Addis Ababa Action Agenda

Ban Ki Moon, the General Secretary of the United Nations, rushed from one meeting to another at the third international Financing for Development conference being held in the Ethiopian capital (13-16 July). The clock was ticking, the conference nearing its end, as the participants struggled to answer a big question:

Where are developing countries going to find the money to achieve the UN development goals over the next 15 years - money urgently needed to prevent mass hunger, extreme poverty, and global ecological catastrophe?

"This will require huge amounts of financial and technological resources," Ban Ki Moon told DW. The UN chief is determined to trump the billions of dollars' worth of development financing commitments that have been made in the past. He wants to see trillions made available.

That's because the UN Conference on Trade and Development (UNCTAD) estimates there's a development funding gap of 2.5 trillion US dollars per year that needs closing if the UN's development goals are to be achieved.

The conference's formal outcome was the publication of the "Addis Ababa Action Agenda", which in typical UN style presented a laundry list of noble and worthy goals and objectives, lacking, unfortunately, specifics on exactly how they will be achieved.

Promises given, results undelivered

"Governments, business communities and civil society are showing solidarity. They're now ready. They should all come on board," Ban said. "That's how billions become trillions."

The UN chief said that governments of the OECD club of industrialized economies should get on with delivering 0.7 percent of their GDP as official development assistance, as they had promised. It's a long-standing goal - the UN formulated it in 1970, and developed countries have endorsed it repeatedly since. But it has never been achieved.

Germany provides an amount equal to about 0.4 percent of its GDP for development assistance. The 0.7 percent goal was once again affirmed at this week's conference in Addis, but without a specific time horizon.

"A specific time plan is something none of the donors who haven't yet achieved the target, including Germany, wanted to put on the table at Addis," according to Klaus Schilder from the Catholic charity Misereor.

Private partners

The UN General Secretary is responding to that reality by increasingly looking for partnerships with the private sector.

"The private sector is ready," he said. Together, big international firms, development banks like the World Bank, the International Monetary Fund, and various sovereign wealth funds and pension funds could put forward trillions of dollars in financing.

Ban believes he has good reason to be optimistic. About 8,400 major firms have joined the "UN Global Compact," which obliges them to run their businesses ethically. Many of them see sustainable development as a business opportunity.

"Climate change threatens wealth," said Georg Kell, director of the UN Global Compact program. Together with the World Bank, Kell was able to persuade 1,000 major firms, including some big investment funds such as Blackrock and the Rockefeller Brothers Fund, to join a push for a levy on CO2 emissions.

Sovereign wealth and pension funds in Norway and Denmark have agreed to gradually pull their financial capital out of fossil fuels, and invest in renewable energy systems instead.

"Healthy societies generate healthy markets," said Ban. "We can be the first generation to end poverty." The UN chief believes in the transformative power of finance, and thinks that fund managers and corporate leaders can make an important contribution to ending poverty.

Scarce funds

The trouble is that except for a few wealthy petro-states like Qatar, Saudi Arabia or Norway, the governments of nearly all UN member countries are heavily in debt. There isn't much prospect of pulling money for development finance out of national treasuries, despite the best efforts of the 34 national government leaders and roughly 100 Cabinet ministers at the Addis meeting.

Unless, perhaps, new sources of revenue can be tapped. A big idea that was discussed at the meeting is the Addis Tax Initiative, which is supported by - among others - German development minister Gerd Müller. Its thrust is to help developing countries improve their taxation administration and increase revenue collection.

The fight against corruption in general and tax evasion by big corporations in particular were also on the agenda at Addis.

Participants argued about whether the UN should have a voice in discussions proposing reforms of international taxation policies. Such reform discussions have been held primarily amongst the members of the wealthiest industrial nations - and so far, they've shown little interest in widening consultations to include poorer countries.

"We would like to see Germany take a stronger leadership role in this debate, and put a compromise proposal on the table," said Misereor's Klaus Schilder.

Additional reporting by Nils Zimmermann