A just, equitable and transformative financial architecture:
Development Justice at the core

Statement of the Asia Pacific Regional CSO Mechanism (APRCEM)
to the Fourth International Conference on Financing for Development

16 December 2024 |  Bangkok, Thailand

 

I. Chapeau

We, the representatives of civil society and peoples’ organisations, organised as 17 constituencies and 5 subregions from 38 countries in Asia and the Pacific through the Asia Pacific Regional CSO Engagement Mechanism (APRCEM) are united in demanding the transformation of the international financial architecture to realise development justice in the region. 

The upcoming Fourth Conference on Financing for Development (FfD4) takes place amid multidimensional social, economic and climate crises spiralling amidst ongoing pandemic recovery and its challenges. The pandemic exposed how decades of neoliberal policies destroyed social protection systems, rendering Global South economies, including in the Asia-Pacific, vulnerable to the whims of foreign capital, and incapable of addressing peoples’ needs. 

We cannot ignore the genocide in Gaza and occupation of the rest of Palestine by Israel with financial and political support from the US, the expanding war in the West Asia and North Africa region, the rest of the African continent, and the heightening militarism in Asia-Pacific. Northern states refuse to deliver on development and climate obligations and even use the narrative of development financing shortfalls to promote private capital interests that cement corporate capture, while continuing to pour resources on military spending. 

Asia-Pacific, home to 60% of the global population, is a mix of large, emerging and least developed economies. However, at least 70% of the region’s wealth is controlled by 5% of the population indicating stark levels of inequalities. An international financial architecture based on neocolonial and extractive systems, breeding an oppressive relationship between the Global North and the Global South, perpetuates inequalities within and among countries with detrimental consequences for peoples’ right to development. The neoliberal development financing model exacerbates the issues of unsustainable debt, tax evasion, illicit financial flows, invasive trade & investment regimes, corporate capture through private financing, technological take-over, and unmet development and climate financing commitments. We challenge the undue global north and corporate influence on multilateral processes and its implications for governance, rights and development obligations in the global south at the FfD. We reiterate our call to just and equitable redistribution of wealth and resources, and the systemic transformation of the global financial architecture to realise Development Justice. 

 

II. A Global Financing Framework For and Beyond the 2030 Agenda in Asia and the Pacific: Development Justice at the core 

Asia and the Pacific region is faced with a myriad of emergent crises while struggling to progress on the 2030 Agenda. UNESCAP’s SDGs Progress Report 2024 revealed that out of the 116 measurable targets, only 11% are on track to be achieved by 2030 while the region is likely to miss on 89% of the targets. The report underscores the dismal rate of progress at merely 17% in the region, with the estimated achievement not in sight until 2062. This reflects the lack of sight, by the current development model through the 2030 Agenda, to an overhaul in the international financial architecture. While it sets itself as the benchmark, it still does not address the fundamental root causes of inequality and uneven development. 

The Fourth International Conference on Financing for Development is expected to reinforce and renew the commitments and existing efforts, especially those of the Addis Ababa Action Agenda (AAAA) to achieve the 17 SDGs, but its current framing lacks the coherence with realities on the ground. The business-as-usual neoliberal approach continues to reinforce policies that perpetuate systemic barriers undermining both peoples’ rights and development requirements. Reckoning the $4.2 trillion SDGs’ financing shortfall, with current average ODA falling 20 times shorter than the requirement, the emergent multidimensional crisis further skews development outcomes in the region. Moreover, the unmet development financing commitments, reaching merely $224 billion in 2023, with only 5 out of the 31 countries contributing  0.7% of their GNI, amplifies the risks for populations caught amidst climate, conflict and cost-of-living crises.  On the flipside, the global military expenditure, having crossed $2.4 trillion in 2023, exceeding ODA 10 times over, breeding conflicts, wars and militarism around the globe. Asia and the Pacific’s military expenditure reached a record $510 billion in 2023, way higher than its cumulative social services spending, crippling the prospects for peace in the region. 

