Addis Ababa Action Agenda — Monitoring Commitments and Actions

Addis Ababa Action Agenda Monitoring commitments and actions

Inaugural Report 2016 Inter-agency Task Force on Financing for Development

asdf United Nations New York, 2016 Cover photo credits Left: UN Photo/John Isaac Top right: UN Photo/Pasqual Gorriz Middle right: UN Photo/Eva Fendiaspara Bottom right: UN Photo/Pasqual Gorriz

United Nations publication Sales no. E.16.I.7 ISBN 978-92-1-101336-8

In 2015, world leaders made ambitious commitments to transform the global economy, bring new opportunities to billions of people, and leave a healthier planet for future generations. Three critical milestones made the year 2015 a global landmark for sustainable development and international cooperation. First, the Addis Ababa Action Agenda provides a new global financing framework to mobilize and deliver the resources, technology and partnerships needed for sustainable development. Second, the 2030 Agenda for Sustainable Development presents a universal, integrated and transformative vision for a better world, including 17 Sustainable Develop- ment Goals. Third, the universal Paris Agreement on climate change marks a turning point in our response to one of the leading threats to stability and well-being. Implementation will be the test of our commitment. Accurate and comprehensive monitoring of actions at all levels will be crucial for success. The Inter-Agency Task Force on Financing for Development, which I convened at the end of 2015, will strengthen the follow-up process by reporting annually on progress in implementing the financing for development outcomes and the means of implementation of the 2030 Agenda. This first report of the Task Force describes the comprehensive scope of the Addis Agenda, with high-level cross-cutting initiatives and additional concrete commitments across its seven action areas. It sets out the sources of data and evidence that will allow the Task Force to carry out its important work. Now is the time to transform our global vision into tangible actions that improve the lives of people everywhere. I urge all partners across the world to embrace the ambition contained in the Addis Agenda and join forces towards its successful implementation.

Preface

The Addis Ababa Action Agenda encouraged the Secretary-General to convene an Inter- Agency Task Force to report annually on progress in implementing the Financing for Development outcomes and the means of implementation of the 2030 Sustainable Devel- opment Agenda. It specified that the Task Force will advise the intergovernmental follow- up on progress, including implementation gaps, and make recommendations for corrective action. In fulfilment of this mandate, the Secretary-General convened the Inter-Agency Task Force on Financing for Development in December 2015. The Task Force, which I have the great honour to chair, comprises over 50 United Nations agencies, programmes and offices and other relevant international institutions and entities. The major institutional stakeholders of the Financing for Development process, the World Bank Group, the International Monetary Fund, the World Trade Organization, the UN Conference on Trade and Development and the UN Development Programme are taking a central role, jointly with the Financing for Development Office of the UN Department of Economic and Social Affairs, which also serves as the coordinator of the Task Force and substantive editor of the report. The Task Force’s annual report will be analytical in nature, with a focus on monitoring progress in implementing commitments in the Addis Agenda and the means of implementation of the Sustainable Development Goals (SDGs). This first edition of the report maps out these commitments, including the relationship between SDG means of implementation and the Addis Agenda. It also presents the full set of data sources that will allow for annual assessments of progress in implementation and that will provide the basis for evidence-based policy analysis, with a view to providing Member States with policy options and recommendations. Future editions of the Report will thus complement the statistical focus of the SDG Progress Report, which is mandated in the 2030 Agenda for Sustainable Development to annually assess progress in implementation of the 17 SDGs. We trust that the work of the Task Force will provide the evidence and analysis necessary to inform substantive and fruitful deliberations of Member States on Financing for Development.

Wu Hongbo Under-Secretary-General for Economic and Social Affairs United Nations Chair of the Inter-agency Task Force

Contents

Foreword ...... iii Preface...... v

Introduction ...... 1 1. The evolving global situation...... 2 2. From Monterrey to Addis Ababa and the means of implementation for the SDGs: Monitoring Financing for Development outcomes. . . 3 3. Task Force assistance to the Financing for Development follow-up . . 5

I . Cross-cutting issues...... 9 1. Introduction...... 9 2. Delivering social protection and essential public services ...... 9 3. Ending hunger and malnutrition ...... 11 4. Closing the infrastructure gap...... 13 5. Promoting inclusive and sustainable industrialization...... 18 6. Generating full and productive employment for all...... 19 7. Protecting ecosystems...... 20 8. Promoting peaceful and inclusive societies...... 23 9. Gender equality...... 25 10. Investing in children and youth ...... 28 11. Addressing the diverse needs and challenges faced by countries in special situations...... 29 12. Global partnership ...... 30

II .A Domestic public resources...... 33 1. Introduction...... 33 2. Domestic resource mobilization and taxation...... 34 3. Illicit financial flows ...... 36 4. Return of stolen assets...... 39 5. International tax cooperation ...... 39 6. Expenditure...... 44 7. Additional topics...... 46 viii Addis Ababa Action Agenda — Monitoring commitments and actions

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II .B Domestic and international private business and finance ...... 51 1. Introduction...... 51 2. The investment climate...... 52 3. Private sector efforts and initiatives...... 54 4. Policies and regulatory frameworks to better align business and finance with global goals...... 55 5. Achieving financial inclusion ...... 57 6. Developing domestic capital markets ...... 59 7. Facilitating the flow of remittances...... 61 8. Encouraging quality direct investment/foreign direct investment, particularly in underfunded sectors and countries ...... 64 9. Incentivizing investment in underfunded areas, including clean and affordable energy ...... 66 10. Encouraging philanthropic engagement that is transparent and accountable...... 67

II C. International development cooperation...... 69 1. Introduction...... 69 2. Official development assistance...... 70 3. South-South and triangular cooperation...... 71 4. Multilateral development banks...... 73 5. Other official flows and catalysing additional resources ...... 74 6. Country allocation, levels of concessionality and graduation issues. . 76 7. Development effectiveness...... 77 8. Climate finance, disaster risk and environmental resilience . . . . . 80 9. Humanitarian finance and peacebuilding...... 82 10. Innovative development finance ...... 83 11. Additional partnerships...... 84 12. International cooperation and capacity building...... 86

II .D International trade as an engine for development...... 87 1. Introduction...... 87 2. Strengthening the multilateral trading system...... 89 3. Facilitating international trade ...... 94 4. Promoting policy coherence in trade...... 97

II .E Debt and debt sustainability...... 103 1. Introduction...... 103 2. Debt crisis prevention...... 104 3. Debt crisis resolution...... 108 Contents ix

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II .F Addressing systemic issues ...... 113 1. Introduction...... 113 2. Strengthening global governance ...... 113 3. Improving cooperation, coordination and policy coherence. . . . . 114 4. Enhancing global macroeconomic stability with sustainable development ...... 116 5. Shaping financial market regulation for sustainable development. . . 119 6. Promoting safe migration...... 122 7. Combating transnational crime...... 123

II G. Science, technology, innovation and capacity-building...... 125 1. Introduction...... 125 2. Promoting information and communication technology, access to technology for all and social innovation...... 125 3. Developing national policy frameworks for science, technology and innovation...... 126 4. Creating a more enabling environment for science, technology and innovation...... 128 5. Institutions and mechanisms to strengthen science, technology and innovation...... 129 6. Technology transfer...... 132 7. Actions within the United Nations or by the United Nations system. 133 8. Capacity building...... 134

III . Data monitoring and follow-up...... 135 1. Introduction...... 135 2. Data availability, adequacy and standardisation...... 135 3. Development of specific measures and tools...... 137 4. Transparency and needs assessment ...... 138 5. Efforts to strengthen statistical capacities...... 139

Appendix A Linkages between the means of implementation of the Sustainable Development Goals and the Addis Ababa Action Agenda...... 141 Appendix B Voluntary initiatives and commitments announced in conjunction with the Addis Ababa conference...... 151 Appendix C Mapping of select Addis commitments and actions in support of the SDGs . 152

Inter-agency Task Force Members

Task Force coordinator and substantive editor

United Nations Department of Economic and Social Affairs (UNDESA)

FFD Major Institutional Stakeholders

World Bank Group

International Monetary Fund (IMF)

World Trade Organization

United Nations Conference on Trade and Development (UNCTAD)

United Nations Development Programme (UNDP)

Regional economic commissions

Economic and Social Commission for Asia and the Pacific (ESCAP)

Economic and Social Commission for Western Asia (ESCWA)

Economic Commission for Africa (ECA)

Economic Commission for Europe (ECE)

Economic Commission for Latin America and the Caribbean (ECLAC)

United Nations System and other agencies and offices

Financial Stability Board (FSB)

Food and Agriculture Organization of the United Nations (FAO)

Global Environment Facility (GEF) xii Addis Ababa Action Agenda — Monitoring commitments and actions

International Atomic Energy Agency (IAEA)

International Civil Aviation Organization (ICAO)

International Fund for Agricultural Development (IFAD)

International Labour Organization (ILO)

International Organization for Migration (IOM)

International Telecommunication Union (ITU)

International Trade Centre (INTRACEN)

Joint United Nations Programme on HIV/AIDS (UNAIDS)

Office of the High Commissioner for Human Rights (OHCHR)

Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (OHRLLS)

Office of the Secretary-General’s Envoy on Youth

Office of the Special Adviser on Africa (OSAA)

Organisation for Economic Co-operation and Development (OECD)

Secretariat of the Convention on Biological Diversity (CBD)

Sustainable Energy for All (SE4All)

The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES)

The Global Alliance for Vaccines and Immunizations (GAVI)

UN Capital Development Fund (UNCDF)

United Nations Children’s Fund (UNICEF)

United Nations Commission on International Trade Law (UNCITRAL)

United Nations Convention to Combat Desertification (UNCCD)

United Nations Educational, Scientific and Cultural Organization (UNESCO)

United Nations Entity for Gender Equality and the Empowerment of Women (UN Women)

United Nations Environment Programme (UNEP)

United Nations Framework Convention on Climate Change (UNFCCC) Inter-agency Task Force members xiii

United Nations Global Compact

United Nations High Commissioner for Refugees (UNHCR)

United Nations Human Settlements Programme (UN-HABITAT)

United Nations Industrial Development Organization (UNIDO)

United Nations Office for Project Services (UNOPS)

United Nations Office for South-South Cooperation (UNOSSC)

United Nations Office for the Coordination of Humanitarian Affairs (OCHA)

United Nations Office on Drugs and Crime (UNODC)

United Nations Population Fund (UNFPA)

United Nations Research Institute for Social Development (UNRISD)

United Nations University (UNU)

United Nations World Food Programme (WFP)

World Health Organisation (WHO)

World Intellectual Property Organization (WIPO) xiv Addis Ababa Action Agenda — Monitoring commitments and actions

Abbreviations

AAAA Addis Ababa Action Agenda CLOUT Case law on UNCITRAL texts ADB (AsDB) Asian Development Bank CMAA Convention on Mutual Administra- AEOI Automatic exchange of financial tive Assistance account information COP Communication on Progress AfDB African Development Bank COP 21 21st session of the Conference of the Parties AFMI African Financial Market Initiative CPA Country programmable aid ALADI Latin American Integration CRA credit rating agency Association CREDAF Centre de rencontres et d’études AML/CFT Anti-money laundering and com- des dirigeants des administra- bating the financing of terrorism tions fiscales ASEAN Association of Southeast CRS Creditor reporting system Asian Nations CRTA Committee on Regional Trade ASTI Agricultural science, technology, Agreements and innovation CSOs Civil society organisations ASYCUDA Automated systems of customs data CSPA Common Statistical Production ATI Addis Tax Initiative Architecture BCBS Basel Committee on Banking CSR Corporate social responsibility Supervision CSTD Commission on Science and Tech- BEEPS Business Environment and Enter- nology for Development prise Performance Survey CTCN Climate Technology Centre BEPS Base erosion and profit shifting and Network BIAT Boosting Intra-African Trade CTD Committee on Trade and BIS Bank for International Settlements Development CD Capacity development DAC Development CDIP Committee on Development and Assistance Committee Intellectual Property DCD Development Co-operation CEMLA Center for Latin American Mon- Directorate etary Studies DCF Development Cooperation Forum CFTA Continental Free Trade Area DDI Data Documentation Initiative CGFS Committee on the Global Finan- DESA United Nations Department of cial System Economic and Social Affairs CGIAR Consultative Group of Interna- DFQF Duty-free and quota-free tional Agricultural Research DTIS Diagnostic trade integration study CIAT Inter-American Center for Tax EBRD European Bank for Reconstruction Administrations and Development CITES Convention on International Trade ECA United Nations Economic Com- in Endangered Species of Wild mission for Africa Fauna and Flora ECB European Central Bank Abbreviations xv

ECF Extended Credit Facility GIFT Global Initiative for Fiscal ECOSOC United Nations Economic and Transparency Social Council GIIN Global Impact Investing Network ECOWAS Economic Community of West GNI Gross national income African States GOOS Global Ocean Observing System EdStat Education Statistics Database GOSR Global Ocean Science Report EECIS Eastern Europe and the Common- GPE Global Partnership for Education wealth of Independent States GPEDC Global Partnership for Effective e-GDDS enhanced General Data Dissemina- Development Cooperation tion System GRI Global Reporting Initiative EIB European Investment Bank GRWG Global Remittances EIF Enhanced Integrated Framework Working Group EITI Extractive Industries Transparency GSBPM Generic Statistical Business Initiative Process Model EMDEs Emerging markets and develop- G-SIBs Global systemically ing economies important banks EMPEA Emerging Markets Private Equity G-SIIs Global systemically impor- Association tant insurers EOI Exchange of information GVCs Global value chains ESCAP Economic and Social Commission HDI Human Development Index for Asia and the Pacific HLM High-Level Meeting ESCWA Economic and Social Commission HSS Health systems strengthening for Western Asia IAEG-SDGs Inter-agency and Expert Group EST Environmentally sound on Sustainable Development Goal technologies Indicators FAO Food and Agriculture Organization IAIS International Association of Insur- FATF Financial Action Task Force ance Supervisors FCSs fragile and conflict-affected states IATF Inter-Agency Task Force FDI Foreign Direct Investment IATI FfD Financing for Development International Aid Transparency FSAP Financial Sector Assess- Initiative ment Program IATT UN Inter-agency Task Team on FSB Financial Stability Board Science, Technology and Innova- FSSAs Financial System Stability tion for the SDGs Assessments IBRD International Bank for Reconstruc- FTEs Fiscal Transparency Evaluations tion and Development FTS Financial Tracking Service ICAO International Civil Aviation GA United Nations General Assembly Organization GAVI The Global Alliance for Vaccines ICESDF Intergovernmental Committee of and Immunizations Experts on Sustainable Develop- GDP Gross domestic product ment Financing GEF Global Environment Facility ICPD International Conference on Popu- GEPE Guidelines for Effective Philan- lation and Development thropic Engagement ICPs Insurance Core Principles GFDRR Global Facility for Disaster Reduc- ICSID International Centre for the Settle- tion and Recovery ment of Investment Disputes GFSR Global Financial Stability Report ICT Information and communications GIF Global Infrastructure Facility technology xvi Addis Ababa Action Agenda — Monitoring commitments and actions

IDA International Development LIC Low Income Country Association LLDCs Landlocked developing countries IDBG Inter-American Development M&E Monitoring and evaluation Bank Group MAPS Methodology for Assessing Pro- IDFC International Development curement Systems Finance Club MCAA The Common Reporting Standard IEA International Energy Agency Multilateral Competent Author- IEP Institute for Economics and Peace ity Agreement IETC International Environmental Tech- MDB Multilateral development bank nology Centre MDG Millennium Development Goal IFC International Finance Corperation MDIs Microfinance deposit taking IFFs Illicit financial flows institutions IFI International financial institutions MHT medium and high-tech IFPRI International Food Policy Research MIGA Multilateral Investment Guaran- Institute tee Agency IGOs intergovernmental organizations MNEs Multinational enterprises IHP+ International Health Part- MoI Means of Implementation nership Plus MSMEs Micro, Small and Medium IIAs International investment Enterprises agreements NDB National development bank ILO International Labour Organization NEPAD The New Partnership for Africa’s IMF International Monetary Fund Development IMF International Monetary Fund NGOs Non-governmental organizations IMFC International Monetary and Finan- NSDP National Summary Data Page cial Committee NTMs non-tariff measures INTOSAI The International Organisation of OCHA Office for the Coordination of Supreme Audit Institutions Humanitarian Affair IOC Intergovernmental Oceanographic ODA Official development assistance Commission ODF Official development finance IODE International Oceanographic Data ODP Open data platforms and Information Exchange OECD Organisation for Economic Co- IOM International Organization operation and Development for Migration OHCHR Office of the United Nations High IOSCO International Organization of Secu- Commissioner for Human Rights rities Commissions OHRLLS United Nations Office of the IOTA Intra-European Organisation of High Representative for the Least Tax Administrations Developed Countries, Landlocked IP Intellectual property Developing Countries and Small IPPMD Interrelations between Public Poli- Island Developing States cies, Migration and Development OOF Other official flows ISDS investor-state dispute settlement OPEC Organization of the Petroleum ITC International Trade Centre Exporting Countries ITU International Telecommuni- OPIC Overseas Private Investment Cor- cation Union poration of the United States IUU illegal unreported and unregulated PAHO Pan-American Health Organisation LAC Latin America and Caribbean PARIS21 Partnership in Statistics for Devel- LCR liquidity coverage ratio opment in the 21st Century LDCs Least Developed Countries PBF Peacebuilding Fund Abbreviations xvii

PEFA Public expenditure and financial STEM Science, technology, engineer- accountability ing and math PICMD Policy and institutional coherence STI Science technology and innovation for migration and development SWIFT Society for Worldwide Interbank PIDA Programme for Infrastructure Financial Telecommunication Development in Africa TADAT Tax Administration Diagnostic PISA Programme for International Stu- Assessment Tool dent Assessment TFM Technology Facilitation Mechanism PPF Project Preparation Facilities TIWB Tax Inspectors Without Borders PPI Private Participation in initiative Infrastructure TMT Transfer of marine technology PPP Public-private partnership TOSSD Total Official Support for Sustain- PRESS Partner Report on Support to able Development Statistics TPP Trans-Pacific Partner- PSGs Peacebuilding and State- ship Agreement building Goals TRAINS Trade Analysis and Informa- QCPR Quadrennial Comprehensive tion System Policy Review TRIPS Trade-related Aspects of Intellectual R&D Research and development Property Rights RA-FIT Revenue Administration’s Fiscal TTIP Transatlantic Trade and Investment Information Tool Partnership RCAP Regulatory Consistency Assess- TWG Thematic working group ment Program U4E United for Efficiency RTAs Regional preferential trade UHC Universal health coverage agreements UNCAC United Nations Convention against SABER Systems Approach for Better Edu- Corruption cation Results UNCDF United Nations Capital Devel- SCP Sustainable consumption and opment Fund production UNCITRAL United Nations Commission on SDG Sustainable Development Goals International Trade Law SDMX Statistical Data and Meta- UNCLOS United Nations Convention on the data eXchange Law of the Sea SDR Special drawing right UNCTAD United Nations Conference on SDSN Sustainable Development Solu- Trade and Development tions Network UNDP United Nations Develop- SE4All Sustainable Energy for All ment Programme SE4All GTF Sustainable Energy for All Global UNECA United Nations Economic Com- Tracking Framework mission for Africa SECURE Stand-by Emergency Credit for UNECE United Nations Economic Com- Urgent Recovery mission for Europe SIDS Small island developing States UNEP United Nations Environ- SIFI Systemically important financial ment Programme institution UNESCO United Nations Educational, Scien- SIFs Sustainable investment forums tific and Cultural Organization SmaRT Smart remitter target UNFCCC UN Framework Convention on SMEs Small and middle-sized enterprises Climate Change SSC South-South cooperation UNICEF The United Nations Chil- StAR Stolen Asset Recovery dren’s Fund xviii Addis Ababa Action Agenda — Monitoring commitments and actions

UNIDO United Nations Industrial Develop- ment Organization UNITAID International Drug Purchas- ing Facility UNMM United Nations Monitor- ing Mechanism UNODC United Nations Office on Drugs and Crime UNSC United Nations Statistics Commission UNSD United Nations Statistical Division USOAP Universal Safety Oversight and Audit Program WEO World Economic Outlook WFP World Food Programme WGI Worldwide Governance Indicators WHO World Health Organization WIPO World Intellectual Property Organization WITS World Integrated Trade Solution WoRLD World Revenue Longitudinal Data WTI World Telecommunication/ICT Indicators WTO World Trade Organization Introduction

In July 2015, world leaders came together in Addis ing to its mandate, the Task Force will (i) report Ababa, Ethiopia, to adopt the Addis Ababa Action annually on progress in implementing the financ- Agenda (the Addis Agenda) at the Third Interna- ing for development outcomes and the MoI of the tional Conference on Financing for Development 2030 Agenda for Sustainable Development, and (ii) (FfD). 1 The Addis Agenda created a holistic and advise the intergovernmental follow-up processes on coherent framework for financing sustainable devel- implementation gaps and recommendations for cor- opment. More than just a framework, the Addis rective action (para 133). The Task Force’s primary Agenda embodies several hundred concrete actions official audiences will be the Forum on FfD Follow- that Member States of the United Nations pledged up and the High-Level Political Forum on Sustain- to undertake individually and collectively. As subse- able Development (HLPF). 3 The Task Force appre- quently emphasized in the 2030 Agenda for Sustain- ciates that there is also great interest in its work by able Development, adopted by the General Assembly Governments, international institutions and other in September 2015, full implementation of the Addis stakeholders. It will strive to be technically precise Agenda is critical for the realization of the sustain- and thoughtful, and to cover the full range of FfD able development goals (SDGs) and targets. 2 issues, while also being accessible to a broad range Member States committed to staying engaged of readers. through a dedicated and strengthened follow-up The Task Force will base its analysis on the process to assess progress, identify obstacles and premise that, given the nature of the issues being dis- challenges to implementation, promote the sharing cussed, there is often not one simple policy solution. of lessons learned, address new and emerging topics Rather, the complex nature of the issues implies that of relevance, and provide policy recommendations there are multiple policy options. Indeed, all eco- for action by the international community (paras nomic policies have trade-offs. The Task Force sees 131–132). In this context, the Addis Agenda estab- its role as mapping out policy options and analysing lished an annual United Nations Economic and their underlying assumptions and economic, social Social Council (ECOSOC) Forum on FfD Follow- and environmental implications, while leaving the up to review implementation of financing for devel- final policy choice to the national and international opment outcomes and the means of implementation political processes. (MoI) of the 2030 Agenda. As requested by the Addis Agenda, the Task Credible and timely monitoring and analysis Force aims to build on the positive experience of will be required to inform this process. This Inter- Inter-agency cooperation that the Secretary-General agency Task Force, convened by the Secretary-Gen- initiated when he invited the relevant international eral, will seek to make a substantive contribution to institutions to leverage their specialized expertise to these monitoring and analytical functions. Accord- monitor the eighth Millennium Development Goal

1 Endorsed by the General Assembly in resolution 69/313. 2 General Assembly resolution 70/1, para. 40. 3 The 2012 United Nations Conference on Sustainable Development created the HLPF (General Assembly resolution 66/288, paras. 84-86); it was given responsibility to be the central mechanism for follow-up and review of progress toward the SDGs at the global level in the 2030 Sustainable Development Agenda (resolution 70/1, paras 82–90). 2 Addis Ababa Action Agenda — Monitoring commitments and actions

(MDG 8). 4 The MDG Gap Task Force drafted ana- not yet been published when this year’s report was lytical reports that incorporated the official indica- being prepared. Instead, the focus of this year’s tors, while also monitoring complementary data and report is on how the Task Force proposes to monitor information to address emerging concerns. It regu- the implementation of commitments in future years. larly gave updates on international cooperation com- The Report also seeks to situate that discussion in the mitments and recommended policy measures that context of relevant recent developments. could be considered by the international community to further the global partnership. It is a model that 1. The evolving global situation the present Task Force will seek to emulate. There have been several important developments The Task Force further appreciates that a dif- since Member States came together in Addis Ababa ferent international exercise will monitor progress in July, including the successful adoption of the on achieving the SDGs. That effort will focus on 2030 Agenda for Sustainable Development and a global indicator framework agreed by the United the adoption of the Paris Agreement under the Nations Statistical Commission for measuring the United Nations Framework Convention on Climate targets specified under each SDG, including those Change. There has also been progress in other action pertaining to the MoI. These indicators, particu- areas of the Addis Agenda. For example, IMF quota larly those for the MoI targets, will be important and governance reforms, which had been agreed inputs to the Task Force’s work. The Addis Agenda to in 2010, became effective in January 2016. In also includes numerous additional commitments response to the call in the Addis Agenda, the new and action items that are not contained in the SDG Global Infrastructure Forum, led by the multilateral targets. In addition, the Task Force has found that development banks, will be launched in Washington, many items are difficult to fully capture with just DC on 16 April 2016 during the IMF/World Bank one indicator. The Task Force Report will thus com- Group Spring Meetings. plement the statistical report on the SDG indicators Nonetheless, these global efforts are tak- by providing: (i) a review of the additional commit- ing place in an increasingly difficult environment. ments and action items in the Addis Agenda and Growing global risks threaten to make implementa- other FfD outcomes; (ii) an assessment of progress tion of the agenda even more challenging than just in implementing agenda items that may not be easily six months ago. As the finance ministers and cen- captured by quantitative indicators, such as quali- tral bank governors of the Group of 20 observed in tative measurements in areas where data is lacking; their communiqué at their 27 February 2016 meet- and (iii) an analytical discussion of the issues to ing, “The global recovery continues, but it remains give a fuller picture of implementation, assess the uneven and falls short of our ambition for strong, impact of financing flows and policies on achieving sustainable and balanced growth. Downside risks goals, and promote knowledge sharing and mutual and vulnerabilities have risen against the backdrop learning. Monitoring of commitments made on the of volatile capital flows, a large drop of commod- sidelines of the Addis Conference is included as ity prices, escalated geopolitical tensions, the shock Appendix B in this year’s Report, and published as a of a potential UK exit from the European Union separate appendix in future years. and a large and increasing number of refugees in The first report of the Task Force, completed some regions. Additionally, there are growing con- in the early months of 2016, does not seek to assess cerns about the risk of further downward revision progress in implementation of the Addis Agenda in global economic prospects.” Indeed, as indicated or the MoI of the 2030 Sustainable Development in the United Nations World Economic Situation Agenda, which were agreed to less than six months and Prospects 2016, over $700 billion of capital left prior to the drafting of this report. Indeed, much developing and transition countries in 2015, greatly of the data for 2015, which is the base year against exceeding the magnitude of net outflows during the which to measure progress in implementation, had “Great Recession”. At the same time, non-financial

4 See http://www. un. org/en/development/desa/policy/mdg_gap/ for the 2015 report and links to the earlier reports. Introduction 3

corporations in emerging market countries accu- lic and private, domestic and international — are mulated significant levels of debt, which increased needed to finance development, but that resource from less than 60 per cent of gross domestic product mobilization depends on public policies and a (GDP) in 2006 to more than 100 per cent at mid- strengthened national and international enabling 2015, making these countries particularly vulnerable environment. Both national policies and regula- to sudden stops and reversals of capital flows. tions and international rules and agreements are Geopolitical risks have also risen. The world is thus linked to development finance and outcomes. facing the largest crisis of forced displacement since The global partnership for development, as the Second World War, which is putting grow- delineated in Monterrey, emphasizes the central ing demands on limited public resources. There is importance of development cooperation and conces- a risk that needed assistance will be diverted from sional financing. Indeed, development cooperation, long-term development and countries most in need. and the fora in which it is discussed, remains a cru- Indeed, the least developed countries (LDCs) risk cial part of the agenda. Building on Monterrey and seeing their share of ODA falling further, despite Doha, the Addis Agenda reafirms that developing the commitment in the Addis Agenda to reverse the countries have primary responsibility for their own decline. The challenge for the international commu- economic and social development. National sustain- nity is to address the need for a response to the cri- able development strategies are thus a core element of sis while maintaining its commitment to long-term the Addis Agenda. As in Monterrey, domestic poli- sustainable development and implementation of the cies must be supported by an enabling international SDGs. The Forum on FfD Follow-up could be a environment. Science, technology, innovation and useful platform to reassert that development com- capacity building had been touched upon in the mitments will not be put at risk. Monterrey Consensus and Doha Declaration on FfD, but they were not accorded detailed treatment. 2. From Monterrey to Addis The Addis Agenda explicitly incorporates each of the Ababa and the means of major non-financial MoI for delivering sustainable implementation for the SDGs: development along with the more traditional finan- Monitoring Financing for cial means, complementing and contextualizing them in a comprehensive framework. Development outcomes The Addis Agenda goes beyond Monterrey and Doha outcomes by taking into account policy The Addis Agenda aims to mobilize public finance, requirements for realizing all three dimensions set appropriate public policies and regulatory frame- of sustainable development — economic, social works to unlock private finance, trade opportuni- and environmental — in an integrated manner. It ties and technological development, and incentivize emphasizes the importance of incentives for private changes in consumption, production and invest- sector investment, as well as the quality of investment patterns. It further seeks to align all resource ment. It also emphasizes sustainable consumption flows and policies with economic, social and envi- and production patterns globally. In doing so, it ronmental priorities. brings issues such as climate finance, protection of The holistic approach is rooted in the FfD pro- oceans and forests, and other environmental con- cess, embodied in the 2002 Monterrey Consensus cerns more prominently into the discussion, and and the 2008 Doha Declaration on Financing for incorporates these into the Monterrey global coher- Development. 5 The Monterrey Consensus recog- ence agenda, along with issues of trade and global nized not only that all sources of financing — pub- financial stability.

5 Report of the International Conference on Financing for Development, Monterrey, Mexico, 18–22 March 2002 (A/CONF. 198/11, chapter 1, resolution 1, annex); Report of the Follow-up International Conference on Financ- ing for Development to Review the Implementation of the Monterrey Consensus, Doha, Qatar, 29 November–2 December 2008 (A/CONF.212/7/resolution 1, annex). 4 Addis Ababa Action Agenda — Monitoring commitments and actions

The commitments and action items in the In consideration of this, the Task Force draws Addis Agenda are organized in seven main action on a nuanced understanding in the Addis Agenda of areas (see Table 1) and a concluding section on data, the benefits and risks associated with different types monitoring and follow-up. Member States also iden- of finance and other MoI, as depicted by the seven tified a number of cross-cutting thematic areas chapters of the Addis Agenda. The different sectors where policy actions harness the synergies that exist and goals have different capital structures, imply- between many of the specific action items elaborated ing that the appropriate combinations of financing in the action areas of the Agenda. modalities vary by sector, as well as by national contexts. For example, some investments, such as those Table 1 that meet basic social needs, in most cases will be Action areas of the Addis Agenda largely financed by public resources (though in some A. Domestic public resources countries, supplemented by private investment). B. Domestic and international private business Other investments, such as infrastructure, will and finance often need to effectively combine public and private c. International development cooperation funding. Still others, such as financing for small and D. International trade as an engine for development medium-sized enterprises (SMEs), will be predomi- E. Debt and debt sustainability nantly private, though generally within public policy F. Addressing systemic issues and regulatory frameworks that support and incen- G. Science, technology, innovation and capacity building tivize investment. All of these will also need support from non-financial MoI, such as technology and a The relationship between the Addis Agenda supportive international environment, including a and the SDGs stable economic system and debt sustainability (see Figure 1). All of the MoI of the SDGs are included in the Addis As noted in the Addis and 2030 Sustainable Agenda. The indicators for the MoI targets will be Development Agendas, the full set of action areas in important inputs to the Task Force’s work, as will the Addis Agenda, together, thus form a strong basis relevant indicators for other SDG targets (which are for implementation of the SDGs and support for the particularly relevant to cross-cutting issues). None- global partnership for sustainable development. theless, the 2030 Agenda for Sustainable Develop- Monitoring the commitments and actions in ment and the Addis Agenda have different struc- the Addis Agenda tures, which can make it difficult to track similar targets across the two agendas. The 2030 Agenda is Monitoring the Addis Agenda and the MoI of the organized around the SDGs, or around goals and SDGs represents a complex exercise covering hun- outcomes, while the Addis Agenda follows the Mon- dreds of commitments and action items. The Task terrey Consensus, and is structured around different Force has carefully gone through the full range financial and non-financial MoI. of these commitments and action items to create As emphasized in the Addis Agenda, the 17 a framework for monitoring the broad agenda in SDGs have enormous synergies across goals, with future years. It compiled and clustered them into implementation of one contributing to progress in nine chapters — on cross-cutting issues, the seven the others. Similarly, there are synergies across the action areas, and on data, with commitments and Addis chapters, as well as between the Addis Agenda actions in each chapter organized by thematic clus- and the SDGs (see Appendix C). Each of the SDGs ters. Under each cluster, the Task Force presents thus draws on inputs from across the Addis Agenda options for monitoring, including: (i) the best cur- chapters for implementation, while each of the rently available sources of data that will allow for Addis chapters speaks to different SDGs. Whether monitoring progress in implementation in future the issues are presented in terms of flows and MoI years; (ii) a discussion on the quality of the data; and (the Addis Agenda) or by outcomes (the SDGs), the (iii) other methods such as qualitative and contextual agendas need to be understood in a holistic manner. analysis and case studies. In addition, the Task Force Introduction 5

Figure 1 The continuum of public and private financing and the non-financial means for achieving sustainable development

Private nance

Social services Structural transformation Employment Financial e.g. infrastructure e.g. SEs means of rotecting implementation ecosystems

Public nance

onfinancial means and enabling Trade, Technology, Capacity Building, Systemic Issues environment

*: The figure is for illustrative purposes only and size of boxes is not representative of magnitudes of flows

report notes where the indicators for the SDGs will sheer breadth of the data gathering exercise, raised provide additional data and information. several questions about future monitoring. In par- While the Task Force will be flexible and ticular, it brought forth three observations on how incorporate new data sources in the future, the the Task Force can best support the Forum on FfD inaugural 2016 report will serve as a reference guide Follow-up. for the FfD follow-up process. Future reports will First, the changing global environment under- also include the monitoring of the broader FfD scores the importance of maintaining flexibility in outcomes, building on the annual monitoring done addressing key issues in the FfD follow-up process. since the Monterrey Consensus by the FfD Office As mandated in the Addis Agenda, the FfD follow- of the United Nations Department of Economic and up process should address “new and emerging topics Social Affairs, in collaboration with the five major of relevance to the implementation of this agenda as institutional stakeholders of the FfD process. the need arises” (para 131). The multidimensional expertise in the Task Force could help provide the 3. Task Force assistance to the Forum on FfD Follow-up with reliable and balanced Financing for Development assessments of the state of play on newly arising Follow-up issues that have an impact on implementation of the FfD agenda. Indeed, the Task Force brings together In fulfilling its mandate to advise this intergovern- the international community’s expertise and respon- mental follow-up on progress, implementation gaps sibilities in support of detailed policymaking in eco- and recommendations for corrective action (para nomic, financial and trade questions. A challenge for 133), this first exercise of the Task Force has focused the Task Force will be how to incorporate flexibility on building a monitoring and assessment framework. into its work program, given the large number of The Task Force work was ongoing in the context of a agencies involved and the timing of the intergovern- changing global environment, with new challenges mental processes. The Task Force could contribute that risked impacting implementation of the agenda. targeted analysis to assist the Forum on addressing The changing global context, combined with the new issues in its annual report, if timing allows. 6 Addis Ababa Action Agenda — Monitoring commitments and actions

Alternatively, analytical inputs could take the form or alternatively, laying out in those conclusions a of policy briefs from the Secretariat, working with plan of how and when those modalities could be relevant Task Force members on a case by case basis. agreed to ensure adequate time for preparation of The second point relates to the importance the Report. of balancing the breadth and depth of the Agenda. The third point addresses the question of how The Addis Agenda is extremely broad, covering seven to engage countries on a national level in the FfD chapters and cross-cutting issues and including hun- process. While the Report is global in nature, several dreds of commitments and action items. While the of the issues addressed in the action areas, particu- breadth of the Addis Agenda calls for full coverage larly those related to national sustainable develop- of this wide range of issues, the complexity of the ment strategies, would be best informed by country issues addressed also demands in-depth discussions, reporting. Yet, countries already carry a significant supported by data and analytical work. To cover the reporting burden for the SDGs. Further guidance entire agenda in depth every year will most likely from Member States would be needed to assess exceed a reasonable page limit of the Task Force’s options for country reporting in the FfD process, report. It may also overburden the Forum on FfD and its relation to related efforts for the SDGs. Follow-up given its mandate of ‘up to five days’. Yet Finally, the Task Force will be pleased to have to not cover the full agenda could leave important feedback on its current monitoring proposals, which gaps in implementation. build on the indicators from the SDGs, but go fur- To address this challenge, the Task Force has ther to serve as a basis for analysis on the full Addis discussed a three-pronged approach for the report: Agenda and the MoI of the SDGs, from the Forum first, inclusion of a brief discussion of the global on FfD Follow-up. context and its implications for implementation Moving from monitoring to action of the agenda and the follow-up process; second, a concise overview of each chapter of the full agenda, As noted, the monitoring exercise carried out by including updated data and pertinent issues as well the Task Force serves a two-fold purpose: to advise as updates on new initiatives called for in the Addis the intergovernmental follow-up on progress and Agenda (such as the Global Infrastructure Forum implementation gaps, and to provide recommenda- and the Technology Facilitation Mechanism), tions for corrective action. This advisory function while covering the broader set of commitments establishes an important link between monitoring and action items in an on-line annex; and third, and implementation. It was perceived as too weak in if Member States so request, a discussion of spe- the experience of the MDG Gap Task Force Report, cific thematic issues, drawing on inputs from across which in its final assessment found that the moni- the seven action areas of the Addis Agenda. Such toring of commitments must be complemented by a theme or themes, if supported, could for example effective accountability mechanisms and avenues draw from the cross-cutting issues delineated in the for advocacy to have a continued impact. 6 The Task Addis Agenda, the HLPF or ECOSOC theme, or Force report and its discussion at the intergovern- other issues. The thematic approach would, how- mental level can serve to provide this link. ever, necessitate further guidance from Member In the context of an aspirational and non- States. Given the time necessary to produce a full binding agreement, such monitoring is a central in-depth report, especially with the active engage- component and lever of change for achieving pro- ment of over 50 agencies, such guidance would gress over time. Indeed, if it leads to a deeper under- need to be given in a timely manner. Member standing of the issues and the creation of consensual States may wish to consider including recommen- knowledge, monitoring and analysis can change dations on modality agreements in the prior year’s perception of policy options and become a driver of agreed conclusions of the Forum on FfD Follow-up, change, as evidenced in the field of environmental

6 United Nations (2015). Taking Stock of the Global Partnership for Development. 2015 MDG Gap Task Force Report. New York. Introduction 7 agreements. 7 The norms and principles contained Combined with the intergovernmental and multi- in international agreements confer legitimacy and stakeholder discussion in the FfD Forum, it may can reinforce the positions of political actors. At be hoped that the knowledge created through this the same time, it can contribute to the diffusion of monitoring and review exercise can in turn support policy approaches and peer learning when it serves greater political traction for implementation of the to bring together a community of practitioners that Addis Agenda and the MoI of the 2030 Agenda at can exchange experiences and learn from each other. national and global levels.

7 Miller-Dawkins, May (2014). Global Goals and International Agreements. Lessons for the Design of the SDGs. ODI Working Paper 402.

