Shifting Responsibilities without Changing the Balance of Power: What Chance of Equality with the Addis Ababa Action Agenda?

This contribution is published as part of the Think Piece Series The Road To Addis and Beyond, launched to coincide with the third and final drafting session of the outcome document of this summer's Third International Conference on Financing for Development. In this Series, global experts discuss a range of topics complementary to the UNRISD research project on the Politics of Domestic Resource Mobilization on how to fund social development and raise provocative or alternative perspectives that can generate further ideas and debates. Please share your thoughts on this article in the comments space below.

The global development financing framework has shifted in emphasis since the 2002 Monterrey Consensus in three ways. First, the Addis Ababa Action Agenda (AAAA) of the Third Conference on Financing for Development moves away from a more balanced sharing of responsibilities between developed and developing countries in the international financial architecture. Second, the document reflects a clear endorsement of the private sector as a privileged development actor. Third, the AAAA takes an instrumentalist view of women’s human rights. As a result, the Conference failed to remove global obstacles to development and to provide the structural conditions and means to move toward sustainable and equitable development patterns and the full realization of human rights, particularly women’s rights. However, the AAAA offers possibilities for continued engagement through the establishment of an FfD follow-up mechanism as a space to redefine the balance of power and negotiate proposals to overcome the regressive trends and reshape the agenda.

Nicole Bidegain Ponte is sociologist from the Universidad de la República, Uruguay (UdelaR) and Executive Committee Member of Development Alternatives with Women for a New Era (DAWN).
Marina Durano is a DAWN Associate and Assistant Professor at the Asian Center of the University of the Philippines-Diliman.
Corina Rodriguez Enriquez is a member of the DAWN Executive Committee and researcher at the National Council of Research (Conicet) and the Centro Interdisciplinario para el Estudio de Políticas Públicas (Ciepp) in Buenos Aires, Argentina.

Introduction

United Nations agencies and developed countries have attempted to project the outcome of the Third Financing for Development (FfD) Conference as a landmark document in advancing a “new global financing framework” with concrete deliverables for implementing the 2030 Agenda for Sustainable Development. Nonetheless, DAWN, as well as wider civil society FfD networks, assesses the result as most disappointing.¹

The Addis Ababa Action Agenda (AAAA) consolidates three major shifts in the global development financing framework since Monterrey (2002). The first is a shift away from recognizing the responsibilities of developed countries to remove global obstacles to development and to achieve internationally agreed development commitments. While the Monterrey Consensus and the Doha Declaration recognized responsibilities based on a global partnership for development, the AAAA focuses on domestic resource mobilization without accounting for the impact of the global economic environment. The second shift is a weakening of state responsibilities (including those on international cooperation) through an endorsement of the private sector as a privileged “development actor” and a commitment to promoting an enabling environment for business. The third shift shows a greater inclusion of women's rights and gender equality references compared to previous FfD outcome documents. However, the approach taken is an instrumental one whereby the fulfilment of women’s human rights is valued almost exclusively as a means for economic growth. This instrumental approach ignores the fact that we need to take into account structural conditions and provide the means needed to realize women’s human rights.

Focusing on domestic resources while ignoring global imbalances

The AAAA fails to fully recognize the impact of macroeconomic policies of systemically significant countries on developing countries’ capacity to mobilize domestic resources. The more globally integrated developing countries are, the more vulnerable their economies are to business cycles generated by policy changes of systemically significant countries. The balance of payments—in trade, in debt, in portfolio and investment flows—serves as the transmission channel for changes in the macroeconomic policies of their key economic partners. The AAAA document does not fully acknowledge the need to respect and expand developing countries’ policy space to enable the use of a variety of tools to protect themselves from global instability, vulnerability to financial crisis and contagion (such as capital account management techniques, macro-prudential regulations,² or strengthening social protection as social and gender-sensitive automatic stabilizers).

Moreover, these tools are crucial to ensure that women's unpaid care work does not continue to be the stabilizer and shock absorber of the economic and financial crises. There is a large amount of evidence showing how the costs of policy conditionalities attached to loans, austerity measures, privatization of government assets, cuts in cash transfers and social services have historically been and continue to be borne by women.³ In this sense, governments failed to acknowledge how gendered power relations and other social and economic inequalities are embedded in macroeconomic policies.