COVID-19 enforced economic downturns, subsequent debt crises and austerity measures have further impoverished the majority of the population, disproportionately affecting the most marginalized segments especially women, children, indigenous and rural communities, among others. UNESCAP Public Debt Survey 2023 indicates at least 19 countries facing a high risk of debt distress largely due to the low output growth at 3.3% and record-high inflation at 7.6% across the region. This is compounded by the widening inequalities within and among countries, especially the Asian region characterized by high inequality, with its Gini coefficient at 44.7, in the absence of universal social security programs requiring adequate fiscal space.     

In fact, the neoliberal trade and investment regimes continue to enable flow of wealth and resources from developing countries through illicit financial flows manifested in tax evasions, capital flows, asset stealth, trade mispricing, and profit shifting by multinational corporations. Public Private Partnerships, relieving the state of its fundamental responsibilities to its citizens, continue to be promoted despite clear failures both in terms of sustainability as well as rights-based quality public services for all. 

The absence of emphasis on addressing systemic barriers undermines the fundamental principles of the Right to Development – envisioned to recognise the human rights to economic, social, cultural and political development – without which sustainable development, peace and justice cannot be achieved. 

The situation requires urgent structural reforms in the international financial architecture, prioritizing rights-based development programming, to reverse the neocolonial, neoliberal patterns for equitable financing for the global south. This should enable a robust framework that addresses systemic barriers, injustices, inequalities with and among countries, between men and women based on care, justice and reparations that would usher in a just, equitable and transformative financial architecture with Development Justice at the core. 


III. Peoples’ Issues, Concerns, and Demands

Austerity and debt 

As of 2024, the external debt of Asia-Pacific, including commercial, bilateral, and multilateral debt, is projected to reach approximately USD 21.1 trillion, the bulk of which comes from refinancing existing obligations, with USD 2.9 trillion earmarked for maturing long-term debt in 2024 alone. Debt servicing takes up most of national budgets, and limits development investment capacities, with 48 countries representing 3.3 billion people spending more on debt repayments than healthcare, education and social protection by end 2022. 

Developing countries paid a record-breaking $1.4 trillion servicing their debt as of 2023 according to the World Bank, even as they continued to struggle from the cascading impacts of the pandemic, building up from unresolved economic downturns of decades past. Further, conditionalities related to trade, in particular, that require removing or lowering tariffs, cause massive revenue loss for Global South countries and further pressures governments to resort to more borrowings, thus contributing to debt dependence and debt accumulation in the long run.

The consequences of governments prioritizing debt service, wary of default and lending windows closing on them, has fallen hardest on the poor and ordinary wage earners in many Global South countries. In South Asia, countries spent more on interest ($103 per capita) than on education ($81 per capita). Further, 85 percent of the global population (more than 6.3 billion people) is subjected to austerity, with figures expected to increase through to 2025. A Human Rights Watch report from 2023 highlights that 22 of 39 IMF programs reviewed included measures to contain or reduce public wage bills, compromising governments’ ability to provide quality public services like healthcare, education and social protection. Austerity measures prioritizing debt servicing over public funding for critical sectors and climate action, undermine development prospects vis a vis exacerbating vulnerabilities, particularly in lower-income countries, disproportionately affecting the most marginalized.  

Recommendations:

