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Sebastien Nkoa

By Sébastien Nkoa Ayissi, OP, Cameroonian economist, banker, and student of Theology at the Catholic University of East Africa in Nairobi, Kenya, and SNDatUN delegate to the Third International Conference on Financing for Development

Morning came and evening came, that was the last day. Unlike in the Bible story God looked at what they had done at FfD3 and he saw that it was not good at all. That is why he inspired CSOs not to rest yet. Not to rest yet, is the feeling we all leave Addis Ababa with since billion of people all over the world will not forgive the inhuman face of the outcome document of Addis. Why? you will ask me, and I will answer you that from Monterrey consensus to Addis Ababa declaration we moved from great hope to great disappointment. Let us analyze why is it so.

NkoaFirst of all and this is the most disappointing point of Addis Ababa, private sector has been given more power.  Indeed if you read the final draft that is about to be adopted it is recommended to countries at their national level to strive to eradicate poverty by 2030. Good point. But how will LDCs (Less Developed Countries), SIDSs (Small Island Developing States) and LLDCs (Land Locked Developing Countries) achieve that goal? How will they be able to mobilize the huge amount of money required to meet the SDGs (Sustainable Development Goals)? The great answer of Addis Ababa conference is simple: first of all PPPs (Private Public Partnerships). Indeed if you read the final document paragraphs 35, 36, 37, 38. Let’s just read together the first lines of those few paragraphs: paragraph 35: “Private business activity, investment, and innovation are major drivers of productivity, inclusive economic growth and job creation.” Paragraph 36: “we will develop policies and, where appropriate, strengthen regulatory framework to better align private sector incentives with public goals.” Paragraph 38 “we acknowledge the importance of robust risk-based regulatory framework for all financial intermediation, from microfinance to international banking.” Having been a banker and with the respect due to my colleagues bankers I have never seen a banker who invest in an activity where he knows very well that he will lose. And this is the greatest mistake Addis Ababa is making. MoI (Means of Implementation) of the post 2015 agenda are entrusted to a sector that is 100% after profit, that is the private sector. Consequences of such a choice decision are disastrous since governments will be forced to privatize key sectors such as energy, health, transport, education, just to mention those few. And we all know that those sectors are non-profit making sectors, not a single rational economic agent or investor will venture in those sectors in order to make profit. Yet Addis Ababa is condemning developed countries to do so though in developed countries it is not the case.

The second point of disappointment is related to the role of our governments. It has come up clearly that national governments in developing countries have been weakened. I would like to elaborate this section by calling upon the final document of Addis Ababa where we noticed that ODA (Official Development Aid) and FDI (Foreign Direct Investment) are not enough, though this was supposed to represent a substantial additional income for governments in developing countries to achieve the SDGs. We said it previously ODA and FDI all together are 10 trillion US dollars while developing countries need 160 trillion US dollars to meet the SDGs. Indeed Addis Ababa document shows us clearly that most of the countries that promised 0.7% of ODA/GNI 0.15% to 0.20% of ODA/GNI to LDCs have not fulfilled their promises. Let’s read paragraph 51: “we express our concern that many countries still fall short of their ODA commitment and we reiterate that the fulfillment of all ODA commitment remains crucial[…] we urge all […] to step up efforts to increase their ODA and to make additional concrete efforts towards the ODA target.” Do we need more to see that national governments are twice weakened? First they are deprived of substantial aid that would have given them tools to meet their responsibilities, second they are forced to privatize key sectors. Like in the first point we made above consequences of this weakening of national government is disastrous because this is what will happen:  when PPPs will fall short in those key sectors we mentioned above (since no profit can be made out of their exploitation), the responsibility of that failure will fall upon national governments at a double level. One they will have an unhappy populace after them, two they will carry the burden of cleaning the mess done by those firms which would have left the country already. We can mention here the energy crisis in many African countries though the energy sector had been privatized just after structural adjustment measures. Education crisis can be mentioned also. Since governments privatized that sector, there is no clear indication of increase in statistics of children going to school, even more, the quality of education decreased and cost increased. At a micro level these PPPs will not favor at all local industries. Indeed how can we expect LDCs LLDCs SIDSs MSMEs (Micro Small Medium Enterprises) to compete with big multinational which will overflow in developing under the arguments of PPPs? It is even clear in the final document in paragraph 88 that something need to be done at that level: “Recognizing that international trade and investment […] also requires complementary actions at the national level, […] we further recognize the need for value addition by developing countries and for further integration of MSMEs into value chains.” At this level too our national governments failed to protect their local industry against multinationals. Addis Ababa conference shows us that sectors that will benefit from this PPPs are only those that will benefit them directly like STI (Science and Technology Innovation) which people living in poverty don’t enjoy since they have more important struggle to fight like daily meal challenge, sanitation, education just to mention those ones. Since as we have just seen our national governments have been weakened, the final question is: who will pay the bill?

CKCNvoSWUAA_Jw-The answer to this question is simple: People living in poverty and the environment will pay the bill. Among the multitude of side events which went on here in Addis Ababa during the four days of conference, it has been noticed that people living in poverty are those paying the bills of the mess in which our world is. People living in poverty are deprived of the basic services they deserve from governments which have been weakened as we mentioned above. Those services have been privatized, given to companies which are only after profit, thus they charge services that should be free of charge or just paid basic fees to support the system. At the end of the day when those companies run short in those sectors they just abandon them and both government and citizen are left on the roadside. And who will be charge in order to clean up the mess: People living in poverty. Over the issue of extractive industries, for instance, the document made it clear that this sector should be regulated. Let’s have a look at paragraph 26: “we underline the importance of corporate transparency and accountability of all companies, notably in the extractive industries. We encourage countries to implement measures to ensure transparency, and take note of voluntary initiatives such as Extractive Industries Transparency.” These industries invade developing countries, extract natural resources almost freely, and leave local populations empty handed and even worse with only big holes here and there if these populations had been lucky enough not to be displaced. The minerals extracted are sold at an affordable cost in international markets. The people from whom resources are stolen are the same who are burdened by the debt. Paragraph 93 says “many countries remain vulnerable to debt crises and some are in the midst of crises including a number of LDCs, SIDSs. […] We acknowledge that debt sustainability challenges facing many LDCs and SIDSs require urgent solutions.” Poor people living in poverty are condemned to pay twice, pay because their resources are stolen from them and pay because they borrowed money to clean the mess made by those who stole their resources. The first price they are to pay is the one they have to pay in order to clean the mess made because of bad policies and lack of transparency. They are charged for services that should be free and that they privatized hoping for the best which didn’t happen. To solve this they borrow money from those who stole their resources and sold them at a high price to the original owners. And since they can’t repay what they borrowed they are condemned.

Nkoa 2These are few elements that we really regret and cause our disappointment. These few issues have not been addressed by the final document as expected since the issue of tax we mentioned yesterday would have solved the matter by providing 160 trillion US dollars to LDCs LLDCs and SIDSs at once if the tax body was to be implemented. So who will pay the bill? People living in poverty as usual. From great hope to great disappointment — that is the feeling we have of FfD3.


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