Financing sustainable human development

1. Financing sustainable human development Jesse Griffiths Eurodad 7 October 2013

2. Structure • What do the numbers tell us? • What should be done? • How to get there

3. A: What do the numbers tell us?

4. Numbers tell us: • Domestic resource mobilisation crucial • Stemming outflows requires systemic reform • Public / private? • Urgent need for public finance for LICs and global public goods • Private finance – be aware of limitations • Mechanisms needed to prevent and deal with debt and finance crises

5. Numbers tell us: • Domestic resource mobilisation crucial • Stemming outflows requires systemic reform • Public / private? • Urgent need for public finance for LICs and global public goods • Private finance – be aware of limitations • Mechanisms needed to prevent and deal with debt and finance crises

6. Tax revenue (%GDP)

7. Domestic investment (%GDP)

8. Numbers tell us: • Domestic resource mobilisation crucial • Stemming outflows requires systemic reform • Public / private? • Urgent need for public finance for LICs and global public goods • Private finance – be aware of limitations • Mechanisms needed to prevent and deal with debt and finance crises

9. What do the numbers tell us?

10. Stemming outflows • Illicit financial flows = two thirds tax evasion by corporations • $160bn lost in tax annually by developing countries

11. Numbers tell us: • Domestic resource mobilisation crucial • Stemming outflows requires systemic reform • Public / private? • Urgent need for public finance for LICs and global public goods • Private finance – aware of limitations • Mechanisms needed to prevent and deal with debt and finance crises

12. Public/ private? • Public need • Sub-Saharan Africa = taxes per capita <$500 per person even in lower middle-income countries • 37 countries, aid = >10%GDP • Many crucial services require public funds to pay for them e.g health, education, sanitation • Private flows have macro problems • Volatility & predictability • Pro-cyclicality e.g 2008 $25bn portfolio equity flowed out of LICs • Blending / leveraging – issues of transparency, accountability + development impact

13. Numbers tell us: • Domestic resource mobilisation crucial • Stemming outflows requires systemic reform • Public / private? • Urgent need for public finance for LICs and global public goods • Private finance – aware of limitations • Mechanisms needed to prevent and deal with debt and finance crises

14. Dealing with crises • Reserves accumulation = insurance as vulnerable to global financial system, no faith in IMF • $7.7 trillion held by developing country governments (2012) • Most in US treasuries – developing countries lending to US on a massive scale • Debt crises = with us until proper solution found • Debt Workout Mechanism

15. B: What should be done? • “European civil society scorecard for European action” • CONCORD • Eurodad • CAN Europe • Main point: hold EU governments to account

16. Scorecard - summary • Put the EU house in order – prevent tax dodging (country by country, beneficial ownership, automatic info exchange) • Respect policy space (e.g. promote reponsible lending standards) • Increase + improve public financing (e.g. ODA + innovative financing) • Preventing crises (e.g. debt work out)

17. C: How to get there • Needs focus on financing! • 2015 process (very little in high level panel report, though recognition of importance of illicit flows) • UN committee of experts on sustainable development financing (intransparent) • Need to put high level attention on issue – major follow up to UN FfD conferences (Monterrey 2003, Doha 2008)