The AAAA fails to redress power imbalances in the international financial architecture. The AAAA does not provide concrete actions towards strengthening the role of the United Nations (UN) in promoting reforms of the multilateral economic and financial architecture that strengthen both human rights and development outcomes. On the contrary, the AAAA preserves the status quo. It insists on recognizing the International Monetary Fund as a permanent international financial safety net with little appreciation for alternative liquidity arrangements that help to fill in gaps. It relies on the Financial Stability Board, the Basel Committee on Banking Supervision and various organs of the Organization for Economic Cooperation and Development (OECD) to define what types of regulations and standards are to be recommended and implemented for the banking and financial sector. While developed countries promoted a narrative during the negotiations about the need to overcome “old North-South dichotomies,” they firmly refused to open up the decision-making mechanisms that define global financial, monetary, tax and debt rules.

The AAAA fails to tackle the transfer of resources from the South to the North and to remove gender bias in taxation. The establishment of an intergovernmental tax body that was discussed in the Addis Conference would have been an important step towards reducing global tax evasion and avoidance as well as stopping the global tax race to the bottom. Developing countries' capacities to raise taxes are limited by revenue losses from tax dodging, tax exemptions, reduction of tariffs, and spillover effects of developed countries’ tax rules.⁴ While this is partially recognized in the AAAA, no concrete step forward to transform it was adopted. Furthermore, the AAAA calls for “broadening the tax base by continuing efforts to integrate the informal sector into the formal economy” (Paragraph 21). This shows how the negotiations failed to take into account the fact that taxation affects women and men differently because of their unequal status as workers, producers, consumers, asset owners and unpaid care work providers. For example, "formalizing the informal sector" could in practice negatively affect self-employed women, including market vendors, farmers and those in micro and small-scale enterprises. The danger is that women, who are overrepresented in these groups, end up bearing a disproportionately high tax burden while big corporations and rich individuals continue to benefit from tax avoidance and evasion.

Enabling environment for the private sector, not for women’s human rights

The AAAA accords the private sector a predominant role in financing development and women’s empowerment. Among the financing modalities promoted are public-private partnerships and blended finance, which combines official resources with private sector resources thus blurring the line between public and private. The blurring of lines is consistent with the OECD approach of using ODA to leverage the private sector, of promoting multi-stakeholder partnerships, and of narrowing down the scope of innovative finance mechanisms to those that enhance private sector businesses.

With the predominance of the private sector, rules, regulations and policies will tend to favour business, for example through privatization, deregulation, lowering labour, environmental and tax standards, which often contradicts and undermines the realization of women’s human rights, especially for women from the global South.⁵ In addition, the profit driven nature of the private sector does not guarantee and may even threaten the availability, accessibility, adaptability, acceptability, and quality⁶ of infrastructure and social services that they are expected to deliver.⁷ Where proper safeguards are not established, risks associated with the provision of services are socialized while the profits are always privatized. Blurring the boundaries between international and national private sector might also force governments to provide equal treatment to very different stakeholders (for example, large multinationals and small and medium local enterprises), and can therefore also place limits on the policy space to protect emerging industries, sectors in which women's jobs are concentrated, women small producers and indigenous communities from unfair competition from multinational corporations. Finally, the asymmetry between enforced mechanisms to protect investor’s rights on one side and voluntary guidelines to respect human rights on the other allows multinational companies and other businesses to sue governments but limits the access to effective remedy for human rights violations against women, indigenous people and other groups, perpetrated by transnational corporations and other businesses.

The Addis outcome document is silent on three core issues: the process at the UN Human Rights Council to develop an international legally binding instrument to regulate, in international human rights law, the activities of transnational corporations and other businesses; the need to establish mandatory ex ante and periodic human rights and gender equality impact assessments of all trade and investment agreements; and, the importance of reviewing investor-state dispute settlement clauses to ensure that the right of states to regulate in critical areas for sustainable development is protected. Nothing in the AAAA prevents foreign investors from suing governments for implementing policies that help achieve the Sustainable Development Goals but may limit potential profitability.⁸

Women’s human rights as an instrument for growth

The AAAA adopts an instrumental view of women and ignores the fact that we need to take into account the structural conditions and provide the means needed to realize women’s human rights. The Addis outcome document emphasizes in its first paragraph a commitment to respect all human rights, including the right to development, and affirms that member states will ensure gender equality and women's and girls’ empowerment. Paragraph 6 reaffirms that “achieving gender equality, empowering all women and girls, and the full realization of their human rights are essential to achieving sustained, inclusive and equitable economic growth and sustainable development”. However, the AAAA lacks an integrated, consistent and explicit human rights-based approach that also ensures the fulfilment of women´s human rights.