  1. Cancellation of all unsustainable, odious and illegitimate debts, and demand reparations, and debt-free support for education, health, and universal social protection, including loss and damage. An automatic debt cancellation mechanism that protects Global South countries from extreme social, economic, environmental, and security shocks, and the promotion of debt contract clauses that ensure sharing the risks of climate-related and other external shocks between lenders and borrowers. 
  2. An end to IFI-imposed structural conditionalities, and austerity measures, and rechanneling of public finance to ensure well-resourced universal social protection, that is binding and enforceable by law. Specifically, provide long-term, sustained, public investment for public goods and essential services, including but not limited to healthcare, education, universal social protection, pensions, and early childhood care and education, which remedy for systemic dis-investment in these areas and ensure gender equality and realisation of women’s human rights.
  3. A UN-hosted binding and transparent multilateral debt workout mechanism that convenes all creditors – bilateral, multilateral, and private – under the United Nations. This mechanism is a necessary alternative to the fragmented, ad hoc, creditor-centric and often inequitable legal approach that currently exists for restructuring debt, a problem exacerbated by the growing number of creditors as debt has moved from banks to capital markets. It is a process that also paves the way for the establishment of a UN Framework Convention on Sovereign Debt that is characterised by the following:
  4. Principles of responsible sovereign lending and borrowing, and promote legislation, both in lender and borrower countries, that mandates transparent and fair governance and management of sovereign debts.
  5. Lowering of borrowing costs to balance the exchange risk  by denominating  all or partial loans in the borrowers’ local currencies.
  6. A legally binding global debt registry to promote transparency and accountability, including data on the use of loan funds, disaggregated by gender, disability and age
  7. Debt servicing should not exceed the threshold spending for health, education, other social services and climate responses, and measures ranging from moratorium to debt cancellation in case debt servicing compromises health, education, social services, and climate spending.
  8. New approach to debt sustainability framework and analyses (DSAs), ensuring that the assessment is aligned with human rights, climate, sustainable development and gendered needs, including ex-post and ex-ante gender, human rights, labor and environmental impact assessments and audits. 
  9. Structural and financial climate reparations that are separate from ODA, including through Loss and Damage. Climate finance must be accompanied by ecological restoration, phasing out fossil fuel subsidies, extractivism, and shifting to decarbonized modes of production, distribution and consumption.
  10. Loss and damage to be funded through grants and not loans to avoid creating further debt burdens.  
  11. Debt relief instruments and measures, in any form, must fulfil principles of transparency and accountability, both in the negotiation and the implementation process, particularly on the use of the proceeds, guaranteeing meaningful participation and rights of the local communities over the interests of private intermediaries.
  12. Establishment of a debtors/borrowers bloc to have leverage in negotiations with creditors. For instance, if a country is offered better terms, these terms should be applied to all members of the debtors bloc. Or develop comprehensive action plans to mitigate the risks associated with unilateral coercive measures imposed on businesses and individuals, which discourage legitimate activities with targeted countries. 

Illicit financial flows, regressive taxation and domestic resource mobilisation

Developing countries lost over $7.8 trillion between 2004-2013 in Illicit Financial Flows (IFFs), which has continued to increase at 6.5% every year, twice as fast as the global GDP, while exceeding the ODA six times over in the same timeframe. The State of Tax Justice 2024 report indicates that the global revenue losses due to cross border tax abuse amount to an annual $492 billion, made up of $347.6 billion due to corporate tax abuse by multinational companies, and $144.8 billion due to undeclared offshore assets by wealthy individuals. In Asia, US$101.71 billion is lost annually due to tax abuse, of which, 82% ($83.36 billion) is due to corporate tax abuse. Although higher-income countries lose more to tax abuse in absolute terms, the lower-income countries are impacted more in proportional terms. 

IFFs are difficult to qualify, categorize and measure due to conceptual and definitional challenges, their multidimensional nature involving a wide range of activities, taking different forms and varying channels, among others, requiring country-specific solutions guided by a common framework. Lack of adequate tracking of such flows, manifested in tax evasions, trade mispricing, profit shifting and asset stealth by the multinational corporations from the North, exposes the frailties of multilateral political will on critical issues that prove to be casualties on the way to consensus among member states. Calls for combating Illicit Financial Flows (IFFs) have failed to mobilize consensus on the need for adequate mechanisms to track such outflows, and hold the multinationals and their host countries to account for eroding human rights and development prospects. 

Recommendations:

  1. Commit to enhancing national regulatory apparatus, guided by regional and global frameworks, to help curb IFFs and other illicit financial activities.
  2. Evaluate, strengthen and effectively translate international standards and accountability mechanisms for enablers into national legislation to standardize regulatory regimes.
  3. Establish an inclusive global coordination mechanism at the United Nations Economic and Social Council (ECOSOC) to address financial integrity at a systemic level and exchange best practices for effectively tracking and curbing IFFs. 
  4. Commit to supporting developing countries’ full implementation of the UN Convention Against Corruption vis a vis concrete accountability measures for tax havens, including reparations, especially for member states harboring such havens.  
  5. Enhance transparent asset recovery and return processes through strengthened international cooperation for a multilateral mediation mechanism to aid in resolving challenges related to asset recovery and return.
  6. Implement wealth taxes and corporate tax structures to ensure equitable contribution to national revenues, through a minimum tax floor set at 25%, addressing both the concentration of wealth vis a vis equitable financing for critical sectors. 
  7. Prioritize the process of adopting the UN Tax Convention to create a multilateral framework for addressing tax avoidance, profit shifting and trade mispricing issues.  
  8. A comprehensive taxation mechanism for digital corporations to pay their fare share to the countries where they earn profits without necessarily having a physical footprint.   
  9. Regressive taxation measures exacerbating the cost of living crisis should be reversed, through a coherent assessment mechanism protecting the poorest, vis a vis enhancing progressive taxation effort to avoid policy incoherence.
  10. Tax incentives and harmful subsidies, as a means of attracting FDI, should be reversed to avoid the race to the bottom affecting both labor and environmental standards across the global south.


Public private partnerships, blended finance and corporate capture 

Private finance has been promoted by the multilateral development banks, donor countries, and the UN as the solution for development financing shortfalls, estimated at $4.2 trillion per year. The development financing gap narrative conveniently ignores multinational corporations plundering resources from the Global South through labour exploitation, resource extraction, unequal trade, tax evasion, and illicit financial flows. 

Much of the expansion of PPPs into the developing world has been driven by a network of experts, scholars and consultants working in the context of the International Finance Corporation (IFC) and the World Bank, and their regional counterparts, such as the Asia Development Bank, which have positioned PPPs as a cost-effective policy solution to the access and quality issues in education, especially in low and middle-income countries. But substantial literature provides clear evidence that Public-Private Partnerships (PPPs) commodify social services divesting from critical sectors impeding the access of the most marginalised communities. Moreover, PPPs tend to be more costly than publicly-funded infrastructure and services due to risk subsidies, higher costs of borrowing, user fees, and other costs that guarantee profits to foreign private investors. Overall, PPPs make business out of public services in favour of foreign investors, strain public resources, undermine domestic interests, and endanger people’s rights and the planet. 

Similarly, blended finance has not scaled up financing for development or leveraged sustainability outcomes, and in fact, investment protection regimes prioritize profits at the cost of social, economic and ecological costs for the public. 

Recommendations:

  1. Establish a UN intergovernmental process to review PPPs, blended finance, investment bonds for SDGs and other private finance instruments, and their impacts on fiscal, human rights, labor and environmental standards. 
  2. Enact robust regulatory frameworks for PPPs to ensure that private providers adhere to norms and standards of quality, transparency, public accountability, and oversight. The capacity of states to effectively regulate is vital to securing the right to quality public services and to effectively mitigating against inequality. However, state capacity to set, monitor, and regulate private providers, particularly in low-income or fragile contexts with governance issues, has been shown to be limited. Therefore, in such cases, a mechanism in the UN should be in place to ensure that human rights, labor and environmental standards  are not violated by PPPs. 
  3. Regulate corporations and private finance by: 
  4. Establishing an internationally legally binding instrument on TNCs and business enterprises 
  5. Establishing a global regulatory framework for the asset management industry, and a global agreement on the importance of capital account management.
  6. Establish a UN intergovernmental process to review, transform, and democratise IFIs and MDBs 
  7. But beyond this, we need to seriously consider holding IFIs accountable for historical harms and rights violations. IFIs’ promotion of private finance has resulted in harms, violent displacement of Indigenous and peasant communities, attacks against land rights defenders, and other rights violations. They enjoy immunity and are known as a human rights-free zone. This should be challenged. Internal inspection panels and accountability mechanisms of IFIs are biased and not independent.
  8. Strengthen public financing for development by addressing tax abuse, debt, illicit financial flows, and unmet development commitments. Assert states’ duty to uphold and fulfill people’s rights to social services. Address reliance on debt, commodity exports and foreign investments; develop productive capacities, re-nationalise industries, support MSMEs, and diversify national economies to generate public finance for development.