Chapter I Cross-cutting issues

1. Introduction essential social services. While social protection gen- The Addis Ababa Action Agenda contains several key erally refers to cash transfers and social insurance, cross-cutting initiatives that build on the synergies such as adequate pensions for older persons, essential of the sustainable development goals (SDGs) and public services include the provision of basic social address critical gaps in their delivery. Cross-cutting services, such as health and education. Countries are issues and commitments in the Addis Agenda, as encouraged to set national spending targets for qual- contained in chapter I, include: (i) the delivery of ity investments in these areas. As part of the social social protection and essential public services for all; compact, the international community commits to (ii) scaling up efforts to end hunger and malnutri- provide support to country efforts and to explore tion; (iii) closing the infrastructure gap including funding modalities. Specifically, countries: establishing the Global Infrastructure Forum; (iv) commit to provide fiscally sustainable and promoting inclusive and sustainable industrializa- nationally appropriate social protection systems tion; (v) generating full and productive employment and measures for all, including floors, with a and decent work for all; (vi) protecting ecosystems; focus on those furthest below the poverty line (vii) promoting peaceful and inclusive societies. It and the vulnerable, persons with disabilities, also addresses such issues as gender equality and indigenous persons, children, youth and older the empowerment of women and girls; children and persons (12, SDG 1.3, MoI 8.b) youth; countries in special situations; and the global are encouraged to consider setting nation- partnership for sustainable development. Each of ally appropriate spending targets for quality these initiatives can contribute to progress across a investments in essential public services for all, large number of SDGs. including health, education, energy, water and Because of the close links to the 2030 Agenda sanitation, consistent with national sustainable for Sustainable Development, monitoring by the development strategies (12) Inter-agency Task Force in this chapter will be able commit strong international support for these to draw on a large number of relevant SDG indica- efforts, and [to] explore coherent funding tors, in particular for commitments and action items modalities to mobilize additional resources, focused on achieving specific outcomes. The Task building on country-led experiences (12) Force will add to those as necessary, and also provide greater specificity and detail to the monitoring of Elements of this compact are included in the SDGs financial and non-financial means of implementa- focused on poverty, health, education, water and tion (MoI). sanitation, energy, decent work and cities. Indeed, 2. Delivering social protection and the social compact addresses the full set of social indicators in the SDGs, while building on three essential public services targets (1.3: implement nationally appropriate social The Addis Agenda presents a new social compact. protection systems and measures for all, including This compact contains two components: a com- floors, and by 2030 achieve substantial coverage of mitment to deliver social protection systems and the poor and the vulnerable; 1.4: ensure that all men measures for all, including floors; and a package of and women, in particular the poor and the vulnerable, 10 Addis Ababa Action Agenda — Monitoring commitments and actions have … access to basic services and 1.a: ensure signifi- Social Protection database (which includes social cant mobilization of resources from a variety of sources, protection coverage and expenditures in 190 coun- including through enhanced development cooperation, tries) can also be useful. In as much as possible, this in order to provide adequate and predictable means effort should track spending that explicitly addresses for developing countries, in particular least developed geographic disparities of services (both quality and countries, to implement programmes and policies to access) and inequities among different population end poverty in all its dimensions). The Task Force groups in service provision. can thus draw on SDG indicator 1.3.1 (proportion Nationally appropriate spending targets for of population covered by social protection floors/systems, quality investments in essential public services for disaggregated by sex, and distinguishing children, the unemployed, old-age persons, persons with disabilities, all can also draw on existing benchmarks such as the pregnant women/newborns, work injury victims, the benchmark to allocate at least 4–6 per cent of gross poor and the vulnerable), SDG indicator 1.4.1 (pro- domestic product (GDP) to education and/or at least portion of population living in households with access 15–20 per cent of public expenditure to education, to basic services) and SDG indicator 1.a.2 (propor- which was adopted at the World Education Forum tion of total government spending on essential services 2015 and included in the Incheon Declaration, or (education, health and social protection)). Additional the African Union’s Abuja Declaration to allocate sources of data that can complement these indicators at least 15 per cent of annual budgets to improve include the World Bank’s ADePT database, which the health sector. Monitoring of the effective use of contains information on coverage and benefit inci- such resources is further elaborated in the context of dence of social protection programmes across quin- chapter II.A on domestic public resources. tiles, deciles or other population groups. Monitoring for the commitment to support The means to implement this social compact domestic efforts with development aid can draw on will come in large part from domestic public sources, the Organization for Economic Cooperation and supported by international public finance. Examin- Development (OECD) Development Assistance ing financing from national budgets as well as from international aid can thus help in monitoring imple- Committee’s (DAC) Creditor Reporting System mentation of the social compact. (CRS) codes, selecting those appropriate within National data is collected and classified by codes 110 (Education), 120 (Health), 13020 (Repro- function in the framework of the System of National ductive health care and HIV/AIDS), 16010 (Social/ Accounts. The International Monetary Fund’s (IMF) Welfare services), 140 (Water and sanitation), 16030 Government Finance Statistics (GFS) database can (Housing and slum upgrading) and 15160 (Human be used to ascertain domestic spending levels for Rights). Case studies can be used to help explore general government spending on an annual basis, coherent funding modalities to mobilize additional though data points can be missing and/or reported resources, building on country-led experiences. on a different basis across different years. SDG indi- Finally, it has been suggested that the United cator 16.6.1 (primary government expenditures as a Nations Economic and Social Council (ECOSOC) proportion of original approved budget, disaggregated Forum on Financing for Development (FfD) Fol- by sector (or by budget codes or similar)) should pro- low-up and subsequent FfD conferences could serve vide additional data. SDG MoI indicator 8.b.1 (total as an institutional home for further exploration government spending in social protection and employment programmes as a proportion of the national budg- of coherent funding modalities for different areas ets and GDP) and other data sources, such as Gov- included in the social compact, in terms of nation- ernment Spending Watch, which tracks government ally appropriate spending targets and international spending in 74 low- and middle-income countries in support, including official development assistance agriculture, education, environment, gender, health, (ODA) allocations, as well as complementary new social protection, and water, sanitation and hygiene innovative sources of finance for education, health, and the International Labour Organization’s (ILO) housing, social protection and water. Cross-cutting issues 11

3. Ending hunger and malnutrition measures with equivalent effect (83, MoI 2.b, see chapter II.D) Governments also commit to prioritise the fight Commits to ensure the proper functioning of against hunger and malnutrition and to adequately food commodity markets and their derivatives support sustainable agriculture. These commitments (108, MoI 2.c); Commits to facilitate timely, are largely consistent with the SDGs (SDG 2 to end accurate and transparent access to market hunger, achieve food security, improve nutrition and information in an effort to ensure that com- promote sustainable agriculture; SDG target 12.3 on modity markets appropriately reflect underlying halving food losses and waste). Monitoring by the demand and supply changes and help limit Task Force can thus rely on the SDG indictors to a excess volatility (108, MOI 2.c) great extent. However, the Addis Agenda includes In the area of hunger and food security, there are several additional aspects. First, it underscores that two relevant indicators — 2.1.1, prevalence of under- combatting hunger is multifaceted, and emphasizes nourishment (the established Millennium Develop- the importance of rural development and addressing ment Goal hunger indicator), and 2.1.2, the new urban poverty in fighting hunger. Second, it puts a Food Insecurity Experience Scale (FIES). Whereas the greater focus on implementation and financing. One prevalence of undernourishment has until now been key area that the Addis Agenda emphasizes is the applied only at the national level, the FIES will be need to increase both public and private investment able to address the effective ability to access food at and to align financing with sustainable development. the individual or household level, directly. Third, in addition to focusing on smallholders and On malnutrition, available indicators (2.2.1 and 2.2.2) are the prevalence of stunting, wasting women farmers, the Addis Agenda addresses mecha- and overweight among children under five. The Task nisms, such as agricultural cooperatives and farm- Force could further monitor three additional World ers’ networks, as potentially playing a greater role in Health Assembly indicators (breastfeeding, anae- rural development and poverty reduction. Specifi- mia and low birth weight). Moreover, it is possible cally, the Addis Agenda: to monitor not just nutritional outcomes, which may Commits to take action to fight malnutrition result from health problems or water and sanitation and hunger (SDG 2.1 and 2.2), including access, but also the quality of diets. This can be done among the urban poor; and to strengthen efforts through the Women Dietary Diversity Score, which to enhance food security and nutrition, focused is supported by the United Nations Standing Com- on smallholders, women farmers (SDG 2.3), mittee on Nutrition, and which connects food sys- and agricultural cooperatives and farmers’ tems, including agricultural production, with diver- networks (13) sified and healthy diets. Additional supporting data Commits to support sustainable agriculture, can be found in the percentage of national budgets including forestry, fisheries and pastoralism (13, allocated to nutrition. SDG 2.4, MoI 2.a) Monitoring of commitments and actions Encourages increased private investment and should also recognize the broader multidimensional commits to increasing public investment, par- nature of interventions in the area of malnutrition ticularly for financing research, infrastructure and hunger, including, but not limited to, agricul- and pro-poor initiatives (13) ture, education, food systems, health, social protec- Commits to significantly reduce post-harvest tion and water and sanitation. To this extent, this food loss and waste (13, SDG 12.3) section is closely linked to monitoring under the social compact and infrastructure sections in this Calls on WTO members to correct and prevent chapter of the Report. trade restrictions and distortions in world In the area of smallholder productivity and agricultural markets, including through the sustainable agriculture, SDG indicators include parallel elimination of all forms of agricultural 2.3.1 (volume of production per labour unit by classes export subsidies and disciplines on all export of farming/pastoral/forestry enterprise size), and 2.3.2 12 Addis Ababa Action Agenda — Monitoring commitments and actions

(average income of small-scale food producers, by sex agriculture is not reported. For example, long-term and indigenous status). This could be supplemented land concessions have not been reported as FDI. by case studies, particularly on the role of agricul- UNCTAD and FAO are working on improving tural cooperatives and farmers’ networks. the capture and coverage of relevant data on FDI In terms of increasing investment, the Food in agriculture. and Agriculture Organization (FAO), the Interna- Measuring domestic private flows is particu- tional Fund for Agricultural Development and the larly challenging. It is possible to measure credit World Food Programme have calculated that to end to agriculture, which represents credit provided by hunger and poverty by 2030, additional resources of domestic financial institutions to agricultural pro- an average of US$265 billion will be required annu- ducers. The metric is available in FAOSTAT, using ally. This includes public investments in social protec- data compiled from central bank websites. Another tion as well as additional targeted public and private possible metric, which focuses on equity investment, pro-poor investments in productive activities, includ- is gross fixed capital formation (GFCF), which is ing agriculture. As discussed under the social com- the year-over-year change in gross capital stock. The pact, much of this investment will be through public metric is expected to be available on FAOSTAT as finance. However, many low-income countries lack of March 2016. the necessary public resources, and lack of investment With respect to trade in agricultural markets, in agriculture over decades has meant continuing the Ministerial Decision taken at the WTO’s Nai- low productivity and stagnant production in many robi Conference in December 2015 reaffirms the countries. The Task Force will be able to draw on commitment for developed Members to immedi- indicator 2.a.1 (Agriculture Orientation Index (AOI) ately eliminate their remaining scheduled export for Government Expenditures), which is defined as subsidy entitlements and for developing Members the agriculture share of government expenditures, to do so by 2018. The Task Force can draw on SDG divided by the agriculture share of GDP. Examining MoI indicator 2.b.2 (Agricultural Export Subsidies) the numerator and denominator separately can give and this can be supplemented by import and export further insight into the growth of government expen- tariffs on agricultural products. The Task Force may ditures in agriculture. International support can be also draw on the Producer Support Estimate (PSE, monitored through 2.a.2 (total official flows (official SDG indicator 2.b.1), which captures various trans- development assistance plus other official flows) to the fers from taxpayers and consumers to agriculture, agriculture sector), which is provided by the OECD including for instance the market price differential and also available through the FAO Statistics Divi- induced by import tariffs that is borne by consumers. sion (FAOSTAT, disaggregated into flows to agri- The PSE is designed to show what share of support to culture, rural development, basic nutrition, food aid, agriculture can be considered to be highly produc- food security, and others). For a complete picture of tion and trade distorting (as opposed to only mini- international support, it would also be helpful to cap- mally influencing markets through more decoupled ture South-South cooperation in this area, however measures of support), and is thus closely aligned to data is currently limited (see chapter II.C). the target aspirations as defined in the Addis Agenda In terms of private flows, the Task Force can commitments under paragraph 83. track foreign direct investment (FDI) flows to devel- Lastly, the Addis commitment for ensuring oping countries going to the agricultural sector, as properly functioning commodity markets and lim- reported by the United Nations Conference on Trade iting excess price volatility is closely matched to MoI and Development (UNCTAD) and the OECD. target 2.c., with indicator 2.c.1 on food price anoma- Both the level and share of these flows would need lies, which measures the number of “price anomalies” to be reported on a country basis, given that recent that occur on a given food commodity price series trends show an increase in FDI with a diminishing over a given period of time. This measure can be share going to agriculture, as well a high concentra- applied to any relevant series of food prices to reveal tion in very few countries, predominantly middle conditions of market instability. This can be sup- income countries (MICs). However, some FDI in plemented by both actual and implied volatility of Cross-cutting issues 13 food commodity prices. Excess volatility, which is Specifically, the Addis Agenda includes the follow- included in the Addis Agenda, is a financial metric ing subpoints: that assesses the difference between the actual vola- 4 1. . Bridging the global infrastructure gap, tility of the market price and the predicted volatility including the US $1-1 . 5 trillion gap in based on asset pricing models, which is calculated developing countries by financial market firms. Data on commodity markets, prices and other related factors are regu- Identify and address infrastructure and capac- larly monitored in a biannual UNCTAD publica- ity gaps across countries and sectors, in par- tion on World commodity trends and prospects. The ticular in LDCs, LLDCs, SIDS and African publication covers volatility in markets, which could countries (14) proxy for a measure of whether prices appropriately reflect underlying demand and supply changes. Estimates of investment requirements for infra- 4. Closing the infrastructure gap structure vary widely, depending on assumptions about economic growth, policies and scope. None- Investing in sustainable and resilient infrastructure, theless, such estimates can shed light on the mag- including transport, energy, water and sanitation for nitude of investment needs, as well as where those all, is a key priority of the Addis Agenda. Infrastruc- needs are greatest. Estimates are made periodically ture is critical for economic development, reducing by both public and private entities. 1 The World Bank poverty and inequality, and ensuring environmental Group will publish global estimates on infrastructure sustainability, and is a core element of SDG 9, with needs, which will likely be updated every three to five additional targets on sector specific infrastructure years. Identifying the infrastructure gap by countries included in many other SDGs. While the SDGs and sectors is particularly challenging, but sectorial focus primarily on infrastructure outcomes, the data could be a basis for understanding trends. emphasis in the Addis Agenda is on overcoming To date, there is no universal database on infra- obstacles and bottlenecks to investment, including structure investment. Rather, different databases both finance and capacity. cover different aspects of infrastructure investment. The Addis Agenda delineates impediments to The table below lists several sources of infrastruc- investment in infrastructure on both the supply and ture data, including World Bank Group and OECD demand side. It emphasizes that in many countries, databases on global infrastructure investments, insufficient investment is due in part to inadequate UNCTAD’s FDI database, commercial subscrip- infrastructure plans and an insufficient number of tion-based databases on infrastructure projects and well-prepared investable projects, which underscores funding, some regularly updated third-party infra- the need for government policies along with capacity structure reports, and several national official data- development. At the same time, financing is insuf- bases on domestic infrastructure investments. The ficient. Public funds are limited, while the existing table also shows the details of the sources, in terms incentive structures of many private investors are of how they break down infrastructure investment not necessarily aligned with the long-term invest- (i.e., by country, by sector and public-private part- ment horizon necessary for many infrastructure nership (PPP) investments), the number of countries projects. The Agenda points out, though, that given covered and the frequency of updates. The Global the large financing gap in infrastructure, all financ- Infrastructure Hub of the G20 may also compile ing sources — public, private, domestic and inter- data on infrastructure deals. These can serve as a national — will be needed. Infrastructure is thus basis for tracking trends in different types of invest- included across the chapters of the Addis Agenda. ment across countries and sectors.

1 See for example Bhattacharya, Romani and Stern, 2012, Infrastructure for development: meeting the challenge, CCCEP Policy Paper; and McKinsey Global Institute, 2013, Infrastructure productivity: How to save US$1 trillion a year. 14 Addis Ababa Action Agenda — Monitoring commitments and actions

4 .2 . As a key pillar to meet the sustainable The inaugural Global Infrastructure Forum development goals, establish a global will be hosted by the multilateral development infrastructure forum, led by the banks (MDBs) during the IMF and World Bank multilateral development banks, Spring meetings in April 2016. The Task Force will aiming to: report annually on the outcome of the Global Infra- structure Forum, which will also be an input to the Improve alignment and coordination among Forum on FfD Follow-up. The future modalities infrastructure initiatives (14) of the Global Infrastructure Forum are yet to be Encourage a greater range of voices to be heard, decided, including the frequency of meetings, tim- particularly from developing countries (14) ing, participation, and the role of different develop- Work to ensure investments are environmentally, ment banks. Depending on the timing, analysis in socially and economically sustainable (14) the Task Force Report could also be an input to the upcoming Global Infrastructure Forum.

Table 2 Infrastructure Investment Data Sources Breakdown Investment Investment PPP Investments Number of Latest Update Name Data by Sector Data by Country in Infrastructure Countries Covered and Frequency World Bank World Development Yes Yes Yes 82 Annually Indicators Database PPI Project Database by the Yes Yes Yes 139 Annually World Bank OECD Statistics Database Yes Yes No 34 Annually (Latest in 2013) UNCTAD FDI Database Yes Yes No 200 Annually IHS Global Insight Yes Yes Not Disclosed 74 Quarterly Construction Database* Project Finance International* Yes Yes Not Disclosed Not Disclosed Not Disclosed Preqin Database* Yes Not Disclosed Yes Not Disclosed Not Disclosed Dealogic Platform Database* Not Disclosed No Not Disclosed Not Disclosed Not Disclosed Oxford Economics* Not Disclosed No Not Disclosed Not Disclosed Not Disclosed Moody’s Global Infrastructure Focus Not Disclosed Not Disclosed Not Disclosed Not Disclosed Monthly Newsletter* GRESB* Yes Not Disclosed Not Disclosed Not Disclosed Not Disclosed European PPP Expertise Center (EPEC) Yes Yes Yes 35 Semi-annually Market Updates Report (Latest in 2015) U. S. Census Bureau Yes No No 1 Monthly (Latest in Dec, 2015) UK HM Treasury Database Yes No No 1 Annually Canadian PPP Project Database Yes No Yes 1 Not Disclosed Africa Infrastructure Yes Yes No 25 Not Disclosed Knowledge Program Infrastructure India Project Database Yes No Yes 1 Not Disclosed Starred (*) data sources do not allow free access. Note 1: European Investment Bank (EIB) and other RDBs may have additional data but not released to the public. Note 2: Only UK Treasury database explicitly presents pure private and public financing data. Note 3: “Not Disclosed” because access is based on subscription, or unknown at time of publication. Note 4: Breakdown information of the data sources requiring subscriptions is given in their marketing materials. Cross-cutting issues 15

4 .3 . Domestic actions and international addition, this Task Force can serve as a vehicle for cooperation for infrastructure financing United Nations agencies to report jointly on their capacity development efforts. Governments commit to embed resilient and In terms of financing and official support quality infrastructure investment plans in more broadly, the proposed SDG MoI 9.a. on infra- national sustainable development strate- structure (total official international support — offi- gies, and to improve domestic enabling envi- cial development assistance plus other official flows to ronments (47) infrastructure), can be used to measure the level of Commit enhanced financial and technical international public support. This can be based on support to facilitate development of sustainable, data from the OECD. In addition, South-South accessible and resilient quality infrastructure in cooperation is particularly important in the area of developing countries (MoI 9.a), including to infrastructure. (See the discussion in II.C on South- translate plans into concrete project pipelines, as South cooperation. ) The Task Force can also follow well as for individual implementable projects, up on infrastructure funds, such as the Association including for feasibility studies, negotia- of Southeast Asian Nations Infrastructure Fund tion of complex contracts, and project man- established by the Asian Development Bank (ADB), agement (47) the Silk Road Fund, the Programme for Infrastruc- ture Development in Africa, the Africa50 Fund, Case studies can help to better understand along with new funds from development banks and developments in infrastructure plans. Coun- the private sector. try reporting within the context of reporting on One of the biggest challenges in this section national sustainable development strategies would will be to measure the ‘quality’ of infrastructure. be particularly useful here. Several tools that can be There is no clear-cut set of criteria for what consti- used to assess the domestic enabling environment tutes ‘quality’ infrastructure investment. It could are discussed in chapter II.B on private business comprise the condition and attributes of the final and finance. Infrascope, developed by the Econo- infrastructure, the nature of the financing, the terms mist Intelligence Unit in conjunction with several of the contract, and/or the impact on sustainable MDBs, in particular, looks at the policy and regula- development, including issues of labour and the tory framework for infrastructure, particularly PPPs, environment, as well as resilience. The World Eco- including experience in projects. The MDBs are nomic Forum’s Executive Opinion Survey, which also undertaking work to measure specific aspects is conducted in collaboration with some 150 part- of the enabling environment, for example through ner institutes, could be used as an estimate of the the Benchmarking PPP Procurement survey. The business sector’s perception of the quality of overall IMF’s Public Investment Management Assessment infrastructure in a country. However, it does not (PIMA) framework, which helps countries evaluate include issues associated with economic/financial, the strength of their public investment management social or environmental sustainability. Bloomberg practices in planning, allocation and implementa- collects some data on ‘sustainable deals’ and there is tion, could be used to assess countries’ institutions good data on clean energy sources (See chapter II.B). related to domestic public investment. Again, case studies can be useful here. The Addis Agenda calls for support for coun- 4 4. . Development banks and infrastructure tries in translating plans into concrete project pipe- financing lines, as well as in project preparation, which can perhaps be best monitored through case studies. Calls on national and regional development There are several initiatives aimed at capacity devel- banks to expand contributions in sustainable opment, including through the MDBs. For example, infrastructure (33) the MDB infrastructure working group is building harmonized approaches to project preparation, pro- Emphasizes the role of MDBs in infrastructure curement, supervision, monitoring and reporting. In investment, including sub-sovereign loans (75) 16 Addis Ababa Action Agenda — Monitoring commitments and actions

and encourages MDBs to address regional MDBs will report on these issues once they have infrastructure gaps (87) been agreed upon. Encourages MDBs to help channel resources of Tracking infrastructure and green bond issu- long-term investors towards sustainable develop- ance is complicated by the fact there there is cur- ment, including through long-term infrastruc- rently no agreement on the definition of what con- ture and green bonds (75) stitutes a green bond. Nonetheless, there is a general understanding that green bonds usually refer to pro- The Addis Agenda recognizes the enormous jects to fund climate change adaptation or mitiga- potential of development banks with regards to tion. Currently, green bonds are primarily issued by infrastructure investment and development. Indeed, MDBs, though they are also issued by governments, the MDBs have recently put in place several mecha- municipalities and the private sector. nisms to facilitate support for infrastructure invest- The Addis Agenda also encourages developments. The Global Infrastructure Facility (GIF) ment banks to go further to channel the resources housed in the World Bank Group facilitates the of long-term investors to infrastructure and green preparation and structuring of infrastructure PPPs, bonds for investment in sustainable and resilient and provides a platform for MDBs to collabo- infrastructure more broadly. There are several poten- rate. Other MDBs are developing their own pro- tial mechanisms for this, including: (i) direct issu- ject preparation facilities aimed at strengthening ance; (ii) enhancing the credit quality of green bonds the infrastructure pipeline, including the Islamic issued by governments, national development banks, Development Bank’s (IDBG) InfraFund, the Afri- agencies and the private sector; and (iii) supporting can Development Bank’s (AfDB) New Partnership green securitization and market development, such for Africa’s Development Infrastructure PPF, Euro- as standardization of loan contracts for green assets pean Investment Bank-hosted initiatives such as the and warehousing. Arab Financing Facility Technical Assistance Fund MDB annual green bonds issuance can be (co-managed by the IDBG and the International tracked using 2015 as a base line year. The Task Finance Corporation, IFC); the European Bank for Force can also monitor overall growth of the green Reconstruction and Development’s Infrastructure bond market. Data on climate bonds are available at Project Preparation Facility (PPF); the ADB’s Asia www.climatebonds.net. Bloomberg also collects data Pacific PPF, as well as AfDB’s Africa50 Initiative, on green bond issuance more broadly. which will focus on both project preparation and The MDBs can also report on efforts to enhance project finance. The MDBs can report on progress the credit quality of green bonds by other issuers, in implementation of these facilities and other activi- and to support green securitization. Specifically, the ties, such as the level of support provided to projects, MDBs could share the amount and value of green broken down by region, the level of development and bonds to which they have provided credit enhance- other categories, for example projects taken to the ment, as well as a list of green securitization and mar- market and funds mobilized by them. ket development projects they have supported. To date, however, there is no consistent data on 4 .5 . Private investment in infrastructure MDB investment in infrastructure across development banks. The new Global Infrastructure Forum Bank lending to infrastructure has fallen since the can provide a platform for MDBs to work together financial crisis. At the same time, institutional inves- to develop (i) a common approach to measuring tors currently invest less than 1 per cent of their port- MDB financial support to infrastructure so that this folios directly in infrastructure and less than 3 per can be aggregated across the MDBs; and (ii) a task cent in broader investments, such as in companies force to establish a joint framework and methodol- that invest in infrastructure, in both developed and ogy to measure catalyzing capacity as intermediar- developing countries. In addition to strengthening ies. This data could also aim to delineate specific the enabling environment and pipeline of feasible investments, such as on sub-sovereign lending, in projects (see 4. 3 above), the Addis Agenda encour- line with commitments in the Addis Agenda. The ages actions to overcome impediments to long-term Cross-cutting issues 17

investment in infrastructure on the part of investors. of Experts on Sustainable Development Financing Specifically, Addis: (ICESDF). Specifically, Addis: encourages long-term institutional investors, Calls for projects involving blended finance, such as pension funds and sovereign wealth including PPPs, to share risks and rewards funds, which manage large pools of capital, to fairly, include clear accountability mecha- allocate a greater percentage to infrastructure, nisms and meet social and environmental particularly in developing countries (47) standards (48) Calls for careful consideration on the structure The World Bank’s Private Participation in and use of blended finance instruments (48) Infrastructure (PPI) Database can be used to track Commits to capacity development for PPPs private investment in infrastructure. The database and to build a knowledge base and share provides information on the overall deal flow of pri- lessons learned through regional and global vate infrastructure projects in emerging markets. In forums (48) addition, the GIF, as part of its results framework, Commits to hold inclusive, open and transpar- will monitor the share of long term financing from ent discussion when developing and adopting institutional investors over the medium term. This guidelines and documentation for the use will look at infrastructure projects post financial of PPPs (48) closing and draw on commercial data sources as well as the PPI Database. Several private sector databases These commitments are partly covered by SDG also provide data on institutional investor asset allo- target 17.17: Encourage and promote effective public, cation, including the percentage of funds invested in public-private and civil society partnerships, building on infrastructure, as well as bank lending to infrastruc- the experience and resourcing strategies of partnerships. ture (see table 2). Chapter II.B on private business The corresponding indicator focuses on the Amount and finance also addresses some of the impediments of United States dollars committed to public-private to private sector investment in infrastructure. In par- and civil society partnerships. While it is unclear how ticular, chapter II.B calls for investors to take meas- this will be measured, the World Bank’s databases ures to incentivize long-term investment, as well as (including the PPI project database and World Devel- for standards-setting bodies to identify adjustments opment Indicators database) are useful sources of to encourage longer-term investment. information on investment in PPPs. Existing data can 4 .6 . Public and private blended finance for also be used as a starting point to assess the impact of infrastructure financing PPPs beyond US dollars committed. As one example, the PPI project database would allow assessing the The Addis Agenda notes that both public and private share of PPP projects cancelled or under distress. investment have key roles to play in infrastructure These quantitative measures would need to be financing, including through PPPs and blended complemented by qualitative analysis. The informa- finance that share risks and rewards fairly. Efforts to tion required to track the record of blended finance monitor blended finance are complicated by the fact initiatives in sharing risks and rewards efficiently, that there is no agreed definition. The Addis Agenda incorporating accountability mechanisms and meet- defines blended finance as combining concessional ing social and environmental standards would be public finance with non-concessional private finance qualitative in nature and likely to vary widely across and expertise from the public and private sector, spe- projects. 2 Obtaining this would involve accessing a cial-purpose vehicles, non-recourse project financing, wide range of case studies and reviews by National risk mitigation instruments and pooled funding Audit Offices, by bilateral and multilateral donors structures, which is consistent with that provided by and by civil society organizations. the United Nations Intergovernmental Committee

2 Social and environmental standards would include the IFC’s Performance Standards to take into account associated environmental, social and governance risks. 18 Addis Ababa Action Agenda — Monitoring commitments and actions

The PPP Fiscal Risk Assessment Model These initiatives, along with efforts to further capac- (P-FRAM), which was developed by the IMF and ity development for PPPs and to build a knowledge the World Bank to assess fiscal costs and risks from base and share lessons through regional and global PPP projects, can provide additional information. forums, can be monitored by the Task Force and The P-FRAM is designed to help efforts to increase reported at the annual ECOSOC Forum on Financ- capacity development for PPPs, as well as the appli- ing for Development as well as at associated regional cation of international standards in accounting for and international meetings. PPPs, and to ensure transparent reporting. In addi- 5. Promoting inclusive and tion, the tool will allow monitoring of risk allocation (different types of risks) between the public and sustainable industrialization private parties for each PPP contract. The Addis Agenda commits to promoting inclusive In addition, the Infrascope index provides and sustainable industrialization for developing quantitative and qualitative indicators pertaining countries as a critical source of growth, economic to the governance, institutional framework and diversification and value addition. These commit- capacity to undertake PPPs for countries across four ments are related to SDG 9. While the indicators regions. 3 The indicators are divided into six catego- for the SDG focus on monitoring by outcome, that ries: the legal and regulatory framework supporting is, by assessing progress in industrialization and PPPs (e.g., consistency and quality of PPP regula- diversification, the Task Force will also look to tions, effective PPP selection and decision-making); assess inputs, such as investment flows and policies the institutional framework (e.g., quality of institu- to promote industrial development. Specifically, the tional design, PPP contract, hold-up and expropria- Addis Agenda: tion risk); operational capacity (e.g., public capacity Commits to invest in promoting inclusive and to plan and oversee PPPs, methods and criteria for sustainable industrial development to effectively awarding projects, regulator’s risk-allocation award); address major challenges such as growth and supporting investment climate; and financial facili- jobs, resources and energy efficiency, pollu- ties. The main sources used in the index are drawn tion and climate change, knowledge-sharing, from the Economist Intelligence Unit, the World innovation and social inclusion (15, SDG Bank Group, Transparency International and the 9. 2, 9. 4) World Economic Forum. The Task Force can use the Commits to craft policies that incentivize the pertinent elements of this index to enhance tracking creation of new technologies, research and inno- of PPPs in the relevant regions. vation in developing countries, recognizing the Over the past decade, efforts towards the importance of … industrial diversification and development of more general sets of guidelines value added to commodities (116, MoI 9.b) for PPP contracts have been made at different fora Calls on national and regional development and at different levels. At the national level, some banks to expand contributions in industriali- countries with well-developed programmes such as zation (33) the United Kingdom, South Africa, Australia and Chile, have made efforts to introduce more trans- The Task Force will draw on the indicators for parent accounting and reporting practices for PPPs. SDG 9 on building resilient infrastructure, promot- International and regional organizations, such as the ing inclusive and sustainable industrialization and OECD, the European Commission, the IMF, the fostering innovation to monitor outcomes. These are World Bank Group and Regional Commissions of manufacturing value added as a percentage of GDP the United Nations, have issued guidelines and rec- and per capita (9.2.1), manufacturing employment as a ommendations on the introduction of more trans- proportion of total employment (9.2.2), CO2 emission parent accounting and reporting practices for PPPs. per unit of value added (9.4.1) and the proportion of

3 There are four regional reports publically available online, covering Africa (2015), Asia-Pacific (2014), Latin America and the Caribbean (2014), as well as Eastern Europe and the Commonwealth of Independent States (2012). Cross-cutting issues 19 medium and high-tech industry value added in total the framework of its GO->SPIN Programme, which, value added (9.b.1). In addition, the United Nations along with the UNESCO Science Report, can also Industrial Development Organization (UNIDO) provide qualitative monitoring in this area (see also maintains an international industrial statistical data- chapter II.G). base, which contains detailed statistics on mining and quarrying, manufacturing and utility sectors 6. Generating full and productive within the scope of industrial statistics as defined by employment for all International Recommendations for Industrial Sta- tistics. The database is regularly updated with the In the Addis Agenda, governments commit to gener- recent annual industrial survey data received from ate full and productive employment and decent work the OECD for OECD countries and directly from for all and promote micro, small and medium-sized national statistical offices for non-OECD countries. enterprises (MSMEs) to enable all people to benefit To follow up on the commitment to invest in from growth. Specifically, the Addis Agenda: industrial development, the Task Force could moni- Commits to include full and productive tor public and private investments in infrastructure, employment and decent work for all (SDG 8) both domestic and international (see section 4 in as a central objective in national development this chapter on infrastructure), as well as FDI in strategies (16) manufacturing sectors, based, for example, on the Calls for full and equal participation of women UNCTAD FDI database which contains data at the and men, including persons with disabilities, in country and industry level. UNCTAD also reports the formal labour market (16, SDG 8.5) on investment in green/low-carbon sectors, which Will work … to integrate the informal sector could be made more regular as part of the monitor- into the formal economy in line with country ing process. This report’s sections on infrastructure circumstances (22, SDG 8.3) and on development banks will provide a useful Commits to developing and operationalizing, complement and further information in this regard. by 2020, a global strategy for youth employ- ODA toward economic infrastructure and services, ment and to implement the ILO Global Jobs which covers assistance for networks, utilities and Pact by 2020 (16, SDG 8.6 and 8.b) services that facilitate economic activity, and which Commits to promote national youth strategies is collected by OECD DAC, provides data on con- as a key instrument for meeting the needs and cessional international finance supporting industrial aspirations of young people (16) development. This could be supplemented by infor- Commits to promoting appropriate, affordable mation on South-South cooperation (see II.C). and stable access to credit to MSMEs (SDG In terms of advancing linkages between infra- 8.3), as well as adequate skills development structure development, inclusive and sustainable training for all (16) industrialization and innovation, UNIDO can provide qualitative monitoring through its background These commitments are in large part covered analysis on policy frameworks for science, technol- in targets under SDG 8 to promote sustained, inclu- ogy and innovation and national development strat- sive and sustainable economic growth, full and pro- egies, which exists for many countries. UNIDO col- ductive employment and decent work for all. The lects qualitative information as part of its projects SDG indicators can be used to inform monitoring to establish knowledge-sharing platforms. UNIDO by the Task Force. These include indicators 8. 3. 1 could also provide data on the number of regional (proportion of informal employment in non-agriculture and international knowledge-sharing platforms and employment, by sex), 8. 5. 2 (unemployment rate, by processes in which countries participate. The United sex, age group and persons with disabilities), and 8.5.1 Nations Educational, Scientific and Cultural Organ- (average hourly earnings of female and male employ- ization (UNESCO) is also building a global database ees, by occupation, age and persons with disabilities). on science, technology and innovation policy instru- Unemployment rates are defined according to the ments, legislation and institutional frameworks, in recently adopted international statistical standard by 20 Addis Ababa Action Agenda — Monitoring commitments and actions the 19th International Conference of Labour Statis- national reporting, which could delve deeper into ticians, which was developed to address the universal national circumstances and priorities. Domestic nature of the new development agenda, and which sources of data include household and establish- is meant to be more meaningful for both development surveys, administrative registries and other ing and developed countries. The targets on youth non-official sources. International compilations such employment can be monitored by including age as the ILO’s central statistics database, ILOSTAT, group in some of the above indicators, as well as by and others will have to increasingly provide inter- indicator 8.6.1 (proportion of youth not in education, nationally comparable data based on agreed statisti- employment or training), the so-called NEET (see cal standards. However, there are important gaps in also section 10 on Investing in Children and Youth). data availability, especially in developing countries, The ILO will follow up on its programme, the as well as for informal and rural sectors. As dis- Global Jobs Pact. The official indicator for this is cussed in Section III of this Report on “Data, moni- 8.b.1, total government spending in social protection toring, and follow-up”, the need for strengthening and employment programmes as a proportion of the of national statistical systems in their coordination national budgets and GDP. Many of these employ- and for producing regular quality basic data is seen ment programmes are a means of operationaliz- as a priority when defining how to monitor and set ing the ILO Global Jobs Pact. The rights at work benchmarks to measure progress. dimension of decent work, one of the pillars of the Global Job Pact, will be captured by indicators refer- 7. Protecting ecosystems ring to occupational injuries (8.8.1) and an indica- The Addis Agenda contains a range of commit- tor dealing with the compliance of various labour ments to protect ecosystems, many of which are rights derived from ILO labour conventions (8.8.2). also included in the SDGs and their MoI targets. Other dimensions also to be monitored can include Monitoring of these commitments will therefore the elimination of the worst forms of child labour often draw on indicators monitored in that con- and forced labour, including through indicator 8.7.1 text. However, the Addis Agenda also includes a (proportion and number of children aged 5–17 years strong emphasis on changing business behaviour, engaged in child labour, by sex and age). The Addis including policies aimed at changing incentives (see Agenda commitment on the global strategy on youth chapter II.B.) Indeed, the commitments to protect employment and monitoring thereof can build on ecosystems are spread throughout the seven action efforts by the ILO in the context of its 2012 call areas of the Addis Agenda. Nonetheless, because of for action on youth employment and the United their wide range and very diverse implications for Nations Chief Executives Board Global Initiative monitoring, these are also included as a cross-cutting on Decent Jobs for Youth. issue in chapter I of the Addis Agenda. In particu- The Addis Agenda and the SDGs recognize lar, Addis: the important role that MSMEs play in generating Commits to coherent policy, financing, trade employment. Access to finance, particularly credit, and technology frameworks to protect, manage for MSMEs, will be monitored in the context of and restore our ecosystems, including marine chapter II. B. With regard to multinational enter- and terrestrial ecosystems, and to promote their prises (MNEs), the ILO is developing a method- sustainable use, build resilience, reduce pollu- ology that will allow national statistical offices to tion and combat climate change, desertification better measure the impact of FDI and MNEs on and land degradation (17) decent work. The multidimensional nature of full and pro- This commitment supports the implementa- ductive employment and decent work underscores tion of a range of SDG targets under goals 2, 12, 13, the need to combine the SDG indicators with 14 and 15. The Task Force can draw on the respective a wider range of additional data, as well as link- SDG indicators for monitoring purposes, including ages with the other chapters of this report. Global for example indicators for targets 14.2, 14.4 and 14.6 monitoring could be combined with regional and on fisheries and indicator 15.1.1 (forest area as a pro- Cross-cutting issues 21

