What if I told you every country on the planet just agreed to finance the eradication of extreme poverty by 2030–and do so in an environmentally sustainable way?
You’d think it would be front page news, right?
This is exactly what happened in Addis Ababa, Ethiopia yesterday at a hotly anticipated UN meeting, known as the Third International Conference in Financing for Development. The meeting may not have made the front pages of the New York Times, but its outcome is certainly of world-historic importance.
192 UN member states signed a document called the Addis Ababa Action Agenda, that had been negotiated over the last several months. The document is sweeping in its ambition, but perhaps most remarkable for the fact that it spells out concrete measures that the international community agrees to take to improve living conditions and quality of life around the world.
The context of the meeting is important. At the UN Summit in September, the international community will adopt the Sustainable Development Goals, a set of 17 international development priorities that will replace the Millennium Development Goals that expire this year. The SDGs are ambitious. They call for the total eradication of extreme poverty–as defined by people living on less than $1.25/day; ending hunger; and promoting gender equality. But beyond that, it calls for a global commitment to support social end economic development in an environmentally sensible and sustainable way. A few weeks after the SDG summit comes the Paris Climate Talks to finalize an international climate agreement.
The Addis Ababa Action Agenda describes in detail how this vision of sustainable development will become manifest. And what is revolutionary about this document is that it treats international development assistance less as alms giving by wealthier countries to poorer ones, but rather as a partnership between wealthy countries, developing countries and the private sector to help countries help themselves. This is a profound shift from the ways the UN has historically approached questions of financing for development.
A good example of this is this is in the area of “domestic resource mobilization,” — which includes tax collection. Weak governments in the developing world sometimes have limited ability to collect taxes, which is how most countries in the world fund social spending. The Action Agenda very clearly places improved tax collection systems as a central mechanism through which the developing world is expected to fund its own development.
“We commit to enhancing revenue administration through modernized, progressive tax systems, improved tax policy and more efficient tax collection. We will work to improve the fairness, transparency, efficiency and effectiveness of our tax systems, including by broadening the tax base and continuing efforts to integrate the informal sector into the formal economy in line with country circumstances.”
The document also affirms the developed world’s commitment to help developing countries achieve this goal. And at a side event in Addis a number of multi-lateral financial institutions, including the World Bank and the IMF offered their backing with a $400 million commitment for “capacity building in the area of taxation.”
To be sure, official development assistance is still important. The Action Agenda recommits donor governments to the target of 0.7% of Gross National Income for foreign aid. It also, crucially, commits donor countries to devote more of that aid to the poorest countries. (Right now, only about one third of foreign aid goes to least developed countries — and that percentage has been steadily declining.)
Implementing this vision of sustainable development is going to cost money and take political will from the entire international community, including donor countries, governments of the developing world, the NGO sector and private enterprise. The meeting in Addis this week was a profound demonstration that the world is ready to rally behind these goals. Money and mouths are staring to converge.
Bonus
For a good overview of that this conference is all about, listen to my conversation with Minh-Thu Pham of the United Nations Foundation. We discuss the big points of convergence and contention between countries as they were negotiating the outcome document and we have a deeper discussion of how this conference signals a profound shift away from thinking about international development as driven primarily by foreign aid.
