What to do? Rather than addressing the need to contrast tax evasion and for progressive taxation, the discussion presents a positive scenario of the role that finance and innovative financing could play in the implementation of the SDGs. Some perplexities from the trade unions side.

First, there is not enough evidence on the impact of these innovative financing instruments neither real risk assessment.

Looking at concrete ex.: in Eastern Europe and Latin America, the 30-year experiment with innovative financing of social security public mandatory pensions led to windfall gains for the financial community and deep losses to individual workers, often reduced in poverty. Ignoring social dialogue mechanisms and compromising the universal coverage for social protection, which is fundamental for leaving no one behind.

And the National Audit Office of the United Kingdom 2018 study to assess the more than 30 year experience with the innovative finance mechanisms known as PF1 and PF2 “…concluded that the private finance initiative model had proved to be more expensive and less efficient in providing hospitals, schools and other public infrastructure than public financing.”

Further evidence shows important risks for the fulfillment of human rights, including the DW agenda. As the current wave of privatizations emphasizes the concept of blended finance, where part of the role of the State is to provide a significant risk buffer. In other words, companies take profits, but the State bears a large part of the losses if they are relevant. All at the expenses of the democracy and of the social inclusion, especially of the most vulnerable people. As the premise of finance is based on assumptions fundamentally different from those that underpin respect for human rights, such as dignity, equality and non-discrimination.

Risks should be taken seriously, especially with respect to social, economic and environmental risk analysis. If we take into account the list of financial instruments, we could also make an assessment of the potential of other financing instruments, including the financial transaction tax, the cancellation mechanisms and debt conversion for social progress and its potential impact in implementing the ILO Decent Work Agenda, in line with the development policy of the countries involved.

Just few but important questions for real people. What are the impacts on beneficiary countries and their regulatory framework? What are the disruptive effects of innovative financing? Are they sustainable? Are decent jobs created? Are the revenues generated in the country favorable to the country’s internal system including taxes and social contributions? These evaluations are still to be done if “to leave no one behind” is not only a slogan but a genuine will of the international community.

 
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