Tax, illicit financial flows and global economy are words that keep ringing in my ears, for the past few months leading and upto the third international conference on financing for development held in Addis Ababa from the 13th of July to run until the 16th these words have been thrown around in various contexts.
These words if unpacked carry weight and hefty connotations with them. They embody an attempt to summarize the discussions and deliberations that have been held on how best the world can make the global economy work for everybody while at the same time recognizing the structural and systemic issues that have defined the current economic trends as pertains to who controls trade, who is indebted to who and also define the grossly unjust global tax order that perpetuates economic inequalities dooming the poor to be poorer and elevating the rich to more riches.
Civil society, government and development agencies alike thronged Addis Ababa from the 13-16th July 2015 to add their voices, lobby and advocate for a progressive outcome document from the 3rd international financing for development conference. One of the contestation was the need for a global tax body coordinated by the UN. A global tax body would attempt to address inequalities that grant big multinationals tax holidays and compel governments to further tax poor citizens who are in the informal sector. During the discussions what came out is that donor countries are crying fatigue and citing recessions as not allowing them the luxury to allocate money for aid. This raised discussions on increased domestic resources mobilization which means that governments in developing countries would have to increase Value added tax which in most cases happens for essential goods further disenfranchising already poor citizens. There were calls for progressive tax reforms to ensure some form of regulation and deliberate efforts to curb the blatant inequalities brought about by a poorly regulated global economic order whose inadequate regulation is in the hands of a few rich countries whose governments and companies drain resources from the global south to the global north.
This analysis would be incomplete if I did not speak of the illicit financial flows; Africa especially is a victim of these. Recently the former president of South Africa, Thabo Mbeki released a report revealing that Africa loses 50billion US Dollars from illicit financial flows. These are moneys lost when big multinational companies evade tax by routing their moneys and especially profits through tax havens and reporting loses in their home countries. In the effort to raise money for the post2015 development agenda which is estimated to require trillion of dollars annually to implement, such monies if retained on the continent would be put to developing our countries and all that would be left is for us citizens to hold our governments accountable on how it is spent.
To add onto the cake was the controversial private financing of development, civil society was calling for governments to regulate the private sector and most importantly avoid the privatization of essential goods and services such as education, health, water and sanitation. This is because the private sector for the most part is profit driven and therefore will prioritize profits over people leading to gross human rights violations as has been evidenced in various parts of the world where this happened. Besides the state is the primary duty bearer of upholding rights and providing for their citizens and an attempt to transfer these responsibilities to the private sector amounts to absconding of duty.
I cannot attempt to summarize all the discussions held but only to give a sneak peak of the series that was 3rd financing for development discussions. Of importance to add is the fact that the process was somewhat interlinked with the broad post 2015 development agenda as a component of the means of implementation which is one of the 4 streams. There were divisions as to whether to have the financing for development as means of implementation or rather maintain the integrity of the process as standalone. This is because the means of implementation of the post 2015 development agenda encompasses much more than money to include capacity at the national, regional and global levels to implement the robust agenda, technology facilitation mechanisms to enable the world share technology to tackle climate change and also data to enable effective planning and targeted investments.
I would go on and on but would like to stop here and point out that even though there many contestations, redlines and all manner of disagreements before and during the 3rd financing for development conference in Addis, we have an outcome albeit with a lot of compromises. It may not contain all that we called for but rather provides a framework, government initiated if I may add to hold governments accountable and attempt to make life better for our fellow citizens, the document is as good as it will be implemented or used to hold our governments accountable. It was a historic and defining moment in history for which those coming after us will hold our governments and civil society activists accountable to the commitments made therein.