portion of total land area) on forestry. The Task Force Commits to combat desertification can also monitor the coverage of protected areas (63, SDG 15.3) broken down by ecosystem type, as well as forests, wetlands and drylands as percentages of total land The Task Force can monitor this commitment area. The latter data builds on the SDG indicator, through the indicator for SDG target 15.3 (propor- and FAO, Ramsar, the Convention on Biological tion of land that is degraded over total land area). In Diversity (CBD) and the Convention to Combat addition, the Task Force can draw on monitoring Desertification (UNCCD), as well as UNESCO’s efforts in the context of the UNCCD ten-year strat- Man and the Biosphere Programme and its World egy adopted in 2008, which includes objectives rel- Heritage Centre, which already maintain relevant evant to financing. In particular, strategic objective databases in this respect. 4 is to mobilize resources to support the implementation of the Convention to Combat Desertifica- Welcomes implementation of the global Strategic tion through the building of effective partnerships Plan for Biodiversity and its Aichi Biodiversity between national and international actors, and oper- Targets; commits to mobilize resources, support ational objective 5 is to mobilize and improve the country efforts to conserve and sustainably use targeting and coordination of national, bilateral and biodiversity and ecosystems (63, MoI 15.a) multilateral financial and technological resources in The CBD, at its 12th Conference of Parties in order to increase their impact and effectiveness. The 2014, reaffirmed its commitment to an overall sub- UNCCD Committee for the Review of the Imple- stantial increase in total biodiversity-related fund- mentation of the Convention has been monitoring ing, from a variety of sources. It adopted a number implementation of the ten-year strategy, including of targets for resource mobilization, including: the operational objective 5. The Global Mechanism doubling of total biodiversity-related international of the UNCCD, which focuses on financing sus- financial resource flows to developing countries; for tainable land management, could also provide data 100 per cent, but at least 75 per cent, of Parties to to this end. have included biodiversity in their national priorities Encourages the mobilization of financial or development plans by 2015, and to have there- resources from all sources at all levels to conserve fore made appropriate domestic financial provisions; and sustainably use biodiversity and ecosystems, to mobilize domestic financial resources from all including promoting sustainable forest manage- sources to reduce the gap between identified needs ment (63, MoI 15.b) and available resources at the domestic level; and others. Resources for biodiversity provided to the Mobilization of resources to conserve and Global Environment Facility, as the financial mech- sustainably use ecosystems is discussed above. The anism for the CBD, also serves as another measure of commitment to financing of sustainable forest available resources. These targets will be reviewed at management is also contained in the fourth Global the CBD meeting in Cancun, Mexico in December Objective on Forests of the United Nations Forest 2016, and findings can inform monitoring by the Instrument, which aims to reverse the decline in Task Force. ODA for sustainable forest management and mobi- The indicator for SDG MoI target 15.b ODA( lize significantly increased new and additional finan- and public expenditure on conservation and sustain- cial resources from all sources for the implementa- able use of biodiversity and ecosystems) can provide tion of sustainable forest management. additional data, sourced from the OECD on For monitoring purposes, SDG indicator international public finance. The United Nations 15.b.1 addresses forest finance official( development Development Programme could assist through assistance and public expenditure on conservation and its biodiversity finance initiative (BIOFIN) and sustainable use of biodiversity and ecosystems), with CBD through its financial reporting framework data sourced from the OECD. The Task Force will by providing information on domestic resource also be able to access and analyse data on domes- mobilization. tic resource mobilization for forests, provided by 22 Addis Ababa Action Agenda — Monitoring commitments and actions

the World Bank Group and FAO through the The monitoring of this commitment can draw Government Expenditure on Agriculture initia- on SDG MoI indicator 14. b. 1 (progress by countries tive and the Forest Resources Assessment. In order in the degree of application of a legal/regulatory/policy/ to track relative trends, the percentage increase in institutional framework which recognizes and protects forest-relevant finance tracked through ODA and access rights for small-scale fisheries). FAO can moni- climate finance channels could also be useful. The tor the legal, regulatory, policy and institutional Voluntary REDD+ Database and Climate Funds aspects of this commitment through its Code of Update both monitor REDD+ financing, however Conduct for Sustainable Fisheries biennial survey it has to be noted that REDD+ financing is not (including in particular its questions on small-scale necessarily in addition to forestry ODA. The World fisheries issues) and its legislative and policy data- Bank Group could also provide data on domestic base, FAOLEX. In addition, the implementation resource mobilization for sustainable forest man- of the Voluntary Guidelines for Securing Sustain- agement through its analytical, advisory and lend- able Small-Scale Fisheries in the Context of Food ing instruments. Security and Poverty Eradication is expected to be endorsed by the FAO Committee on Fisheries in Stresses importance of the conservation and 2014. This will provide further elements for moni- sustainable use of the oceans and the seas, toring over the coming years. recognizes that international law, as reflected in UNCLOS, provides the legal framework for Will increase scientific knowledge, develop the conservation and the sustainable use of the research capacity and transfer marine tech- oceans and their resources (64, MoI 14.c) and nology, taking into account the Criteria and commits to protect/restore oceans and ecosystems, Guidelines on the Transfer of Marine Technol- and maintain their biodiversity (64, SDG 14) ogy adopted by the Intergovernmental Oceano- graphic Commission, in order to improve This commitment mirrors SDG MoI target ocean health and to enhance the contribution 14.c, with the indicator number of countries mak- of marine biodiversity to the development of ing progress in ratifying, accepting and implementing developing countries, in particular small island through legal, policy and institutional frameworks, developing States and least developed countries ocean-related instruments that implement interna- (121, MoI 14.a) tional law, as reflected in UNCLOS, for the conservation and sustainable use of the oceans and their The UNESCO IOC is mandated to promote resources. The Task Force will rely on the contribu- scientific research, capacity development and facili- tion of United Nations agencies working on ocean- tate the transfer of marine technology. IOC’s capac- related matters, including UNESCO’s Intergov- ity development strategy, adopted in 2015, will pro- ernmental Oceanographic Commission (IOC) and vide a framework for guiding the development of FAO, to support the compilation of national data research capacities and transfer of marine technology reporting in this regard. in regions. Monitoring by the Task Force will draw on Commits to support the most vulnerable in the IOC’s Global Ocean Science Report, to be pub- addressing and adapting to climate change (65, lished in 2017. The Report will assess national and SDG 1.5, 13.1, MoI 13.b) regional investment in marine research, and will This commitment will be monitored in Section depict the status of ocean research, investment in II.C, 8.1 on climate finance. research infrastructure and human capacity in countries. Data will be derived from national surveys, as Commits to provide access for small-scale arti- well as existing IOC programmes on ocean observa- sanal fishers to marine resources and markets, tion and ocean data exchange, the UNESCO World consistent with sustainable management prac- Science Report, the Institute for Statistics and the tices as well as initiatives that add value to out- OECD. In addition, the indicator for SDG MoI tar- puts from small-scale fishers (108, MoI 14.b) get 14.a. (budget allocation to research in the field of Cross-cutting issues 23

marine technology as a percentage of total budget for tive data, such as judicial records and public health/ research) will provide relevant data. civil registration (World Health Organization). Finally, Addis also According to a recent review conducted by UNO- DC’s and the National Statistics and Geography Commits to promote corporate sustainability Institute of Mexico’s (INEGI) Centre of Excellence (17, SDG 12.6) on crime statistics, 72 countries have implemented Monitoring of corporate sustainability is dis- at least one national victimization survey after 2009. cussed in detail in chapter II.B. In addition, nine African countries have already 8. Promoting peaceful and inclusive implemented or are in the process of implementing a victimization survey module as part of the Strategy societies for Harmonisation of Statistics for Africa. A focus The Addis Agenda commits to promote peaceful and by the Task Force on conflict and violence is of par- inclusive societies and to build effective, account- ticular significance: countries that experienced major able and inclusive institutions at all levels to enable violence during the period 1981–2005 had poverty the effective, efficient and transparent mobilization rates that were on average 21 percentage points and use of resources. These Addis commitments are higher than in countries without violence. broadly consistent with SDG 16, and are also cov- These sources also inform a number of SDG ered by other goals, such as SDG 5 on gender equal- indicators, which the Task Force will be able to draw ity, or integrated across the Agenda, as in the case of on, including 16.1.1. number of victims of intentional human rights. homicide per 100,000 population, by sex and age; Specifically, the Addis Agenda: 16.1.2. conflict-related deaths per 100,000 population, by sex, age and cause; 16.1.3. proportion of population Reaffirms the importance of peaceful and inclu- subjected to physical, psychological or sexual violence sive societies (5, 18, 67, SDG 16) in the previous 12 months; and 16.2.1 proportion of Stresses the need to build effective, accountable children aged 1–17 years who experienced any physical and inclusive institutions at all levels (5, 18, punishment and/or psychological aggression by caregiv- 20, 30, 112, SDG 16.6, MoI 16.a) ers in the past month. Recognizes that good governance, rule of law The chapter on systemic issues, and its sub- (SDG 16.3), human rights, fundamental section on combating transnational crime, presents freedoms, equal access to fair justice systems are additional data sources and options for monitoring, integral to efforts (5, 18, 20, 36, 37, 112) in particular with regard to organized crime, terror- Recognizes measures to combat corruption ism, and transnational crime. and curb illicit financial flows as integral (5, 18, 20, 23, 24, 25, 27, 112, SDG 16.4, 8 .2 . Effective, accountable, transparent and 16.5) See chapter II.A on Domestic pub- inclusive institutions lic resources The commitment to build effective, accountable, Commits to promoting and enforcing non- transparent and inclusive institutions can be moni- discriminatory laws (21, MoI 16.b) tored by analysing existing data on institutional per- 8 1. . Peaceful and inclusive societies formance, accountability and inclusiveness, and of the public perception thereof. The Task Force can Monitoring the commitment on peaceful, secure and draw on surveys of public financial management sys- inclusive societies can draw on a number of existing tems and performance, data collected on national data sources and surveys, such as the United Nations human rights institutions, national refugee com- Crime Trends Survey, (collected by the UN Office missions and women’s representation in the public on Drugs and Crimes, UNODC), household sur- sector, parliaments and other relevant institutions. veys such as Multiple Indicator Cluster Surveys and Attention can also be paid to the activities of parlia- Demographic and Health Surveys, International ment in scrutiny and oversight of the SDGs, includ- Crime Victimization Surveys, as well as administra- ing measures such as numbers of hearings, and fol- 24 Addis Ababa Action Agenda — Monitoring commitments and actions

low up on committee recommendations. The World hold surveys. Perception surveys are conducted in an Bank Group’s “Worldwide Governance Indicators” increasing number of countries, and often include dataset, which measures the perceived quality of a number of measures of quality. They include the institutions and traditions that governments use, World Value Survey, Gallup, Afrobarometer and the can also provide input, particularly on government other Barometers, and surveys conducted by vari- effectiveness and regulatory quality. Perception sur- ous non-state organizations at the national level. In veys of institutional performance such as the World Africa, the approach has already been applied and Value Survey, Gallup, or Afrobarometer will further reported by several state organizations using the complement this exercise. Harmonised Module on Democratic Governance Specific dimensions of institutional perfor- of SHaSA, the Strategy for the Harmonisation of mance are covered by other sections of the Task Statistics in Africa. Force Report and by indicators for the SDGs. The 8 .3 . Good governance cross-cutting section on gender will provide inputs for assessing the inclusiveness of institutions. The Addis recognizes good governance, rule of law, chapter on domestic public resources includes com- human rights, equal access to fair justice systems batting corruption, in particular in the context of as central to the mobilization and effective use of illicit financial flows and the return of stolen assets, resources. They comprise the enabling environment and contains a subsection on national control and necessary for sustainable development. The chapter oversight mechanisms, transparency and non-dis- on domestic and international private business and crimination in budgeting and expenditure decisions. finance contains a section on the investment climate, The indicator 16.6.1 (primary government ex- which lays out in detail options for monitoring com- penditures as a proportion of original approved budget, mitments to stable investment climates, contract by sector (or by budget codes or similar)) can be based enforcement and respect for property rights, and on Indicator PI-2 of the Public Expenditure and transparent and stable rules, among others. Financial Accountability (PEFA) dataset: composi- Human rights accountability mechanisms, tion of expenditure outturn compared to original including the Human Rights Council’s Universal approved budget. PEFA was started in 2001 to Periodic Review, the periodic reviews and complaint develop a country-led agenda on public financial mechanisms of the human rights treaty bodies, the management reform. Indicator 16.a.1 (existence special procedures of the Human Rights Council, of independent National Human Rights Institutions regional human rights mechanisms, and national (NHRIs) in compliance with the Paris Principles) human rights institutions play a role in ensuring measures the proportion of countries that have that State commitments on economic, social and internationally recognized independent NHRIs. cultural as well as civil and political rights are met. Compliance with the Paris Principles vest NHRIs They can contribute to the monitoring and review of with a broad mandate, competence and power to the implementation of the Addis Agenda in a num- investigate, report on the national human rights situ- ber of areas, including cross-cutting commitments ation, and publicise human rights through informa- to end hunger and malnutrition, generate full and tion and education. The main sources of data are productive employment for all, promote peaceful administrative records of the Sub-Committee on and inclusive societies, and focus on children, youth, Accreditation reports of the International Coordi- gender equality and the empowerment of women, nating Committee of National Institutions, and the among other objectives. Office of the United Nations High Commissioner In addition, the Task Force will want to moni- on Human Rights compiles the data into a global tor broader measures of civil and administrative jus- directory. tice, including public access to information and pro- SDG indicators 16.6.2 and 16.7.2 assess protection of fundamental freedoms, and the promotion portions of populations satisfied with public services and enforcement of non-discriminatory laws. A num- and who believe that decision-making is inclusive. ber of SDG indicators will also provide relevant data Data in this area comes from perception and house- in this regard. They include indicators for means of Cross-cutting issues 25

implementation target 16.b (proportion of population 9. Gender equality reporting having personally felt discriminated against or harassed in the previous 12 months on the basis of In the Addis Agenda, Member States have com- a grounds of discrimination prohibited under interna- mitted to promoting and ensuring gender equal- tional human rights law), target 16.10 to ensure public ity. Addis’ strong focus on gender is anchored in access to information and protect fundamental free- its first paragraph, which commits to ensure gen- doms, and indicator 16.3.1 (proportion of victims of der equality and women’s and girls’ empowerment, violence in the previous 12 months who reported their and is reflected in gender-specific commitments and victimization to competent authorities or other officially actions throughout the seven Action Areas of the recognized conflict resolution mechanisms). UNODC Addis Agenda. In particular, Addis: also collects data on crime reporting rates through the long-standing annual data collection mandated Commits to ensuring gender equality and (1, SDG by the United Nations General Assembly. UNESCO women’s and girls’ empowerment MoI 1.b, 5.c) has developed a comprehensive set of Media Devel- opment Indicators aimed at enabling the assessment Commits to adopt and strengthen policies, of media landscapes at the national level. These indi- enforceable legislation and transformative cators cover all aspects of media development and actions for the promotion of gender equality can inform monitoring by the Task Force. and women’s and girls’ empowerment at all lev- International human rights law outlaws dis- els, to ensure women’s equal rights, access and crimination against population groups on the basis opportunities for participation and leadership of specific characteristics or ‘grounds’. One option in the economy and to eliminate gender-based to assess the promotion and enforcement of non- violence and discrimination in all its forms (6, discriminatory law is to measure how well non-dis- SDG 5.1, 5.2, 5.3 SDG MoI 1.b, 5.c) criminatory laws and policies are applied in practice, Commits to promoting and enforcing non- from the perspective of the population. Relevant data discriminatory laws, social infrastructure and is collected through surveys in an increasing num- policies for sustainable development as well as ber of countries. At the regional level, the European enabling women’s full and equal participation Union Fundamental Rights Agency has collected in the economy and equal access to decision- the data for 27 European Union Member States. making processes and leadership (21, SDG 5.1, Relevant data is also collected in Eurobarometer and 5.5, SDG MoI 1.b) Afrobarometer surveys. These data sources will also Commits to increase transparency and equal inform monitoring of SDG MoI indicator 16.b. participation in the budgeting process, and promote gender responsive budgeting and tracking 8 4. . Combatting corruption (30, SDG MoI 5.c) The commitment to combat corruption and curb Commits to women’s and girls’ equal rights illicit financial flows will be followed up in the chap- and opportunities in political and economic ter on domestic public resources, and its section on decision-making and resource allocation and to illicit financial flows and return of stolen assets. In removing barriers for women’s full participa- addition, SDG indicator 16.5.1 (proportion of persons tion in the economy (41, SDG 5.5) (alternative: businesses 16.5.2) who had at least one Commits to improve access and opportunities contact with a public official and who paid a bribe to a for economic advancement for women; Resolves public official, or were asked for a bribe by these public to undertake legislation and administrative officials, during the previous 12 months) will provide reforms to give women equal rights with men to data, which will be based on household corruption economic resources, including access to owner- surveys and victimization surveys. UNODC also ship and control over land and other forms of collects prevalence data on bribery from surveys property, credit, inheritance, natural resources (since 2009) through the annual data collection in and appropriate new technology (41, SDG 5.1, the United Nations Crime Trends Surveys. SDG MoI 5.a) 26 Addis Ababa Action Agenda — Monitoring commitments and actions

Supports Women’s Empowerment Principles by tional targets under SDGs 1, 4, 8, 10, 12, 16 and 17. UN Women and the Global Compact; Encour- However, it is important to recognize the limitations ages the private sector to ensure women’s full of the SDG indicator framework in capturing the and productive employment and decent work, full complexity of the gender equality commitments equal pay for equal work or work of equal in the Addis Agenda. To adequately measure pro- value, and equal opportunities, and to protect gress, several of these will require multiple sources them from discrimination and abuse in the of data which currently fall outside the scope of the workplace; Encourages increased investments in proposed gender equality indicators. There are a female-owned companies (41, SDG 5.1, 8.8) number of existing data resources that could support Urges countries to track and report resource and complement monitoring of these commitments. allocations of international public finance for They include: gender equality and women’s empowerment The World Bank Group’s Women, Business (53, SDG MoI 5.c) and the Law (WBL) project, which has a dataset on Commits to address challenges to women’s equal laws and regulations that constrain women’s eco- and active participation in domestic, regional nomic choices and restrict their ability to engage in and international trade (90) entrepreneurial and employment activities. A recent Commits to scaling up investments in science, edition reveals the magnitude of the challenge: of technology, engineering and mathematics the 173 countries covered, 155 have at least one law education, and enhance technical, vocational that differentiates between women and men. The and tertiary education and training, ensuring WBL may be useful for monitoring Addis commit- equal access for women and girls and encour- ments on discriminatory laws in particular. Data on aging their participation therein, (including the proportion of seats held by women in national through international cooperation) (119, SDG parliaments is included in the World Development 4.5, 17.6) Indicators, and data on the percentage of firms with In addition to the commitments and action a female top manager is included in the World Bank items listed, a significant number of additional Group’s Enterprise Surveys. These can be used to commitments across the Action Areas of the Addis monitor women’s equal access to decision making Agenda contain gender-specific provisions. They processes and leadership. Additionally, the WBL include commitments on smallholder and women dataset also includes a question measuring industry farmers (13), women’s participation in the labour and job specific restrictions on women which can market (16), addressing gender equality in principles be used to measure women’s equal participation in for responsible business and investing (37), access the economy. to financial services (39, 40, 43), social and envi- The World Bank Group’s Global Financial ronmental safeguard systems for development banks Inclusion Index (Global Findex) regularly reports (75), upgrading education facilities (78), gender-bal- sex-disaggregated data on access to financial services anced and merit-based selection of the heads of inter- (see chapter II. B). One relevant indicator in Findex national financial institutions and diversity of their is the percentage of women with an account at a staff (106), human rights and fundamental freedoms bank or other financial institution or with a mobile of migrants (111), strengthen institutions to prevent money service provider. The latest report reveals that violence, end human trafficking and exploitation of there are big opportunities to expand financial inclu- persons (112), access to technology and science (114), sion, particularly among women and the poor. The capacity building for social and gender-responsive gender gap is not significantly narrowing: some 58 budgeting (115), and increased use of disaggregated per cent of women have an account, compared to data (126). 65 per cent of men. It would be useful to consider Monitoring of these commitments and action using the Global Findex as a tracking indicator for items will be covered, in part, by the outcome and the commitments on women’s financial inclusion. MoI indicators under SDG 5 to achieve gender equal- The OECD’s Social Institutions and Gender ity and empowerment of women and girls, and addi- Index (SIGI) is a cross-country measure of discrimi- Cross-cutting issues 27

nation against women in social institutions (formal to these Principles measures the commitment of and informal laws, social norms and practices) across the private sector to promote women’s economic 160 countries. SIGI measures the level of discrimina- empowerment (see also the ILOSTAT information tion at the national level based on variables, combin- mentioned above). ing qualitative and quantitative data, which quantify The OECD DAC Gender Equality Policy discriminatory social institutions such as unequal Marker tracks bilateral ODA in support of gender inheritance rights, early marriage, violence against equality. As part of the annual reporting of their aid women, and unequal land and property rights. Since activities to the DAC, DAC members are required the SIGI measures discriminatory laws and policies, to indicate whether each aid activity targets gender it can be used alongside the two data sources dis- equality as a policy objective according to a three- cussed above for Addis commitments related to leg- point scoring system. The data generated by the islative and structural discrimination. marker provides a global estimate of DAC mem- UN Women captures data on Gender Respon- bers’ aid in support of gender equality annually and sive Budgeting annually. Since 2001, UN Women a breakdown by each DAC member. In addition, and the United Nations Development Fund for the OECD DAC has two Creditor Reporting Sys- Women (UNIFEM) have supported countries in tem purpose codes that contribute to tracking ODA integrating gender perspectives into national devel- in support of gender equality: on aid to women’s opment strategies and sectorial plans and budgets as equality organizations and institutions and aid to well as increasing women’s participation in budget eliminate violence against women and girls. The processes. This data is used for SDG MoI indica- OECD DAC Gender Marker combined with the tors 5.c.1 (proportion of countries with systems to track purpose codes may be the most apt source for mon- and make public allocations for gender equality and itoring the commitment on international public women’s empowerment). The IMF is currently com- finance allocations for gender equality and women’s piling data on significant gender budgeting—ana- empowerment. lysing practices and impacts in all regions. Once UNESCO’s Institute of Statistics contains all completed (by end-2016), the dataset will provide available data and indicators for education, literacy, detailed information for approximately 50 countries science, technology and innovation, culture, com- on the origin and legal basis of the gender budg- munication and information (see also chapter II.G). eting effort, the roles of government and civil soci- It provides data on science, technology, engineer- ety, and the extent to which gender budgeting is ing and mathematics (STEM), including human incorporated into the fiscal process. In addition, the resources in science, technology and innovation. IMF summarizes, in narrative form, more than 75 This data may be useful for monitoring gender- gender budgeting initiatives, and the work includes related aspects of Addis commitments on education, extensive as well as nascent gender budgeting efforts. training, technology and science. These data sources will complement UN Women’s In addition to the above data sources, the data collection and allow for monitoring the Addis Minimum Set of Gender Indicators, endorsed by the commitments on gender responsive budgeting. United Nations Statistical Commission, serves as a ILOSTAT may be useful for monitoring Addis guide for the national and international compilation commitments related to women’s labour market par- of gender statistics. The level of their integration into ticipation. United Nations Guiding Principles on national monitoring systems will be a measurement Business and Human Rights and Women’s Empow- of the increase and use of high-quality, timely and erment Principles (WEPs) set expectations for busi- reliable data as stated in the Addis commitment on ness to promote gender equality and empowerment disaggregated data by sex. The Evidence and Data of women in the workplace, market and community. for Gender Equality (EDGE) initiative (a partner- Framed around seven principles, the WEPs encour- ship between UN Women, the United Nations age the private sector to promote human rights as Statistics Division, the World Bank Group, and the well as women’s economic empowerment in all its OECD) has already contributed to the strengthen- operations. The number of companies signing up ing of gender statistics. 28 Addis Ababa Action Agenda — Monitoring commitments and actions

10. Investing in children and youth traditional sectorial budgets, such as nutrition, early childhood development and child protection. Exam- The Addis Agenda commits to investing in children ples of potential public expenditure measurement and youth. Specifically, the Agenda: instruments in this context include child-spending markers and taxonomies developed by countries Recognizes that investing in children and youth such as Argentina, Colombia, Dominican Repub- is critical to achieving inclusive, equitable and lic, Ecuador, Egypt, El Salvador, Honduras, India, sustainable development for present and future Mexico, Peru, Uganda and Yemen, and established generations (7) reporting practices on child-focused allocations Recognizes the need to support countries that by signatories of the Convention of the Rights of face particular challenges to make the requisite the Child. While to date no such markers exist for investments in children and youth (7) the youth sector, efforts could be undertaken to Reaffirms the vital importance of promoting establish these and offer them to Member States. 4 and protecting the rights of all children, and Case studies could also be used to follow-up on the ensuring that no child is left behind (7) development and implementation of national youth Commits to promote national youth strategies strategies. However, monitoring the promotion and as a key instrument for meeting the needs and protection of the rights of all children is challeng- aspirations of young people (16) ing given that reporting of spending on children In addition, children and youth are mentioned and youth, including geographic disparities of qual- throughout the document, including in the new ity services for children, is currently limited. Tools social compact (12), with regard to youth employ- and methods for results-based reporting of spending ment (16), access to technology and science for youth on children and youth could be developed in the and children (114), in global partnerships (77) and context of wider reforms in the area of results-based education (78), with regard to the human rights of budgeting. girls (78) and migrants (112), and as part of respon- International support to countries with par- sible business (37). ticular needs and challenges can be monitored Data and other methods for monitoring in through existing OECD DAC indicators for ODA these areas are discussed throughout the report, to child and youth-focused programme areas (e.g., including for example in the sections on inter- primary and secondary education, basic life skills national development cooperation for education for youth and adults, early childhood education, and the social compact. Often, indicators can be health, nutrition, etc.). Monitoring of child and adapted through further disaggregation of domes- youth-related commitments in other areas of the tic spending and interventions to include child- and Addis Agenda can draw on recent international data youth-focused purposes and categories. For exam- collection and harmonization efforts, such as under ple, in the area of social protection, indicator 1.3.1 is the Global Nutrition Report initiative, the Scaling meant to distinguish children in the breakdown of Up Nutrition (SUN) Movement, new Partnerships the population covered by social protection systems. on Child Protection and Early Child Development Another example is in the area of education, where (UNICEF and the World Bank Group), the Lancet indicators are meant to distinguish the participation Countdown to 2015 Initiative for tracking progress rate of youth in formal and non-formal education in maternal, newborn and child survival, the H4+ and training. technical partnership for the Secretary General’s In some countries it is also possible to moni- Every Woman, Every Child initiative, and the new tor spending that has direct and indirect impacts Global Financing Facility for Maternal, Neonatal, on children, including on child-focused multi-sec- Child and Adolescent Health. torial SDG priorities that are not well captured by

4 See Cummins, M. Child-focused Public Expenditure Measurement: A Compendium of Country Initiatives, New York: UNICEF, forthcoming 2016. Cross-cutting issues 29

It is also challenging to follow-up on the pro- opment issues of relevance to LDCs, LLDCs, SIDS, motion of national youth strategies. Case studies can Africa and middle-income countries, informed, for be useful here, as well as voluntary country report- example, by language in new resolutions, agreed con- ing, in the context of national sustainable develop- clusions, declarations and communiques emanating ment strategies. from the United Nations and other international processes. United Nations reports, such as UNC- 11. Addressing the diverse needs TAD’s annual LDC Report and its Vulnerability and challenges faced by Profiles, which provide economic analysis of those countries in special situations LDCs that have been found eligible for graduation by the Committee for Development Policy, or the Addis commits the international community to annual Report on the state of the LDCs, prepared by support countries in special situations. Specifi- the United Nations Office of the High Representa- cally, Addis: tive for Least Developed Countries, Landlocked Developing Countries and Small Island Developing Commits to support the implementation of States, can also provide input. relevant strategies and programmes of action for The sub-section can also cover the cross- least developed countries, landlocked develop- cutting aspects of the set of commitments toward ing countries, and small island developing vulnerable countries that will be difficult to address States (8) fully or adequately in the subsequent chapters. One Reaffirms the need to achieve a positive socioeco- example of such dimensions is progress towards nomic transformation in Africa, and the need socioeconomic transformation. Monitoring by the to address the diverse and specific development Task Force could be informed by data on economic needs of middle-income countries (8) structural transformation (the dynamic reallocation Recognizes the development challenge posed of resources from less productive to more produc- by conflict and the importance of the Peace- tive sectors) and on social transformation (human building Fund, and takes note of the princi- and social development). In this context, UNCTAD ples set out in the New Deal by the Group of is developing performance measures and quantifi- Seven Plus (8) able indicators to measure economy-wide productive These commitments are mirrored in many capacities, with a view to providing an operational concrete commitments across the Action Areas of methodology and policy guidelines on how to main- the Addis Agenda, as well as in SDGs and targets stream productive capacities into national develop- specific to vulnerable countries. Some of these tar- ment policies and strategies in LDCs. Monitoring of gets build on those agreed in the programmes of economic structural transformation could also draw action for the least developed countries (LDCs), on data collected in the context of section 5 on pro- landlocked developing countries (LLDCs) and small moting industrialization, as well as on UNCTAD’s island developing States (SIDS). Export Diversification Index. Social transformation The indicators for targets relevant to vulner- in vulnerable countries could be captured through able countries either directly monitor commitments two sub-indices of the human development index: toward vulnerable countries, or can be disaggregated life expectancy index and education index. In the to highlight developments in these country groups. area of infrastructure, aerodromes are an integral They will thus provide input for monitoring commit- and essential component of the aviation infrastruc- ments toward vulnerable countries throughout the ture, and are drivers for economic development and chapters of the Task Force report. This cross-cutting trade especially in LLDCs and SIDS. The Interna- section addresses global commitments to address tional Civil Aviation Organization collects data on specific development challenges of countries in the quality, reliability, sustainability and reliance of special situations. One option for monitoring these aerodrome infrastructure. commitments is to rely on qualitative assessments of Another dimension that will be worth moni- the level of global awareness and debate on the devel- toring will be the level of inequality among countries, 30 Addis Ababa Action Agenda — Monitoring commitments and actions

which could be considered the ultimate objective of Recognizes that the enhanced and revitalized “addressing the needs of countries in special situa- global partnership for sustainable develop- tions”. This monitoring can draw on those indica- ment, led by Governments, will be a vehicle tors of SDG 10 that focus on reducing inequality for strengthening international cooperation for among countries. This assessment should be com- implementation of the 2030 Agenda; and that plemented—in the subsequent chapters of the multi-stakeholder partnerships and the resources, report— by a monitoring of progress to be informed knowledge and ingenuity of the private sector, by quantitative indicators measuring the level of ful- civil society, the scientific community, academia, filment of global commitments in favour of these philanthropy and foundations, parliaments, groups of countries in the seven action areas of the local authorities, volunteers and other stake- Addis Agenda. holders will be important to mobilize and share Commitments made towards Africa’s develop- knowledge, expertise, technology and financial ment are reviewed in the United Nations Monitor- resources, complement the efforts of Govern- ing Mechanism, which was established by General ments, and support the achievement of the Assembly resolution 66/293. The Task Force can sustainable development goals, in particular in draw on the assessment of progress in implementa- developing countries (10, MoI 17.16) tion of commitments by African countries and their Commits to respect each country’s policy space development partners contained therein. To monitor and leadership to implement policies for poverty the commitment on countries affected by conflict, eradication and sustainable development, while the Task Force will be able to draw on a New Deal remaining consistent with relevant interna- Monitoring framework prepared by the Interna- tional rules and commitments (9, MoI 17.15) tional Dialogue on Peacebuilding and State building. Encourages and promotes partnerships to It has reported on progress to monitor financial flows support country-driven priorities and strate- dedicated to peacebuilding and state building every gies, building on lessons learned and available two years (last report issued in 2014, the next is due expertise (76, MoI 17.17) in 2016) and will be collecting data on progress on implementing aspects taken up in the Addis Agenda The overarching commitment in this subsec- (notably on the use of country systems). Nonetheless, tion, and perhaps in the Addis Agenda as a whole, it remains challenging to accurately monitor finan- is to enhance the global partnership. As noted in cial flows dedicated to peacebuilding and state build- the Addis Agenda “The enhanced and revitalized ing in conflict/post-conflict contexts. 5 global partnership for sustainable development, led by Governments, will be a vehicle for strengthen- 12. Global partnership ing international cooperation for implementation of The Global Partnership enshrined in the Addis the post-2015 development agenda.” The SDG 17.16 Agenda is a vehicle for strengthening international indicator is focused on development cooperation cooperation for implementation of the 2030 Agenda efforts, assessing the number of countries reporting for Sustainable Development. The Addis Agenda in progress in multi-stakeholder development effectiveness its entirety and the myriad commitments contained monitoring frameworks that support the achievement of within, as well as SDG 17, reflect the reinvigorated the SDGs. This will serve to monitor one dimension global partnership. More specifically, Addis: of the global partnership, which is also discussed in more depth in chapter II.C. A more complete assess- Commits to reinvigorate the global partnership ment of progress on the global partnership will need for sustainable development (9, MoI 17.6) to look across the seven Action Areas of the Addis Agenda. Indeed, this entire Task Force Report will

5 See for example OECD, States of Fragility Report, 2015: http://www.oecd.org/dac/states-of-fragility- 2015-9789264227699-en.htm Cross-cutting issues 31 be a report on the progress of the Global Partnership part, this effort will be able to draw on the informa- for Sustainable Development. tion collected at the Partnerships for SDGs online In terms of the specific commitments, the platform 6 which will support the global review to indicator for SDG 17.15 on policy space is to assess be undertaken by the High-Level Political Forum extent of use of country-owned results frameworks and starting in 2016. The platform contains partnership planning tools by providers of development cooperation, initiatives in all areas, including commitments and also focusing on development cooperation. The Addis Agenda addresses country ownership issues initiatives stemming from Every Woman, Every with regard to development effectiveness in chapter Child, Sustainable Energy for All, Global Compact, II.C on international cooperation. The Addis Agenda Partnerships for Small Island Developing States, also addresses the broader issue in the context of and the Rio+20 Conference, among others. It will policy coherence on the national and international further be informed by progress on the partnership levels, as discussed in chapter II.F on systemic issues. initiatives and voluntary commitments that were Finally, the promotion of multi-stakeholder launched at the sidelines of the Addis Conference. partnerships can be informed by SDG 17.17. The These initiatives will be reported on in a separate indicator for this is the amount of US dollars committed to public-private and civil society partnerships. This Annex to this Report in future years. The Task Force will need to be complemented by qualitative analy- will also give account of other partnership initiatives sis and by further disaggregation of available data and programmes relevant to the implementation of that distinguishes different types of partnerships. In the Addis Agenda.

6 As of March 2016, more than 1900 initiatives have been registered on the partnerships for SDGs platform, see: https://sustainabledevelopment.un.org/partnerships.