Unjust trade and investment policies

The Asia Pacific (AP) region has witnessed an increasing engagement with trade and investment policies as a key tool for development. Along with unilateral policies, the region has been actively engaged in signing legally binding trade and investment agreements at multiple levels, including mega-FTAs such as the Regional Comprehensive Economic Partnership (RCEP), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the recently launched US-led Indo-Pacific Economic Framework (IPEF). These bilateral and regional agreements not only cover trade in goods and services, but often include areas that get deep into regulatory policy, often beyond WTO commitments; such as investment, intellectual property rights, digital economy and ecommerce, government procurement, and competition policy, among others. 

In addition, the region is host to around 2,139 International Investment Agreements (IIAs), which include bilateral investment treaties (BITs) and investment chapters in FTAs, allowing major policy concessions, accepting invasive neoliberal instruments as well as conceding arbitration leverages such as ISDS to foreign corporations. The agreements, with their range of provisions, have enabled detrimental implications across the social, economic and environmental spheres against the principles of policy coherence. The power dynamics of these agreements have discriminated against vulnerable populations deepening existing inequalities of the most marginalized.

Marginalised communities have also been adversely impacted through the IP provisions of the TRIPS Agreement of the WTO which are now pushed to even higher standards in the FTAs. Such provisions have raised prices of medicines across the global South and hampered access to technologies for diagnostics, therapeutics and vaccines. Simultaneously, services liberalisation has not led to uniform increase in access to services, but rather to price rises in health, education, banking and insurance services, through the withdrawal of public services and increase in profit-driven foreign private services, thus exacerbating the inequality in access for vulnerable populations. The trade liberalisation framework of the WTO was supposed to provide developing countries and LDCs the policy tools they needed for pursuing their development objectives. But nearly 30 years down the road, the WTO, the FTAs and the Investment agreements, have in conjunction severely restricted their policy space to develop, especially through invasive instruments like ISDS. 

Recommendations:

  1. Address Investor-State-Dispute-Settlement (ISDS) in investment agreements in the Asia Pacific: Provide the mandate for a comprehensive framework of international investment based on the principle of reparation that replaces the ISDS by a system that is underpinned by cooperation, accountability and transparency; and recognises the primacy of human rights and sustainable development priorities. It should be comprehensive in the sense that it must go beyond just the system of dispute settlement and arbitration.
  2. Promote policy space for development including the strengthening of special and differential treatment: Developing countries and LDCs must get full policy space to determine national policies that impact their development objectives and pathways; including through the expansion and full realisation of special and differential treatment. Trade commitments must be subservient to such policy decisions.
  3. Promote a cohesive and efficient multilateral  approach on sustainability: While climate measures must be the domain of the UNFCCC, any trade related discussions on environment and sustainability must be multilateral, democratic, transparent, must integrate the principle of CBDR, avoid standard-setting as a tool for economic advantages and rather address substantive issues such as carbon-trading and the ISDS. Any unilateral trade measure justified on grounds of sustainability must be rejected outright.
  4. Promote access to technology in developing countries and LDCs through its facilitation and transfer through trade agreements rather than hindering access to technology through the use of intellectual property rights provisions in the areas of seeds; medicines, vaccines, therapeutics and diagnostics; and environmental technology. At the same time allow the policy space for developing countries and LDCs to design their own domestic policies for the development and use of domestic technology including digital technology and data. 
  5. All trade agreements and treaties that include military and arms trade, extraction and production across the global supply chain must be held accountable and subjected to public participation and a referendum. Such trade also undermines human rights and diverts critical resources away from development spending.
  6. Ensure publicly accessible information and transparency of trade and investment agreements, allowing for public oversight and independent monitoring, including by local communities.
  7. Conduct ex-ante, ex-poste and periodic sustainable development and human rights impact assessments of trade and investment agreements, especially from the perspective of marginalised constituencies, led by oversight and (independent) monitoring committees including parliamentarians, civil society and local communities.


International Development Cooperation/Official Development Assistance

Development cooperation is now at a crossroads to address the longstanding gap between the Global North and the Global South that is built on the former’s ceaseless extraction of the latter’s resources. Even the official development assistance, which was historically and essentially intended to “expand the flow of resources to less developed countries,” has not been spared from the neocolonial and extractivist economic cycle. In fact, for every $1 of aid the South receives, they lose $14 in resource drain alone. Recent ODA data shows that despite what seems to be an increase from the previous year, the 2023 ODA preliminary total worth $223.7 billion only represents 0.37% of the combined gross national income (GNI) of the Development Assistance Committee (DAC) member countries, still far from the 0.7% threshold set by the Organisation for Economic Co-operation and Development (OECD). Time after time, donor countries have consistently failed to meet their obligations which eventually led to a USD 4 trillion worth of undelivered aid. 

