Trade Unions bring workers’ voice to the 4th Follow-Up Forum on Financing for Development

Trade unions participated in ECOSOC’s Follow-up on Forum on Financing for Development (15 to 18 April) to bring workers and unions’ position on how development should be financed. The discussions took place amidst warnings from the OECD about the international community not doing enough to meet the financial needs to achieve the 2030 Agenda and its Sustainable Development Goals (SDG).

Mamadou Diallo, Deputy Secretary General of the ITUC, intervened during the Ministerial Finance Dialogue on “promoting inclusive growth and reducing inequalities”. He called for fiscal policies to be more effective in strengthening inclusive growth and reducing inequalities. Mr. Diallo also stressed the need to mobilise domestic resources to support the extension of national social protection systems that ensure universal coverage, in line with ILO standards.

Another point raised by Mr. Diallo was the need to secure the effective application of fair fiscal policies that will ensure business’ contribution to finance decent and sustainable work. In this respect, Mr. Diallo said that stronger efforts and time-bound commitments to address the erosion of tax revenues and profit shifting are fundamental; along with tackling tax evasion and tax havens.

Mr. Diallo’s remarks are particularly pressing as many states have retrenched social protection benefits and services in recent years because of cost concerns.


Making private sector’s investment in development to aligned with the SDGs and human rights

Leo Baunach, Director of the Washington office of the ITUC and the Global Unions group participated in the panel “domestic public resources”. During his intervention, Leo Baunach called for the creation and utilisation of selection criteria to ensure that private sector’s investments in development programmes are aligned with the development effectiveness principles and the SDGs. He also stressed that before increasing their support to innovative instruments - such as blended finance - donors should gather more evidence on the real capacity of these instruments to leverage private funding at the required scale to finance sustainable development. Last but not least, Mr. Baunach insisted on the need for eligibility criteria for private investors and companies involved in blended finance initiatives on the basis of fundamental worker and human rights.

ITUC delegates also intervened on side-event meetings addressing issues related to social protection and systemic issues. On the latter, Leo Baunach stressed the need for systemic reforms that change the rules for the global economy, including policy space for sustainable industrial policies and financial regulations.


The International community is not doing enough

To the question on whether the international community is doing enough to meet these financial needs, the President of the General Assembly, María Fernanda Espinosa, stated “Clearly, the response is no”. Jorge Moreira da Silva, Director of the Director, OECD Development Co-operation Directorate, added “there is no room for complacency” while warning for the world to be at risk of defaulting on the Agenda 2030.

Despite signs of progress, critical investments to achieving the SDGs remain underfunded. Interest in sustainable financing of development is growing, but this is not happening at the necessary scale. The challenges are many: addressing illicit financial flows and the redistribution of wealth; trade restrictions; the rising of debt risks; countries experiencing significant capital outflows; the rise of in-country inequalities, while global real wages are hardly increasing (1.8 per cent in 2018, the lowest since 2008).

In addition, OECD member states are far from meeting their commitments to devote 0.7% of their PIB to the development cooperation budget. In this sense, in 2018 overseas development assistance (ODA) reached a meagre 0.31% of gross national income, far from the 0.7% agreed on almost half a century ago. Furthermore, donor countries are increasingly reluctant to provide aid as grants. Instead, they are using more and more limited resources through mechanisms involving the private sector such as blended finance, whose development effectiveness is yet to be proven.


Why do trade unions participate in the FfD?

The ECOSOC Forum on Financing for Development follow-up (FfD Forum) is an intergovernmental process mandated to review the Addis Ababa Action Agenda (2015) and other financing for development results that are key to support the implementation of the Agenda 2030 and its Sustainable Development Goals (SDGs).

The ECOSOC Forum on Financing for Development follow-up is a unique multilateral space where discussions on development financing can take place on equal basis – with all nations represented on equal footing. Yet, another year, members are not up to overcome the challenges that meeting the financing of the SDGs will take. Together with other CSOs, ITUC continues to believe this process can and must play a pivotal role in removing many of the structural barriers to the socio-economic transformation and advancing systemic reforms of global economic frameworks to realign them with the imperatives of human rights, decent work, gender justice and sustainable development. However, it will take governments to do more than welcome, recognize or reaffirm past agreements, to show political leadership, ambition and action to prevent the Agenda 2030 from falling off the tracks. The time for action is now.