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12. Create a Global Enabling Environment and Catalyse Long-Term Finance

High Level Panel on the Post-2020 Development Agenda

a) Support an open, fair and development-friendly trading system, substantially reducing trade-distorting measures, including agricultural subsidies, while improving market access of developing country products

b) Implement reforms to ensure stability of the global financial system and encourage stable, long-term private foreign investment

c) Hold the increase in global average temperature below 2⁰ C above pre-industrial levels, in line with international agreements

d) Developed countries that have not done so to make concrete efforts towards the target of 0.7% of gross national product (GNP) as official development assistance to developing countries and 0.15 to 0.20% of GNP of developed countries to least developed countries; other countries should move toward voluntary targets for complementary financial assistance

e) Reduce illicit flows and tax evasion and increase stolen-asset recovery by $x

f) Promote collaboration on and access to science, technology, innovation, and development data

An enabling global environment is a necessary condition for the post-2015 agenda to succeed, to set us on a course towards our vision of a 2030 which is more prosperous, more equitable, more peaceful and more just. An enabling environment makes concrete the spirit of a new global partnership, bringing cooperation to bear on pressing global challenges.

Creating a global trading system that actively encourages sustainable development is of paramount importance. Increasingly, countries are driving their own development, and this dynamism is driven by trade more than aid. Ensuring that the global trading system is open and fair creates the platform for countries to grow.

The WTO is the most effective tool to increase the development impact of trade, and a successful conclusion of the Doha round of trade talks is urgently needed to put the conditions in place for achieving the post-2015 agenda. Currently, goods and services produced by firms in least-developed countries (LDCs) face quotas and duties that limit their ability to cross borders and succeed in the global marketplace. Systems that provide market access for developing countries, including preference programmes and duty-free, quota-free market access, can assist LDCs. However, even when these fees and limits are reduced, other complications can arise, such as ‘rules of origin’, that can create unnecessary red tape and paperwork for LDCs. This curtails the participation of LDCs in global production chains, and reduces their competitiveness in the global marketplace. Some agricultural subsidies can distort trade and market access of developing country products.

A system that better facilitates the movement of people, goods and services would go a long way towards allowing more people and more countries to benefit fully from globalisation. Increased trade and access to markets brings more equitable growth and opportunity for all – the surest way to defeat poverty and deprivation.

Stability of the financial system is crucial to enable long-term growth and sustainable development. The severe downsides of an interconnected world were brought to life in the global financial crisis in 2008. Risky actions in one part of the world can wreak havoc on people across the globe – and can reverse gains in eradicating poverty. Commodities are especially volatile and we urge continued commitment to initiatives such as the Agricultural Market Information System, to enhance food market transparency and encourage coordination of policy action in response to market uncertainty.

Following the financial crisis, there is more concern that the international financial architecture must be reformed, and agreed regulatory reforms implemented consistently, to ensure global financial stability. Recommendations and actions are being implemented, both in major individual financial centres and internationally.

The proper place to forge an international agreement to tackle climate change is the UN Framework Convention on Climate Change. The Panel wants to underline the importance of holding the increase in global average temperatures below 2 degrees Centigrade above pre-industrial levels, in line with international agreements. This is all the more important as, despite existing agreements, the world is missing the window to meet the promise made to limit global warming to a 2 degree rise over pre-industrial temperatures.

Without tackling climate change, we will not succeed in eradicating extreme poverty. Some of the concrete steps outlined in this report, on renewable energy, for example, are critical to limiting future warming and building resilience to respond to the changes that warming will bring.

The 2002 Monterrey Consensus was an historic agreement on development finance that guides policy today. Developed countries that have not done so agreed to make concrete efforts towards lifting their aid budgets towards the target of 0.7% of GNP. As part of that, they reaffirmed their commitments to offer assistance equal to 0.15 to 0.2% of GNP to least-developed countries. This is still the right thing to do. Official development assistance (ODA) that flows to developing countries is still a very important source of financing: 55 cents of every dollar of foreign capital that comes into low-income countries is ODA. Other countries should also move toward voluntary targets for complementary financial assistance.

Developed countries have to go beyond aid, however. There are signs that the money illegally taken out of sub-Saharan Africa and put in overseas tax havens and secrecy jurisdictions is greater than all the aid money that has been put in. Some of this is money-laundering of bribes and stolen funds, and some is to evade taxes. Much more can and should be done to stop this. It starts with transparency in all countries. Developed countries could be more actively seizing and returning assets that may have been stolen, acquired corruptly, or transferred abroad illegally from developing countries. The average OECD country is only “largely compliant” in 4 of 13 categories of Financial Action Task Force (FATF) recommendations when it comes to detecting and fighting illicit financial flows.

If the money is openly tracked, it is harder to steal. That is the motivation behind the Extractive Industries Transparency Initiative, a voluntary global standard that asks companies to disclose what they pay, and has governments disclose what they receive. Other countries could adopt EITI and follow the example of the United States and the EU in legally compelling oil, gas and mining companies to disclose financial information on every project.

Developed countries could also pay more attention to exchanging information with developing countries to combat tax evasion. Together, they can also crack down on tax avoidance by multinational companies through the abuse of transfer pricing to artificially shift their profits across international borders to low-tax havens. When developed countries detect economic crimes involving developing countries, they must work together to make prosecuting such crimes a priority.

Domestic revenues are the most important source for the funds needed to invest in sustainable development, relieve poverty and deliver public services. Only through sufficient domestic resource mobilisation can countries ensure fiscal reliance and promote sustainable growth. Data is one of the keys to transparency, which is the cornerstone of accountability. Too often, development efforts have been hampered by a lack of the most basic data about the social and economic circumstances in which people live.

To understand whether we are achieving the goals, data on progress needs to be open, accessible, easy to understand and easy to use. As goals get more ambitious, the quality, frequency, disaggregation and availability of relevant statistics must be improved. To accomplish this requires a commitment to changing the way we collect and share data.

Systems are not in place today to generate good data. This is a special problem for poor countries, but even the most powerful and wealthy countries have only a limited understanding of, for example, how many patients in a given area are accessing healthcare services, and how and what happens when they do.

The availability of information has improved during the implementation of the MDGs, but not rapidly enough to foster innovations and improvements the delivery of vital services. Learning from data – and adapting actions based on what we learn from it – is one of the best ways to ensure that goals are reached.

To be able to do this, we need to start now, well ahead of 2015. We need to build better data-collection systems, especially in developing countries. Without them, measuring the goals and targets set out here can become an undue and unfeasible burden. With them, a global goal framework is an effective way of uniting efforts across the globe. Building the statistical capacities of national, subnational and local systems is key to ensuring that policymakers have the information they need to make good policy. The UN Statistical Commission should play a key role.

Data are a true public good, and are underfunded, especially in low-income countries. That must change. Technical and financial support from high-income countries is sorely needed to fill this crucial gap.

The innovation, diffusion and transfer of technology is critical to realising true transformation. Whether in information, transportation, communications or lifesaving medicines, new technologies can help countries leapfrog to new levels of sustainable development. Some technologies exist which can help us reach our vision for 2030, and science is making ever greater progress in this direction, but some technologies have yet to be developed. Partnerships can help us develop the tools we need, and ensure that these innovations are more broadly shared.

At its heart, a global enabling environment must encourage substantial new flows for development, better integrate resources by engaging the talents of new partners from civil society and the private sectors, and use new approaches. This goal underpins the action and partnerships needed to fully achieve the ambitious aims of the post-2015 agenda.