International financial institutions, on the other hand, remain culpable in the maldevelopment of the developing countries due to austerity policies, private finance mobilization, and conditional loans, all while being influential institutions and important channels of aid. In a region where 134 million people are living below their country’s minimum wage, 238 million are living with disabilities, and almost 60% of the world’s elderly population is located, aid is still an essential source of financing to support the development of various marginalized groups, and this demands reforming the development and financial architecture.

Recommendations:

  1. Shift the narrative of aid as reparations from the neocolonial and neoliberal grip of the North by democratizing global governance and establishing the UN Convention on International Development Corporation, which will set a new normative framework of development cooperation. While we acknowledge the role of OECD-DAC, IFIs, and other multilateral institutions, it is now time to shift the power to the Global South in leading and defining their own development. A reparative lens ensures that accountability is centered on the Global North and would not pass on the burden to the maldeveloped Global South countries.
  2. Ensure that ODA is delivered by reiterating that aid is an obligation, and compel donor countries to ramp up and exceed their ODA commitments of 0.7% GNI per year. This also includes recognizing “aid debt” for the years of unpaid and unmet ODAs. 
  3. Strengthen accountability across stakeholders by creating a more binding framework, in which IFIs would answer and be accountable to multi-stakeholders such as the UN member states, national governments and laws, and to the affected people and their communities.
  4. Empower the Global South in pushing for their own economic and political sovereignty, in which development cooperation policies are centered on their needs instead of the geopolitical interests of the Global North.


Cross-cutting: Digital Divide, Digitalisation and Technology

Technology can either facilitate the achievement of human rights and sustainable development, or further aggravate inequalities, strengthen corporate power, maintain neo-colonial relations between developed and developing countries, and worsen unsustainable development. It is thus important that mechanisms are in place to guarantee people’s access to technology especially in developing countries, making sure technology is developed and transferred in an equitable manner, promoting local innovations and recognizing diverse sources of knowledge, and that it does not cause harm. 

The Asia Pacific region is characterized by profound disparities and challenges that threaten the potential benefits of its digital transformation. The urgency for a new digital economy based on redistributive justice is palpable, as many developing countries grapple with the implications of technological advancement while striving to uphold their sovereignty. The dominance of global tech giants often sidelines local innovations and indigenous knowledge systems, leaving communities vulnerable and underrepresented.

For example, in Asia-Pacific, the e-learning market is expected to reach US$ 113.39 billion by 2028 from US$ 55.81 billion in 2022 (annual growth of 12.5% – APAC E-Learning Market Forecast). However, wide disparities exist in access within and between countries in the region. Nearly 40% of the population in the Asia Pacific remained unconnected in 2021 (ITU, 2022). During the pandemic, online learning failed to reach at least half a billion, or 31% of students worldwide – and 72% of the poorest (UNESCO GEM Report, 2023).

The financial landscape in the region also presents significant barriers to equitable digital access, with many communities lacking access to affordable financial products, experiencing the digital divide. The governance of digital technologies poses a substantial challenge. The unchecked influence of Big Tech corporations raises concerns about data privacy, monopolistic practices, and the erosion of local economies. Environmental and social impacts of new technologies further complicate the landscape, with the rapid rollout of digital infrastructure often overlooking its effects on local ecosystems and communities. Moreover, the gender digital divide remains a pressing issue in the region. Women, particularly in rural areas, face significant barriers to accessing digital technologies, which limits their economic opportunities and participation in the digital economy. The interplay of technology, governance, and community needs must be navigated carefully to ensure that the benefits of the digital economy are equitably distributed, fostering resilience and empowerment for all.