Chapter II.A Domestic public resources

1. Introduction On average, countries have increased their tax Domestic public finance is essential to providing revenue over the last 15 years (figure 2), although public goods and services, increasing equity and room remains for further improvement. In many helping manage macroeconomic stability. It is a countries domestic resource mobilization remains central component of financing across the sustain- insufficient to meet sustainable development needs. able development goals (SDGs), as well as the social The Addis Agenda recognizes that the foremost compact of the Addis Agenda (discussed in chap- driver of domestic resource mobilization is economic ter I on cross-cutting issues). This present chapter growth, supported by sound policies and an enabling focuses on raising resources and expenditures, as environment at all levels. It also notes the need to well as the quality and alignment of both with sus- strengthen tax administration, implement policies tainable development. Many commitments and to generate additional resources and combat corrup- actions in this chapter are national in nature, but tion in all its forms. At the same time it stresses the the Addis Agenda underscores that implementation importance of combatting illicit financial flows. In needs to be supported by international actions and a globalized world, there are limits as to what coun- cooperation. tries can do on their own through domestic policies,

Figure 2 Median tax revenue as a percent of GDP by income grouping, 1990–2013 (Tax/GDP ratio)

0.25 High income

Upper middle income 0.2 Lower middle income

Low income 0.15

0.1

0.05

0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: United Nations Department of Economic and Social Affairs calculations, based on International Monetary Fund World Revenue Longitudinal Data (WoRLD), 13 July 2015. Note: Tax revenue as a percent of GDP, country classification according to World Bank Group country income groups 2015. 34 Addis Ababa Action Agenda — Monitoring commitments and actions

and the Addis Agenda thus calls for strengthening funded by domestic taxes) can be a useful starting international tax cooperation. point for measuring government revenues and tax Commitments in the Addis Agenda aim to collection. However, generating consistent, com- address these challenges, underscored by the princi- parable revenue data and measuring revenue as ple of national ownership. This chapter also describes a percentage of gross domestic product (GDP) is how the Task Force will examine budget execution a complex undertaking. For example, there are and expenditure and follow-up on other topics, such changes in and uneven implementation of the sys- as extractive industries, national development banks tem of national accounts, discontinuities in time and subnational finance. series, differences between federal and non-federal 2. Domestic resource mobilization systems, differences between budgetary and other central government information, and different and taxation measures of GDP as reported by different institu- Governments recognized in Addis Ababa that the tions. These challenges create difficulties in aggre- mobilization of domestic public resources is central gation, as well as in measuring trends over time. In to the pursuit of sustainable development, including addition, the methodology used for aggregation will achieving the SDGs. often depend on the expected use of the data set. 2 1. . Resource mobilization and domestic For example, the treatment of revenue from natural targets resource extraction varies across data sets, partially reflecting the different purposes for which they SDG 17 on the global partnership and means of were designed. implementation (MoI) target 17.1 (strengthen domes- As a result, while there are several different tic resource mobilization, including through inter- data sets available, they are not strictly comparable. national support to developing countries, to improve The International Monetary Fund’s (IMF) World domestic capacity for tax and other revenue collection) Revenue Longitudinal Data (WoRLD) data set is focus on domestic resource mobilization. However, designed to be as consistent as possible across coun- this target does not spell out in detail how this will tries and will be the basis of the Task Force’s work. be achieved. The Addis Agenda builds on this, rec- The database compiles comprehensive data on tax ognizing the need for significant additional domestic and non-tax revenues by country on an annual public resources. In particular, Governments: basis, going back to 1990. The WoRLD database combines data from two IMF publications: the IMF Remain committed to further strengthening Government Finance Statistics and World Economic the mobilization and effective use of domestic Outlook (WEO) and various Organization for Eco- resources (20, MoI 17.1) nomic Cooperation and Development (OECD) Rev- Welcome efforts by countries to set nationally enue Statistics publications. This annually updated defined domestic targets and timelines for data set can be helpful in tracking changes in taxes domestic revenues as part of their national across all major tax types and essentially all coun- sustainable development strategies (22) tries. Additional databases created by intergovern- Commit support to developing countries in need mental bodies such as the OECD, researchers, the in reaching these targets (22, MoI 17.1) private sector and multi-stakeholder partnerships Following-up on the Addis Agenda will can be used complementarily. 1 require more detailed reporting and monitoring In addition, countries maintain annual and, than is proposed for the SDG monitoring process. in some cases, medium-term forecasts for govern- Nonetheless, the indicators for MoI 17.1 (17.1.1 ment revenues as part of the overall fiscal framework, total government revenue (by source) as a percentage including expenditure, though there is no central of GDP; and, 17.1.2 proportion of domestic budget database on this. The IMF systematically tracks fore-

1 See for example http://www.ictd.ac/datasets/the-ictd-government-revenue-dataset; http://www.rockinst.org/gov- ernment_finance/revenue_data.aspx; https://dits.deloitte.com/. Domestic public resources 35

casts and medium-term forward looking scenarios base. Its criteria include administrative organization, on a country-by-country basis. taxpayer identification and registration, filing, rev- Tracking the action item on revenue targets enue controls and post-filing arrangements. These is also challenging. One way to track this would be are benchmarked within and across country groups, through voluntary country reporting in the context for example by income and features such as conflict of reporting on national sustainable development affected or resource dependent. It should be noted strategies, which take account of country circum- that specific country information derived from RA- stances, economic characteristics and initial condi- FIT is not public, though benchmarking across tions. This could be done through the annual Forum groups of countries can be made available. The tool on Financing for Development (FfD) Follow-up. has now been expanded into a more broadly used Case studies can also be helpful. The key issue will international survey on tax administration, as a joint be to measure progress toward appropriately set- endeavour between The Inter-American Center of ting individual goals over the medium and longer Tax Administrations (CIAT), the IMF, the Intra- term — with evaluations of why and how goals are European Organisation of Tax Administrations or are not being reached. Case studies can help assess (IOTA) and the OECD. It provides a core set of whether, over time, setting revenue targets actually questions and definitions that will form the basis of leads to increased revenue collection. Case studies the data collection system each organization will use can also assess drivers of domestic revenues and to gather data on tax administration. This will allow potential policy trade-offs by considering the over- more efficient data collection and will improve com- all economic context, including economic growth, parability of data between countries and organiza- external developments and government policies that tions, and establish metrics that tax administrations impact the tax base. globally could report against. The new survey will The commitment to support countries in need be launched by the four organizations at the Plenary in these efforts is discussed in section 5.4 on capac- of the OECD’s Forum on Tax Administration in ity building, and more broadly in chapter II.C on Beijing, China in May 2016. international cooperation. This data can be complemented with tax per- 2 .2 . Tax policy effectiveness, transparency formance assessment by multi-stakeholder assess- and administration ments of Public Expenditure and Financial Account- ability (PEFA) undertaken in selected countries. The Increasing domestic resource mobilization will Tax Administration Diagnostic Assessment Tool require changes to both tax policies and tax admin- (TADAT) is a new instrument used to diagnose istration. The Addis Agenda includes concrete com- weaknesses and assess performance in tax admin- mitments and action items in this respect. Specifi- istrations on a country-by-country basis. However, cally, Countries commit to: TADAT data is not public, nor is it intended as a benchmarking or comparative tool — its purpose is Enhance revenue administration through mod- rather to assist country authorities to develop and ernized, progressive tax systems, improved tax prioritize an evidence-based assessment of the areas policy and more efficient tax collection (22) for potential reform and improvement in their tax Work to improve the fairness, transparency, administrations. efficiency and effectiveness of our tax systems, The OECD, under the auspices of the Forum including by broadening the tax base and con- on Tax Administration, biennially provides compar- tinuing efforts to integrate the informal sector ative information and data on tax administration. into the formal economy in line with country The series summarizes tax administration systems, circumstances (22) practices and performance across 56 advanced and World-wide data on revenue administration emerging economies (including all OECD, Euro- performance is being tracked in a tool that was pean Union and Group of 20 members). IMF Fis- originally developed as the IMF’s Revenue Admin- cal Transparency Evaluations (FTEs) can provide istration Fiscal Information Tool (RA-FIT) data- additional insights in countries where these are 36 Addis Ababa Action Agenda — Monitoring commitments and actions

undertaken, as can findings from multi-stakeholder The indicator for the related MoI 3.a is 3.a.1 initiatives including the Global Initiative for Fiscal age-standardized prevalence of current tobacco use Transparency (GIFT), the OECD Forum on Tax among persons aged 15 years and older. The Task Force and Crime, and the Extractive Industries Trans- could build on this indicator to include tax measures parency Initiative (EITI). The assessment of rev- and tobacco-related finance. Based on the World enue administrations can be further complemented Health Organization’s (WHO) technical manual on with case studies based on insights from activities taxation of tobacco, important metrics include tax by Addis Tax Initiative (ATI) members (including share as a percent of the retail price of tobacco and partner and donor countries, and regional tax organ- the revenue realized from tobacco taxation. Informa- izations, and international organizations) and other tion to track progress is available from the WHO, development partners. which conducts biannual global surveys of tobacco Additional data in addition to tax administra- prices and taxes. 2 The survey will specifically track tion parameters and revenue outturns will be needed countries that: increase excise taxes on tobacco; to follow-up on the portion of the commitment increase revenues from tobacco taxes; and earmark related to tax policy and progressivity of tax sys- tobacco taxes specifically for health purposes and/or tems. Measurement and monitoring of effectiveness, tobacco control. The survey methodology includes fairness and efficiency of tax policies in individual near universal coverage for tax information on the countries will need to be done using case studies. most sold brand of tobacco and less information on Likewise quantitative data on the widening of the averages and cheapest brands, but the WHO is mov- tax base and integration of the informal sector can ing to collect more data on the market average. The be treated in case studies, rather than cross-country WHO also publishes country profiles linked to ciga- analysis, which can be complemented by reference rette taxation and prices as well as information about to the data on informality from the World Bank exports, imports, production and illicit trade. It also Group’s enterprise survey data. has a simulation tool for countries to use to assess The IMF and the World Bank Group are tobacco taxation policies. Additionally, the WHO jointly developing a framework to be used to pro- monitors the countries that increase financial sup- vide diagnosis and assessment of individual coun- port for activities intended to achieve the objective try tax policy systems, against the background and of the WHO Framework Convention on Tobacco context of each country. This framework, when it is Control (see chapter II.C). Case studies can be pre- completed, could provide a publicly available system sented to show specific country efforts to reduce for assessment of these questions. However, it is not tobacco consumption and raise related revenues. intended that the framework will be — or should be — used for comparing or benchmarking coun- 3. Illicit financial flows tries against one another. The Addis Agenda also includes commitments on In addition to improving the effectiveness reducing illicit financial flows (IFFs), as a necessary of tax policy and tax administration, in the Addis measure to raise domestic resources. It identifies tax Agenda Governments specifically: evasion and corruption as particular areas that need both domestic and international action. Specifically, Recognize that price and tax measures on in the Addis Agenda, Governments: tobacco can be an effective and important means to reduce tobacco consumption and Commit to redouble efforts to substantially health-care costs, and represent a revenue reduce IFFs by 2030, with a view to eventually stream for financing for development in many eliminating them, including by combating tax countries (32, MoI 3a) evasion and corruption through strengthened

2 The OECD biennially publishes detailed information on rates, tax bases and calculation methods for excise duties and value-added tax on tobacco products in OECD countries. Domestic public resources 37

national regulation and increased international estimate IFFs. These tend to concentrate on selected cooperation (23, MoI 16.4) elements of IFFs, and thus do not give a global pic- Invite other regions to carry out exercises similar ture of the size or nature of illicit flows. For example, to the High Level Panel on Illicit Financial one methodology starts with errors and omissions in Flows from Africa (24) official trade statistics as a proxy for illicit flows. An Invite appropriate international institutions alternative measure starts from estimates on the pro- and regional organizations to publish estimates ceeds of crime. However, the data sources are gener- of the volume and composition of illicit finan- ally not robust in measuring changes or determining cial flows (24) trends across years. Commit to strive to eliminate safe havens that In one example of a methodology for measur- create incentives for transfer abroad of stolen ing IFFs, the World Bank Group’s “residual model” assets and IFFs (25) subtracts the total of funds actually used by a country from the total entering that country and, if there The commitment on reducing IFFs is reflected are more funds coming in than funds being used, under SDG 16 in target 16.4. The SDG indicator the resulting fund shortfall is considered to represent (16.4.1 total value of inward and outward illicit finan- illicit flows. The underlying assumption is that funds cial flows (in current United States dollars)) could be that are not officially recorded are ‘illicit’. helpful in following-up on this. However, there is Another commonly used methodology meas- no agreed definition of IFFs or agreed-on methodol- ures trade mispricing or misinvoicing as a proxy ogy for their measurement. There is general agree- for illicit flows. This methodology views practices ment that IFFs include cross-border movement of of over- or under-invoicing of trade receipts as a financial assets relating to tax evasion, international means of transferring funds from one (typically trade fraud (including misinvoicing), criminal activ- high-tax) jurisdiction to another (typically low-tax) ity (including smuggling and trafficking in drugs, jurisdiction. Researchers aggregate the differences cultural objects, medicines, persons and natural in reported bilateral trade from the exporting and resources), and corruption. There is disagreement, importing sides, accessing data from the IMF’s however, on whether tax avoidance should be con- Direction of Trade Yearbook or the United Nations sidered an illicit flow. For example, the report of the Comtrade Database to get down to very specific High Level Panel on Illicit Financial Flows from product lines in the estimates. While trade mispric- Africa includes “tax abuse” which comprises “evad- ing could arise from multiple motivations — including or aggressively avoiding tax” 3 in its broad inter- ing money laundering — it can also represent capi- pretation of illicit flows. Other sources and institu- tal flight (in countries with exchange controls), tax tions exclude tax avoidance from the definition of evasion or tariff evasion. Similarly, while balance of IFFs on the grounds that legal exploitation of tax payments data should in principle cover all trans- loopholes in not illicit. actions between residents and non-residents, errors Currently no single tool or process can effec- and omissions may be caused by a number of factors, tively establish a comprehensive measure of IFFs at including suspect source data quality. the global or country level. Indeed, measuring and Global studies using the above methodolo- tracking illicit flows is extremely challenging, since gies are regularly produced by civil society organi- by their very nature illicit flows are not transparently zations, such as Global Financial Integrity, which or systematically recorded. Nonetheless, there are a combine the World Bank Group’s residual method few methods that are currently used to attempt to and the trade mispricing model, and by academ-

3 The panel’s report “defined IFFs as ‘money illegally earned, transferred or used’”, but went on to state “We also felt that the term “illicit” is a fair description of activities that, while not strictly illegal in all cases, go against established rules and norms, including avoiding legal obligations to pay tax.” Within the commercial component of IFFs the report identifies abusive transfer pricing, trade mispricing, misinvoicing, unequal contracts and tax inversion. See: http://www.uneca.org/sites/default/files/PublicationFiles/iff_main_report_26feb_en.pdf. 38 Addis Ababa Action Agenda — Monitoring commitments and actions ics. 4 The United Nations Economic Commission for parked in favourable jurisdictions due to low taxes, Africa produced an estimate for Africa, which was secrecy or other reasons. Methods for estimation published in the aforementioned High Level Panel look at discrepancies in the balance of payments report, which could be regularly updated and whose statistics, for example on portfolio equity hold- methodology could be adopted in other regions. ings, or at disclosures of offshore wealth holding in Some of these estimates can overstate the impact the aggregate by some jurisdictions. Such studies of ‘illicit flows’ on domestic resource mobilization, have been published by academics and civil society since they include the nominal value of the errors sources. Multinational enterprises (MNEs) based in and omissions, while the loss to public resource the United States are supposed to provide an esti- mobilization is often the tax or tariff amount that mate of potential tax liability of foreign earnings is evaded, which is a smaller number. At the same that are never repatriated with their Securities and time, these methods are generally not comprehen- Exchange Commission filings, leading journalists sive measures of illicit flows, as they yield little to and analysts to routinely report these figures. no information on other components of IFFs, such While transfer mispricing is not necessar- as the proceeds of corruption or criminal activities ily illegal, depending in particular on domestic such as illegal narcotics sales or smuggling of natural law, and is not always categorized as an illicit flow, resources. such conduct is widely regarded as being contrary Other approaches seek to estimate the pro- to prevailing rules and norms. Whether or not it ceeds of specific criminal activities. The United fits neatly into a definition of IFFs, it is considered Nations Office on Drugs and Crime (UNODC) important to measure its impact on countries, and estimates the value of the global illicit drugs trade particularly developing countries. Such measure- and other crimes (via surveys and questionnaires), ment is usually accomplished by analysing large but, due to the resource and data intensiveness of databases of MNE financial accounts to identify this effort, not for all crimes and not within time variances between expected taxes paid based on the periods which are robust enough to produce com- structure of MNE groups and tax rate differentials prehensive trend analysis. In relation to the volume and the actual taxes reported as paid in the finan- of IFFs related to corruption, various programmes cial accounts. Such analysis has been conducted by and initiatives have produced data on the experience the OECD and a number of independent academics, of corruption by the population. Surveys have been each with varying coverage and sometimes making supported by international organizations, including use of different databases. 5 As part of the OECD/ UNODC, the World Bank Group and the United G20 base erosion and profit shifting (BEPS) project, Nations Development Programme (UNDP). Civil the OECD presented a number of BEPS indica- society organizations also collect data such as Trans- tors, which will be refined and developed further parency International’s Global Corruption Barom- over time. Some research has also explored a related eter, but these usually focus on corruption percep- avenue for estimating BEPS using econometric esti- tions rather than the volume of resources. mations based on macro-differences in statutory An additional avenue of exploration is in look- corporate income tax rates and effective tax rates ing at off-shore un-taxed wealth. This can include of different countries. An alternative, explored by both personal wealth and corporate profits that are the United Nations Conference on Trade and Devel-

4 See for example: http://www.gfintegrity.org/report/illicit-financial-flows-from-developing-countries-2004-2013/; Ndikumana, J. et al, “Capital Flight from Africa”, in Capital Flight from Africa: Causes, Effects, and Policy Issues. Eds. Ajayi, S. Ibi, and Léonce Ndikumana: Oxford University Press, 2014. 5 For OECD see http://www.oecd-ilibrary.org/deliver/2315361e.pdf?itemId=/content/book/9789264241343- en&mimeType=application/pdf; for some academic work see Clausing, Kimberly A., The Effect of Profit Shifting on the Corporate Tax Base in the United States and Beyond (11 January 2016). Available at SSRN: http://ssrn. com/abstract=2685442 or http://dx.doi.org/10.2139/ssrn.2685442; http://www.ictd.ac/ju-download/2-working- papers/91-measuring-misalignment-the-location-of-us-multinationals-economic-activity-versus-the-location-of- their-profits. Domestic public resources 39

opment, has used locational data on foreign direct Commits Governments to work to strengthen investment (FDI) flows to estimate profit shifting, regulatory frameworks to increase transpar- based on the empirical observation that FDI routed ency and accountability of financial institu- through offshore investment hubs (typically low-tax) tions, the corporate sector and public adminis- is associated with lower reported profitability of the trations (25) FDI in the destination country. Monitoring could also focus on measuring Activities and results of the Stolen Asset the commitment to and effectiveness of normative Recovery (StAR) initiative, jointly supported by the frameworks. Existing peer review frameworks, for World Bank Group and the UNODC, can also be example of the United Nations Convention Against monitored. In particular, findings can be based on Corruption, the Global Forum on Transparency the Asset Recovery Watch Database, which tracks and Exchange of Information for Tax Purposes, the all known asset recovery cases, and provides a “one Financial Action Task Force (FATF), and selected stop shop” to access the related public case infor- data collected at the international level, could be mation. This can be complemented by further data used for this. The follow-up process could look into from OECD surveys of OECD members about their whether this type of administrative data is useful to investigation and repatriation of illicit assets stolen monitor combatting IFFs and the related corruption in developing countries and hidden in OECD coun- prevention, anti-money laundering/countering the tries. 6 A progress report on efforts to develop a set financing of terrorism (AML/CFT) and asset recov- of good practices on asset return can be provided ery efforts. For example, efforts to eliminate safe annually. Information on programme activities havens for transfer abroad of stolen assets and IFFs and findings from the United Nations Convention can be monitored by looking at the number of coun- against Corruption (UNCAC) review mechanism tries implementing relevant global standards and in selected countries where reviews take place, can the effectiveness of their implementation. Relevant supplement the above information. The second cycle standards include those on AML/CFT, exchange of of the UNCAC review mechanism, which focuses information for tax purposes, and implementation in part on asset recovery, is a potential source of of global tax norms such as monitoring of beneficial information on the actions taken by member states ownership information, as discussed in section 5 of to enhance their legal, institutional and operational this chapter. The Task Force can monitor the impact capacities to recover stolen assets. Case studies can of these efforts. However, monitoring their effective- also be presented. ness in eliminating safe havens for transfer abroad of The OECD has published an assessment of stolen assets and IFFs is challenging, and case stud- how its members perform in policy areas essential ies could be used. to reducing their attractiveness to illicit funds from developing countries. This assessment puts together, 4. Return of stolen assets in a comparative manner, publicly available data pro- The Addis Agenda also has commitments on the duced through peer review processes conducted by return of stolen assets; it: the OECD and other bodies. The frequency of replication of the exercise will depend on the publica- Encourages the international community to tion of new rounds of peer reviews covering OECD develop good practices on asset return (25) member states. Supports the Stolen Asset Recovery Initiative of Work to strengthen regulatory frameworks to the United Nations and the World Bank, and improve accountability will have to be reported on other international initiatives that support the in a qualitative manner. Future cycles of UNCAC recovery of stolen assets (25) review may include information in this regard. The

6 The survey was conducted twice: Few and Far: The Hard Facts on Stolen Assets Recovery and Tracking anti-corruption and stolen asset recovery commitments. 40 Addis Ababa Action Agenda — Monitoring commitments and actions

FATF assessments mentioned above will also provide cially those detailing inter-agency cooperation. The information related to this commitment. FATF itself also produces a myriad of case studies, reports of expert working groups, and trend and 5. International tax cooperation typologies analysis on money laundering and the The Addis Agenda recognizes that both strength- financing of terrorism. ened national regulation and increased international Evidence gathered by the World Bank Group cooperation are needed to tackle IFFs. It commits has indicated that banks might be cutting off to scale up international tax cooperation, which is money transfer operators’ access to banking ser- seen as a necessary complement to domestic efforts vices because the cost of complying with AML/ to raise resources. CFT and other requirements makes the business 5 1. . Combatting money laundering/terrorist unprofitable. However, there is no plan for the financing World Bank Group to regularly monitor this issue. As a result of the evidence gathered in 2015, the Transparency is an important theme in the Addis Bank for International Settlements’ Committee on Agenda, including in relation to efforts on combat- Payments and Market Infrastructures has elabo- ting crime, which is also covered in chapter II.F. In rated proposals to encourage the use of know-your- the Addis Agenda, Governments: customer utilities which would facilitate information sharing. The Task Force can report qualitative Commit to strengthen international cooperation information on policy development in this area, and national institutions to combat money- as well as any quantitative information that may laundering and financing of terrorism (25) become available. Commit to identify, assess and act on money- laundering risks, including through effective 5 .2 . International efforts to combat tax implementation of the Financial Action Task avoidance and evasion Force standards on anti-money-laundering/ In the Addis Agenda, international cooperation to counter-terrorism financing (24) combat tax evasion and tax avoidance are important Encourage information-sharing among finan- subjects, forming a significant part of the negotia- cial institutions to mitigate the potential impact tions. The Addis Agenda specifically: of the anti-money-laundering and combating the financing of terrorism standard on reducing Commits to enhance disclosure practices and access to financial services (24) transparency in source and destination countries, including through transparency in all Currently, the FATF and FATF-style financial transactions between Governments regional bodies monitor and publish information and companies to relevant tax authorities (23) on country performance relating to AML/CFT for Commits Member States to make sure that all their members. The IMF and other international companies, including multinationals, pay taxes organizations also conduct AML/CFT assessments, to the Governments of countries where eco- including for the IMF in the context of regular sur- nomic activity occurs and value is created (23) veillance and financial stability assessments (see Encourages countries to work together to chapter II.F). strengthen transparency and adopt policies, The February 2012 FATF (see section 3) including: MNE reporting country-by-country recommendations on AMF/CFT will likely have to tax authorities where they operate; access to beneficial implications for monitoring due to the beneficial ownership information for compe- emphasis they place on information, along with tent authorities; and progressively advancing risk and effectiveness. The FATF peer reviews towards automatic exchange of tax information and assessments can provide a follow-up mecha- among tax authorities as appropriate, with nism. Case studies and best practices publications, assistance to developing countries, especially such as those from the OECD’s multi-stakeholder LDCs, as needed (27) Forum on Tax and Crime, can be presented, espe- Domestic public resources 41

Stresses that efforts in international tax coopera- MNEs. Examination of where those MNEs are pay- tion should be universal and should fully take ing taxes, as revealed in country-by-country reports into account the different needs and capacities could contribute to analysis of whether MNE value of all countries (28) creation and economic activity is being taxed in the Welcomes on-going efforts, including the work jurisdiction where it is occurring. of the Global Forum on Transparency and There is no global tracking mechanism for Exchange of Information for Tax Purposes; country-by-country reporting. The OECD/G20 takes into account OECD work on BEPS (28) BEPS Action Plan includes a new standard of infor- Decides to further enhance the resources of the mation and proposed procedures for implementa- Committee of Experts on International Coop- tion. For implementation, countries would need to eration in Tax Matters to strengthen its effec- adopt national legislation, and there needs to be a tiveness and operational capacity (29); increase mechanism to exchange reports with other coun- the frequency of its meetings and its engagement tries. Some countries have already moved forward with the Economic and Social Council through legislation on country-by-country reporting. One the Special Meeting on International Coopera- mechanism for international exchange is the Mul- tion on Tax Matters (29); urges Member States tilateral Competent Authority Agreement on the to support the Committee and its subsidiary Exchange of Country-By-Country Reports, and bodies through the voluntary trust fund (29) the Task Force can follow-up on the signatories to this. The OECD’s “Inclusive Framework” for BEPS Overall assessments of the progress of interna- implementation (see below) is planning to monitor tional tax cooperation can be made through many progress on jurisdictions’ compliance with commit- mechanisms, which may include but are not limited ments they have made and effectiveness of the filing to the number of bilateral tax treaties, participation and dissemination mechanisms of the country-by- in and support for the forums and committees dis- country reports, and on other relevant actions. The cussed below, and ratification of multilateral instru- BEPS Action 11 final report on Measuring and ments. This includes forums with voluntary partici- Monitoring BEPS recommends the production of a pation, such as the follow-up mechanisms for the new publication named Corporate Tax Statistics that OECD/G20 agreements, as well as broader discus- will include aggregate and anonymous tabulations sions in the United Nations system. from country-by-country reports, as well as other The commitment to enhance disclosure prac- information to better analyse MNE tax behaviours. tices can also be monitored in a number of differ- In terms of beneficial ownership information, ent ways. For example the OECD’s Action Plan on the highest profile commitment has been from the BEPS included Action 12, which discussed manda- G20 group of countries, which adopted principles in tory disclosure regimes that require taxpayers to dis- 2014 but has not monitored their implementation. close their tax planning arrangements to the revenue Civil society organizations have produced studies on authority. The EITI requires public transparency on implementation of the new principles. Compliance payments to governments from all extractive indus- with Global Forum standards on beneficial own- try companies operating in EITI-adhering countries. ership will be assessed in its second round of peer IMF Fiscal Transparency Evaluations (FTEs) can reviews (discussed below). also provide insights. Qualitative information can The G20 and OECD have launched a new be presented from peer reviews under UNCAC as framework for BEPS implementation, which invites discussed above. interested countries and jurisdictions to work on As discussed above, estimates of tax avoidance reviewing and monitoring the implementation of and evasion are difficult to make, so that case stud- the already agreed OECD/G20 BEPS Action Plan, ies may be used to follow-up on the commitment as well as on developing standards on BEPS Project- to ensure that MNEs pay tax where activity occurs. related issues. Non-OECD countries and jurisdic- Additional tentative indications could come from tions can join this implementation framework with looking at effective corporate tax burdens on major Associate Status, on an equal footing with OECD 42 Addis Ababa Action Agenda — Monitoring commitments and actions

members and G20 and other countries that are cur- of the standard. Peer reviews will be undertaken on rently Associates to the BEPS Project. All countries the basis of agreed terms of reference, which now involved would be required to commit to the imple- include the updated requirements relating to benefi- mentation of the entire BEPS Action Plan. In gen- cial ownership information of all legal entities and eral, as the BEPS Project sets out 15 actions, many arrangements. An additional instrument to facilitate of which cannot be tackled without amending bilat- international administrative cooperation between eral tax treaties, implementing these changes on a countries in the assessment and collection of taxes treaty-by-treaty basis would be a very lengthy pro- is the Convention on Mutual Administrative Assis- cess. About 95 countries, representing more than tance in Tax Matters. 2,000 treaties currently in force, are now working However, it is important to note that countries together on the development of a multilateral instru- do not have equal levels of capacity to produce the ment capable of incorporating the tax treaty-related vast amount of information needed for peer reviews, BEPS measures into the existing network of bilateral as well as to implement the many provisions in the treaties. The Task Force will report on the number OECD/G20 BEPS Action Plan, such as country-by- of countries involved and implementation of the country reporting. Most standards have data and framework. record keeping provisions, and many countries are In 2014, the Global Forum on Transparency limited in their ability to produce such data, mak- and Exchange of Information for Tax Purposes ing it difficult for them to participate in the Global endorsed the new standard on automatic exchange Forum. In addition, some countries have chosen not of financial account information (AEOI), the Com- to implement the OECD/G20 BEPS Action Plan. mon Reporting Standard, which 96 jurisdictions There is currently no mechanism for reporting for have publicly committed to implement. these countries. The Global Forum conducts and publishes The Addis Agenda emphasizes the importance peer reviews to monitor compliance of its 132 mem- of inclusive cooperation and dialogue among national bers and other relevant jurisdictions to its agreed tax authorities on international tax matters. In this standard of transparency and exchange of informa- respect, it looks to the United Nations Committee of tion. The Global Forum’s annual report provides Experts on International Cooperation in Tax Matters detailed qualitative analysis of its membership and (the Committee) as an important forum because of the progress made in implementing the internation- its inclusive nature. The commitment to strengthen ally agreed tax standard on exchange of informa- the Committee’s effectiveness and capacity will be tion on request (EOIR), and in time, the new AEOI followed-up on in a number of ways. The Commit- standard. The peer review process is one of the main tee produces a report after each of its sessions that instruments used by the Global Forum to ensure provides information on its work, which is publicly that its members and relevant non-members effec- available on the Committee’s website. The United tively implement the internationally agreed stand- Nations Economic and Social Council (ECOSOC) ards. The outcomes of the peer reviews on EOIR also holds an annual discussion on the Commit- identify gaps in the legislative frameworks or prac- tee’s work and adopts a resolution and decision in tices against ten essential elements of the standard this regard. These documents track the work of the and provide ratings of each of the essential elements Committee, and provide further information about and an overall compliance rating. All peer review its composition and effectiveness. The information reports adopted by the Global Forum are published is mostly qualitative in nature, but with quantitative and are available at the Global Forum EOI Portal. aspects such as the number of publications. These The results of the peer review for each jurisdiction documents will also provide details about the new reviewed so far are also available in the summary working arrangements of the Committee, including of compliance ratings. From mid-2016, a second the transition to having two sessions a year for four cycle of reviews will commence, which will be a days each. More detailed information on progress combined examination of both the legal and regu- can be had through subcommittee reports, which latory framework and the practical implementation are presented at the Committee sessions. Details on Domestic public resources 43

the representation of Committee members can also may be of assistance if it is expanded (it is not com- be presented. prehensive, currently covering some 500 treaties The Addis Agenda urged Member States to that low- and lower-middle income countries in support the Committee and its subsidiary bodies sub-Saharan Africa and Asia have signed since 1970) through the voluntary trust fund, to enable the and regularly updated. In addition, there are private Committee to fulfil its mandate; including support- sector databases of bilateral tax treaties. The Task ing the increased participation of developing country Force can also report on the preparation of toolkits experts at subcommittee meetings, where the inter- and other materials that have been prepared to assist sessional work of the Committee is achieved. An low-income countries on negotiations and considera- additional area for follow-up is thus the volume of tions for entering into tax treaties. resources contributed to the Committee’s trust fund. The Addis Agenda recognizes that tax incen- This financing is critical to strengthen the Commit- tives can be an appropriate tool, including to attract tee and to meet the expectations of an expanded set FDI, but that regional and international cooperation of activities including enhanced liaising with other has the potential to reduce or minimize harmful tax international organizations and contribution to their competition (e.g., though “races to the bottom” in work, greater governmental and public interest in the dispensing tax incentives and exemptions). The IMF, Committee’s work, and more active subcommittees. OECD, World Bank Group and United Nations pro- 5 .3 . Tax treaties and voluntary agreements duced, at the request of the G20, a paper and tools on the effective and efficient use of tax incentives In relation to bilateral treaties and agreements, in the for investment in lower income countries, in 2015. Addis Agenda, Governments: Qualitative information on the progress in tax coop- Commit to reduce opportunities for tax avoid- eration in various regional groups can be observed ance, and consider inserting anti-abuse clauses and reported over time. Action 5 of the BEPS Action in all tax treaties (23) plan also addresses harmful tax practices. The BEPS Note that countries can engage in voluntary peer review process will address such practices, discussions on tax incentives in regional and including patent boxes, which include harmful international forums to end harmful tax features, as well as a commitment to transparency practices (27) through the mandatory spontaneous exchange of relevant information on taxpayer-specific rulings. Model provisions to prevent treaty abuse, The United Nations’ regional economic commissions including through treaty shopping, have been devel- can report on activities they have pursued in this oped and are being discussed, including in the con- regard, and other efforts within the United Nations text of the multilateral instrument for implementing system, such as at ECOSOC, will be presented. the BEPS Action Plan mentioned above. These would impede the use of conduit companies in countries 5 4. . Capacity building with favourable tax treaties to channel investments The Addis Agenda references the need for assistance to and obtain reduced rates of taxation. Some of these developing countries in regard to domestic resource provisions require additional technical work, which mobilization. In it Governments specifically: will be finalized in 2016. This could be reported on through the BEPS Action Plan implementation Commit to strengthen international cooperation framework mentioned above. Some countries have to support efforts to build capacity in developing already proceeded to review individual bilateral tax countries, including through enhanced ODA treaties and incorporate anti-abuse clauses, for which (22, MoI 17.1) qualitative information can be presented. Though Commit international support to developing there is no official database of tax treaties that quan- countries in need in reaching targets for enhanc- tifies the presence or absence of certain provisions, ing domestic revenue (22, MoI 17.1) case studies can be presented. Academics and civil Support strengthening of regional networks of society have developed a tax treaty database which tax administrators (28) 44 Addis Ababa Action Agenda — Monitoring commitments and actions

International organizations and bilateral nical cooperation in the area of taxation/domestic donors provide support for domestic resource mobi- revenue mobilization by 2020. OECD ODA sta- lization. The OECD provides data on official devel- tistics underpin the annual monitoring of progress opment assistance (ODA, see chapter II.C), but do against reaching the ATI commitment of doubling not yet specifically track aid to tax administrations ODA to tax system development. Monitoring the or domestic revenue mobilization. The OECD evolution of signatories of the ATI could be an addi- Development Assistance Committee has proposed tional indicator of progress. a Creditor Reporting System (CRS) code dedicated Additionally, the IMF, OECD, United to tracking ODA related to domestic resource mobi- Nations and World Bank Group have been man- lization in addition to the broader category of public dated by the G20 to develop practical tools for devel- financial management. This is expected to be for- oping countries to deal with the BEPS Action Plan malised in 2016, allowing tracking of such ODA and other cross-border tax issues not covered by the from 2015 onwards. Some donors have attempted BEPS Project. to report on ODA spending in this category retroac- The Tax Inspectors Without Borders (TIWB) tively on their own initiative. Additional monitoring initiative, a joint project of the UNDP and OECD, and reporting can draw on multi-stakeholder plat- enables the transfer of tax audit knowledge and forms (in particular the ATI, see below). Some data skills to tax administrations in developing countries is already available by provider and recipient group- through a real time, “learning by doing” approach. ing, on the financial cost of the support, and effort Progress can be monitored through annual could be made to link this assistance to impact in updates on finalized TIWB projects and their rev- terms of improved resource mobilization. Depend- enue impacts. ing on data availability, reporting on support can The IMF provides technical assistance to be broken down by type (e.g., advice, training and approximately 100 countries every year. As in the capacity building). Broader support for domestic case of TADAT assessments, the outcomes of such resource mobilization by countries which are not advice are not public and are provided on a confiden- part of the ATI or the OECD Development Assis- tial basis to member countries. However, the princi- tance Committee can be examined with case studies. ples for provision of successful capacity building in Regional tax organizations such as the African the revenue area are found in many published IMF Tax Administration Forum, the Meeting Centre of papers. The existence of such technical assistance Tax Administrators and CIAT, can also be queried is not confidential, and thus could contribute to a to assess the support they receive from development measure of efforts to increase capacity building. The partners, the role they play in supporting member IMF will undertake additional efforts beginning in countries, and the impact of collaboration between 2016 to incorporate revenue mobilization advice in such organizations. Finally, the IMF receives a good its regular surveillance of member countries, includ- deal of external financial support for its technical tax ing on international taxation issues. assistance from individual member countries (bilat- The Global Forum engages in a range of activi- eral donors), and especially through its topical trust ties to support its member jurisdictions in effectively funds which pool donor support to revenue capacity implementing the international standards on trans- building. Similarly, the independent TADAT initia- parency and exchange of information. Work has tive is supported through a multi-donor trust fund. been completed to build a one-stop-shop for Global The financial support provided to those funds can be Forum technical assistance. The Global Forum regularly tracked and reported. Secretariat is working with its developing country Through the Addis Tax Initiative international members and five pilot projects to implement the assistance providers support partner countries to AEOI standard have been launched with developing implement the Addis Agenda in raising domestic countries (Albania, Colombia, Ghana, Morocco and public revenue. Signatories commit to step up their the Philippines). More projects are in the pipeline efforts to mobilize domestic resources and donors and qualitative and quantitative information about collectively commit to double their support for tech- project implementation can be reported. Domestic public resources 45

6. Expenditure tional Energy Agency work on fossil fuel support produces regular estimates of subsidies and other While much of the Addis Agenda on domestic public forms of support for fossil fuels for a large number resources focuses on revenue, it equally emphasizes of countries. that Member States are committed to the effective use of domestic resources. The social compact cov- 6 .2 . National control mechanisms, ered in the cross-cutting issues chapter is a high pro- transparency, non-discrimination and file commitment in the Addis Agenda that relates to procurement expenditure, and the gender section of the cross-cutting chapter covers important commitments related In the Addis Agenda, Governments: to non-discrimination, gender budgeting, and the role of women in the economy and decision making. Commit to strengthen national control mecha- There are other important commitments related to nisms, such as supreme audit institutions, along domestic public resource expenditure covered in the with other independent oversight institutions, cross-cutting chapter as well. as appropriate (30) 6 1. . Fossil fuel subsidies Commit to establish transparent public procurement frameworks as a strategic tool to reinforce The Addis Agenda: sustainable development (30) Commit to increase transparency and equal Reaffirms the commitment to rationalize inef- participation in the budgeting process (30) ficient fossil-fuel subsidies that encourage wasteful consumption by removing market distortions, Related commitments in this chapter on in accordance with national circumstances, promoting and enforcing non-discriminatory laws, including by restructuring taxation and phasing gender-responsive budgeting, and enabling women’s out those harmful subsidies, where they exist, to full and equal participation in the economy are fol- reflect their environmental impacts, taking fully lowed up in chapter I on cross-cutting issues, and into account the specific needs and conditions of its subsections 8 (promoting peaceful and inclusive developing countries and minimizing the pos- societies) and 9 (gender equality). sible adverse impacts on their development in a Some information on oversight agencies, manner that protects the poor and the affected including supreme audit agencies, is captured in communities (31, MoI 12.c) assessments made using the PEFA framework, par- There is a relevant indicator for the SDGs ticularly indicators 30 and 31. PEFA assessments are related to MoI 12.c (12.c.1 amount of fossil-fuel made for many developing countries with funding subsidies per unit of GDP (production and consump- from a donor trust fund housed by the World Bank tion) and as a proportion of total national expenditure Group, but are not made for developed countries. on fossil fuels). Monitoring fossil fuel subsidies that The International Organisation of Supreme Audit reflect the environmental impacts of fossil fuel con- Institutions and the World Bank Group are devel- sumption, requires estimates of existing levels of fuel oping a new benchmarking exercise of supreme audit taxes and also estimates of efficient fuel taxes (fuel agencies, which should facilitate better cross-country taxes needed to cover environmental costs). The comparisons. IMF’s Energy Subsidy Database, covering fossil fuel In a similar way, basic information on the products in over 150 countries, provides estimates workings of public procurement systems is captured for both efficient taxes and existing taxes and can in the revised PEFA exercise at indicator 24. Under be readily used for measuring fossil fuel subsidies the auspices of the joint World Bank Group and per unit of GDP. The OECD’s Taxing Energy Use OECD Development Assistance Committee Pro- report and methodology provides an analysis of the curement Round Table initiative, bilateral and mul- structure and level of energy taxes in the OECD tilateral donors worked together with some develop- and other selected countries. The OECD-Interna- ing countries to develop procurement standards for 46 Addis Ababa Action Agenda — Monitoring commitments and actions