An instrumentalist approach to women´s economic participation is clearly found in paragraph 21 of the AAAA, where it states that “gender equality, women’s empowerment and women’s full and equal participation and leadership in the economy are vital to achieve sustainable development and significantly enhance economic growth and productivity”. While it is true that more egalitarian countries tend to have better economic performances, this link between gender equality and economic growth is not automatic. Instead it requires explicit gender-sensitive policies that, for example, remove structural barriers to women´s economic participation.

At the same time, throughout the AAAA there is strong emphasis on improving women’s financial inclusion while little attention is paid to the unequal distribution of unpaid care work, persistent labour market segregation, and the fragile and overexploited position of women in global care and value chains.⁹ Financing comprehensive social protection systems and providing universal access to quality social services, social infrastructure, services related to sexual and reproductive health and rights, education, and care services are necessary in order to remove structural barriers for “women’s full and equal participation in the economy (paragraph 21)” and to ensure decent work (paragraph 16). It is especially important to reduce the burdens and redistribute unpaid care work more broadly across societal institutions.

Language that advances women’s human rights remains weak in the AAAA. The commitment to pursue legislative and administrative reforms to give women equal rights with men in economic resources simply replicates a commitment found in the Rio+20 outcome document.¹⁰ Worse, the statements on delivering social protection and essential services are weaker than those in the Monterrey and Doha outcome documents and make a lesser requirement than the state obligation to fulfill the human right to social security in the International Covenant for Economic, Social, and Cultural Rights¹¹ as the reference is conditioned on fiscal sustainability and national appropriateness.

Hopes placed on the follow-up mechanisms

Two mechanisms were established that we can consider a step forward. Not only was a Technology Facilitation Mechanism set up, but also a dedicated follow-up mechanism in the form of an annual ECOSOC Forum for Financing for Development that will produce intergovernmentally agreed conclusions and recommendations. The forum will also discuss the Means of Implementation of the 2030 Agenda for Sustainable Development. Although the schedule is tight, here at least there is space to push once more for the integrity of the FfD agenda and to challenge the regressive trends outlined above.

This follow-up mechanism is especially important in redefining the balance of power in the international financial architecture. The expectation is that all countries will have an opportunity to discuss, deliberate and negotiate the issues mentioned above. Since the UN is moving to a “universal”, “voluntary” and “multi-stakeholder” agenda, it is essential to push forward an equitable and meaningful multilateralism that can truly address accountability gaps and global governance deficits.

FOOTNOTES
¹ DAWN co-facilitated the drafting of the Women’s Working Group on Financing for Development (WWG on FfD) response to the AAAA. The WWG on FfD is part of the broader civil society FfD community and actively contributes to drafting common positions. The reflections on this article are based on DAWN’s contribution to the WWG analysis and civil society collective statements. To see DAWN inputs on FfD 3 please click here. To read the WWG reaction and other WWG statements click here, to read joint CSO statements click here.

² These are regulations that reduce the systemic risks or strengthen the ability of the financial system to mitigate shocks, such as those on loan loss provisions or capital adequacy.

³ See UNWomen. 2015. Progress of the World’s Women Report 2015-2016 and Antonopoulos, Rania (ed) 2013. Gender Perspectives and Gender Impacts of the Global Economic Crisis. New York: Routledge.

⁴ On spillover effects see IMF. 2014. Spillovers in International Corporate Taxation. Washington DC: IMF.

⁵ An example is the case of maquilas, which is the dominant economic growth model in Mexico and Central America, see Giosa Zuazúa and Rodríguez Enríquez. 2010. Estrategias de desarrollo y equidad de género en América Latina y el Caribe: Una propuesta de abordaje y una aplicación al caso de la IMANE en México y Centroamérica. Santiago: Cepal. Serie Mujer y Desarrollo 97.