Recommendations:

  1. We call upon governments and multilateral institutions to uphold the technological sovereignty of developing countries. Enabling local innovations based on traditional and indigenous knowledge systems and endogenous capacities to respond to community needs and aspirations as defined by these communities.
  2. Ensuring community connectivity should not undermine state obligations to provide basic services and social protection to communities. Innovative mechanisms are essential but need to be community designed and publicly managed. Exploring solutions, such as community centered connectivity initiatives and other complementary solutions can offer viable alternatives to traditional connectivity models, ensuring a more inclusive approach to addressing the digital divide while providing options beyond digitalization.
  3. There is a need to build a democratic, rule-based governance regime for a digital paradigm that can rein in Big Tech corporations and cryptocurrency operations and rethink digital platform, data, and AI-supported production models that do not reinforce gender and racial biases, exploitation, inequalities, and aggravate environmental impacts. 
  4. As the UN, governments and institutions grapple with the governance of digital technologies, there is a need for a UN mechanism on the evaluation of actual and potential impacts on basic needs of people, the environment, health, the labor market, livelihoods and society. This mechanism must be broad, transparent, inclusive, accessible and participatory, and should be mandatory before deployment of any new technologies. The institutionalization of gender audits of technologies should also be conducted to examine the impacts of existing and new technologies on women.
  5. The horizon scanning and foresight capabilities of developing countries and communities must be enhanced, focusing on identifying options that extend beyond technological solutions. Governance measures regarding technology should not only involve regulation but also prioritize the protection of community rights, ensuring that the common good takes precedence over profit. This includes providing mechanisms for communities to reclaim and expropriate resources and solutions that have been appropriated by corporations under intellectual property rights.
  6. On education, ensure equitable, inclusive, gender-just digitalisation, ensuring the protection and privacy of learners. Invest in appropriate and context-based technologies and prioritise the poorest, most excluded communities and learners.
  7. The transfer of climate-friendly technologies from developed countries to developing countries should not be impeded by the restrictions of intellectual property rules under trade frameworks. These are preventing wider adoption of emission-reducing technologies, shifting the costs onto developing countries either in royalty payments or paying the price of higher emitting processes and products, while benefiting those who hold the patents, often from countries most responsible for climate change.
  8. Industrial activities, facilitated by free trade agreements, to access materials for physical technology in locations and ways that will have devastating consequences for local communities and the environment, such as deep sea mining, should be permanently banned in line with human rights and the health and well-being of the environment.


Climate Finance

In the recently concluded COP 29, developed countries agreed to raise USD 300 billion in climate finance by 2035, which falls short of the expected USD 1 trillion per annum to support developing countries in moving towards a low carbon development pathway. In Asia Pacific, there is a huge dependence on fossil fuels where 75% of global coal production and 94% of global coal pipeline is produced, accounting for 58% of global emissions, requiring equitable finance for energy transition. ADB estimates that the region faces a climate finance gap of $800 billion per year, with more than 70% of the climate finance provided through debt channels, while the  region accounts for 25% of the total global debt with at least 19 countries at high risk of debt distress (ESCAP, 2023). 

The second Needs Determination Report of the Standing Committee on Finance (SCF) 2024 revealed that the developing countries need $5 trillion to $6.8 trillion up to 2030 to implement their NDCs, while smaller countries’ estimations may be much less than required due to lack of assessment capacity. Moreover, these SCF estimates do not include economic costs from loss and damage, which would take the required threshold to a much higher ratio. Besides, a clear definitional understanding of climate financing needs to be established; OECD claimed providing $115.7 billion in climate finance in 2022 whereas Oxfam revealed that the actual climate funding amounted to $35 billion of the claimed. Similarly, a coherent bifurcation is critical to assess the percentage of climate finance provided for adaptation measures, currently lackluster at 20%. This requires coherent, consistent, CBDR considerate climate financing mechanisms, vis a vis comprehensive debt cancelation, reduction of illicit financial flows, progressive and corporate taxation measures to leverage climate financing in the global south. 

Financing for development cannot be achieved without genuine climate finance, which is new and additional, timely, transparent and predictable and based on the needs of the developing countries largely sourced from the public sources and given in grant equivalent terms. It must factor in the rising costs of extreme climate events for the developing countries and has a proportion allocated for simplified direct access for vulnerable and marginalized communities.

