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Doha Finance for Development: no train wreck, but no surprises

The Doha Financing for Development Conference closed this afternoon. Six thousand delegates, politicians, NGOs, private sector representatives, journalists and hangers-on breathed a sigh of relief and headed for the airport.

The Conference wasn’t the political train wreck some had predicted, and even achieved some useful outcomes. But the atmosphere is very different from the heady optimism at the end of the original Monterrey Conference in 2002 when, in the wake of the 9/11 attacks and with the Millennium Summit still a warm memory, a breakthrough was achieved. Mixing with the delegates here this afternoon the common refrain was ‘this wasn’t too bad after all’. Talk to the NGOs and the more common view expressed was ‘this was a lost opportunity’. Some key players, such as the heads of the World Bank and the IMF decided to stay at home.

So, what did Doha achieve? First, it aimed to take stock of progress made since the 2002 Monterrey Consensus. It found a mixed story. The Monterrey agreement laid out a balanced set of responsibilities between rich and poor countries, between private and public sectors, and on the overall scale of effort required. Solutions to development problems were presented in a holistic way by promoting a comprehensive approach to development. The idea was to optimise synergies between domestic resource mobilisation, aid, international trade, private capital flows and debt relief. Monterrey delivered well from 2002 through 2006, as it spawned rising ODA commitments, new initiatives in Barcelona and Gleneagles, debt relief and the Paris Declaration on Aid Effectiveness.

But since then signatories to Monterrey deserve only a C grade at best, as ODA levels fell (following debt relief) and the global trade deal (the other Doha) fell apart. Despite huge efforts by some world leaders (including Gordon Brown) to hold the donor community to its word, the pledges made look distinctly shaky. Promises earlier this year by the EU (to honour its 0.56% pledge by 2010) and the G8 (to honour its Gleneagles pledges) are losing credibility, and the recent decisions by France and Italy to slow the rate of their aid increases could be seen as signs of  lost commitment. The spirit of joint responsibility between rich and poor countries had eroded.

The final Document at Doha will not be an historic compact. It is a nuanced statement, which leaves doors open but does not indicate a clear set of actions. Given the critical times, there were mixed views on what Doha would be able to deliver. Some were hoping to merely keep the train on the tracks, while others had called for radical change at this crucial time. A number of areas were particularly contentious:

  1. Strong calls were made (including by President Sarkozy on behalf of the European Union) to keep commitments and not to ‘sacrifice development to the crisis’. Leaders reconfirmed their commitment to provide 0.7% of GNP to ODA but there was no response to the demand for a multi-annual timetable. Negotiations also led to an agreement on greater quality of aid (in line with the Paris and Accra declarations) and new donors were urged to join the process.
  2. Tax reform and international tax cooperation were introduced at the conference as the ‘lifeblood of government services’ but, while the issue was recognised, the outcome document failed to reach a clear agreement on how to address critical issues such as tax evasion and tax havens. Initial clear language on avoiding ‘detrimental tax’ practices was watered down. A proposal, strongly supported by civil society, to upgrade the mandate of the UN Tax Committee was not accepted. Some language is also included on the role of transparency and accountability in key sectors, which was also a contentious issue.
  3. There was some disappointment around debt relief with seemingly little new initiative and the G77’s call for an independent and transparent debt arbitration system was not accepted.
  4. There were strong divisions, which nearly led to a breakdown in the talks, around systemic issues and the way forward for the reform of the international financial architecture. While an agreement was reached on a UN conference to be held next year, it is unclear who will be at the centre of the reform process. And while calls for an increased voice for the developing world were recognised, a clear structure to actually make this happen was not identified.
  5. On the positive side: the final document includes language and action on gender that is stronger than expected.

However, it would be wrong to judge Doha’s success purely on the language of the Outcome Document. Many ideas and new initiatives – which did not exist at Monterrey -- were presented in the many side events and preparatory meetings (including the CSO and Business Fora)

It was clear that the issue of tax reform and international tax cooperation – critical to mobilise domestic resources – has moved firmly up the agenda. Many experiences and ideas on innovative financing (for example for climate change and health) were discussed and new initiatives (such as the High Level Taskforce for Health and Debt2Health agreement between Germany and Pakistan) were launched. There were discussions on the role of sovereign funds, venture capital and other private flows in development, as well as on regulatory frameworks for these flows. The impact of the global trading system, especially at this time of crisis, was a core issue and a new UK strategy for Aid for Trade was launched. Debates were held on a new multilateralism and increased voice for developing countries.

The success of Doha may not be determined by its lengthy and perhaps bland Outcome Statement, but by the energy gained and views exchanged through many channels and networks. The responsibility now lies with individual nations and regions, civil society and the business community to take the broad messages and put them into action.

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