⁶ In order for states to fulfil their human rights obligations, the four above-mentioned interrelated standards should be met. Further elaboration on those elements can be found in the General Comment No. 14 of the Committee of Economic, Social and Cultural Rights.

⁷ According to WHO, globally about 150 million people suffer financial catastrophe annually from paying for health care, while 100 million are pushed below the poverty line. (World Health Report, 2010). In 2011, private consumers in developing countries paid over US$34 billion out-of-pocket for family planning, reproductive health and HIV/AIDS-related expenses. See Table 2 in UNSG report E/CN.9/2013/5 2013.

⁸ For more information about the need to reform the international investment agreements regime to comply with the Sustainable Development Goals, please see the UNCTAD World Investment Report 2015 and UNCTAD Word Investment Report 2014.

⁹ The global care chains concept describes an international divison of labour regarding paid and unpaid care work. It emerges in the context of globalization, combined with the “care crisis” in developed countries and the feminization of migration in developing countries. Women migrate to developed countries to be employed as paid caregivers, while the care deficit in the country of origin is taken over by other members of their families (mostly women and girls) or other low paid caregivers. For more information, see Orozco, Amaia. 2010. Global care chains: Toward a right-based care regime? Santo Domingo, Dominican Republic: United Nations International Research and Training Institute for the Advancement of Women.

¹⁰ Compare paragraph 41 of AAAA and paragraph 240 of Rio+20 outcome document.

¹¹ See paragraph 12 of the AAAA and compare with paragraph 16 of Monterrey Consensus and paragraph 13 of the Doha outcome document as well as Article 9 of the ICESCR.

ABOUT THE AUTHORS

Nicole Bidegain Ponte is a Uruguayan feminist activist and sociologist who has been a member of the Executive Committee of Development Alternatives with Women for a New Era (DAWN) since 2011. She works on advocacy at the global level and develops analysis especially in the area of the Political Economy of Globalization (PEG). As part of her advocacy work she has been following the Financing for Development and Post 2015 Development Agenda debates and negotiations. As DAWN representative she is one of the core group facilitators of the Women’s Working Group on Financing for Development, and she also collaborates with the Women’s Major Group, the Righting Finance Initiative and the Global Reflection Group on Development Perspectives. Previously she worked in various regional and global networks such as the Latin American and Caribbean Youth for Sexual and Reproductive Rights, Latin American Chapter of the International Gender and Trade Network (LA-IGTN), Social Watch, the International Council for Adult Education. Nicole holds a Masters in Contemporary Latin American Studies jointly developed by the Universidad Complutense de Madrid and the Universidad de la República, Uruguay (UdelaR).

Marina Durano is currently Assistant Professor at the Asian Center at the University of the Philippines-Diliman. Before joining academia, she spent more than 15 years engaged in strengthening women’s political engagement with macroeconomic policies and global economic governance structures with the International Gender and Trade Network (IGTN) and Development Alternatives with Women for a New Era (DAWN). She was part of DAWN’s Executive Committee in 2008-2010. She recently published a book that she co-edited with Gita Sen entitled The Re-making of Social Contracts: Feminists in a Fierce New World with Zed Books in London. Last year, she, along with her co-authors, was awarded the 2014 Outstanding Book Award by the National Academy of Science and Technology (Philippines) for the book 2012/2013 Philippine Human Development Report: Geography and Development. She received her Ph.D. in Economics from the University of Manchester in the UK.

Corina Rodriguez Enriquez is a feminist economist and researcher at the Consejo Nacional de Investigaciones Científicas y Técnicas (Conicet) [National Council of Scientific and Technical Research] and at the Centro Interdisciplinario para el Estudio de Políticas Públicas (Ciepp) [Interdisciplinary Centre for the Study of Public Policy] in Buenos Aires, Argentina. She is also an Executive Member of Development Alternatives with Women for a New Era (DAWN) and a member of Gem-Lac (Grupo de Género y Macroeconomía de América Latina / Latin American Gender and Macroeconomic Group). She is also currently on the Board of the International Association for Feminist Economics (IAFFE). Her working areas include: social and fiscal policy, care economy, the labour market, poverty and income distribution.