Recommendations:

  1. Debt cancellation to allow countries to increase climate spending rather than on paying debts, increased taxation for high net worth individuals, and complete divestment to fossil fuels;
  2. Climate financing such as the Forest Pledge should  focus on forests and other ecosystems that are critical for combating climate change and combating biodiversity loss;
  3. Give priority to those peoples, communities, and ecosystems who are most at risk and struggle the most difficult circumstances and particular focus and support be provided for women, youth, persons with disabilities and other marginalized groups. Peoples who are most at risk includes those without recognized rights, peoples in voluntary isolation, territories affected by violence, and defenders; 
  4. Align flexible long term funding with self determined priorities  and increase direct funding. In this, support should be aligned with the peoples/communities’ self determined priorities and strategies, provide flexible support to counter emergencies and work towards long term unrestricted funding  and for Indigenous Peoples one that truly underpins self-government and autonomy;
  5. Strengthen transparency and tracking of climate funding which includes publishing available detailed data and disaggregating further to funding provided to Indigenous Peoples, local communities, women, and youth and geographical distribution among others; 
  6. Reform the current climate finance architecture to make it more accessible for peoples and communities and support more locally-led climate action.
  7.  Redefine what constitutes “Climate Finance”, ensuring genuine climate financing.   
  8. Develop a  mechanism that ensured the direct access of marginalized and vulnerable communities to climate finance. 
  9. Gender-responsive climate financing  and scaling of the community led best practices on resilience and adaptation. 
  10. Refusal of Carbon market and emission trading since they are dangerous and destructive mechanisms for deciding climate finance.   Market-based finance false solutions should be ignored. 
  11.  Governments should ensure adequate fund allocation for the  just transition. 
  12. Polluter pay and historical responsibilities should be underlying principles in climate finance. 
  13. Accepting the green energy projects also have immense externalities ,  The project proponent should be able to address the real cost of the green energy  project, and proper community consultations in planning, design, implementation and monitoring  should be conducted.

IV. Follow up and Review

Consolidation and strengthening of the annual FfD cycle is needed and the FfD review forum, currently held annually, is an important space for taking stock of the FfD process, of progress made and for identifying gaps. But it has increasingly become an ineffective forum as it is preceded by a gradually weakening process of evaluation; In addition, it does not ensure true accountability from the responsible Member States. 

The current Inter-Agency Task Force (IATF) process of stock taking and evaluation set up by the Addis Ababa Action Agenda is flawed as it is stuck in its political economy and exhibits a strong bias towards the status quo, being therefore an agency of regression rather than advancement of the agenda. The political dialogue and follow-up process of FfD4 should be Member States-driven, rather than an expert-driven process. 

Further, the donor and developed countries should be more accountable for their actions and guarantee delivery of commitments; The certainty of the implementation window will be a critical factor in ensuring the success of the FfD4 commitments, particularly for urgent and time-sensitive, imperative measures such as the immediate debt cancellation and reparations, expediting measures to establish a UN-hosted binding and transparent multilateral debt workout mechanism that paves the way for the establishment of a UN Framework Convention on Sovereign Debt, and the provision of non-debt creating, additional resources that are sufficient and responsive to the climate mitigation, adaptation and loss and damage needs of the peoples of the Global South.

Concrete indicators and parameters to review and assess the implementation of commitments in FfD4 need to be adopted and data at the national and regional levels should be made accessible to civil society to be effective partners in following up and reviewing commitments of governments and institutions in FfD.  Documentation of lived experiences of communities impacted by projects and priorities in financing for development should be prioritised as concrete evidence and inputs  in review processes.

To provide a meaningful mechanism for civil society to provide substantive inputs and effectively engage in follow up and review of implementation of commitments in FfD4, a dedicated session on FfD in the RFSDs should be institutionalized.  Civil society should be  represented in FfD sessions and deliberations in regional processes. Civil society submissions on follow up and status of implementation of commitments at the national level should be encouraged  throughout the year.

Finally, there is need for certainty of time-frame for follow-up with a clear date for the Fifth FfD Conference, possibly in 2030.

Change the System, Shift the Power! Development Justice!