ODA recipients known as the OECD Methodology 7. Additional topics for Assessing Procurement Systems (MAPS). The OECD is leading a set of partners to improve the The Addis Agenda also identifies other issues that are assessment process with the creation of MAPS II, relevant to domestic public resources which do not which should be universally applicable and will be fall under the categories presented above. launched in 2017. 7 1. . Extractives and resources sector A civil society organization, the International Budget Partnership, conducts an Open Budget The Addis Agenda notes that countries relying sig- Survey which measures budget transparency across nificantly on natural resource exports face particular 100 countries; other sources include IMF Fiscal challenges. The Addis Agenda, specifically: Transparency Evaluations. Through the Global Ini- tiative on Fiscal Transparency (GIFT), the World Encourages investment in value addition, pro- Bank Group, IMF, OECD, PEFA and others are cessing and productive diversification (26) collaborating to further strengthen the promotion Commits to addressing excessive tax incentives and monitoring of transparency and participation related to these investments, particularly in in budget processes through the High-Level Prin- extractive industries (26) ciples of Fiscal Transparency and a forthcoming set Encourages countries to implement measures to of principles on public participation in budget mak- ensure transparency, and takes note of volun- ing. The GIFT principles do not yet have assessment tary initiatives such as the Extractive Industries frameworks or data collection associated with them. Transparency Initiative (26) However, none of the existing tools seek to measure Commits Governments to share best prac- and track the ability of procurement to serve as a tices and promote peer learning and capacity strategic tool, instead focusing on transparency and building (26) competitive bidding, which tend to relate to shorter- term goals of reducing corruption. Medium-term Case studies can be undertaken to assess coun- goals of fostering industrial upgrading, protecting try efforts to reduce excessive tax incentives in the the environment, or boosting social development extractives sector, including whether countries are in relation to procurement have no monitoring preparing tax expenditure statements detailing the framework. estimated costs of the incentives. The case studies In addition to the International Budget Part- could be informed by the findings of technical assis- nership, there also a number of multi-stakeholder tance providers, such as the IMF and World Bank partnerships, such as the Open Contracting Part- Group, in providing support to developing countries nership and Government Spending Watch, which on these issues. focus on transparency, data standards and data col- Insight on transparency, for those countries lection related to budgeting and public expenditure. that are participating members, can be obtained Currently the IMF tracks the outturn of government with findings from both the EITI and IMF FTEs, expenditure in the Government Finance Statistics including pillar IV of the Fiscal Transparency Code database, but this does not contain information for resource-rich countries. EITI member countries on budgets. Some of the partnerships have sought are assessed for compliance with the EITI standard, to match budget and expenditure data including and an annual progress report presents more detail with more up-to-date data, which can be useful to on how transparent EITI members are. the Task Force, but this is limited in geographical International organization and bilateral donor coverage at present. PEFA indicator PI-9 measures support to resource-rich countries around contract access to key fiscal information, and would allow the negotiation and implementation involves sharing Task Force to track the percentage of government of good practices to build capacity and building revenues, procurement and natural resource conces- infrastructure for peer learning. Additional support sions that are publicly available and easily accessible is also made available on the interaction between in open data format. extractives industries and taxation. Information on Domestic public resources 47

these initiatives will have to be qualitative. Some of Follow-up will also draw on efforts by the the funding for these activities can be monitored IDFC. The association includes 23 financial institu- and reported, with data on the provider, recipient tions from all regions and is developing methodolo- country, and financial cost of the support. This can gies for more comparable tracking of information be broken down by type of support (e.g., advice, across their membership. Amongst other activities, training and capacity building), and could include they conduct an annual green finance mapping exer- participation in regional and global events to share cise which seeks to quantify the amount of finance country experiences. Number and breakdown of from their members that is directed at climate change users of online resources can also be tracked. mitigation and adaptation, green energy and other environmental objectives. The IDFC green finance 7 .2 . National development banks mapping report presents aggregate figures for each sector and type of finance. It only disaggregates by The Addis Agenda notes the role that well-function- institution in terms of those based in OECD coun- ing national and regional development banks can tries and in non-OECD countries, so that regional play in financing sustainable development, with a or national analysis is difficult. countercyclical role, especially during crises. Specifi- In addition, in 2013, a group of 25 national, cally, the Addis Agenda: regional and multilateral development banks agreed to a set of harmonised indicators for measuring the Calls on national and regional development development results of private sector operations. banks to expand their contributions in relevant These predominately developed-country-based insti- areas important for sustainable development, tutions will now report development impact figures, and urge relevant international public and such as number of jobs created or the gigawatt-hours private actors to support such banks in develop- of energy produced, using the same framework. Such ing countries (33) results are currently not brought together in any sin- To track the contribution of development gle location and cannot be aggregated because of the banks to the agenda, the Task Force will follow risk of double-counting. Nonetheless, the data pro- trends in national development bank (NDB) invest- vides a basis for additional reporting. ment, building on existing public information from 7 .3 . Subnational urban development/ institutions and working with the International planning, subnational financing Development Finance Club (IDFC), an association of NDBs and regional development banks (RDBs). The Addis Agenda acknowledges that in some coun- As many NDBs raise funds in capital markets, their tries expenditures and investments in sustainable financial documentation often includes key met- development are being devolved to the subnational rics such as capital base, annual commitments and level, and that these institutions may lack the capac- annual disbursements. While some banks publish ity to effectively implement the Addis Agenda and, sectoral breakdowns of their operations, each insti- by extension, the 2030 Agenda. As a result, the tution has different categorization and classification Addis Agenda: systems. Nonetheless, available sectoral data is relevant for following-up on how NDBs are contributing Encourages the participation of local commu- at the national level in their specific contexts. Given nities in decisions affecting their communi- the idiosyncratic nature of each NDB and its relation ties, such as in improving drinking water and to national sustainable development strategies, case sanitation management (34, MoI 6.b) studies and lessons learned from NDB operations Commits Governments to support cities and can examine how NDBs operate counter-cyclically, local authorities of developing countries, par- and how in certain markets they effectively respond ticularly in LDCs and SIDS, in implementing to market failure, investment gaps and inadequate resilient and environmentally sound infra- private credit. structure and sustainable and resilient build- 48 Addis Ababa Action Agenda — Monitoring commitments and actions

ings using local materials (34, MoI 6.a, MoI that implement urban and regional development plans, 9.a, MoI 11.c) integrating population projections and resource needs, Commits to increase the number of cities and by size of city; and 11.c.1 proportion of financial sup- human settlements adopting and implementing port to the least developed countries that is allocated to integrated policies and plans towards inclusion, the construction and retrofitting of sustainable, resil- resource efficiency, mitigation and adaptation ient and resource-efficient buildings utilizing local to climate change, and resilience to disasters by materials. 2020 (34, MoI 11.b) Measuring international support for subna- Commits Members to develop and imple- tional development and finance is complex since ment holistic disaster risk management at data on ODA provided to the OECD does not pro- all levels in line with the Sendai Framework vide locational tags for all its projects. While sectoral (34, MoI 11.b) data is available, it does not include the level of speci- Commits States to support national and local ficity that would be necessary to track these indica- capacity for prevention, adaptation and tors, particularly around whether the recipient is a mitigation of external shocks and risk man- subnational entity. Additionally categorization may agement (34) not be consistent. For example, it is not clear whether Commits States to scaling up international investment in a rural hospital would be classified as cooperation to strengthen capacities of munici- a local or a health investment. palities and other local authorities (34) Project level data related to ODA contained Commits to strive to support local governments in the OECD CRS allows for multiple sector and in their efforts, as appropriate, to mobilize activity codes per project. However, it does not allow revenues, strengthen debt management, and for more detailed data on how much aid is spent for strengthen municipal bond markets (34) capacity building at local levels or capacity building Commits to promote lending from financial geared towards strengthening subnational finance. institutions and development banks, along with Growth in municipal bond markets can also be risk mitigation mechanisms, such as the MIGA, tracked. In addition, South-South cooperation while managing currency risk (34) could be important in this area (see chapter II.C). Commits to enhance inclusive and sustain- Although data in this area is limited for developing able urbanization and strengthen economic, country markets, Bloomberg often tracks new issues, social and environmental links between urban, and the International Finance Corporation or aid peri-urban and rural areas by strengthening agencies working on these deals (such as the United national and regional development planning, States Agency for International Development) can within the context of national sustainable devel- also supply information. opment strategies (34, MoI 11a) Qualitative information can supplement quantitative data. Case studies and examples of successful These commitments are partly covered in MoI instances of donor collaboration to strengthen sub- targets under SDG 6 on water and sanitation, SDG national finance and lessons learned would be useful 9 on infrastructure, and SDG 11 on sustainable cit- and desirable. In that context, the United Nations ies and settlements. The related indicators include: Department of Economic and Social Affairs is col- 6.a.1 amount of water- and sanitation-related official laborating closely with the United Nations Capital development assistance that is part of a government Development Fund on a series of regional expert coordinated spending plan; 6.b.1 percentage of local consultations, with the objective to improve and administrative units with established and operational strengthen international cooperation on municipal policies and procedures for participation of local com- finance in support of the SDGs. In addition, the Task munities in water and sanitation management; 9.a.1 Force can call on case studies and examples draw- total official international support (official developing, among others, from the Multilateral Investment ment assistance plus other official flows) to infrastruc- Guarantee Agency and national, regional and multi- ture; 11.a.1 proportion of population living in cities lateral development banks. Domestic public resources 49

In terms of the financial health of subnational In terms of the non-financial policy commit- entities, there is insufficient data available at the ments contained in the Addis Agenda, such as on global level that would allow for a comprehensive resilience, risk management and urban planning, assessment. Efforts are underway to fill some of many of these commitments relate to agreements these data gaps. For example, the United Nations made in Sendai as part of the Sendai Framework Human Settlement Programme is currently working for Disaster Risk Reduction. An open-ended inter- with the Lincoln Institute of Land Policy to design governmental expert working group on indicators a Global Municipal Database. The project is facing and terminology relating to disaster risk reduction some major challenges, however, including the lack established by the United Nations General Assem- of access to or availability of city level data in general, bly (A/RES/69/284) is developing a set of indicators standardization problems, limited information on to measure global progress in the implementation revenue sources and other data irregularities. While of the Sendai Framework. The indicators under the there is a lack of global data on financial health at SDG include: 11.b.1 proportion of local governments the subnational level, case studies could focus on cer- that adopt and implement local disaster risk reduction tain aspects of the financial health of subnational strategies in line with the Sendai Framework for Dis- authorities, such as: characteristics of grant finance aster Risk Reduction 2015-2030 and 11.b.2 number from the central government to subnational entities, of countries with national and local disaster risk reduc- implementation of e-government at the subnational tion strategies. While no global mechanisms yet exist level, effectiveness of public financial management to track the sustainability of urban infrastructure, or at the subnational level (for example capital plans, the pervasiveness of urban planning that incorpo- tracking of land value, local asset inventories, sub- rates sustainable development dimensions, case stud- national entity financial statements), and the finan- ies could highlight best practices in these regards cial sustainability of subnational entity finance (for from certain national or subnational contexts. example cash flow, fiscal space or other indicators).

Chapter II.B Domestic and international private business and finance

1. Introduction highly volatile. (See figure 3) At the same time, the The Addis Agenda emphasizes that private business domestic private sector in a number of developing activity, investment and innovation are major drivers countries also risks becoming a source of financial of productivity, inclusive economic growth and job instability as many emerging market corporates have creation. Long-term private investment is critical to taken on large amounts of foreign currency debt. support growth, employment and structural trans- The Addis Agenda thus emphasizes the formation, and needs to be aligned with social inclu- importance of mobilizing stable longer-term private sion and environmental sustainability. Nevertheless, finance, both domestic and international, in ways finance and investment is not always allocated to that further sustainable development. The Agenda where it is needed for sustainable development. welcomes private sector corporate responsibility ini- Moreover, the impact of sudden surges or exits tiatives, while also exploring policy and regulatory of international private capital flows can seriously frameworks to better align business and finance with undermine sustainable development, as was seen sustainable development. This necessitates efforts in past financial crises. Indeed, in recent years, pri- across a range of areas including strengthening the vate capital flows to developing countries have been investment climate, developing appropriate regula-

Figure 3 Net financial flows to developing counries and economies in transition, 2005 – 2015 (Billions of United States dollars)

1000 Reserve assets

Direct investment 500 Total net ows

Other investment 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Portfolio investment

-500

-1000

Source: United Nations World Economic Situation and Prospects 2016. 52 Addis Ababa Action Agenda — Monitoring commitments and actions

tory and policy frameworks, developing domestic tiveness. While the appropriate set of policies are capital markets while managing risks, and encourag- necessarily country specific, a number of global ing development-enhancing direct investment into benchmarking initiatives have been developed that underfunded sectors and countries. can be helpful in understanding the business invest- The Addis Agenda stresses the role of financial ment climate in countries. Most of these initiatives inclusion for achieving sustainable development, as are organized around five themes: (i) competitive- well as the importance of designing regulatory and ness and the investment climate; (ii) perceived con- policy frameworks across all financial intermedia- straints by businesses; (iii) business and investment tion that encourage access to finance and financial barriers; (iv) risk and policy uncertainty; and (v) cost market stability in a balanced manner. The Addis of operations. Agenda also includes commitments aimed at facili- In the area of competitiveness and the invest- tating the flow of international remittances, empha- ment climate, the World Bank Group’s Enterprise sizing the relationship between remittances and Surveys present data from surveys of formal sector inclusive finance. Finally, it also incorporates com- firms on perceived constraints by businesses. The mitments on the potential role of philanthropy in World Bank Group’s Doing Business indicators implementation of the Addis Agenda. measure regulatory challenges for businesses, based A significant number of commitments and on a combination of statistical data, regulatory actions related to private business are of a crosscut- information and business surveys. The surveys and ting nature. Where appropriate, these items will be the indicators are complementary, but have differ- followed up in chapter I on crosscutting issues. This ent approaches to benchmarking the quality of the includes, in particular, items related to infrastruc- business environment across countries. Whereas the ture, blended finance and gender equality. Enterprise Surveys are firm-level polls of a representative sample of the private sector in an economy, 2. The investment climate Doing Business primarily surveys legal profession- Public policy is needed to create the enabling envi- als to measure the regulations applying to domestic ronment at all levels necessary to encourage entre- companies throughout their life cycle. preneurship and a vibrant domestic business sector. Another source of information is the World Monterrey tasked Member States with building Economic Forum’s “Global Competitiveness Index”, transparent, stable and predictable investment cli- which combines executive opinion survey results and mates, and many countries have made great strides quantitative data in an attempt to measure the com- in this area. In the Addis Agenda, countries resolved petitiveness of an economy, based on institutions, to continue this work, while aiming for private sector policies and other factors as delineated in box 1. 1 investment that is inclusive and sustainable. The United Nations Industrial Development Organ- In particular, in the Addis Agenda, Govern- ization’s (UNIDO) Competitive Industrial Perfor- ments commit to: mance (CIP) benchmarks more than 100 countries in terms of their industrial competitiveness, and spe- Create transparent, stable and predictable cifically their production and export capacity. The investment climates, with proper contract Organization for Economic Cooperation and Devel- enforcement and respect for property rights, opment’s (OECD) Policy Framework for Investment embedded in sound macroeconomic policies and looks at a range of policy areas affecting investment. institutions, transparent and stable rules, and The framework has been used in 25 countries and free and fair competition. (36) two regional economic communities — the South- Many dimensions influence the quality of a ern Africa Development Community and the country’s investment climate and overall competi- Association of Southeast Asian Nations — to assess

1 The IMD of Lausanne has a more limited country coverage but also provides an assessment of four factors driving overall competitiveness, including economic performance, government efficiency, business efficiency and infrastructure. Domestic and international private business and finance 53 their investment policies and enhance their regional investment attraction and retention produced by investment policy frameworks. Lastly, the World the World Bank (including “Investment Promotion Bank’s Regulatory Quality Index captures percep- Best Practice Indices” and “Time to start a foreign tions of the ability of the government to formulate business”) as well as measures of dispute and debt and implement sound policies and regulations. resolution (including “Contract enforcement time”). With a smaller geographic coverage, the Euro- Relevant surveys to monitor risk and policy pean Bank for Reconstruction and Development uncertainty include the World Bank Group’s World- is implementing the Business Environment and wide Governance Indicators (which measure the per- Enterprise Performance Survey (BEEPS) in partner- ceived quality of institutions and traditions that gov- ship with the World Bank Group. BEEPS is a firm- ernments use) and the Control of Corruption Index level survey based on face-to-face interviews with (which captures perceptions of public power being managers that examines the quality of the business used for private gain, including capture of the state environment. by private interests). Measurements of business and investment With regard to the cost of operations, data barriers focus on foreign and domestic firms’ ability is collected on the cost and reliability of electric- to enter markets, set up operations, access finance ity connections, the cost of trade (quality of trade and exit business operations. Relevant comparative and transport-related infrastructure, border and indicators across countries produced by the World documentary costs associated with importing and Bank Group include the “Cost of registering a busi- exporting goods, etc.), and the effect of tax rates and ness”, “New firm registration rate”, “Cost of regis- administration processes on business. tering property” and “Time to obtain a construc- Box 1 identifies some of the key global datasets tion permit”. There are also numerous measures of from which information on the above five dimen-

Box 1 Overview of Select Global Datasets on Investment Climate and Business Environment Indicators Doing Business: The Doing Business project of the World Bank uses surveys and questionnaires, primarily of legal professionals, to measure business regulations and their enforcement across 189 economies. The Doing Business topics include: starting a business; dealing with construction permits; getting electricity; registering property; getting credit; protecting minority investors; paying taxes; trading across borders; enforcing contracts; and resolving insolvency. The data generally reflect a limited geographic coverage within countries (usually the largest or several of the largest cities). Global Competitiveness Index: This World Economic Forum dataset combines executive opinion survey results and quantitative data to compare the competitiveness of an economy. Global Competitiveness pillars are the pillars under which the components of the Global Competitive Index are grouped to assess institutions, policies and other factors, including: institutions, infrastructure, macroeconomic environment, health and primary education, higher education and training, goods market efficiency, labour market efficiency, financial market development, technological readiness, market size, business sophistication and innovation. Enterprise Surveys: The World Bank Group’s Enterprise Surveys provide company-level data in emerging markets and developing economies, including 130,000 firms in 135 countries. For most countries, an Enterprise Survey is conducted every 3-4 years. The surveys cover a broad range of business environment topics including access to finance, tax rates, corruption, labour regulations, informal sector practices, business licensing and permits, courts, infrastructure, crime, competition and performance measures. Worldwide Governance Indicators: The World Bank Group’s Worldwide Governance Indicators (WGI) assess 215 economies over the period 1996–2014, in six categories of governance, including: voice and accountability; political stability and absence of violence; government effectiveness; regulatory quality; rule of law; and control of corruption. These indicators are based on over 30 individual data sources produced by a variety of survey institutes, think tanks, non-governmental organizations, international organizations and private sector firms. The WGI present country rankings based largely on perceptions of governance, meaning they may not reflect real changes in governance over time. 54 Addis Ababa Action Agenda — Monitoring commitments and actions

sions of the investment climate can be obtained. Encourages investors to take measures to The data only track some elements of the investment incentivize greater long-term investment such climate, and need to be viewed within the broader as reviews of compensation structures and per- country context. Furthermore, these should not be formance criteria (47) considered in isolation from other concerns and Encourages impact investing (37) goals, such as social and environmental sustainability. In addition, there are many other regional and Monitoring business behaviour can be chal- country-specific sources of information. lenging. There are several dimensions that can be 3. Private sector efforts and measured, such as environmental, social and governance reporting and the number of companies signing initiatives on to agreed-upon principles. However, there is less Private sector efforts and initiatives are an inte- data available to measure how these initiatives ulti- gral part of the Addis Agenda, and essential to the mately change business behaviour. achievement of the 2030 Agenda. However, the The relevant indicator for measuring the SDG only direct reference is sustainable development goal target is 12.6.1 number of companies publishing sus- (SDG) target 12.6 (encourage companies, especially tainability reports, which the Task Force will use as large and transnational companies, to adopt sustaina- an input. The Global Reporting Initiative (GRI) ble practices and to integrate sustainability information maintains a database that monitors the progress of into their reporting cycle). The Addis Agenda builds environmental, social and governance (ESG) report- on this, and includes additional action items. It wel- ing around the world and the number of sustainabil- comes voluntary initiatives and encourages greater ity reports disclosed in each country by collecting accountability by the private sector to embrace busi- data through a system of data partners (e.g., KPMG, ness models that have social and environmental Deloitte, EY, CSR Asia, etc.). impacts, and that operate sustainably. At the same Data from the United Nations Global Com- time, it also emphasizes the importance of policies pact can also be used to reflect progress. The Global and regulatory frameworks (as discussed in section Compact has over 8,500 private sector signatories, 4 of this chapter). In terms of private-led voluntary which submit an annual Communication on Pro- initiatives, the Addis Agenda: gress in four areas (human rights, labour, environment and anti-corruption), along with a meas- Urges businesses to embrace a core business urement of outcomes. The Global Compact also model that takes account of the environmen- publishes an annual business survey that examines tal, social and governance impacts of their how companies implement sustainability practices activities (37) and provides a sample of global corporate trends and Commits to promote sustainable corporate regularly updates and issues documents exemplify- practices, including integrating environmental, ing how the initiative relates to other key frame- social and governance factors into company works, such as the Guiding Principles on Business reporting as appropriate, with countries decid- and Human Rights. ing on the appropriate balance of voluntary and There are a number of additional principle- mandatory rules (37) based, voluntary ESG initiatives, including: the Encourages adoption of principles for responsible Equator Principles, Principles for Responsible Invest- business and investing and supports related ment, Principles for Sustainable Insurance (which work of the Global Compact (37) are also part of the insurance industry criteria of the Commits to work towards harmonizing the Dow Jones Sustainability Indices and FTSE4Good), various initiatives on sustainable business and and Sustainable Stock Exchanges (through which financing, identifying gaps, including in rela- stock exchanges promote ESG reporting, intro- tion to gender equality, and strengthening the duce sustainable investment education and enable mechanisms and incentives for compliance (37) green bonds trading, etc.). There are also national- level Sustainable Investment Forums (SIFs), some of Domestic and international private business and finance 55

which have formed larger geographic groupings. The and particularly ESG reporting, which states that Global Sustainable Investment Alliance groups the countries should decide on the appropriate balance largest regional and national SIFs. The Task Force of voluntary and mandatory rules, indicates the can follow-up on these and other initiatives. There importance of also tracking government policies is, however, currently no single database document- in these areas. ing all the platforms. The Addis Agenda thus calls for harmonizing various initiatives on sustainable 4. Policies and regulatory business and financing. The Task Force could be a frameworks to better align starting place for such an initiative. business and finance with global In the field of investment, many asset own- goals ers and asset managers are now members of the United Nations-supported Principles for Responsi- Policies and regulatory frameworks are an impor- ble Investment. The number of signatories to the tant complement to voluntary actions. There are two Principles could serve as an indicator for improved sets of issues covered in this section: international private sector awareness of these issues. The Addis standards and agreements on labour rights and Agenda also encourages investors to take measures environmental and health standards, which are also to incentivize longer-term investment time hori- well-covered in the SDGs, particularly in SDG 8; zons, such as reviews of compensation structures and regulatory frameworks for the financial sector, and performance criteria. There is no centralized which have no direct references in the SDGs. data source for monitoring progress in the adoption In terms of labour rights and environmental of such measures by investors. Nonetheless, there and health standards, the Addis Agenda: is progress in this area as well. The GRI database Commits to protect labour rights and environ- includes data on the investment horizon of inves- mental and health standards in accordance tors, including compensation structures and per- with relevant international standards and formance criteria. Several private initiatives, such agreements, such as the Guiding Principles as Morningstar, publish data on incentive fees for on Business and Human Rights and the the funds they cover, and Bloomberg also carries labour standards of ILO, the Convention on some compensation data. The Financial Stability the Rights of the Child and key multilateral Board (FSB) publishes a periodic progress report environmental agreements, for parties to those on “Implementing the FSB Principles for Sound agreements (37) Compensation Practices and their Implementa- tion Standards” on compensation schemes in sig- These commitments are covered by several nificant financial institutions in FSB jurisdictions. SDG targets, particularly SDG 8.7 and 8.8. The As discussed in the next section, the Addis Agenda corresponding indicators are: proportion and num- further calls on promoting incentives for sustain- ber of children aged 5-17 engaged in child labour, by able behaviour along the entire investment chain, sex and age group (8.7.1); frequency rates of fatal and including investment intermediaries, investment non-fatal occupational injuries, by sex and migrant banks, brokers, investment consultants and credit status (8.8.1); and increase in national compliance rating agencies. of labour rights (freedom of association and collective In terms of impact investing (i.e., investments bargaining) based on International Labour Organiza- which aim to generate measurable social, environ- tion (ILO) textual sources and national legislation, by mental and governance impacts along with finan- sex and migrant status. These can be a basis for the cial returns), the Global Impact Investing Network relevant Addis commitments. (GIIN) monitors the growth of the impact invest- The commitment to enforce labour rights and ing market across asset classes, sectors and regions. social standards related to children can also draw This quantitative data can be complemented by on existing routine reporting under the Convention case studies. Finally, the Addis Agenda commit- on the Rights of the Child (especially Article IV on ment to promote sustainable corporate practices, public spending on enforcing child rights). The pro- 56 Addis Ababa Action Agenda — Monitoring commitments and actions

are aligned with long-term performance and cess can be supported at the country level by relevant sustainability indicators, and that reduce excess stakeholders, such as UNICEF country offices and volatility (38) other technical and child-focused agencies. In addition, Global Compact reporting, which While financial market regulation is designed is derived from internationally agreed standards, to ensure stability of the financial system, the Addis including the Universal Declaration of Human Agenda underscores the importance of understand- Rights, the International Labour Organization’s ing the impacts of regulation on incentives for access Declaration on Fundamental Principles and Rights to credit and investment in areas important to sus- at Work, the Rio Declaration on Environment and tainable development. On the flip side, it also notes Development, and the United Nations Convention that to ensure a stable financial system, all forms of Against Corruption, can be an input here, as well as financial intermediation should be incorporated into in section 3 above. the regulatory framework. While there is a host of Moreover, assessments can be made regard- information on financial market regulations, there ing the number of investment-related national plans, is very little concrete data on the specific issues put laws and regulations that are aligned with the United forward above. However, the issues are closely linked Nations Conference on Trade and Development’s to the discussion on international norms for finan- (UNCTAD) Investment Policy Framework for Sus- cial market regulation covered in chapter II.F on sys- tainable Development or that encourage adherence temic issues. As discussed in II.F, the FSB prepares by investors to international standards of responsible an annual report to the G20 on the implementation investment, such as the ILO Tripartite Declaration of financial regulatory reforms (such as Basel III, of Principles concerning Multinational Enterprises over-the-counter derivatives and shadow banking) (MNEs) and Social Policy and the OECD Guide- by FSB jurisdictions. The report also summarises lines for MNEs. evidence on the effects of these reforms, including On the commitments pertaining to financial potential “unintended consequences”, such as the market regulations, the Addis Agenda is based on the cost and availability of credit, the supply of long- presumption that financial market regulations and term investment finance, and effects on developing policy frameworks should support a stable financial countries. Reporting on these effects, including system while promoting access to finance in a bal- the unintended consequences, is based on findings anced manner. The issue of financial market regula- from empirical work carried out by FSB members tion, including its impact on access, is discussed in and other stakeholders. The FSB will continue to this section, while broader issues related to inclusive monitor the effects of internationally agreed reforms, finance are discussed in section 5. Specifically, the including with respect to overall financial interme- Addis Agenda: diation and financial regulatory factors affecting the supply of long-term investment finance. While the Acknowledges the importance of regulation to FSB has 24 jurisdictions as members, its outreach cover all financial intermediation (e.g., shadow through its Regional Consultative Groups includes banking as well as microfinance) (38) 65 countries globally. Commits to work to ensure that policy and In addition, the International Monetary regulatory environment supports financial mar- Fund’s (IMF) surveillance work involves review- ket stability and promotes financial inclusion in ing countries’ policy and regulatory environments a balanced manner (38) with a view to supporting financial market stabil- Calls on standard-setting bodies to identify ity and promoting financial inclusion in a balanced adjustments that could encourage long-term manner. At the country level, the Financial Sector investments within a framework of prudent Assessment Program (FSAP) is a comprehensive risk-taking and robust risk control (47) and in-depth analysis of a country’s financial sec- Endeavour to design policies, including capital tor. Assessments under the programme have to be market regulations where appropriate, to pro- conducted at least every five years in 29 countries mote incentives along the investment chain that with systemically important financial systems, and Domestic and international private business and finance 57

are done at a lower frequency in other countries. 2 The Addis Agenda strongly commits to In developing and emerging market countries, the strengthening financial inclusion. Financial inclu- IMF conducts FSAP assessments jointly with the sion is also an important element in the SDGs. World Bank Group, combining a financial stability SDG targets 1.4, 2.3 and 5a call for equal access assessment with a financial development assessment. to financial services, particularly for women. SDG Information from completed FSAPs could serve as target 8.10 calls for strengthening the capacity of the basis for case studies, complemented by addi- domestic financial institutions to improve access to tional evidence in this area. banking, insurance and financial services for all. The Information on the adjustments made by relevant indicators are proportion of population living standard-setting bodies to encourage long-term in households with access to basic services (SDG.1.4.1); investments will be qualitative in nature. proportion of adults (15 years or older) with an account Finally, the commitment to endeavour to at a bank or other financial institution or with a mobile design policies to ensure that incentives are aligned money service provider (SDG 8.10.2); and number of with long-term performance and sustainability commercial bank branches and ATMs per 100,000 is closely linked to the discussion in section 3 on adults (SDG 8.10.1). private sector initiatives. As discussed, the Addis The Addis Agenda goes beyond the SDGs by Agenda calls for promoting incentives for sustainable committing countries to concrete policies and greater behaviour along the entire investment chain, includ- efforts towards capacity building that involve all rel- ing investment intermediaries, investment banks, evant stakeholders on financial inclusion. Monitor- brokers, investment consultants and credit rating ing full and equal access to formal financial services agencies. While there is no standardized dataset to could utilize both demand and supply side datasets. track this, the Task Force can look at case studies, On the demand side, the main dataset is the World on a country basis, to better understand the ways in Bank Group’s 2014 Global Financial Inclusion which policy changes impact investment behaviour. (Global Findex) database, which has approximately 100 indicators drawn from survey data. This data 5. Achieving financial inclusion could be used to disaggregate SDG 8.10 on the per- 5 1. . Financial services for all centage of adults owning an account either through a financial institution or mobile money provider, by income level, geographic location, gender, age and Commits to work towards full and equal access education. World Bank Group data can be com- to formal financial services for all (39) plemented by the more frequently updated IMF Commits to adopt or review financial inclusion Financial Access Survey (http://fas.imf.org), which strategies, in consultation with relevant stake- is a source of provider-side data on access to, and holders, and to consider including financial use of, basic consumer financial services by resident inclusion as a policy objective in financial regu- households and nonfinancial corporations. The lation, in accordance with national priorities Financial Access Survey contains annual data and and legislation (39) metadata for 189 jurisdictions covering the period Encourages commercial banking systems to serve from 2004 to 2014. all, including women (39) The Alliance for Financial Inclusion could pro- Supports microfinance institutions, development vide data on the “Number of countries with national banks, agricultural banks, mobile network financial inclusion strategy and monitoring frame- operators, agent networks, cooperatives, postal work”. Additional commitments could be monitored banks and savings banks as appropriate (39) through data on the “Percentage of women owning

2 Assessments outside the 29 countries are voluntary, so their frequency depends on country requests and resources available for the programme. The IMF’s 2014 FSAP review indicates that without increased resources, the frequency outside the 29 systemic jurisdictions would be about once every 14–15 years, http://www.imf.org/external/np/pp/ eng/2014/081814.pdf. 58 Addis Ababa Action Agenda — Monitoring commitments and actions

an account through a financial institution or mobile from World Bank Enterprise Surveys. Monitoring provider” (see Global Findex above). credit lines and other forms of affordable credit Commitments pertaining to supporting schemes that are both accessible and inclusive microfinance, development banks and other rel- (youth and women entrepreneurs) can also be done evant institutions may require a more qualitative through OECD reports on Entrepreneurship as well analysis that highlights examples where different as Country Team reports from the United Nations financial intermediaries have helped advance the System Wide Action Plan Employment and Entre- financial inclusion agenda. The United Nations preneurship section. Development Programme (UNDP) and the United The issues of collateral substitutes and excep- Nations Capital Development Fund (UNCDF) can tions to capital requirements are linked to the discus- provide case studies in this regard (see for example sion on balancing access and stability in section 4 the Pacific Financial Inclusion Programme, www. above, in that Member States are noting that there are pfip.org). cases where regulations can facilitate greater access 5 .2 . Promoting lending to micro, small and to credit. Efforts to reduce entry and exit costs could medium-sized enterprises be tracked through several sources, including “Entry (starting a business) and exit (closing a business) costs” Access to credit and financial services is a prerequi- and the “Number of countries without minimum site for the functioning of many small and medium- capital requirements” from the World Bank Group, sized enterprises (SMEs), which provide the majority Doing Business data, and “Number of microfinance of new jobs in many countries. The Addis Agenda: deposit taking institutions (MDIs) worldwide” from Mix Market. Monitoring capacity for cost-effective Commits to promoting affordable and stable credit evaluation would require qualitative work. access to credit to MSMEs (16) Case studies could highlight successful examples of Encourages international and national develop- countries that have strengthened their capacity for ment banks to promote finance for SMEs, not- cost-effective credit evaluation through training or ing the IFC, including through the creation of the establishment of credit bureaux. Finally, progress credit lines (33, 43) on providing adequate skills development training Recognizes that financial regulations can permit could be assessed through country-level case studies collateral substitutes, create appropriate excep- on the effectiveness of national development banks tions to capital requirements, reduce entry and and multilateral development banks (MDBs) in exit costs to increase competition and allow promoting SME finance, as well independent evalu- microfinance to mobilize savings by receiving ation of International Finance Corporation (IFC) deposits (43) programmes (World Bank Group Independent Commits to strengthen capacity for cost-effective Evaluation Group). credit evaluation, including through public While numerous initiatives have been training programmes, and through establishing launched in recent years to promote financing for credit bureaux where appropriate (43) MSMEs, it is unclear how well integrated they have Commits to providing adequate skills develop- been and how they impact access to finance for dif- ment training for all, particularly for youth ferent types of MSMEs across countries and sectors. and entrepreneurs (16) UNIDO, UNCDF and the United Nations Depart- SDG targets 8.3 and 9.3 call for enhancing ment of Economic and Social Affairs are embarking the access of SMEs to financial services. The rele- on a joint project aimed at analysing these initiatives vant indicator is 9.3.2 (the proportion of small-scale (comprising financial instruments and complemen- industries with a loan or line of credit) and this will tary financial and non-financial measures) centred be an input to the Task Force. “Promoting lend- on an assessment of existing initiatives to strengthen ing to micro, small and medium-sized enterprises entrepreneurial finance; an evaluation and mapping (MSMEs)” could be tracked through data on the of workable initiatives across different typologies of “percentage of (M)SMEs with a loan or line of credit” smaller enterprises, different sectors and different Domestic and international private business and finance 59

regions/categories of countries (i.e., least developed, tity. The Task Force can report on the work of the low income, middle income, etc.); and an appraisal FG DFS and subsequent follow-up initiatives. of ways to maximize the effectiveness and sustainable development impact of workable initiatives. 5 4. . Capacity building on financial literacy Studies such as the above could report on both the and inclusion status and impact of existing initiatives to promote finance for MSMEs. The Addis Agenda: 5 .3 . Increasing and diversifying lending and Promotes financial literacy (40) financial tools for increased access Expands peer learning and experience-sharing among countries and regions, including through The Addis Agenda: the Alliance for Financial Inclusion and Encourages the use of innovative tools, includ- regional organizations (39) ing mobile networks, banking, payment plat- Commits to strengthening capacity development, forms and digitalized payments (39) including through the UN development system, Recognizes the potential of new investment and encourage collaboration between initia- vehicles, such as development-oriented venture tives (39, 43) capital funds, blended finance, risk mitiga- The promotion of financial literacy could be tion instruments and innovative funding assessed through data on the “share of adults world- structures (43) wide that are financially literate” (Gallup Global Progress in increasing and diversifying lend- Financial Literacy Survey; OECD Programme ing and financial tools for increased access could be for International Student Assessment — financial assessed through the “number of live and planned literacy module, the module is only available for mobile money services for the unbanked” (see select countries but may be expanded). Monitoring GSMA Deployment Tracker), as well as the “per- progress on peer learning and experience-sharing centage of adults owning an account through a among countries and regions could draw directly mobile money provider” (Global Findex). The from the experiences of the Alliance for Financial tracking of new investment vehicles would require Inclusion and other relevant regional organizations, case studies and examples drawing, among others, including regional economic commissions and from the Multilateral Investment Guarantee Agency regional development banks. The implementation (MIGA), regional development banks and national of the commitment to strengthen capacity devel- development banks. The Emerging Markets Private opment and encourage collaboration between ini- Equity Association also collects information on pri- tiatives should be monitored through a qualitative vate equity and venture capital flows. assessment of capacity-building initiatives within The full potential of mobile banking has not the United Nations system. yet been achieved, in part because many policy and 6. Developing domestic capital regulatory environments are not conducive to the launch and scaling up of mobile money services for markets the unbanked. In this respect, in June 2014, the Domestic capital markets have an important role to International Telecommunication Union (ITU) set play in mobilizing private capital to finance domes- up a Focus Group on Digital Financial Services (FG tic development. By giving companies the ability to DFS) to bridge the gap between telecommunications borrow domestically in local currencies, domestic and financial services regulators, and the private and capital markets can also reduce currency mismatches public sectors. The FG DFS is discussing some of for borrowers, thus reducing systemic risks. At the the main policy and regulatory issues currently pre- same time, government bond markets create tools to venting the roll-out of mobile banking including manage macroeconomic and fiscal risk and provide interoperability, consumer protection, competition, important pricing benchmarks. However, the Addis regulation, security, service quality and digital iden- Agenda also emphasizes that capital markets can 60 Addis Ababa Action Agenda — Monitoring commitments and actions

increase risks in the real economy, for example, due information on development of these markets would to market herding and boom and bust cycles. The be case studies by regional commissions and regional Addis Agenda stresses the importance of regulations development banks (RDBs). Since 2008, the African aimed at reducing volatility and incentivizing longer Development Bank has been managing the African term investment. Governments commit to: Financial Market Initiative (AFMI), which contains up-to-date, country specific financial data and infor- Work towards developing long-term bond mation on domestic bond markets in Africa and markets (44) recently launched two indices, the African Funda- Work towards developing insurance markets, mental Bond Index and the AFMI Bloomberg Africa including crop insurance on non-distortive Bond Index. terms (44) In addition, assessing the ultimate impact Strengthen supervision, clearing, settlement and of bond market development includes evaluating risk management (44) the extent of new and outstanding fundraising in Recognize that regional markets can provide nominal terms and relative to gross domestic prod- scale and depth (44) uct (GDP), the number and type of issuers to see Increase local currency lending from if access has expanded in targeted sectors, and the MDBs (44) percent of investment portfolios invested in dif- Enhance international support in domestic ferent types of capital market products. Liquidity capital markets; strengthen capacity building, indicators can be used, such as bid-ask spreads and including through regional and international turnover ratios. Certain databases provide aspects of forums for knowledge-sharing (44) this information such as the Bank for International Stress the importance of managing volatility Settlements database, which has figures on the size associated with foreign inflows (44) and issuance of bonds by sovereign, non-sovereign Endeavour to design capital market regulations and financial institution issuers. This data has the that promote incentives along the investment limitation that it includes all securities above one chain that are aligned with long-term per- year, whereas the maturity of concern is closer to formance and sustainability, and that reduce 3 to 5 years plus. There are also various investment excess volatility (38) bank and other reports on investor asset sizes, such To follow-up on these commitments and action as those by J.P. Morgan. items, the Task Force can monitor market capitaliza- In the short and medium term, monitoring tion, market depth, market access by borrowers and the development of domestic capital markets should investors, and the quality of market operations and focus on steps taken to put the legal, regulatory and infrastructure. operational enabling environment in place, build The availability of data in this area is mixed. capacity, and improve quality of oversight, clearing, Data on equity markets is readily available from settlement and risk management. Information on sources such as the emerging markets databases of progress in these areas typically needs to be obtained Standard & Poor’s (S&P) and J.P. Morgan. There is on a country basis, and tends to be available from no centralized source of data on developing country national central banks. Information on local cur- bond markets. The data would need to be pieced rency lending by MDBs and on international efforts together from a number of sources including S&P, in the form of technical assistance and capacity J.P. Morgan, Bloomberg, Thompson Reuters, Dea- building to support domestic capital market devel- logic and national central banks. In addition, the opment tend to be more readily available. Data on World Bank Group prepares an annual trends note local currency lending by MDBs and RDBs are pub- on local currency bond markets for the G20, which licly available in their annual reports, which outline would also provide some updated figures. To date, their portfolios. Details of international support and the development of regional bond markets has been capacity building can be obtained from the World fairly limited, with some exceptions, such as the CFA Bank, IFC and other MDBs and RDBs as well as bond market in West Africa. The best sources of from the International Organization of Securities Domestic and international private business and finance 61

