Conference, said, “the world is clear in its resolve that no one is left behind as we make the sustainable development goals a reality,” the FFD3 has garnered criticism as well. The NGO ‘European Network on Debt and Development’ (Eurodad) said: “The final outcome rejects the proposal of establishing an intergovernmental UN body on tax matters, and instead introduces some minor changes to the existing UN expert committee. This means that the OECD will remain the only intergovernmental body that adopts global standards on tax matters.” “… The world’s developing countries...will now have to accept that global tax standards will get decided in a closed room where they are not welcome. As long as our governments keep failing to cooperate on tax matters, multinational corporations (MNC) will be able to dodge taxes. At the end of the day, the Addis Ababa failure will impact us all,” Eurodad added. One of the most important goals, goal number 10 of the proposed SDGs, is to “reduce inequality within and among countries”. Research published by the Tax Justice Network estimates “there is between $21 and $32 trillion of unrecorded offshore financial wealth in the world”. It added that “almost all this unrecorded wealth and income will be enjoyed by the top 1% of the world’s population”. The study cites research saying that “more unequal societies tend to experience slower growth, higher political instability, and a wide range of negative health and social outcomes.” All eyes will now be on the September Summit in NYC to see if big companies and MNCs will come forward along with UN member states in assuring the world that they will assume leadership roles to take forward the SDGs, especially the one on reducing inequality, in a responsible and sincere manner. The UN members would do well to remember what Louis Dembitz Brandeis (1856-1941), an associate justice of the U.S. Supreme Court, said long ago: "We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can't have both."