Commissions, and from various private financial insurance, measurements of regulation and super- institutions. vision of insurance markets do exist — for example An important caveat, however, is that the data through assessments of the International Asso- on domestic capital market development can be ciation of Insurance Supervisors Insurance Core misleading, and the specific country context is very Principles. However, more work needs to be done important. Large issuances can occur in countries to standardize the assessment of quality of insur- with underdeveloped markets; stock market capitali- ance markets and products, and better and longer- zation can be large when no economic transactions term plans for supervisory capacity building need occur; turnover ratios can be high but highly con- to be implemented to establish a more measurable centrated in a small number of securities. Capital benchmark. market data therefore needs to be disaggregated to Crop insurance is in many instances subsi- the country level and the country context must be dized, and issues around distortions in crop insur- understood in order to get a more accurate picture of ance can be linked to the structure and level of subsi- the situation. Hence, a quantitative analysis of mar- dies. Monitoring the development of crop insurance ket volumes needs to be complemented by qualita- in non-distortive terms could include monitoring tive country and case studies in order to formulate the application of subsidies offered by governments, an accurate idea of progress at the national level. which can be found usually as part of the budget. Price volatility of key issues can be used to Recently, there has been considerable discussion assess market volatility. In countries without well- around the use and structure of smart subsidies in functioning options markets, implied volatility agriculture and crop insurance. There are also some can also be an input. Data on foreign investment subsidy structures that could promote/incentivize in domestic markets varies by country and type of improve risk management and adaptation to cli- instrument. For example, there tends to be limited mate change rather than inhibit it. Hence, both the data on foreign investment in domestic bond mar- volume and the structure of subsidies for crop insur- kets. Capital account data, which is broken down by ance need to be assessed. portfolio flows, can be used to supplement domestic Finally, the Addis Agenda calls for the design capital market data, to better understand the impact of capital market regulations that promote incen- of foreign inflows on domestic markets. tives along the investment chain that are aligned The Task Force can also monitor the devel- with both long-term performance and sustainabil- opment of insurance markets, including crop ity. This calls for changing incentives for all market insurance on non-distortive terms. To follow up actors, including investors, brokers, advisors and on the commitment to develop insurance markets, rating agencies, among others, and is closely linked monitoring needs to be done on a quantitative with the discussion in sections 3 and 4 on private basis, looking at the size and composition of insur- sector initiatives and regulatory frameworks. As dis- ance markets. In addition, qualitative evaluation is cussed there, there is no centralized database on this. needed to make sure that good quality insurance The Task Force will look to follow up on voluntary is being provided to more people and insurance initiatives as well as through case studies. regulation and supervision is carried out in a manner that reduces risk to consumers and builds trust. 7. Facilitating the flow of In terms of quantitative sources of information, remittances Axco is the main source of international insurance market data. However, this has limitations. Size The Addis Agenda pledges to facilitate the flow of in terms of premiums can be measured, but this remittances and commits to: says little about the number of people covered. The development of such measures of underlying cov- Reduce the average transaction cost of migrant erage is needed. International databases are also remittances by 2030 to less than 3 per cent of poor when it comes to providing information on the amount transferred; and to ensure that no some developing markets. In terms of quality of remittance corridor charges higher than 5 per 62 Addis Ababa Action Agenda — Monitoring commitments and actions

cent by 2030, (MoI 10.c) while maintaining each corridor and be expressed as a percentage of the service coverage (40) total amount sent. Work to ensure that affordable financial New technology and data collection tools can services are available to migrants in home and play an important role in enhancing this target. To host countries; to reverse the trend of banks guide and/or complement their national efforts to withdrawing services; to increase coordina- collect demand-side data, policymakers can draw tion among national regulatory authorities on certain global or international demand-side sur- to remove obstacles for non-bank remittance veying efforts, including notably the Global Fin- providers; to promote competitive and transpar- dex database. ent market conditions (40) Supply-side data relies mostly on collection Exploit new technologies and improve data efforts conducted by financial regulators as part collection (40) of the discharge of their regulatory, supervisory and oversight responsibilities. Supply-side data col- These commitments are partly covered by the lected through financial regulators provide insights following means of implementation (MoI) target into the quality of the enabling environment, the under SDG 10c: By 2030, reduce to less than 3 per legal/supervisory framework and the underlying cent the transaction costs of migrant remittances and payments and information and communications eliminate remittance corridors with costs higher than 5 technology infrastructure. The World Bank Group, per cent. The MoI indicator measures remittance costs for example, regularly compiles the Global Pay- as a proportion of the amount remitted (10.c.1). ment Systems Survey, through which it is possible Currently, the most complete data set available to monitor market trends and evolution (e.g., most on remittance transfer costs is collected and main- used payment instruments to send/receive remit- tained by the World Bank Group, via the Remit- tances, most used remittance service providers), and tance Prices Worldwide (RPW) database. RPW the enabling environment to facilitate the provision covers 300 “country corridors”, including 35 major of new services (e.g., regulatory and supervisory remittance sending countries and 99 receiving coun- requirements, transparency and competition). These tries. This monitoring activity has supported the existing data sources can already be used to develop efforts of the G8 and the G20 to reduce the cost initial benchmarks. of remittances from 10 per cent to 5 per cent of the With regard to the availability of affordable average amount of US$200 sent by migrants world- financial services for migrants, the World Bank wide (the 5x5 objective). Group has provided assistance to the G20 and the In addition, the smart remitter target (SmaRT) FSB in measuring the impact of the de-risking activi- currently being developed by the World Bank Group, ties that commercial banks are implementing at the in consultation with countries and international global level. In coordination with the different tech- experts, may complement existing measures in mon- nical areas, the World Bank Group has published itoring progress towards price reduction for remit- two surveys on the phenomenon of de-risking in the tance transactions at a more granular level. The aim area of remittances and corresponding banking rela- is to ensure that in each country corridor there are at tionships. Additional efforts in this area will require least three remittance service-providers who charge appropriate collaboration of the national supervisors 3 per cent or less to send money. To be included in and regulators, who would need to regularly monitor the SmaRT Index, remittance services will need to the market and identify the impact of the phenom- be accessible on both the sending and receiving ends, enon across their financial sector. The World Bank and the money will need to be available to recipients Group will continue monitoring the issue, in col- within five days. The SmaRT methodology will be laboration with standard setting bodies and inter- finalized via the World Bank Group’s Global Remit- national fora. The collection of financial inclusion tances Working Group in mid-April 2016. It will be data from financial service providers would also be calculated using a simple average of the three cheap- useful in measuring the volume, coverage and costs est services for sending the equivalent of US$200 in of remittances as well as the availability of affordable Domestic and international private business and finance 63

financial services in home countries. However, this currently implementing a four-year project which data is currently limited. will work with other international organizations More generally, the FSB has noted that the loss and relevant authorities in Latin America and the of correspondent banking services can create finan- Caribbean in order to: identify and address regula- cial exclusion, particularly where it affects flows such tory obstacles that hinder the financial inclusion of as remittances. The FSB initiated and coordinated remittance recipients, and to increase the availability work among standard setting bodies and interna- of disaggregated, accurate, up-to-date remittances tional financial institutions to examine the extent data in order to have a better understanding of the and causes of banks’ withdrawal from correspondent market and offering of products required by remit- banking and the implications for affected jurisdic- tance recipients. tions, including through the World Bank Group The KNOMAD Thematic Working Group survey mentioned above. The resulting Report to (TWG) on Policy and Institutional Coher- the G20 on actions taken to assess and address ence — co-chaired by the OECD Development the decline in correspondent banking presents a Centre and the UNDP — has developed a dash- four point action plan that is being implemented board of indicators for measuring policy and insti- in partnership with other organizations through tutional coherence for migration and development a coordination group to: examine the decline and (PICMD). The dashboard aims to measure the implications for financial inclusion and financial extent to which public policies and institutional stability; clarify regulatory expectations, including arrangements are coherent with international best through more guidance by the Financial Action practices to minimize the risks and maximize the Task Force; support domestic capacity-building in development gains of migration. The dashboard jurisdictions that are home to affected respondent includes indicators pertaining to enhancing the banks; and strengthen tools for due diligence by cor- development impact of diaspora engagement, skills respondent banks. and migrants’ finances which, in turn, relate to An additional source of information for moni- improving data collection on remittances, money toring is the joint OECD-European Commission transfer options, restrictions/taxes on remittances, project to improve data collection on remittance pat- and financial literacy training for immigrants. The terns and financial inclusion, as well as to strengthen TWG is currently operationalizing the dashboard policies related to investment and financial services. in 11 pilot countries: Bosnia and Herzegovina, In January 2013, the OECD and European Com- Cabo Verde, Jamaica, Moldova, the Netherlands, mission launched a project on the Interrelations the Philippines, Portugal, Sri Lanka, Sweden, Swit- between Public Policies, Migration and Develop- zerland and Trinidad and Tobago. ment (IPPMD). The project is carried out in ten Finally, it is also important to monitor the con- low- and middle-income partner countries across the ditions under which remittances are earned, sent and globe with significant migration experience, includ- used. Reducing remittance transaction costs alone ing both South-North and South-South migration will not be sufficient to improve the benefits of flows. The IPPMD project has, through household remittances if those funds are earned in the context and community data surveys, gathered data on of dangerous or exploitative working conditions, or remittance patterns, financial inclusion and policies where the lack of social safety nets in the destination related to investment and financial services. The country breeds dependency on remittance transfers. data provide an overview of remittance patterns and With regard to how remittances are earned, for availability and use of financial services in partner example, implementation of and adherence to fair countries, and contribute to a better understand- recruitment practices and decent work conditions, in ing of the linkages between financial services and accordance with international standards, and pro- remittances. moting the full participation of migrants and their In addition, the Multilateral Investment Fund, families in their home and host societies, are critical member of the IDB Group, in partnership with the metrics. Such conditions can be monitored through Center for Latin American Monetary Studies, is analysis of international labour standards relating 64 Addis Ababa Action Agenda — Monitoring commitments and actions

to recruitment, national laws and their enforcement Commits financial and technical support for and other conditions relating to migrant work- project preparation and contract negotiation, ers’ rights. Information regarding developments in investment-related dispute resolution, access to these issues can be obtained from the International information on investment facilities and risk Organization for Migration. insurance and guarantees such as through the MIGA, as requested by LDCs (46) 8. Encouraging quality direct investment/foreign direct These commitments and action items are partly investment, particularly in covered by SDG MoI targets 10b and 17.5. The cor- underfunded sectors and responding indicators are 10.b.1 (total resource flows for development, disaggregated by recipient and donor countries countries and type of flow) (e.g., official development assistance, FDI and other flows) and 17.5.1 number( The Addis Agenda commits to incentivizing the of countries that adopt and implement investment pro- expansion of direct investment/foreign direct invest- motion regimes for least developed countries). ment (FDI) to underfunded countries and priority Currently, the most complete set of data on sectors, while ensuring the maximum contribution FDI stocks and flows to various categories of coun- to sustainable development and other national and tries is contained in UNCTAD’s World Investment regional goals. Specifically, the Addis Agenda: Report database, with data on 200 economies and other variables related with FDI (including sectors/ Strengthens efforts to incentivize FDI and industries). Associated databases maintain informa- address financing gaps and low levels of FDI in tion on MNEs. Data and analysis from UNCTAD’s developing countries, particularly least devel- World Investment Report also shed light on the con- oped countries, landlocked developing countries, centration of FDIs among developing countries. small island developing States and countries In addition, the OECD’s database of FDI in conflict and post conflict situations (45, statistics includes aggregate statistics for 34 OECD 46, MoI 10.b) Member countries, including detailed FDI statis- Acknowledges that foreign direct investment is tics by partner country and by industry, available concentrated in a few sectors in many develop- from 2014. The OECD’s Benchmark Definition of ing countries and often bypasses countries most Foreign Direct Investment, 4th edition (BMD4), in need, and international capital flows are sets guidelines for the compilation of FDI statistics, often short-term oriented (35) which can serve as a point of reference for issues sur- Commits to adopt and implement investment rounding FDI measurement. promotion regimes for LDCs (MoI 17.5) Qualitative information relating to trends in Encourages the alignment of FDI with national policies to incentivize FDI and the implementation and regional sustainable development strategies; of investment promotion regimes for least developed promotes policies to strengthen spillovers as well countries (LDCs) is available from UNCTAD’s as integration into value chains (45) Investment Trends and Policies Monitor, its Invest- Encourages project preparation and prioritiz- ment Policies Reviews and its Investment Promo- ing projects with employment and decent work, tion Agency Observer Series, covering all United sustainability, industrialization, diversifica- Nations Member countries. In addition, the OECD tion and agriculture; financial and technical produces regular Investment Policy Reviews and its support; collaboration between home and host FDI Regulatory Restrictiveness Index (FDI Index) country agencies (45) measures statutory restrictions on FDI in 58 coun- Encourages consideration of insurance, invest- tries, including all OECD and G20 countries, and ment guarantees, including through MIGA, covers 22 sectors. and new financial instruments. Encourages Information pertaining to the contribution of innovative mechanisms and partnerships (45) FDI to regional and national sustainable develop- Domestic and international private business and finance 65

ment strategies, its role in global value chains and which have put into place frameworks for assessing on policies to strengthen spill-overs and linkages the sustainable development component of national of FDI into the national economy is less easy to plans and laws. For instance, as noted in section 4, obtain, though organizations like UNCTAD, the assessments can be made regarding the number of OECD and UNIDO have embarked on work pro- investment-related national plans, laws and regula- grammes to generate clearer information in these tions that are aligned with UNCTAD’s Investment areas. A number of World Investment Reports have Policy Framework for Sustainable Development, or recently focused on these issues, generating data and that encourage adherence by investors to interna- information in the process. In the context of G20 tional standards of responsible investment such as requests, UNCTAD has embarked on the process the ILO Tripartite Declaration of Principles con- of constructing indicators to assess the contribution cerning Multinational Enterprises and Social Policy of FDI to sustainable development, taking account and the OECD Guidelines for MNEs. UNCTAD of its effect on capital formation, exports, taxes, job maintains two relevant databases on national policy creation and social impact. In a similar vein, the laws and regulations (Investment Policy Database) OECD is undertaking exploratory work to develop and International Investment Agreements (IIA a set of indicators on ‘quality FDI’ to strengthen Database), which include information on provi- the monitoring and assessment of the benefits of sions related to sustainable development. Moreover, FDI. These indicators would provide more informa- as part of the promotional strategy on the MNE tion on the productivity, inclusiveness, and social Declaration, the ILO is developing a methodol- responsibility of FDI. They would also open new ogy that will allow national statistical offices to avenues to generate evidence on the socio-economic better measure the impact of MNEs and FDI on effects of FDI. The OECD is also conducting decent work in their country and provide evidence- research on the integration of its FDI statistics into based policy advice to investment policy makers the Trade in Value Added framework; this research to enhance policy coherence between investment should provide a better understanding of the role of attraction and the creation of more and better jobs FDI in global value chains and its impacts on host in the host country. economies. 3 Finally, information on tools, instruments and UNIDO has also developed work streams in other mechanisms to better mitigate the risks facing the area of ‘quality FDI’ through its standardized foreign direct investors in key development sectors Investor Surveys and a dedicated evidence-based can be obtained from a range of sources. Agencies policy research programme. The data collected from that have been at the forefront of the development representative firm-level surveys features detailed of risk mitigation and risk sharing tools, as well as information on the characteristics, operations and capacity building, include MIGA, the IFC, regional perceptions of domestic and foreign investors, in development banks and bilateral agencies like the both the manufacturing and services sectors, across Overseas Private Investment Corporation of the a larger number of countries in sub-Saharan Africa. United States. An ideal metric would be total financ- This line of micro-level inquiry may be complemen- ing — equity and debt — that is mobilized with the tary to the ongoing efforts by UNCTAD and the help of insurance, investment guarantees and new OECD and has the potential to offer insights into financial instruments. While this may be challeng- the role FDI plays in stimulating economic developing to aggregate, it is possible to observe trends using ment of host countries. more limited indicators such as the total amount of Trends relating to the sustainable develop- equity and debt financing that is mobilized with ment impact of FDI could also be gauged using the help of MIGA products. Likewise, assistance information from organizations such as UNCTAD, to LDCs to access information on the above facili- the OECD, the ILO and the World Bank Group, ties and the provision of project preparation support

3 Furthermore, UNCTAD, OECD and the World Bank Group are collaborating on a set of G20 initiatives including taking stock of policy developments relating to domestic and international investment regimes. 66 Addis Ababa Action Agenda — Monitoring commitments and actions

can also be accessed from multilateral agencies like and technology (7.1.2); renewable energy share in the MIGA and bilateral donors (as well as information total final energy consumption (7.2.1); energy inten- from the OECD DAC database). sity measured in terms of primary energy and gross With regard to assistance to LDCs on invest- domestic product (GDP) (7.3.1); mobilized amount of ment-related disputes, the International Centre for United States dollars per year starting in 2020 account- the Settlement of Investment Disputes (ICSID), able towards the US$100 billion commitment (7.a.1); which is a member of the World Bank Group, and and investments in energy efficiency as a percentage of UNCTAD would be important sources of informa- GDP and the amount of foreign direct investment in tion. In general, a complementary way of monitor- financial transfer for infrastructure and technology to ing and following up on the commitments relating sustainable development services (7.b.1). to LDCs would be to rely on new developments in Monitoring will also need to focus on the inter-governmental negotiations. These develop- modalities of access, in particular generation capac- ments can be gauged through a review of new reso- ity and cost of access to energy. In this regard, refer- lutions, agreed conclusions, declarations and com- ence could be made on electricity production (kwh) muniques emanating from the United Nations and per capita, and the tariff per kilowatt hour (constant other international processes. terms or PPP). The Addis Agenda welcomes Sustainable 9. Incentivizing investment in Energy for All (SE4All) as a useful framework. The underfunded areas, including SE4All Global Tracking Framework (SE4All-GTF), clean and affordable energy a consortium of more than 20 agencies coordinated by the SE4All Knowledge Hub at the World The Addis Agenda: Bank Group and the International Energy Agency (IEA) with a consortium of more than 20 agen- Aims to ensure universal access to affordable, cies, tracks financial and technology development reliable, modern and sustainable energy services needs and progress, energy access, renewable energy for all by 2030; to substantially increase the and energy efficiency (energy conservation is dis- share of renewable energy; and to double the cussed in relation to energy efficiency). At the next global rate of energy efficiency and conservation SE4All-GTF, planned for 2017, the intention is to (49, SDG 7.1, 7.2, 7.3) further align monitoring efforts to SDG indicators Promotes public and private investment in and to begin to provide an overview of finance and energy infrastructure and clean technologies investment including those related to the SE4All including carbon capture and storage; commits recommendations to raise over US$100 billion in to enhance international cooperation to provide annual investments by 2020, through market-based adequate support and facilitate access to clean initiatives, partnerships and leveraging develop- energy research development (49, MoI 7.a) ment banks. Commits to enhance international cooperation Additional data sources include the Energy to expand infrastructure and upgrade technol- Development Index by the IEA, which includes ogy for modern and sustainable energy services a multi-dimensional indicator that tracks energy to all developing countries, in particular LDCs development country-by-country and distinguishes and SIDS (49, MoI 7.b) between developments at the household and com- Calls for action on SE4All recommendations to munity levels. Furthermore, the IEA/International raise over US$100 billion in annual invest- Renewable Energy Agency Joint Policies and Meas- ments by 2020, through market-based initia- ures Database for Global Renewable Energy con- tives, partnerships and leveraging development tains country-validated renewable energy policy banks (49) data and country-specific policy profiles from 116 The related SDG indicators are: percentage of countries. population with access to electricity (7.1.1); percentage of population with primary reliance on clean fuels Domestic and international private business and finance 67

10. Encouraging philanthropic ing among other things the incorporation of the engagement that is transparent SDGs in strategies and programmes, the number of and accountable SDG-related impactful interventions and collaborative initiatives and cross-sectoral partnerships. Self- The Addis Agenda welcomes the rapid growth of reporting on these and other metrics by the philan- philanthropic giving and the significant financial thropic sector would be helpful. and non-financial contribution philanthropists One way to track progress on transparency and have made towards achieving our common goals. accountability would be by looking at the number It encourages philanthropists to partner with Gov- of foundations that provide data on their grants and ernments, as well as increased transparency and report on them through initiatives like the Interna- accountability in philanthropy. Specifically, the tional Aid Transparency Initiative (IATI). However, Addis Agenda: the IATI model is currently very difficult for small foundations to adopt. Encourages growth of philanthropy and efforts There are no agreed principles or monitor- to increase cooperation between philanthropic ing frameworks for collaboration between foun- actors, Governments and other development dations and Governments, and no easily available stakeholders (42) data on alignment and ownership for most coun- Calls for increased transparency and account- tries. Although evidence on effective collaboration ability in philanthropy (42) between philanthropic actors, Governments and Encourages philanthropic donors to apply due other development actors is still limited, ongoing consideration to local circumstances and align case studies from various foundation networks, with national policies and priorities (42) including the OECD Global Network of Founda- Encourages philanthropic donors to consider tions Working for Development (netFWD), can managing their endowments through impact provide guidance. These pilots will generate coun- investing (42) try-level data gathered through questionnaires and a These commitments are not covered in the multi-stakeholder dialogue process. They are prem- SDGs or the MoI targets. Data collection for these ised upon the Guidelines for Effective Philanthropic items is challenging as systems for monitoring phil- Engagement (GEPE), a voluntary and non-binding anthropic investments are rudimentary in many tool developed by netFWD, which aims to help places in the world. improve development outcomes by establishing a There is ongoing collaboration among foun- framework for collaboration between foundations dation networks to strengthen data collection on and Governments. The netFWD will also contribute the ground, including through the establishment by elaborating a methodology assessing the impact of the SDG Philanthropy Platform (set up jointly of multi-stakeholder partnerships with foundations. by the Foundation Center, UNDP and Rockefeller The United Nations Development Cooperation Philanthropy Advisers), which aims to monitor and Forum (DCF), which brings philanthropic founda- strengthen philanthropic contributions to the SDGs. tions together with other development cooperation However, at present, most sources of data on phi- actors, provides another source of data and informa- lanthropy cover mostly United States foundations tion. Philanthropic foundations are also included in and efforts are being made to collect data from other the scope of the Secretary General’s report on trends countries on a voluntary basis. and progress in international development coopera- Until this is achieved, it will be necessary to tion for the biennial High-level meeting of the DCF monitor the annual reports of the larger philan- and the 2015-2016 Fourth DCF Global Account- thropic entities to obtain a sense of the alignment of ability Survey. their activities with the SDGs. For example, the Bill Data is also limited with regard to philan- and Melinda Gates Foundation has been reporting thropic actors investing their portfolios in line with directly to the OECD since 2011. Though there is impact investing. One possibility would be to uti- no standard methodology, this would entail assess- lize the Global Social Impact Investment Steering 68 Addis Ababa Action Agenda — Monitoring commitments and actions

Group, first launched as the Social Impact Invest- dations investing through their endowments in addi- ment Taskforce in 2013, which brings together gov- tion to the key role they often play as catalytic grant ernment officials and senior figures from the worlds funders. In addition, philanthropic actors could vol- of finance, business and philanthropy. The current untarily self-report on this item and case studies can phase of work focuses on social impact investment in be explored. developing countries and includes the role of foun- Chapter II.C International development cooperation

1. Introduction ration in 2000. However, at 0.3 per cent of donor The 2030 Agenda for Sustainable Development will gross national income (GNI), it falls short of the place significant demands on public budgets and commitment by many donors to achieve the target capacities, which require scaled up and more effec- of 0.7 per cent of ODA/GNI. In the Addis Agenda, tive international support, including both conces- developed countries reaffirm their respective ODA sional and non-concessional financing. To mobilize commitments, and urge all those that have not met this support, the Addis Agenda contains a range of their targets to make additional concrete efforts. commitments and actions on official development ODA providers further commit to reverse the declin- assistance (ODA). It also contains commitments ing trend of ODA to the least developed countries and actions on South-South cooperation, lending by (LDCs) and other countries most in need, many of multilateral development banks (MDBs) and other whom will continue to rely on concessional finance international development cooperation efforts. to meet sustainable development needs. Yet, in 2014, ODA reached an all time high in 2014, at ODA to LDCs decreased by 9.3 per cent in real US$137.2 billion, and has increased by nearly 70 per terms compared to 2013, and aid to other priority cent since the adoption of the Millennium Decla- groups fell as well (see Figure 4). Given increasing Figure 2C Net ODA received by priority groups of countries from Development Assistance Committee donors, 2000 – 2014 (Billions of of 2013 dollars) 40 Africa

35 LDCs

30 LLDCs

SIDS 25

0 0 0 1 0 2 0 3 0 4 0 5 0 6 0 7 0 8 0 9 1 0 1 1 2 1 3 1 4 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0 2 0

Source: OECD/DAC data. 70 Addis Ababa Action Agenda — Monitoring commitments and actions demands on ODA, for example from in-country ages them to support country-driven priorities and refugee costs, there is a risk that ODA to LDCs will strategies. continue to fall. The Addis Agenda also encourages develop- 2. Official development assistance ing countries to strengthen South-South coopera- The Addis Agenda reaffirms ODA commitments. It tion. South-South cooperation has been increas- further commits to prioritizing the allocation of con- ing in recent years according to various estimates, cessional international public finance to those with along with growing South-South trade, investment the greatest needs and least ability to mobilize other and regional integration. Different approaches and resources. The Addis Agenda goes beyond earlier modalities of South-South development cooperation international agreements to include a commitment render reporting on broad global trends challeng- to reverse the recent decline in ODA to LDCs, to ing, but the availability of information about South- encourage ODA of 0.2 per cent of GNI to LDCs, South cooperation is increasing and efforts are under and to recognize those countries that allocate at least way, including within the United Nations System, to 50 per cent of ODA to LDCs. It also highlights the further improve estimates. importance of ODA for the poorest and most vul- Beyond increasing the magnitude of conces- nerable countries. Specifically, the Addis Agenda: sional finance, all providers also commit to increas- Reaffirms existing ODA commitments (0.7 ing the quality, impact and effectiveness of their per cent of GNI to developing countries and development cooperation, including the adherence 0. 15-0.20 per cent of GNI to LDCs) (51, to agreed development cooperation effectiveness MoI 17. 2) principles. They further commit to take into account Commits to reverse decline in ODA to the the three dimensions of sustainable development in LDCs (52); Encourages ODA of 0.2 per cent of all international public finance, and to share knowl- GNI to LDCs (51); is encouraged by coun- edge about their respective efforts. tries that allocate at least 50 per cent of ODA In recognition of their significant potential to to LDCs (51) finance sustainable development, MDBs are encour- Commits to open, inclusive and transparent aged to adapt and be fully responsive to the sus- discussions on the modernization of ODA tainable development agenda. In response, MDBs measurement (55) announced their intention to extend financing for sustainable development at the sidelines of the Third The data to track these commitments can be International Conference on Financing for Develop- drawn from Organization for Economic Coopera- ment, held in Addis Ababa, by making better use of tion and Development (OECD) ODA data, which their balance sheets, among other measures. New covers bilateral flows from the 29 OECD Develop- development finance institutions, recently set up ment Assistance Committee (DAC) members, disag- and welcomed in the Addis Agenda, will provide an gregated by recipient and donor countries on both additional source of international public finance for a commitments and disbursements basis. Progress sustainable development investments, in particular made by members to these commitments is tracked in sustainable infrastructure. and presented on the OECD website. This data will Additional sources of international public be used for sustainable development goal (SDG) finance — including climate finance, humanitarian indicator 17. 2. 1 (net official development assistance, finance, and innovative sources of finance — further total and to least developed countries, as a percentage add to the international public financing landscape of OECD/Development Assistance Committee donors’ for sustainable development. The Addis Agenda gross national income), which will also support the emphasizes both the importance of meeting all exist- work of the Inter-agency Task Force. ing commitments and of achieving greater coherence Reporting on ODA commitments by the Mil- in all development financing. The Addis Agenda also lennium Development Goals (MDG) Gap Task acknowledges the role played by multi-stakeholder Force aggregated this data for LDCs and other partnerships in financing certain sectors and encour- groups of countries most in need and deserving International development cooperation 71 special attention, and this Task Force will continue tion as an increasingly important element thereof. this practice. In particular, it will follow trends in The Addis Agenda welcomes the increased contri- ODA to LDCs to assess whether the decline in ODA bution of South-South cooperation and specifically: to LDCs is reversed. The Task Force, building on Encourages developing countries to voluntarily analysis by the OECD, will also monitor additional step up their efforts to strengthen South-South concrete measures by DAC members to target sup- cooperation (57) port to countries most in need, as foreseen by the Commits to strengthening triangular coop- December 2014 DAC High-Level Meeting (HLM) eration (57) and reaffirmed by the February 2016 HLM. This information will be regularly updated on the HLM South-South cooperation is also an important follow-up site and will be reported by the Task Force. element of SDG 17 on the global partnership and In paragraph 50, the Addis Agenda highlights means of implementation (MoI), but commitments that international public finance is important in par- in SDG 17 are focused specifically on science, ticular in the poorest and most vulnerable countries. technology and innovation (17.6) and capacity As such, the Task Force should also report ODA building (17.9). Two indicators to monitor these flows to other groups of countries, such as land- MoI targets can support the work of the Task Force: locked developing countries (LLDCs), small island 17.6.1 (number of science and/or technology cooperation developing States and African countries (SIDS), agreements and programmes between countries, by type alongside LDCs. In addition, the OECD monitors of cooperation) and 17.9.1 (dollar value of financial and country programmable aid (CPA) from 46 provid- technical assistance (including through North-South, ers of development assistance through the Survey on South-South and triangular cooperation) committed Donors’ Forward Spending Plans. CPA is considered to developing countries). However, calculating dollar to be a good a proxy for aid recorded at the country values is subject to methodological challenges, in level and effectively received by recipient countries part due to the way technical assistance is carried out from different country groups. in the context of South-South cooperation. Southern With regard to the modernization of ODA, 1 experts are usually dispatched by their governments OECD DAC members agreed at the December 2014 to provide technical assistance and their service DAC HLM to introduce a grant equivalent system is rarely procured in an open market. Moreover, for the reporting of ODA loans to more accurately reporting currently is only partial. Nonetheless, compare the effort involved in providing ODA loans these indicators could, in future years, serve to with that of providing grants. Reporting and pub- capture commitments contained in this subsection. lishing of the current headline figure of ODA loans The Task Force will also go further to assess on a cash-flow basis will continue alongside the new trends in South-South cooperation more broadly. grant equivalent based reporting system for trans- Southern partners embrace different approaches parency purposes, and the grant-equivalent system and modalities in South-South cooperation and do will become the standard of reporting of data from not document their cooperation in a comparable way, 2018. Consultation and outreach on ODA moderni- which will render reporting on broad global trends zation included discussions with a wide range of rel- challenging. However, the availability of informa- evant stakeholders, including partner countries and tion about South-South cooperation has improved providers beyond the DAC. in recent years. Some southern partners already 3. South-South and triangular have a reporting system in place at the country level, which allows for systematic reporting on a regular cooperation basis. For example, India, Mexico, Qatar and Tur- In the Addis Agenda, governments express their key report on their development cooperation on a determination to increase all forms of international yearly basis. Other countries choose to publish their public finance and recognize South-South coopera- development cooperation through other channels

1 Total official support for sustainable development is a separate process, and is discussed later in this chapter. 72 Addis Ababa Action Agenda — Monitoring commitments and actions rather than annual reporting. For example, China In response to General Assembly resolution has published two White Papers on its foreign aid. 50/119 of 20 December 1995, the United Nations There have also been efforts to document bilat- Office for South-South Cooperation also prepares eral South-South cooperation at the regional level. an annual report on “the State of South-South Ibero-American countries publish an annual report Cooperation”, which focuses on the United Nations on South-South cooperation since 2007. The report system’s support for South-South cooperation. has developed a comprehensive framework to docu- The OECD collects data from 20 countries ment the quantity and quality of Ibero-American and territories beyond the DAC on their develop- and bilateral South-South cooperation. In addition, ment cooperation programmes, and estimates devel- southern multilateral institutions provide detailed opment cooperation for another ten countries, cov- and disaggregated information about their opera- ering the main southern providers of development tions in their corporate reporting. For example, the cooperation. Although the OECD does not usually India, Brazil and South Africa (IBSA) Fund Sec- refer to these countries as South-South cooperation retariat prepares an annual report, which includes partners, several of them describe themselves as such. both financial and qualitative information. The A report covering 2013 figures was published 3 and Islamic Development Bank and the Organization of 2014 figures are available online. These are regularly Petroleum Exporting Countries (OPEC) Fund for updated. 4 Southern partners also engage in volun- International Development report on their opera- tary reporting on their aid-for-trade support at the tions in their annual reports. World Trade Organization’s (WTO) biennial Global At the global level, and in response to the Reviews of Aid for Trade. mandate of the Development Cooperation Forum There are also efforts under way to further (DCF) to review trends and progress in interna- improve estimates of South-South cooperation at tional development cooperation, the United Nations the global level. The ultimate goal of a global review Department of Economic and Social Affairs (DESA) of South-South cooperation should be to help those submits a biennial report to the DCF that provides engaged in South-South cooperation better learn an estimate of the scale of global South-South and from each other, better match the support and the triangular cooperation, its geographical and sectorial needs as well as better support sustainable develop- distribution, and its effectiveness and impact. More ment. Under the auspices of the DCF, a group of elaborated analysis is contained in DESA’s Interna- Southern partners undertake dialogues on issues of tional Development Cooperation Report. In quan- common interest on South-South cooperation. They titative terms, DESA estimated total South-South have initiated discussions on how to better reflect cooperation at between US$16. 1 billion and US$19 the contribution of South-South cooperation at the billion in 2011, accounting for some 10 per cent of global level. Some think tanks are also working to total development cooperation, based on aggregat- propose frameworks to capture South-South coop- ing official concessional resources (concessional eration at the global level. For example, the United loans and grants as well as debt relief and technical Nations Conference on Trade and Development cooperation) that are provided within the South for (UNCTAD) is working with the Network of South- development purposes. 2 Estimates based on partial ern Think-Tanks to try and harmonize definitions data available show that such South-South develop- and approaches to the measurement of South-South ment cooperation may have reached US$20 billion cooperation. in 2013 as a result of a major increase in contribu- To monitor the commitment to strengthen tri- tions from some Arab countries. angular cooperation, the Task Force will be able to

2 UN, 2014, Trends and progress in international development cooperation, Report of the Secretary-General E/2014/77. 3 Development cooperation by countries beyond the DAC, available from http://www.oecd.org/dac/dac-global- relations/Development%20Co-operation%20by%20Countries%20beyond%20the%20DAC.pdf. 4 Regular updates are available from http://www. oecd. org/dac/stats/non-dac-reporting.htm. International development cooperation 73

them to adapt and be fully responsive to the draw on OECD efforts, which will monitor triangu- sustainable development agenda (70) lar cooperation in two ways. First, it has conducted Welcomes efforts by new development banks to two surveys on triangular cooperation which include develop safeguard systems in open consultation information on the number of projects, duration and with stakeholders on the basis of established (for some of the projects) amounts. A total of 67 gov- international standards, and encourages all ernments and international organizations responded development banks to establish or maintain to the 2015 survey, which will be published in 2016, social and environmental safeguard systems that and provided detailed information on over 300 pro- are transparent, effective, efficient and time- jects and activities. Initial findings, based on the sensitive (75) responses received, show that the most active coun- Encourages multilateral development banks tries in triangular cooperation were Brazil, Chile, to further develop instruments to channel the Colombia, Germany, Guatemala, Japan, Mexico resources of long-term investors towards sustain- and Norway. The Pan-American Health Organiza- able development, including through long-term tion (PAHO), the International Labour Organiza- infrastructure and green bonds (75) tion (ILO) and the World Food Programme (WFP) were the most involved international organizations. Second, the OECD has also developed a method- To assess the provision of long-term stable ology for tracking triangular cooperation activities financing by MDBs, the Task Force will monitor the through DAC statistics, which was approved in 2015. amount and purpose of concessional and non-con- Information is collected on an annual basis on the cessional financing provided by MDBs to developing size, sectors and instruments related to each trian- countries annually. Such data could be monitored in gular cooperation project. Concrete examples and aggregate or broken down by regions or by category case studies of triangular cooperation projects can of countries. The MDBs define country categories as further complement this section. low-income, middle-income and high-income, and 4. Multilateral development banks do not generally categorize countries as LDCs, a category of particular importance in the Addis Agenda The Addis Agenda recognizes the significant poten- and 2030 Agenda. Nonetheless, it will be possible for tial of MDBs and other international development the Task Force to aggregate data for the LDC group banks, including in countercyclical lending and pro- and other relevant groups, based on MDB report- viding both concessional and non-concessional sta- ing on a country basis. OECD statistical data for ble, long-term development finance. In this context, the MDBs are standardised, and categorized on the the Addis Agenda: same basis as the data for bilateral donors, which can provide a good starting point for such efforts. Invites multilateral development banks to The Addis Agenda also encourages MDBs provide concessional and non-concessional stable to make optimal use of their resources and bal- long-term finance (70) ance sheets. Following Addis, the G20 put forth a Encourages MDBs to make optimal use of similar call in their Antalya Summit Leaders’ Com- their resources and balance sheets, consistent muniqué in November 2015. In this context, the with maintaining their financial integrity; MDBs will report to the G20 on progress in this (70) encourages MDBs to make use of all risk area in July 2016, and the Task Force will provide management tools, including through diversifi- an update in its 2017 report. In addition, in an cation (44) effort to better manage risks across the World Bank Encourages MDBs to update and develop poli- Group, the African Development Bank, the Inter- cies in support of 2030 agenda and SDGs (70) American Development Bank and the World Bank Encourages multilateral development finance Group’s International Bank for Reconstruction and institutions to establish a process to examine Development approved a framework agreement for their own role, scale and functioning to enable an exchange of sovereign exposures in December 2015, and approved the first three bilateral exposure 74 Addis Ababa Action Agenda — Monitoring commitments and actions

exchange agreements within this new framework for private resources to meet the large financing needs a total of about US $6.5 billion. associated with sustainable development. The Addis In addition, the World Bank Group expects to Agenda recognizes the potential of using interna- increase its lending in areas that support the 2030 tional public finance to catalyse additional public Agenda for Sustainable Development and the SDGs. and private investment, while also recognizing the In particular, it will expect to increase its commit- importance of sharing risks and returns fairly and ments to 30 to 50 per cent of total lending in infra- including clear accountability (48; see the section on structure, including energy, information and com- public private partnerships in chapter I on cross-cut- munications technology, transport and water and ting issues). The Addis Agenda also commits to inclu- sanitation, with an additional 5 to 10 per cent in sive and transparent discussions on the measurement social infrastructure of health and education. Sub- of a broader set of financing flows for sustainable ject to market conditions, the World Bank Group development. Specifically, the Addis Agenda: also expects mobilization across the International Recognizes the important use of international Finance Corporation (IFC) and Multilateral Invest- public finance, including ODA, to catalyse ment Guarantee Agency (MIGA) to at least double additional resource mobilization from other the current private financing totals, over the next sources, public and private … [including three years, among other measures. Many of the through] unlocking additional finance through MDBs are working on deepening their ability to blended or pooled financing and risk miti- mobilize additional sources of finance, in line with gation (54) commitments made in the lead up to the Addis Commits to open, inclusive and transparent Ababa conference highlighted in the Joint MDB and discussions on the … proposed measure of “total International Monetary Fund “Billions to Trillions: official support for sustainable development;” Transforming Development Finance” April 2015 reaffirms that the measure will not dilute com- Development Committee paper. The Task Force will mitments already made (55) report on these efforts. With regard to the development and/or main- To quantify other official flows, the Task Force taining of social and environmental safeguard will be able to draw on OECD DAC data on Other systems, the World Bank Group is carrying out Official Flows (OOF) and Official Development extensive stakeholder consultations to update its Finance (ODF). OOF is defined as official sector safeguards policies. The World Bank’s new Environ- transactions with ODA-eligible countries that do mental and Social Standards Framework is envisaged not meet ODA criteria. It includes grants to devel- to be finalised in 2016. The Task Force will report on oping countries for representational or commercial this and related efforts by existing and new MDBs, purposes; official bilateral transactions that do not including on the effectiveness, efficiency, transpar- meet the concessionality grant element threshold; ency and time-sensitivity of the measures. and official bilateral transactions that are primarily 5. Other official flows and export-facilitating in purpose. ODF is a composite measure, which includes concessional and non-con- catalysing additional resources cessional resources from bilateral and multilateral Other official flows generally refer to international development partners. It includes OOF, as defined public finance that does not qualify as concessional above, as well as bilateral ODA, grants, guaran- lending. It thus includes non-concessional loans, tees and concessional and non-concessional devel- which are particularly important for countries that opment lending by multilateral financial institutions. have graduated to middle income status, but still Measuring the contribution of development have difficulties accessing affordable financing from partners to catalysing private investment is chal- private markets. It also includes instruments that lenging. There is no agreed on methodology, in can leverage private finance, such as guarantees. In part because there is no clear-cut definition of what this regard, there has been an increasing focus on catalysing private investment means. In this regard, using public funds to leverage additional public and there are two different approaches currently being International development cooperation 75

explored. The first focuses on resources mobilized age and the broader policy environment, making it from the private sector through specific projects or difficult to imply a causal relationship to any par- mechanisms such as guarantees (direct mobilization). ticular international assistance. Country case stud- The second takes a much broader view, and attempts ies can provide further insights. The World Bank to measure the effect of aid on catalysing resources Group is also currently investigating the potential to through indirect measures (indirect mobilization). use multipliers to estimate private investment cata- This method attempts to estimate investment mobi- lysed, and the Task Force will report on these efforts. lized through assistance that aims to strengthen the The OECD has taken a narrower approach. It domestic enabling environment, build essential pub- has been working on methodologies to measure the lic services or support tax collection. As noted in the amounts mobilized directly from the private sector Addis Agenda, many forms of aid help to catalyse through three leveraging mechanisms: guarantees, other resources in this way. Indeed, institutions like syndicated loans and shares in collective investment MDBs have their main catalytic impact by mak- vehicles. In 2015, the OECD carried out a data ing economic activities more attractive to investors. survey aimed at piloting the proposed methodolo- Nonetheless, this type of definition can help inform gies and collecting comprehensive data on amounts discussions about the impact of official interventions. mobilized through these mechanisms over the To address the question of how to measure period from 2012 to 2014. The OECD statistical mobilization of other resources, the MDBs set system is being amended to include this information up a Joint MDB task force earlier this year. The in its regular reporting from 2017. Work is underway MDBs are developing measures using both of the to elaborate methodologies for other instruments, approaches described above. As one example, the including project finance and direct investment in World Bank Group assesses private capital mobilized companies, with a view to collecting data in 2016. and private investment catalysed in its corporate One challenge in this exercise is that it is sometimes scorecards. Private capital mobilized is defined as difficult to identify whether private finance would financing from private entities other than the World have been invested without public support, and, for Bank that becomes available to a client as a result example, whether the full value of an investment of the World Bank Group’s direct involvement in should be included, or only the portion guaranteed raising resources. A complementary measure — pri- directly by a public entity. As a member of this Task vate investment catalysed — is defined more broadly Force, the OECD will continue to report on progress as private sector investment resulting from World in work carried out in this area. Bank Group’s involvement, regardless of whether Total Official Support for Sustainable the entity was directly involved in raising financing Development or soliciting investors. This definition attempts to capture the impact from helping the public sector In addition to the OECD DAC discussions on the improve the underlying conditions for private sector modernization of ODA referred to above, OECD activity and investment. It thus includes both private DAC Members also agreed at the 2014 DAC High- capital mobilized directly and investments made as a Level Meeting to develop a new measurement result of an operation after it is completed. framework, Total Official Support for Sustainable Private investment related to a specific transac- Development (TOSSD). The new measure is meant tion can be monitored directly, for example by esti- to capture both official and officially supported sus- mating the amount of co-financing in a project. The tainable development activities above and beyond “after-project” impact (private investment resulting ODA and concessional finance, including from pro- from the development impact of an operation, such viders beyond the DAC — that is, all available finan- as through an improved investment climate, better cial and non-financial instruments. This includes all infrastructure, improved business environment, or development cooperation modalities and multilat- similar social changes) is much more difficult to eral arrangements, including instruments measured measure. For example, improvements in the invest- in ODF, as defined above. The extent of the scope ment climate are generally due to a full policy pack- that will be covered is, however, still being explored. 76 Addis Ababa Action Agenda — Monitoring commitments and actions

In particular, work is ongoing to determine whether and other vulnerable countries. In addition, the TOSSD should only capture official resources in the Addis Agenda recognizes the importance of address- comprehensive monitoring framework, or whether it ing the financing gap that many countries experi- should also include private flows mobilized by offi- ence when they graduate to middle income country cial interventions. (MICs) status. Specifically, the Addis Agenda: The TOSSD framework is foreseen to include Recognizes the importance of focusing the most both a provider and a recipient perspective. The concessional resources on those with greatest recipient perspective, which would monitor cross- needs and the least ability to mobilize other border flows to developing countries, is expected to resources (52, MoI 10.b) enhance visibility of financing packages mobilized Commits to take into account level of devel- for developing countries, as well as the interplay of opment of recipients, including income level concessional and non-concessional finance. and vulnerability, as well as the nature of the The OECD proposes to work with the Task project being funded, (when determining the) Force to conduct consultations to develop TOSSD level of concessionality (73) and address outstanding questions. The OECD is Commits to consider appropriately the specific also reaching out to external stakeholders, including development needs of MICs; Acknowledges that developing countries, providers beyond the OECD ODA and other concessional finance remain DAC, multilateral organizations such as the United important for MICs (71) Nations, regional commissions, and the World Bank Encourages shareholders in multilateral devel- Group, as well as civil society, academic institutions opment banks to develop graduation policies and the private sector. Discussions on the scope that are sequenced, phased and gradual (72); of TOSSD will contribute to shaping the defini- Commits to couple graduation process of least tion of TOSSD, which is to be developed by the developed countries with appropriate measures end of 2016, in order to initiate data collection in to not jeopardize development progress (73) 2017. The working definition, building blocks and principles will be compiled into a TOSSD com- As discussed above, OECD DAC data can be pendium. All stakeholders will be able to provide used to monitor ODA and OOF flows to countries comments through a web-based platform available with the greatest needs, including LDCs in particu- as of April 2016. The technical and outreach work lar, as well as other groups of vulnerable countries to develop TOSSD will continue through 2016, such as LLDCs, SIDS and African countries. The including through expert workshops, pilot case Task Force can also monitor ODA flows to MICs. studies in both provider and recipient countries, SDG means of implementation indicator 10.b.1 and existing dialogue platforms such as the United (total resource flows for development, by recipient and Nations Regional Commission, the United Nations donor countries and type of flow (e.g. ODA, FDI and Development Cooperation Forum and the Global other flows)) can also be used as an input to assess a Partnership for Effective Development Cooperation, broader set of financing flows to countries in need. and could also be discussed in the Financing for The Task Force will also report on trends in the Development Forum. level of concessionality of ODA and OOF to these countries. 6. Country allocation, levels of In addition to monitoring trends for groups of concessionality and graduation vulnerable countries, the Task Force could also use issues other measures — such as the Human Development Index (HDI), the multidimensional poverty index, The Addis Agenda recognizes that the allocation of the United Nations Human Asset Index (HAI) and concessional public finance should take into account the Environmental Vulnerability Index — to report a recipient country’s needs and ability to mobilize on the extent to which bilateral and multilateral resources. The Addis Agenda focuses on the special donors are providing finance to countries ‘with needs of different country groups, particularly LDCs greatest needs’, as well as the level of concessional- International development cooperation 77

ity. The Task Force will further track criteria that 7. Development effectiveness both bilateral and multilateral donors use in their allocation decisions. For example, the World Bank The Addis Agenda contains a range of commit- Group’s International Development Association ments to enhance the quality, impact and effective- (IDA), the largest multilateral source of concessional ness of international development cooperation. The financing, recently revised its resource allocation Addis Agenda: framework to more effectively respond to the specific Commits to make development more effec- challenges facing fragile and conflict-affected states tive and predictable by providing developing and small states. countries with regular and timely indicative To evaluate the impact of graduation from low information on planned support in the medium to middle income status on country borrowing, the term (58); Encourages the publication of Task Force can track changes in total public finance, forward-looking plans which increase clar- including as a proportion to national income. This ity, predictability and transparency of future could be done by tracking changes in ODA and development cooperation (53) OOF, in conjunction with trends in sovereign debt Welcomes efforts to improve the quality, impact and domestic resource mobilization, particularly tax and effectiveness of development cooperation; revenues. The average cost of financing should also welcomes adherence to agreed development be monitored to give a full picture of the impact of cooperation effectiveness principle (58) graduation on country borrowing. The OECD will Commits to: align activities with national contribute to this analysis by unpacking the prac- priorities, including by reducing fragmentation, tices of bilateral providers in this context. The Task accelerating the untying of aid, particularly for Force will also draw on reporting by the World Bank, least developed countries and countries most in which uses a coordinated approach to assist prospec- need; promote country ownership and results tive IDA graduates for a smoother transition to Inter- orientation; strengthen country systems; using national Bank for Reconstruction and Development programme-based approaches where appropri- (IBRD) only status. An internal World Bank Group ate; reduce transaction costs; increase transpar- task force provides advice to country authorities ency and mutual accountability (58) when an IDA-only country becomes creditworthy Urges countries to track and report resource for IBRD lending, as well as for when current ‘blend allocations for gender equality and women’s countries’ graduate to IBRD-only status. empowerment (53) Monitoring support measures for the graduation process of LDCs will be based on report- The Addis Agenda notes that efforts to pursue ing by the Office of the High Representative for effective development cooperation will be addressed Least Developed Countries, Landlocked Develop- in the Development Cooperation Forum (DCF) ing Countries and Small Island Developing States of the Economic and Social Council (ECOSOC), (OHRLLS). OHRLLS is entrusted with continuing while also taking into account the efforts of other to harness its substantive activities and operational relevant forums, such as the Global Partnership for programmes in support of graduation and smooth Effective Development Cooperation (GPEDC), in a transition in LDCs (A/RES/67/221). Building on complementary manner. With its inclusive, multi- this mandate, the office will follow up on the above stakeholder format, the DCF maps and analyses commitment, drawing on its annual Secretary- progress in monitoring, review and accountability General’s report on the implementation of the Pro- of development cooperation. It aims to promote gramme of Action for the LDCs. OHRLLS will also policy dialogue for knowledge building and shar- draw on the Secretary-General’s report on gradua- ing; strengthen normative and operational links of tion and smooth transition, which the office prepares development cooperation interventions to ensure the on an ad hoc basis, as well as on other reports and effective translation of principles into actions at all knowledge products, including those generated by levels; and promotes greater policy coherence and the Committee for Development Policy Secretariat. synergies towards achieving the SDGs. In generating 78 Addis Ababa Action Agenda — Monitoring commitments and actions

policy recommendations, the DCF also reflects on ation (financial assistance, technical cooperation and the functioning of government-led and other inde- others), priority sectors and projects of South-South pendent monitoring mechanisms for development cooperation, their conditionalities, procedures and cooperation, including regional monitoring and concessionality, value for money, speed of delivery, review processes. predictability and coordination. These parameters Since 2008, the DCF has reviewed the effec- are to be updated and informed by the discussions tiveness of mutual accountability mechanisms and among Southern partners under the auspices of transparency initiatives at national, regional and the DCF. In addition, the Task Force’s monitoring global levels. To support this effort, DESA has con- efforts can draw on voluntary reports published by ducted four global surveys in close collaboration South-South development cooperation providers on with the United Nations Development Programme the nature and types of assistance they are providing. (UNDP). The survey results are then unpacked in The GPEDC Monitoring Framework, led by comprehensive studies, with an emphasis on results OECD and UNDP, is currently being reviewed and transparency to inform global monitoring by an independent Monitoring Advisory Group efforts, knowledge sharing and mutual learning. The to strengthen its framework in light of the SDGs, results of the Fourth Survey, which was rolled out drawing on lessons from the second monitoring pro- in low-income and low middle-income countries in cess. A revised monitoring framework is expected to 2015-2016, will be presented in advance of the high- be agreed to at the Second High-Level Meeting of level meeting of the DCF from 21–22 July 2016. the GPEDC taking place in Nairobi on 28 Novem- DCF surveys have provided evidence on the ber – 1 December 2016. state of play of development cooperation on the The current framework includes ten indicators ground and helped to structure their assessment that provide information on progress on adherence around a number of “mutual accountability ena- to the principles of effective development coop- blers” — such as national development cooperation eration (country ownership, results focus, inclusive policies, results frameworks guided by country pri- partnerships, and transparency and accountabil- orities, clear institutional structures and inclusive ity). Eight out of ten indicators are monitored at dialogue forums, and transparent and independent the country level, with two indicators relying on information. The surveys assess both the effective- globally sourced data. The scope of this monitor- ness of cooperation efforts of programme country ing exercise includes ODA and, for countries where actors, and the progress made against national tar- non-concessional flows are relevant, also OOF. In gets by individual donors. practice, countries engage traditional and non-tra- In consultation with stakeholders and experts, ditional providers of development cooperation as DESA updated the survey design in 2015 to ensure well as civil society organizations and private sec- assessment of areas and issues increasingly relevant tor actors in data reporting. The second monitor- in the SDG era. Governments with weak finance ing exercise is currently underway in 80 countries. and budgeting systems will need particular support The data is expected by the end of May 2016, with to monitor and review development cooperation the progress report to be published in October 2016. commitments and results in the context of the 2030 The monitoring framework generates a combination Agenda for Sustainable Development. In this regard, of quantitative and qualitative data. mutual accountability enablers could be useful GPEDC Indicator 1 assesses extent of use tools to help integrate and track progress and results of country-owned results frameworks by providers against development cooperation commitments, of development cooperation, and can thus serve and will be drawn on by the Task Force. to monitor the commitment to align activities The Secretary-General’s report to the DCF also with national priorities. GPEDC Indicator 10 also reports on the effectiveness of South-South and tri- assesses progress on untying aid based on this data. angular cooperation. The report captures channels of Several countries have developed their own per- cooperation (such as bilateral and multilateral coop- formance assessment in the area of fragmentation. eration and philanthropy), different types of cooper- Fragmentation can be measured through progress International development cooperation 79 made on division of labour (i.e., the number of sec- The OECD Survey on Donors’ Forward tors development cooperation providers are engaged Spending Plans projects future aid receipts by in; the average size of their intervention; etc.). developing countries. The 2015 Survey will capture Indicators 1 (use of country results frame- providers’ most recent and future plans of Country work), 6 (percentage of development aid scheduled Programmable Aid (CPA), also known as “core” aid, for disbursement that is recorded in the annual or the portion of aid that donors programme for budgets approved by the legislatures of developing individual countries, over which partner countries countries), 9a (quality of developing country public could have a greater say. The figures for 2014 are financial management system) and 9b (use of coun- provisional spending figures. For 2015 and beyond, try public financial management and procurement these are providers’ current indicative planning fig- systems) support promotion of country ownership ures and do not represent firm commitments, but and results orientation. In addition, GPEDC Indi- rather providers’ best estimates of future aid efforts. cator 2 (civil society organization enabling environ- The IATI is a voluntary, multi-stakeholder ment and development effectiveness) and GPEDC initiative that seeks to improve the transparency of Indicator 3 (public-private dialogue) recognize the development cooperation and humanitarian assis- critical importance of civil society organizations tance. IATI has developed an open data standard and the private sector in development planning pro- that enables a wide range of organizations to publish cesses. The GPEDC monitoring process does not information on their development cooperation activ- assess the use of programme-based approaches, but ities in a common, open, electronic format. IATI, several countries monitor this through assessing the via the IATI Dashboard, publishes assessments on percentage of development cooperation that uses a timely, comprehensive and forward-looking infor- programme-based approach (including budget sup- mation that is publically available and that meet the port, sector-wide approaches, etc.). needs of developing countries’ planning processes. In relation to gender, GPEDC Indicator 8 The 2015 assessment is currently available at the assesses the percentage of countries with systems IATI Dashboard. OECD and IATI data can also that track and make public allocations for gender serve to monitor the commitment to reduce transac- equality and women’s empowerment. This is moni- tion costs. In addition, the Center for Global Devel- tored at the country level, with the data collected opment publishes an annual brief on the quality of from ministries of finance at the country level. Its ODA, which analyses OECD DAC data to measure methodology has been developed by UN Women in the administrative costs of major providers. collaboration with OECD Gender Net. In addition to the above commitments, in GPEDC Indicator 5 tracks the predictability Addis, Governments also committed to: of development cooperation. Specifically, GPEDC Consider not requesting tax exemptions on Indicator 5b assesses the proportion of development goods and services delivered as government-to- cooperation funding covered by indicative forward government aid, beginning with renouncing expenditure and/or implementation plans provided repayments of value-added taxes and import at country level for one, two and three years ahead. levies (58) Data is collected at the country level (reported by Work to strengthen national ownership and developing country governments based on the avail- leadership over the operational activities for ability of forward plans by each provider). GPEDC development of the United Nations system in Indicator 4 on transparency tracks the status of programme countries; United Nations coher- development cooperation providers in publishing ence, relevance, effectiveness and efficiency, to timely, comprehensive and forward-looking infor- improve coordination and results, including mation in an electronic format. This assessment is through achieving further progress on the based on data from the OECD Creditor Reporting “Delivering as one” voluntary approach (74) System (CRS), OECD Survey on Donors’ Forward Spending Plans, and the International Aid Transpar- The OECD Task Force on Tax and Develop- ency Initiative (IATI). ment monitors the debate on the tax treatment of 80 Addis Ababa Action Agenda — Monitoring commitments and actions

aid-funded goods and services. It is a regular agenda Reaffirms existing climate finance commitments item during Task Force on Tax and Development (US $100 billion annually from a wide variety Plenaries. At the Tax and Development donor meet- of sources) by 2020 (60, MoI 13.a) ing in December 2014 the Development Coop- Commits to support the most vulnerable in eration Directorate (DCD) Director called on the addressing and adapting to climate change (65, Members to review their policy on tax exemptions SDG 1.5, 13.b) of aid-funded goods and services. At the moment Recognizes the need for transparent methodolo- only Denmark, the Netherlands, Poland and Swe- gies for reporting climate finance (60) den are reviewing their policies and are taking steps Welcomes GCF board decision to aim for a toward these exemptions. The Task Force will report 50:50 balance between mitigation and adapta- on developments. tion over time and floor of 50 per cent of adap- The review of the effectiveness of the United tation activities for LDCs, SIDS and African Nations system can draw on existing reporting of countries (61) the Secretary-General. The effectiveness of United Nations system operational activities for development These commitments are partly reflected in is reviewed by the General Assembly and ECOSOC SDG 13 to take urgent action to combat climate through the Quadrennial Comprehensive Policy change and its impacts, and in particular MoI target Review of the United Nations System Operational 13.a. At the 21st session of the Conference of the Activities for Development (QCPR). Every four Parties (COP 21) in December 2015, Member States years, the General Assembly adopts a resolution to further decided that developed countries intend to guide, monitor and assess the operational activities continue their existing collective mobilization goal of the United Nations development system with the through 2025 in the context of meaningful mitiga- aim to improve its effectiveness, efficiency, coherence tion actions and transparency on implementation; and impact. ECOSOC reviews the implementation and that prior to 2025, the Conference of the Parties of the QCPR on an annual basis, which is informed shall set a new collective quantified goal from a floor by an annual report of the Secretary-General pre- of US $100 billion per year, taking into account the pared by DESA. Included in the report of the Secre- needs and priorities of developing countries. tary-General is a review and monitoring framework, The Task Force will be able to draw on indica- which monitors progress of the implementation of tor 13.a.1 from the SDG monitoring process, which the mandates contained in the QCPR resolution will measure the mobilized amount of US dollars per through a set of indicators. The report and moni- year starting in 2020 accountable toward the US $100 toring framework draw on surveys, analytical stud- billion commitment and 13.b.1 (number of least devel- ies, consultations and desk reviews. Member States oped countries and small island developing States that will negotiate the next cycle of the QCPR in the lat- are receiving specialized support, and amount of support, ter part of 2016 and will guide the United Nations including finance, technology and capacity building, for development system according to their assessment. mechanisms for raising capacities for effective climate change-related planning and management, including 8. Climate finance, disaster risk and focusing on women, youth, local and marginalized environmental resilience communities). Monitoring in this area will be based on information and data collected in the context of 8 1. . Climate finance the UNFCCC. The UNFCCC Secretariat publishes national reports of developed country Parties that The Addis Agenda reaffirms decisions and agree- include information on support provided to devel- ments on climate finance made in the context of the oping countries, including National Communica- United Nations Framework Convention on Climate tions of Annex I Parties, submitted every four years Change (UNFCCC). It also calls for transparent and containing information on support provided, methodologies in reporting climate finance. Spe- as well as biennial reports which include informa- cifically, it: tion on financial support, technology transfer, and International development cooperation 81

capacity building. Developing countries also report both mitigation and adaptation actions under the under the Convention, albeit on a voluntary basis. Paris Agreement. Furthermore, the Standing Committee on Finance Given their role enshrined in the Paris agree- has been mandated by the Conference of the Par- ment within the Financial Mechanism of the UNF- ties at its seventeenth session to prepare a biennial CCC, the Task Force will also monitor resource assessment and overview of climate finance flows, mobilization and funding decisions of the Green drawing, among others, from the national reports Climate Fund and the Global Environment Facility, under the Convention mentioned above. The first including the Least Developed Countries Fund and biennial assessment was prepared in 2014, with the Special Climate Change Fund, particularly as they second due in 2016. relate to the balance between adaptation and mitiga- COP 21 also addressed the need for transpar- tion activities, country allocations (including coun- ent methodologies for reporting climate finance, as try groups such as the LDCs and SIDS), and levels recognized in paragraph 60 of the Addis Agenda. It of concessionality. This effort can draw on the UNF- established an enhanced transparency framework for CCC Climate Finance Data Portal, which aims to action and support, with a view to provide clarity on assist Parties in tracking the financial mechanism the support provided and received, and to provide of the Convention, with the Green Climate Fund a full overview of aggregate financial support. The and the Global Environment Facility as its operating Framework will also inform the global stocktaking entities. This information can be complemented by under Article 14. The Task Force will report on pro- country level case studies and expenditure reviews as gress in the implementation of this framework. carried out by the UNDP. To enhance the provision of ex-ante informa- 8 .2 . Disaster risk and environmental tion, developed country Parties agreed to biennially resilience communicate indicative quantitative and qualitative information in COP 21, including, as available, pro- The commitments in the Addis Agenda on disaster jected levels of public financial resources to be pro- risk and environmental resilience are largely covered vided to developing country Parties. Other Parties in a dedicated section on ecosystems in chapter I on providing resources were encouraged to communi- cross-cutting issues. In addition, the Addis Agenda: cate such information biennially and on a voluntary Encourages consideration of climate and disas- basis. In addition, a process was set up to identify the ter resilience in development financing to ensure information to be provided by the Parties. the sustainability of development results (62) Other sources of climate finance include Cli- mate Funds Update, an initiative of the Heinrich- The Task Force will be able to draw on the Böll Stiftung and the Overseas Development Insti- findings of a working group set up by the MDBs tute, which provides quantitative information on and development finance institutions to develop and international climate finance initiatives designed implement principles for mainstreaming climate and to help developing countries address the challenges resilience into their work. The working group, estab- of climate change. The Climate Policy Initiative lished at COP 21 in Paris, can report back through has devised a method to track climate and land the Task Force on any monitoring mechanism it may use finance from all sources. The OECD statisti- establish in this regard. cal system will continue to provide consistent data 9. Humanitarian finance and on climate-related development assistance and, in collaboration with the OECD-hosted Research peacebuilding Collaborative, develop improved methodologies. The Addis Agenda acknowledges that development The OECD/International Energy Agency Climate finance can contribute to reducing vulnerabilities Change Expert Group, which brings together and enable countries to prevent or combat situations experts from both developed and developing coun- of crisis related to conflict or natural disasters. In tries, will work on improving the transparency of this context, it: 82 Addis Ababa Action Agenda — Monitoring commitments and actions

Recognizes the need for coherence of develop- the resource base and increased cost-efficiency. These mental and humanitarian finance (66) recommendations were brought together with the Commits to promoting innovative financing aim of not only meeting, but also reducing needs in mechanisms to allow countries to better prevent protracted crises, where humanitarian action alone and manage risks and develop mitigation is not sufficient. Discussions on the humanitarian/ plans (66) development divide and possible actions will be at Steps up efforts to assist countries in accessing the heart of the Summit, and the Task Force will financing for peacebuilding and development in report on progress in this area. the post-conflict context and recognizes role of Financing mechanisms and instruments can Peacebuilding Fund (67) play a key role in reducing the financial burden on governments from disasters, particularly when sup- The main reporting systems for international ported by policy reform and collaboration across humanitarian assistance are the United Nations partners to use risk-informed financial planning. Office for the Coordination of Humanitarian Affairs The commitment to promote innovative financing (OCHA) Financial Tracking Service (FTS) and the mechanisms in this area can be partially monitored OECD, which reports on humanitarian and devel- through resources committed to disaster risk reduc- opment finance. OECD data can serve to report on tion programming, which is reported under the official humanitarian financing flows, while data humanitarian codes in OECD statistics. However, from the FTS, which records all reported interna- prevention and mitigation should be part of nor- tional humanitarian aid contributions, includes con- mal development programming. In addition, risk tributions of nongovernmental organizations, the reduction should not be seen as stand alone projects Red Cross/Red Crescent Movement, bilateral aid, that require additional finance — good risk reduc- in-kind aid and private donations. Analytical reports tion occurs when all development projects are sys- such as the annual Global Humanitarian Assistance tematically disaster proofed. OECD members are Report, published by Development Initiatives, pro- also developing innovative forms of finance for risk vide an additional source for data and information. reduction, such as Japan’s SECURE, which gives Coherence of humanitarian and development governments immediate access to funds after a natu- finance can also be monitored at the country level, ral disaster. by assessing OECD data at the regional or country The Task Force could also track the use of level, or through the UNDP Multi-Partner Trust financial tools that support better prevention and Fund Office, which provides a gateway and overview management of risk at the country level, such as of all humanitarian and development funding for sovereign insurance regimes or gross domestic prod- a country. In addition, informal mechanisms such uct-linked lending instruments (see chapter II.E), as Development Initiatives’ Development DataHub the number of programmes and/or countries that aggregate and analyse funding flows from both are actively engaged in efforts to improve financial humanitarian and development streams, together planning and risk-sharing across governments, bilat- with some national-level expenditures, to build a eral donors, humanitarian agencies, development comprehensive picture of aid at the country level. partners, and private sector actors, and the number The need for coherence of development and of countries working to strengthen financial resil- humanitarian finance was also recognized by the ience to disasters. The Task Force could draw on the Secretary-General in his recent report “One Human- World Bank Group’s advisory support to countries ity: Shared Responsibility” for the World Humanitar- in this area. ian Summit in 2016. From the financing perspective, With regard to assisting countries to access it calls for greater investment in local capacities and financing for peacebuilding and development, there conflict prevention, investing according to risk of are several well-established methodologies that could humanitarian crises, financing collective outcomes be used to assess the proportion of funds directed rather than individual projects through sophisticated to peacebuilding activities, which are all based on financing instruments, and urging diversification of development partner expenditure reported to the International development cooperation 83

OECD Creditor Reporting System (CRS). First, the There is no uniformly agreed definition of OECD has monitored resource flows to fragile states innovative financing. Nonetheless, the Task Force since 2008. In its 2015 report, it uses the Peacebuild- will be able to report on activities carried out under ing and Statebuilding Goals (PSGs) to monitor the auspices of the Leading Group on Innovative financing in five areas and using CRS proxy codes Financing for Development, and will monitor and for each of the PSGs. Second, resources allocated report on new initiatives and mechanisms such as by the United Nations Peacebuilding Fund (PBF) green bonds, vaccine bonds, carbon pricing mecha- are also ODA eligible and captured in the OECD nisms and others mentioned in paragraph 69. CRS, and can thus be monitored. Third, the United The Leading Group describes innovative devel- Nations Peacebuilding Support Office, in collabo- opment finance as ‘comprising mechanisms for rais- ration with the Institute for Economics and Peace ing funds for development that are complementary (IEP), has defined 17 categories, based on three to ODA, predictable and stable, and closely linked to the idea of global public goods. Most prominently, peacebuilding priority areas identified by the 2009 the international solidarity levy for airline tickets Report of the Secretary General on Peacebuilding. has raised resources for UNITAID. More recently, Finally, the World Bank Group financed research at the Third International Conference on Financ- on the current state of peacebuilding programming ing for Development in Addis Ababa, the Leading and evidence (April 2015) and defined a framework Group launched UNITLIFE, an innovative financ- with 25 intervention categories. ing mechanism that seeks to generate new resource However, one key challenge is that the uni- flows from extractive industries to address malnutri- verse of countries to which this applies is not clearly tion in sub-Saharan Africa. defined. “Conflict-affected countries” have been The Task Force will report on these and related used in a United Nations context for countries with initiatives, such as new public insurance programmes, multidimensional peacekeeping operations, special annual issuance of green bonds and long-term infra- political missions and/or that are PBF-eligible (31 structure bonds (see the discussion on infrastructure countries in 2016). Nonetheless, there is no clear-cut in chapter 1 on cross-cutting issues), as well as the United Nations categorization that can be readily annual volume of projects developed and financed used. The World Bank Group, African Development through MDB project preparation facilities. It can Bank and Asian Development Bank have issued a also follow innovative private initiatives, such as Harmonized List of Fragile Situations. The World catastrophe bonds, social impact bonds and private Bank Group is currently reviewing the way to assess sector green bonds. fragile situations to recognize a broader set of situa- In addition to mechanisms focused on mobi- tions. The current ODA system contains a “fragile lizing resources, many innovative mechanisms are states” grouping, which allows for measurement of aimed at intermediating existing resources, such as OECD member targets, such as the United King- the International Finance Facility for Immunization. dom’s recent commitment to spend 50 per cent of These mechanisms aim at restructuring existing its ODA in fragile states. flows to better match financing with needs, reduce risk, pool philanthropic funds with official resources, 10. Innovative development finance or leverage official flows with private resources. To Addis welcomes the progress in developing and encourage replication of existing mechanisms, the mobilizing support for innovative sources and mech- Task Force can provide an overview of such initia- anisms of additional financing since Monterrey, and: tives and case studies of successful examples, drawing for example on KPMG’s SDG Matrix, which Invites more countries to join in implementing showcases industry-specific innovative examples. innovative mechanisms (69) The Task Force will report on indicative volumes Encourages consideration of replicating existing raised, number of countries involved in different mechanisms and exploring additional mech- schemes, as well as the extent to which they have anisms (69) mobilized additional resources for the SDGs. 84 Addis Ababa Action Agenda — Monitoring commitments and actions

11. Additional partnerships Alliance are supportive of health systems strengthening (HSS) investments. For example, The Global The Addis Agenda emphasizes the importance of Fund Strategy (GFS) 2017–2022: Investing to End international development cooperation and part- Epidemics includes, under Strategic Objective 2, nerships in the health and education sectors in Build Resilient and Sustainable Systems for Health, particular. two operational objectives: (i) Leverage critical 11 1. . Health investments in human resources for health, and (ii) Strengthen and align robust national health strategies In the area of health, Addis: and national disease-specific strategic plans. Simi- larly, the GAVI Alliance under its new Strategic Encourages better alignment between multi- Goal 2 commits to increase effectiveness and effi- stakeholder partnerships in health and to ciency of immunization delivery as an integrated improve contributions to strengthening health part of strengthened health systems. Both also systems (77) have associated indicators that assess investments Commits to enhanced international coordina- in specific technical areas. For example, Gavi has tion and enabling environments to strengthen included HSS grant specific indicators within each national health systems (77) individual country monitoring and accountability Commits to substantially increase health framework. financing and the recruitment, development, The multi-stakeholder Universal Health Cov- training and retention of the health workforce erage (UHC) 2030 Alliance, advocated for by the in developing countries, especially LDCs and G7, the World Health Organization (WHO) and SIDS (77, MoI 3.c) development partners, could also serve to inform Commits to strengthening implementation of the Task Force’s monitoring in this area. It aims the WHO Framework Convention on Tobacco to expand the IHP+ to maintain political commit- Control (77, MoI 3.a) ment, advocate for resources, and strengthen com- The leading example for facilitating better munication and accountability that accelerates alignment between multi-stakeholder partner- progress towards UHC. To guarantee transparent ships to strengthen health systems in developing monitoring, the alliance will include an independ- countries is the International Health Partnership ent review mechanism, a civil society engagement Plus (IHP+). International organizations, bilateral mechanism on accountability and advocacy for agencies and country governments all sign the UHC, and a monitoring mechanism producing an IHP+ Global Compact, in which they commit to annual progress report on UHC (supported by the putting internationally agreed principles for effec- Health Data Collaborative). In addition, SDG 3. 8 tive aid and development cooperation into practice on universal health coverage will provide informa- in the health sector. There have been four rounds tion on the level of financial protection (and service of monitoring IHP+ since 2009, with the fifth coverage) in countries, and thus on the outcomes of round to take place during 2016. It will track seven efforts to strengthen health systems. In this context, effective development cooperation practices using a first global monitoring report on tracking univer- indicators for both governments and development sal health coverage was published in 2015. partners, and through collecting quantitative and To monitor health financing, the System of qualitative information, as part of a monitoring Health Accounts (SHA) 2011 is the global standard framework that is closely aligned with the Global for reporting health expenditures. SHA 2011 reports Partnership on Effective Development Cooperation on health expenditures from the financing, provi- monitoring. Findings can serve to inform the Task sion and consumption perspectives. Health accounts Force’s monitoring effort in this area. are done in many countries, and it is anticipated that The major development partners in health with institutionalization, health accounts will be also recognize the importance of strengthening produced yearly and will demonstrate trends in the health systems. The Global Fund and the GAVI volumes and shares of different financing streams. International development cooperation 85

Health accounts data is available at the global health education outcomes. They are partly covered in the expenditure database of the WHO. indicators for SDG means of implementation tar- To monitor the health work force commit- gets 4.a (proportion of schools with access to electricity, ment, the Task Force will be able to draw on the internet, computers, infrastructure and materials for indicator for MoI target 3.c (health worker density students with disabilities, single-sex basic sanitation and distribution). In addition, the World Health facilities, and basic handwashing facilities) and 4.c Assembly will consider the WHO Global Strategy (proportion of teachers in different school types who on Human Resources for Health: Workforce 2030 have received at least the minimum organized teacher in May 2016. This strategy includes an account- training required for teaching at the relevant level ability framework that outlines policy options for in a given country). Indicators from the Education WHO Member States and responsibilities of the 2030 Framework for Action can provide additional Secretariat in monitoring and reporting, and can inputs to the Task Force. Specifically, indicator serve as a source of additional data for the Task 37 (percentage of teachers qualified according to Force’s monitoring efforts in this area. In particular, national standards by education level and type of the strategy encourages WHO Member States to institution), indicator 38 (pupil/qualified teacher invest in analytical capacity for human resources ratio by education level) and indicator 40 (pupil/ for health and health system data and invites trained teacher ratio by education level) are rel- development partners to support national Human evant. All of these indicators are regularly produced Resources for Health data collection and analysis by the United Nations Educational, Scientific and systems for improved planning and accountability. Cultural Organization’s (UNESCO) Institute of Lastly, strengthened implementation of the Tobacco Statistics (UIS). Convention can be monitored with the indica- However, the above indicators focus on educa- tor for MoI target 3.a (age-standardized prevalence tion outcomes, while the Addis Agenda’s primary of current tobacco use among persons aged 15 years focus is on investments or enhanced cooperation. and older). This data is obtained from household The Task Force will therefore complement the SDG or specific surveys and is reported in the WHO’s indicators by monitoring data and qualitative devel- Global Infobase. opments on resources and cooperation mobilized for 11 .2 . Education education. For domestic spending, the 2016 Global Edu- In the area of education, the Addis Agenda: cation Monitoring Report, published by UNESCO, will present data collected by UIS on national Commits to scale up investments and inter- spending on education by country. SDG means of national cooperation to allow all children to implementation indicator 1.a.2 (proportion of total complete free, equitable, inclusive and qual- government spending on essential services (education, ity early childhood, primary and secondary health and social protection)) will provide additional education (78) relevant data. The Task Force will also follow up on Commits to scale up and strengthen (of part- the Addis Agenda’s encouraging of countries to con- nership initiatives in education), such as the sider setting nationally appropriate spending targets Global Partnership for Education (77) for quality investments in essential public services Commits to upgrading education facilities, for all, including in the area of education (see section acknowledging the importance of providing safe, on Delivering social protection and essential public non-violent, inclusive and effective learning services). environments for all; (MoI 4.a) Commits to To monitor the commitment on scaling up increasing the percentage of qualified teachers investments and international cooperation for in developing countries (78, MoI 4.c) schooling, global data on ODA to education by the The Addis Agenda commitments on education OECD DAC and by the Global Education Monitor- focus on mobilizing investments and resources and ing Report could be used. The IATI database can strengthening international cooperation to improve help to further assess global efforts towards specific 86 Addis Ababa Action Agenda — Monitoring commitments and actions

areas such as early childhood, primary and second- Commits to strengthen international coopera- ary education. tion to support efforts to build capacity [in tax The scaling up and strengthening of the administration] in developing countries, includ- Global Partnership for Education (GPE) can be ing through enhanced ODA (22) monitored by drawing on the indicators from GPE’s Strategic Plan 2016–2020. The GPE will monitor Overall monitoring of capacity building activi- cumulative donor contributions to the GPE Fund for ties will be carried out in the context of Action Area 2015–2018 (indicator 1.3.1 in its theory of change G on science, technology, innovation and capacity and results framework) and the amount of funding building. Monitoring of capacity building activities to GPE from non-traditional donors (private sector on tax administration and related areas will be car- and those who are first time donors to the GPE) for ried out in the context of Action Area A on domestic 2015–2020 (indicator 1.5). Beyond monetary contri- resource mobilization. The specific commitments on butions, the GPE will also assess the percentage of (i) capacity building for managing and financing dis- developing country partners and (ii) other partners aster risks and responding to shocks can partially be reporting strengthened clarity of roles and responsi- monitored through reporting by the Global Facil- bilities in GPE country processes (indicator 2.1) and ity for Disaster Reduction and Recovery (GFDRR). the percentage of GPE partner countries organizing GFDRR is a global partnership that helps develop- Joint Sector Reviews (2.1.1). ing countries better understand and reduce their 12. International cooperation and vulnerabilities to natural hazards and adapt to climate change. capacity building The Global Environment Facility (GEF) pro- The Addis Agenda contains commitments and vides grant and concessional resources to countries action items on capacity building throughout its to protect and conserve the global environmen- Action Areas. In the area of international develop- tal commons. In order to develop the capacity of ment cooperation, the Addis Agenda: these countries to access GEF funding and develop effective and transformative projects, the GEF has Calls for capacity building of local and national held a number of regional meetings and supported actors in the areas of managing and financing national level activities, including annual Expanded disaster risk (62) Constituency Workshops for government officials Calls for capacity building for LDCs, LLDCs and civil society organizations in every region in and SIDS responding to various kinds of shocks which it works. Since 2014, it further supported including financial crisis, natural disasters, and about 35 National Dialogues and National Portfo- public health emergencies (68) lio Formulation Exercises to promote consultation, Supports building capacity in accessing identify synergies for greater impact, and take a stra- available funds of the Global Environment tegic approach to the use of GEF resources. In the Facility (76) current funding cycle, the GEF has also provided Commits to strengthen country capacity for eight Cross-Cutting Capacity Development grants early warning, risk reduction and manage- based on the results of the National Capacity Self- ment of national and global health risks; in Assessments to improve the ability of countries to particular in LDCs, LLDCs and SIDS, and implement their commitments under the Rio Con- in conflict-affected and post-conflict States ventions. As part of the Task Force, the GEF Secre- (77, MoI 3.d) tariat can continue to report on such efforts. Chapter II.D International trade as an engine for development

1. Introduction triangle, however, leaving many developing coun- The Addis Ababa Action Agenda acknowledges that tries, particularly raw commodity-supplier countries international trade is an engine for inclusive eco- in sub-Saharan Africa and Middle-East and North nomic growth and poverty reduction. It notes that, Africa, largely outside the production processes in with appropriate supporting policies, infrastructure GVCs. Gains from trade have often been unequally and an educated work force, trade can also help to distributed within value chains. realize productive employment, decent work, wom- Closely linked to the evolution of GVCs has en’s empowerment and food security, as well as a been the surge in the number of bilateral and regional reduction in inequality, among other objectives. preferential trade agreements (RTAs). Many recently International trade in goods and services formed RTAs aim at deeper economic integration, increased rapidly in the past several decades, from that is they encompass a range of behind-the-border about US $4 trillion in 1990 to about US $24 tril- measures and other non-tariff regulatory measures, lion in 2014. However, the 2008–2009 financial in addition to reciprocal tariff liberalization. In 2014, crisis changed world trade dynamics. Although almost half of world trade took place between coun- trade strongly rebounded in 2010 and 2011, global tries that had signed an RTA with one another, and trade in goods has not yet regained its pre-crisis rate almost one third was regulated by “deeper” trade of growth. The slowdown in global merchandise agreements. Virtually all countries belong to at least trade has been somewhat compensated for by high one RTA, with some countries being more active growth in trade in services, and developing coun- in forming bilateral and regional RTAs than others. tries’ participation in services trade also increased in Globally, the emergence of “mega” RTAs, such as the past decade. Nonetheless, dwindling commodity the Trans-Pacific Partnership Agreement (TPP) and prices make it difficult for least developed countries the United States-European Union Transatlantic (LDCs) to repeat the buoyant growth in commodity Trade and Investment Partnership (TTIP) may fur- export earnings, which contributed to almost dou- ther change the dynamics in world trade flows as bling their share in world exports from 0.6 per cent well as the underlying international trade rules. in 2000 to 1.1 per cent in 2014. Nonetheless, the Addis Agenda reaffirms the One of the features that characterises today’s need to promote a universal, rules-based, open, trans- patterns of global trade flows is the emergence of parent, predictable, inclusive, non-discriminatory global value chains (GVCs). GVCs have been the and equitable multilateral trading system under the motor behind the massive expansion in trade among World Trade Organization and meaningful trade developing countries, or South-South trade, in the liberalization. At the Tenth World Trade Organi- past decade. In 2014 South-South trade, at around zation (WTO) Ministerial Conference, which took US $5.5 trillion, almost equalled the magnitude of place in December 2015 in Nairobi, Kenya, Mem- trade among developed countries (North-North bers reaffirmed the pre-eminence of the WTO as trade). A large proportion of the world’s GVCs have the global forum for the setting and governance of evolved within the Europe-North America-East Asia trade rules. They also acknowledged the contribu- 88 Addis Ababa Action Agenda — Monitoring commitments and actions tion that the rules-based multilateral trading system els. At the national level, an effective coordination has made to the strength and stability of the global mechanism is imperative for ensuring synergistic economy and the role that international trade can interactions between trade policy and other pub- play towards achieving sustainable, robust and bal- lic policies including particularly industrial policy, anced growth for all. as well as those on health, food security, educa- The current world trade dynamics point to tion, gender, migration, energy, human rights and two key challenges towards realising the potential of environment. At the regional and the international trade to contribute to sustainable development. The levels, stronger partnerships are required to ensure first of these is how to make trade growth inclusive. that trade’s contribution to sustainable development At the international level, formation of deeper RTAs would not result in a situation where a country’s involving major economies may further exacerbate trade-led inclusive growth damages other countries’ the marginalization of low-income or small and potential to use trade for sustainable development. vulnerable economies in world trade. The entry into Against the above background, the follow- force of mega RTAs could result in trade diversion ing sections present options for monitoring the effects against non-members. The second challenge commitments covered in the Trade Chapter of the concerns how to establish policy coherence at all lev- Addis Agenda.

Figure 4 Mega-regionals (Mega-regionals are substantially larger in all dimensions)

TPP TTIP

n ASEAN o i a t l u p

o 8 P

l EU r

o NAFTA W

o 6

e a r h

S COMESA CIS 4

MERCOSUR

2 ECOWAS

0 0 10 20 30 40 50 60 Share of World GDP

Source: UNCTAD calculations. Note: Size of circles is proportional to intra-PTAs trade. International trade as an engine for development 89

2. Strengthening the multilateral least developed countries and small island developing trading system States which can serve as a basis to assess the implementation of these commitments. Tariff data col- A key message of the Addis Agenda is that, in order lected by the International Trade Centre (ITC), the to make trade an engine for economic growth and United Nations Conference on Trade and Develop- poverty reduction, Member States will promote a ment (UNCTAD) and the WTO, are available on universal, rules-based, open, transparent, predictable, an annual basis and are disaggregated by developing inclusive, non-discriminatory and equitable mul- countries and LDCs. The reference databases for tar- tilateral trading system under the WTO (79, MoI iff data are ITC (MacMap), UNCTAD (TRAINS) 17.10). The indicator for the Sustainable Develop- and WTO (IDB). ment Goals (SDGs) can be an input (17.10.1 World- To give a fuller picture, the data for both of wide weighted tariff-average), but does not effectively these indicators should be disaggregated for other track trade policy developments. To follow-up on groups of countries, such as landlocked develop- the commitments in the Addis Agenda, monitoring ing countries (LLDCs) and small island develop- of these five areas will be crucial to determining how ing states (SIDS). The exports of LDCs, as well as strong the multilateral trading system has become. LLDCs and SIDS, are typically highly concentrated 2 1. . Special and differential treatment/least in just a handful of products where they have com- developed countries parative advantage. Monitoring the share of imports (calculated in value terms and excluding oil and arms) from developing countries, LDCs, LLDCs Commits WTO members to implement the and SIDS that are admitted free of duty would also provisions of special and differential treatment be helpful. for developing countries, in particular LDCs The data for indicator 17.12.1 could also be (84, MoI 10.a) disaggregated by type of product — for example, Welcomes the establishment of the monitoring agricultural products, textiles and clothing, and mechanism to analyse and review all aspects of environmental goods — to accurately reflect the the implementation of special and differential varying levels of tariffs on different products. Focus- treatment provisions with a view to strength- ing on specific sectors could also be beneficial for the ening them and making them more precise, monitoring of other targets. As an example, product effective and operational as well as facilitating specific tariff levels could allow for the tracking of integration of developing and least-developed market distortions in agricultural markets (83 and WTO members into the multilateral trading MoI 2b) as well as access to affordable medicines. system (84) This data is collected annually by the WTO, UNC- Calls on WTO members to realize timely TAD and ITC. implementation of duty-free and quota-free Not only have average tariffs on exports from (DFQF) market access on a lasting basis for LDCs declined significantly, but so have tariffs on all products originating from all LDCs (85, exports from other developing countries. Relative MoI 17.12) preferential margins enjoyed by LDCs over other Calls on WTO members to facilitate market developing countries could also be monitored, as a access for products of LDCs, including by measure of special preferences for LDCs. Moreover, developing simple and transparent rules of tariffs alone do not adequately reflect market access origin applicable to imports from LDCs (85, constraints. Non-tariff measures are playing an SDG 17.12) increasingly important role in limiting trade, and The SDG indicators under targets 10a and therefore a methodology for capturing the effects of 17. 12 are respectively, (10.a.1) “proportion of tariff non-tariff barriers would be helpful. lines applied to imports from least developed coun- Preferential treatment may not be fully used by tries and developing countries with zero-tariff” and developing countries’ exporters for different reasons (17.12.1) Average tariffs faced by developing countries, such as the inability of certain exporters to meet eli- 90 Addis Ababa Action Agenda — Monitoring commitments and actions

gibility criteria (i.e., complying with rules of origin), Members to have an in-depth exchange on the issues however this is more difficult to measure. For exam- involved with the implementation of DFQF market ple, to date, data on “preferences utilization by devel- access for LDC products. Discussion on a possible oping and least developed countries on their exports,” way forward focused on a “clinical examination” of which would provide information on the amounts of the issues involved and possible impact arising from exports have effectively benefited from preferential the implementation of DFQF market access for access or duty free access, is available only for some LDCs, on the basis of a study to be prepared by the leading importers, and not on a yearly basis. Secretariat. Following-up on these commitments will also Market access for LDCs remains an important require qualitative assessments on future WTO issue and the WTO Secretariat regularly prepares a negotiations and policies. As part of the Doha Round note in response to paragraph 8 of the WTO Work of negotiations, the Special Session of the WTO Programme for Least Developed Countries (LDCs), Committee on Trade and Development (CTD) which mandates an annual review of market access is reviewing the special and differential treatment for products originating from LDCs (WT/COMTD/ provisions in the WTO Agreements with a view to LDC/11/Rev.1). The latest note (WT/COMTD/ making them more precise, effective and operational. LDC/W/60) updates the information on trends in The CTD is also mandated to review periodically LDC trade and market access conditions. One issue the application of special and differential treatment that has been found to hinder market access for the for developing countries, in particular LDCs, and to LDCs is preferential rules of origin. This has been consider any questions in this regard. At the request the focus of recent work in the WTO. To examine of the CTD, the WTO Secretariat compiles evi- the complexity of rules of origin and other inhibiting dence on the implementation of special and differ- factors, the secretariat note estimates the percentage ential treatment provisions; the most recent of which of imports entering under a preferential regime as a is from 2013 (WT/COMTD/W/196), and tabulates percentage of imports eligible for preference to select all the provisions in WTO agreements that provide developed markets. special and differential treatment. The WTO Committee on Rules of Origin At the Bali Ministerial Conference in 2013, annually reviews developments in preferential rules WTO members decided to establish a monitoring of origin, including measures taken by Members to mechanism on special and differential treatment. implement the decisions reached at the Tenth WTO The function of the monitoring mechanism is to Ministerial Conference in Nairobi. The WTO also review the implementation of special and differen- maintains a Database on Preferential Trade Arrange- tial treatment provisions and, where appropriate, to ments (http://ptadb.wto.org) where members’ notifi- make recommendations on actions or negotiations cations and legislation on preferential rules of origin to improve implementation. The status of recom- can be accessed. mendations emerging from the Mechanism will be Data and statistics for the relative preferential included in the annual report of the CTD to the tariff margins facing LDCs are calculated by UNC- General Council, the WTO’s highest-level decision- TAD periodically. These are reported in the annual making body in Geneva. report titled “Key statistics and trends in interna- The implementation of duty-free, quota-free tional trade”. market access (DFQF) is regularly monitored in 2 .2 . Agriculture and fisheries the WTO CTD, which conducts annual reviews on the steps taken by WTO Members to provide DFQF market access to LDCs. The report provides Calls on WTO members to correct and prevent the percent of tariff lines enjoying DFQF for LDCs trade restrictions and distortions in world agri- and the remaining number of dutiable tariff lines cultural markets, including through the parallel for both developed countries and selected develop- elimination of all forms of agricultural export ing WTO members. A special CTD meeting, held subsidies and disciplines on all export measures in September 2015, provided an opportunity for with equivalent effect (83, MoI 2.b) International trade as an engine for development 91

Calls on WTO members to strengthen disci- dedicated discussion process on export competition, plines on subsidies in the fisheries sector, includ- resulting from the WTO Bali Ministerial Confer- ing through the prohibition of certain forms of ence, in accordance with the provisions of the annex subsidies that contribute to overcapacity and to the Nairobi Ministerial Decision. overfishing in accordance with mandate of the The data available to monitor the imple- Doha Development Agenda and the Hong Kong mentation of the Nairobi Ministerial Decision are Ministerial Declaration (83, SDG 14.6) as follows. On export subsidies, Members’ notifications The Nairobi Ministerial Declaration contains to the WTO Committee on Agriculture on a commitment by all Members to advance nego- their use of export subsidies, as well as replies tiations on the remaining Doha issues including by Members to the first section (“operational advancing work in all three pillars of agriculture, changes in measures”) of the questionnaire namely domestic support, market access and export on export competition circulated to WTO competition. Members also adopted decisions on Members in advance of the annual dedicated cotton, public stockholding for food security pur- discussion poses and a special safeguard mechanism for devel- On export credits, export credit guarantees oping country Members. or insurance programmes, Members’ replies In Nairobi WTO Members also adopted a to the second section (“export credits, export decision of direct relevance to the achievement of credit guarantees or insurance programmes”) the SDG objective above on the parallel elimination of the questionnaire circulated in advance of of all forms of agricultural export subsidies and dis- the annual dedicated discussion ciplines on all export measures with equivalent effect. On international food aid, relevant informa- According to the decision, export subsidies shall be tion contained in countries’ notifications eliminated by developed country Members immedi- to WFP’s INTERFAIS database and in ately as a general rule, with delayed implementation Members’ notifications to the WTO Com- under certain conditions for a limited number of mittee on Agriculture on their use of export products. Developing country Members have longer subsidies, as well as replies by Members to implementation periods. The decision also contains the third section (“food aid”) of the ques- disciplines on maximum repayment terms and self- tionnaire circulated in advance of the annual financing of export credits, export credit guarantees dedicated discussion and insurance programmes. Members also agreed On agricultural exporting State Trading to ensure that agricultural exporting State Trading Enterprises, relevant information contained Enterprises do not operate in a manner that would in Members’ notifications to the WTO circumvent the other provisions of the decision. Working Party on State Trading Enter- Finally, the decision includes disciplines on food aid prises, as well as replies by Members to the aimed at minimizing the risk of commercial dis- fourth section (“agricultural exporting State placement and more specifically ensuring that food Trading Enterprises“) of the questionnaire aid does not negatively affect domestic producers circulated in advance of the annual dedicated and local or regional markets. Least developed and discussion net food importing developing country Members benefit from specific flexibilities. These data are both quantitative and qualita- The WTO Committee on Agriculture shall tive and their availability depends on the timeliness monitor the implementation of the Nairobi Minis- and accuracy of the replies to the questionnaire and terial Decision on export competition, as stated in the notifications transmitted by WTO Members. In its paragraph 4. This monitoring function will be this regard, the Nairobi Ministerial Decision states achieved in accordance with existing notification that, unless they are in a position to do so at an ear- requirements under the Agreement on Agriculture, lier date, developing country Members shall imple- as well as through the continuation of the annual ment the annex of the decision (i.e., be requested to 92 Addis Ababa Action Agenda — Monitoring commitments and actions

reply to the questionnaire) no later than five years include (i) respecting the requirement to notify rel- following the date of adoption of the decision. evant laws and regulations to the Council for TRIPS An additional input will be the indicators for pursuant to Article 63.2 of the TRIPS Agreement; monitoring the SDGs. They include 2.b.1 Producer (ii) sharing of experiences by Members on a more Support Estimate and 2.b.2 Agricultural export subsi- regular basis under the relevant agenda items of the dies. The methodology for 2.b.1 is not yet developed. Council for TRIPS, such as the Annual Review of There is no single source estimate for measuring all the Decision on the Implementation of Paragraph 6 distortions in world agricultural markets. Academ- of the Doha Declaration on the TRIPS Agreement ics, some of whom had worked at the World Bank and Public Health; and (iii) coverage in the reports Group, compiled a database of distortions to agri- prepared by the WTO Secretariat as part of a WTO cultural incentives, which includes export subsidies Member’s trade policy review. but also other distortions such as domestic producer The WTO maintains and regularly updates support, and exchange rate effects. It is updated peri- a list of Members that have accepted the Protocol odically, but does not have universal coverage. Amending the TRIPS Agreement. While a majority In terms of fisheries, WTO Members worked of WTO Members had accepted the TRIPS amend- intensively up to and during the Tenth Ministerial ment by March 2016, additional acceptances are still Conference on proposals to develop new substan- needed to trigger entry into force of the amendment. tive disciplines and/or transparency obligations with respect to fisheries subsidies. However, they The WTO General Council Decision to extend the were unable to reach an agreement in Nairobi. As period for acceptance of the TRIPS Protocol until Members resume work in the WTO post-Nairobi, end-2017 provides the basis for Members to com- fisheries subsidies continue to be identified by some plete their domestic procedures and submit their delegations as a priority area for further negotiations. instrument of acceptance to the WTO. Monitoring should be based on progress made by The Committee on Development and Intel- Members in the adoption of disciplines to limit sub- lectual Property (CDIP) of the World Intellectual sidies that contribute to overcapacity and overfishing Property Organization (WIPO) provides an online and their subsequent implementation. The indicator Database on Flexibilities in the Intellectual Property for SDG 14.6 (Progress by countries in the degree of System, which contains data drawn from WIPO implementation of international instruments aiming documents on Patent Related Flexibilities in the to combat illegal, unreported and unregulated fishing) Multilateral Legal Framework and their Legisla- can be an input in this area. tive Implementation at the National and Regional 2 .3 . Access to affordable medicines Levels (namely CDIP/5/4 Rev., CDIP/7/3 Add, CDIP/13/10 Rev, and CDIP/15/6). The database Reaffirms the right of WTO members to take allows users to search for the implementation of advantage of the flexibilities in the WTO flexibilities in national IP laws in selected jurisdic- Agreement on Trade-Related Aspects of Intel- tions. The Indictors for MoI 3.b, Proportion( of the lectual Property Rights (TRIPS); reaffirms that population with access to affordable medicines and the TRIPS Agreement does not and should vaccines on a sustainable basis and Total net official not prevent Members from taking measures to development assistance to the medical research and protect public health (86, MoI 3.b) basic health sectors) can also help contextualize Urges WTO Members to accept the amendment this section. of the TRIPS Agreement allowing improved 2 4. . Progress on implementation of the Bali access to affordable medicines for developing and Nairobi outcomes countries by the deadline of the end of 2015 (86, MoI 3.b) Calls on WTO Members to fully and expedi- Options for monitoring the implementation tiously implement all the decisions of the Bali and use of TRIPS flexibilities by WTO Members Package (80) International trade as an engine for development 93

Calls on WTO Members to notify commercially with the objective to enhance LDCs’ participation meaningful preferences for LDC services and in world services trade. The Bali decision was subse- service suppliers in accordance with the 2011 quently adopted in 2013 as initial progress to imple- and 2013 Bali decision (80) ment the LDC Services Waiver was slow. The 2011 “LDC Services Waiver” was extended The WTO regularly reviews the implementa- by Nairobi Ministerial Decision T/MIN(15)/48 for tion of the decisions in the Bali Package. A report an additional four years, until 31 December 2030. by the Chairman of the General Council on imple- The Nairobi Ministerial Decision also encourages mentation of the Bali outcomes is a standing item at discussions among members on technical assistance meetings of the WTO General Council. aimed at increasing the capacity of LDCs to par- Regarding the Bali decisions on regular work ticipate in services trade. It also urges members who under the General Council, on TRIPS non-violation have not yet notified their preferences to the WTO’s and situation complaints, Members at the Tenth Trade in Services Council to promptly do so and sets Ministerial Conference decided to continue exami- up a review to monitor the operation of the noti- nation of this issue and make recommendations at fied preferences. With regards to this commitment, the next Ministerial Conference. In the meantime, it monitoring will be based on the number of countries was also agreed that Members will not initiate such and regional groups that have indicated that they complaints under the TRIPS Agreement. will provide preferences to LDC services and service On Aid for Trade, Ministers at the Tenth Min- providers in certain sectors. isterial Conference recognized, inter alia, the impor- 2 .5 . Trade negotiations, WTO accessions, tance of and continuing need for the Aid-for-Trade trade policy reviews and trade Initiative. A new Aid-for-Trade work programme monitoring reports with the theme of “Promoting Connectivity” has been developed for the period 2016–2017 (see para- Commits to promptly conclude the negotiations graph 3.3). (See also section 3.3 below. ) on the Doha Development Agenda and reiter- On Trade and Transfer of Technology, the ates development concerns as integral to the Working Group on Trade and Transfer of Technol- Agenda (83, MoI 17.10) ogy has in its Annual Report recommended that it Calls on WTO Members to accelerate acces- continues to work to fully achieve its mandate. sion of developing countries in negotiations for Other areas of the Bali and Nairobi packages WTO membership (83) where specific decisions were taken are analysed Commits to combat protectionism in all its under the sections where the respective commit- forms (83) ments have been elaborated. These include Trade Facilitation, DFQF, Preferential Rules of Origin, the The Nairobi Ministerial Declaration contains Services Waiver and the Monitoring Mechanism on a strong commitment of all Members to advance special and differential treatment. negotiations on the remaining Doha issues. This includes advancing work in all three pillars of agri- Calls on WTO Members to notify commercially culture, namely domestic support, market access and meaningful preferences for LDC services and export competition, as well as non-agriculture mar- service suppliers in accordance with the 2011 ket access, services, development, TRIPS and rules. and 2013 Bali decision (80) Members acknowledged that this work shall The so-called “LDC Services Waiver”, first maintain development at its centre and provisions adopted at the WTO’s Eighth Ministerial Confer- for special and differential treatment shall remain ence in 2011, releases Members from their most- integral. Members also agreed to continue to give favoured nation obligation under the General priority to LDC concerns and interests. Agreement on Trade in Services (GATS). This allows Members agreed at Tenth Ministerial Con- Members to grant LDC services and service provid- ference that officials should work to find ways to ers preferential access to their markets for 15 years advance negotiations and request the Director-Gen- 94 Addis Ababa Action Agenda — Monitoring commitments and actions

eral to report regularly to the General Council on 3 1. . Promoting world trade growth that is these efforts. While Members concurred that offi- consistent with the SDGs cials should prioritize work where results have not yet been achieved, some wished to identify and discuss The Addis Agenda lays out the commitments and other issues for negotiation; others did not. Members action items that would help to ensure that inclusive also clarified that any decision to launch negotia- trade growth is an economic foundation for sustain- tions multilaterally on such issues would need to be able development, including the following: agreed by all Members. Endeavours to increase world trade in a man- At the Tenth Ministerial Conference, Mem- ner consistent with the SDGs, including exports bers celebrated the enlargement of the WTO by from developing countries, in particular LDCs, accessions, in accordance with Article XII of the with a view towards doubling their share of Marrakesh Agreement. Two LDCs completed their global exports by 2020 (82, MoI 17.11) respective accession processes at the Tenth Minis- Commits to integrate sustainable development terial Conference: Afghanistan and Liberia. WTO into trade policy at all levels (82) Members remain committed to work towards com- Commits to support integration of small, pleting and facilitating current accessions; and to vulnerable economies in regional and world provide pre and post-accession technical assistance markets (82) and support. The WTO Director General reports Recognizes the need for value addition by devel- on developments in accession negotiations, when oping countries and for further integration of he presents his Annual Report on Accessions 1 at MSMEs into value chains (88) the year-end Meeting of the General Council. The Annual Report is forwarded to the Ministerial Con- The indicator under SDG target 17.11 17.11.1( ference, as appropriate. Real-time updates on acces- Developing countries’ and least developed countries’ sions are available at the WTO website and through share of global exports) can be a helpful input to the monthly Accessions Newsletter. track the progress toward implementing the Addis In addition to the regular trade policy reviews Agenda’s trade-related commitments. The Addis of Members on an individual or regional basis, the Agenda commitments also include process-oriented WTO currently produces two series of trade moni- and qualitative objectives, such as increasing world toring reports: the WTO-wide reports on trade- trade “in a manner consistent with the SDGs” and related developments covering the whole WTO integrating “sustainable development into trade membership and observers; and joint reports with policy at all levels”. The monitoring of these com- the Organization for Economic Cooperation and mitments benefits from existing platforms that Development (OECD) and UNCTAD on trade review and monitor relevant international frame- and investment measures taken by G-20 economies. works and conventions, which include: Istanbul These reports, among other things, track the status Plan of Actions for the Leased Developed Coun- of the trade-restrictive measures recorded since 2008, tries for the Decade 2011–2020 (A/CONF. 219/3/ including progress in eliminating them. Rev.1); Vienna Programme of Action for Landlocked Developing Countries for the Decade 2014–2024 3. Facilitating international trade (A/RES/69/137); SIDS Accelerated Modality of The Addis Agenda specifies key areas that require Actions/SAMOA Pathway (A/RES/69/15); and coordinated actions at all levels to foster effective United Nations Monitoring Mechanism (UNMM) participation of developing countries in interna- to Review Commitments towards Africa’s Develop- tional trade. These key areas are: (i) promotion of ment Needs (A/RES/66/293). trade growth consistent with the SDGs; (ii) trade Statistical information that depicts progress finance; (iii) Aid for Trade; and (iv) trade facilitation. in sustained, inclusive and sustainable economic growth at the national level should include, among

1 The 2015 Director-General’s Annual Report on Accessions was circulated as document WT/ACC/25. International trade as an engine for development 95 others, an export diversification index and changes market. Aspects of bank-intermediated trade finance in factor intensity of traded products. Time-series are captured by statistics in many Committee on data that are necessary for such statistics are avail- the Global Financial System member countries, but able through United Nations agencies, including the coverage differs significantly across countries, and United Nations Statistics Division (http://comtrade. in many cases is quite limited. Combining these un.org/), UNCTAD and ITC (www.trademap.org). data with information from other sources, such as However, within-country firm-level data, which trade associations and SWIFT, can support a general would help assess the increase in the participa- characterisation of the size, structure and trends of tion of micro, small and medium-sized enterprises the global market, but the approach requires signifi- (MSMEs) and different segments of society in inter- cant interpolation and inference. 2 Developments in national trade is not currently available. For assess- national policy incentives and at development banks ing synergies between trade growth and sustainable can be explored with qualitative information and development in social and environmental dimen- case studies. sions, time-series data on trade flows and trade pol- The WTO is currently examining possible icy (e.g., bound, applied and preferential tariff rates concrete measures to address the problem of trade and non-tariff measures available from the WTO, finance availability for SMEs, such as possible ITC and UNCTAD) can be combined/compared proposals for achievable and measurable targets, with data related to various SDGs, available at the with a view to reducing the trade finance gap in Food and Agriculture Organization (FAO), World the future. The idea is not to “re-invent the wheel” Health Organization (WHO), International Labour but to rely on existing successful mechanisms and Organization (ILO), United Nations Industrial initiatives, such as trade finance facilitation pro- Development Organization, United Nations Envi- grammes, training and capacity building initia- ronment Programme (UNEP), World Bank Group tives, and channels of dialogue with regulators. A and OECD, among others. dialogue is currently taking place with the WTO’s Given the importance of regional trade inte- traditional partners. gration for vulnerable groups of countries such as The WTO Director-General will issue a publi- LDCs, LLDCs and SIDS, monitoring could also cation that will contain proposals on how the WTO include an analysis of the exports of these countries, and its partners can reduce the trade finance gap. It the geographic diversification of their exports and will build on the WTO’s long-standing commitment measures of intra-regional trade. to support multilateral partners in addressing trade 3 .2 . Trade Finance financing gaps, through advocacy in favour of trade finance facilitation programmes (which are largely SME-based), capacity building and market intelli- Commits to explore use of market-oriented gence to improve the understanding of such gaps. incentives to expand WTO-compatible trade This could include working towards aspirational tar- finance and the availability of trade credit, gets which would help members of the international guarantees, insurance, factoring, letters of credit community and of relevant international organiza- and innovative financial instruments, includ- tions to galvanize action and pool resources, with a ing for MSMEs in developing countries (81) view to reducing the global trade finance gap. Calls on development banks to provide and increase market-oriented trade finance and to 3 .3 . Aid for trade examine ways to address market failures associated with trade finance (81) Commits to focus Aid for Trade on develop- There is no comprehensive source for measuring countries, in particular LDCs, including ing the size and composition of the trade finance through the Enhanced Integrated Framework

2 Bank for International Settlements, “Trade finance: developments and issues”, Committee on the Global Financial System, CGFS Paper No. 50, January 2014, http://www. bis. org/publ/cgfs50. pdf. 96 Addis Ababa Action Agenda — Monitoring commitments and actions

for Trade-Related Technical Assistance to LDCs Additional donor resources leveraged through (90, MoI 8.a) Tier 2 projects Commits to allocate an increasing proportion of Additional donor resources leveraged to fund Aid for Trade to LDCs, provided according to other projects/priorities — as identified through development cooperation effectiveness principles; EIF support (e.g., DTIS/Update, Medium Term and welcomes additional cooperation among Programme/Trade Policy Framework) (90, MoI 8.a) developing countries to this end 3 4. . Trade facilitation At the Tenth WTO Ministerial Conference In reaffirming the commitments to strengthen held in Nairobi in December 2015, Ministers rec- the multilateral trading system, the Addis Agenda ognized the importance of and continuing need for calls on WTO Members to fully and expeditiously the Aid for Trade Initiative and of according pri- implement the ministerial declarations and deci- ority to the needs of LDCs. The biennial Aid for sions agreed at the Ninth WTO Ministerial Con- Trade Work Programme for 2016–2017 has as its ference in Bali (2013), called the Bali Package. One overarching focus “Promoting Connectivity” by of the major components of the Bali Package was reducing trade costs, including in the area of ser- the Agreement on Trade Facilitation, which has vices’ trade costs. been subsequently inserted as a new agreement into The SDG indicator is 8.a.1 Aid for Trade Annex 1A of the WTO Agreements. commitments and disbursements. In order to collect Calls on WTO members to expeditiously ratify further data and information on how and to what the Agreement on Trade Facilitation (80) extent trade costs affect the economic development of developing countries and LDCs, it is foreseen The commitment can be effectively moni- that a series of pertinent questions will once again tored, on an annual basis, by counting the number be included in the self-assessment questionnaire to of countries that ratified the WTO Agreement on be developed in connection with the monitoring and Trade Facilitation. Existing frameworks and plat- evaluation exercise (M&E) that will be conducted in forms that can help monitor the implementation of support of the Aid for Trade Work Programme for trade facilitation activities across countries would 2016–2017. An analysis of the results of the M&E include: Joint United Nations Regional Commis- exercise will be presented at the Sixth Global Review sions Trade Facilitation and Paperless Trade Imple- of Aid for Trade to be held in 2017. mentation Survey 2015: Global Report; The New The WTO continues to work closely with the Partnership for Africa’s Development (NEPAD) OECD with regard to the monitoring of Aid for 2010–2040 Programme for Infrastructure Develop- Trade flows (The specific website that can be -con ment in Africa (PIDA); Aerodromes and ground aids sulted for the purposes of monitoring is http://www. indicator of the International Civil Aviation Organi- oecd.org/dac/aft/aid-for-tradestatisticalqueries.htm). zation’s Universal Safety Oversight and Audit Pro- Regarding the monitoring of commitments with gramme; and the UNCTAD Automated systems of respect to the LDCs, Phase Two of the Enhanced customs data, a computerised customs management Integrated Framework (EIF) began on 1 January system for handling customs declarations, account- 2016, coinciding with the commitments adopted in ing procedures, transit and suspension procedures. the Addis Agenda. Therefore, monitoring of donor Trade facilitation programmes in international commitments towards the EIF, as the main Aid for organizations (including UNCTAD, ITC, WTO, Trade vehicle for LDCs, should be relatively straight and the United Nations Economic Commission for forward. Monitoring of commitments can take place Europe) support the implementation of the Trade at three levels: Facilitation Agreement including the categorization and establishment of national committees. Donor contributions to the EIF Global Trust Work towards the ratification of the Trade Fund (currently US $90 million pledged) Facilitation Agreement has continued to progress. for Phase Two As of 4 March 2015, Members had submitted 81 International trade as an engine for development 97

category A notifications, and had begun to present in providing comprehensive statistical information the first Category B and C notifications. The WTO on trade’s contribution to the SDGs at the national has also received 70 instruments of acceptance level, could help each country identify the areas which is close to the two thirds of ratifying Mem- where complementary policy actions are needed. bers required for the Trade Facilitation Agreement 4 .2 . Coherence among bilateral and regional to enter into force. trade and investment agreements 4. Promoting policy coherence in The Addis Agenda highlights the significant poten- trade tial of regional economic integration and intercon- The Addis Agenda calls for greater coherence specifi- nectivity to promote inclusive growth and sustaina- cally with a view to: (i) creating domestic enabling ble development (87). It also articulates that regional environments; (ii) achieving coherence and consist- integration can be an important catalyst to reduce ency among bilateral and regional trade and invest- trade barriers and to enable companies, including ment agreements and their compatibility with WTO micro-, small- and medium-sized enterprises, which rules; (iii) promoting development-friendly trade represent a large share of employment in most coun- and investment agreements; (iv) enhancing women’s tries, to integrate into regional and global value equal and active participation in international trade; chains. In this respect, the Addis Agenda encour- and (v) strengthening international agency/commis- ages multilateral development banks (MDBs), in sion relevant to trade, trade laws and development; collaboration with other stakeholders, to address and (iv) combatting illegal trade, poaching and traf- gaps in trade, transport and transit-related regional ficking of protected species, hazardous waste, miner- infrastructure (87), and elaborates on the following als and other natural resources. commitments: 4 1. . Development at the local level: the domestic enabling environment for Commits to strengthen regional cooperation and (87) trade regional trade agreements Commits to strengthen coherence and consist- The Addis Agenda acknowledges the importance ency among bilateral and regional trade and of the domestic enabling environment. Tracking investment agreements, and ensure that they improvements in this area is discussed in Chapter II. are compatible with WTO rules (87) B and its subsections 2 (investment climate), 4 (poli- Urges the international community to increase cies and regulatory frameworks to better align busi- support to projects and cooperation frameworks ness and finance with global goals) and 8 (Encour- that foster regional and subregional integra- aging quality direct investment/FDI, particularly in tion, with special attention to Africa, and that underfunded sectors and countries) in detail. With enhance the participation and integration of regard to trade, Governments: small-scale industrial and other enterprises, particularly from developing countries, into Commit to strengthen domestic enabling global value chains and markets (87) environments and implement policies conducive Encourages MDBs in collaboration with other to realizing the potential of trade for inclusive stakeholders to address gaps in trade, transport growth and sustainable development (88) and transit-related regional infrastructure, The exact nature of the domestic enabling envi- including completing missing links connect- ronment and the choice of domestic policies for this ing LLDCs, LDCs and SIDS within regional purpose must be specific to each country’s economic networks (87) and developmental conditions. Moreover, creating the enabling environment also depends on other sec- To ensure transparency and a better under- tor and how they are mutually supportive with trade standing of RTAs, they should be reported to the policies. In this context, the initiative mentioned for WTO following the provisions for RTAs in WTO section 3. 1 above, that is inter-agency collaboration rules. Transparency is further enhanced through 98 Addis Ababa Action Agenda — Monitoring commitments and actions the WTO’s Transparency Mechanism for RTAs indicators to monitor progress on regional coopera- which has been operational since December 2006. tion and integration of the ADB’s 48 regional mem- Furthermore, under the Transparency Mechanism, bers. Universally, the WTO’s Transparency Mecha- the WTO maintains a database (the Regional Trade nism for RTAs and the Regional Trade Agreements Agreements Information System — rtais.wto.org) Information System provides information on exist- which contains information on all RTAs reported ing RTAs, which can be used for assessing whether a to the WTO and that have been examined or con- given trade agreement is compatible with WTO rules. sidered by the appropriate Committee; the informa- Today’s deeper regional economic integration includes legal texts, trade and tariff data on each tion depends increasingly on compliance with trade RTA as well as the factual presentation of the RTA regulatory measures such as sanitary requirements prepared by the WTO Secretariat. The Ministerial and goods standards, which constitute non-tariff Declaration from the Tenth Ministerial Conference measures (NTMs) that generally impose dispro- has instructed the Committee on Regional Trade portionally higher trade costs on exporters from Agreements to discuss the systemic implications of low-income countries than from richer countries. RTAs for the multilateral trading system and its rela- Information on official NTM notifications is -col tionship with WTO rules. lected by the WTO (http://i-tip.wto.org/goods/ With regard to Africa’s regional integration, default.aspx?language=en), ITC, UNCTAD and the African Union Summit in January 2012 com- the World Bank Group. All members of RTAs, such mitted to establish a Continental Free Trade Area as the Association of Southeast Asian Nations, the (CFTA) by 2017. The negotiations for the African Economic Commission of West African States and megaregional trade agreement are now ongoing, the Latin American Integration Association, have with significant expected benefits for strengthening been cooperating in the collection of NTMs applied intra-African trade and harmonizing trade policy in worldwide. While this information is not available Africa. The 2012 Summit also adopted the Boost- for all countries and cannot be produced on a yearly ing Intra-African Trade (BIAT) Initiative. The BIAT basis, there have been continuous efforts to extend identifies seven clusters — market integration, pro- coverage. 3 NTM data are made available in online ductive capacity, trade-related infrastructure, trade databases such as World Integrated Trade Solution information, trade facilitation, trade finance and fac- (WITS), Market Access Map (MacMap), Trade tor mobility — where progress is necessary to com- Analysis and Information System (TRAINS), and plement the steps that are to be taken to establish Integrated Trade Intelligence Portal (I-TIP) on goods. the CFTA. Action plans are being developed by the ITC has also been involved in the rollout of business regional economic communities, which will provide surveys on NTM with the objective of capturing the the basis for data collection and monitoring progress perspective of SMEs involved in international trade. in regional cooperation in Africa. The findings of these surveys are then discussed with In addition, the Africa Regional Integration national and regional institutions and stakeholders Index, published jointly by the African Development to identify possible solutions and remedial actions. 4 Bank (AfDB), African Union Commission and the MDB actions on infrastructure were covered United Nations Economic Commission for Africa, under Action Area II.B. The UNCTAD Maritime can be a valuable tool to monitor progress in imple- connectivity index (unctadstat) can assist in meas- menting commitments falling under African regional uring the physical connectivity of regions. The UN integration frameworks. The three organizations Office of the High Representative for the Least Devel- also produce a recurring joint publication, Assessing oped Countries, Landlocked Developing Countries Regional Integration in Africa, partly based on the and Small Island Developing States also reports on Index. With regard to Asia, the Integration Indicator the development of transit transport systems and any of Asian Development Bank (ADB) provides a set of available estimates of the length of missing links in

3 For reference purposes, see information on NTMs at www. macmap.org and wits.worldbank.org 4 For reference purposes, see http://www. intracen. org/itc/market-info-tools/non-tariff-measures/business-surveys/ International trade as an engine for development 99

trans-continental road and rail networks in regions At this stage, there is no international frame- with landlocked developing countries. 5 work that comprehensively tracks the transparent 4 .3 . Trade and investment agreements implementation of trade and investment agreements, nor on capacity building specifically in this regard. Closely related to the commitments in section 4.2 Capacity building can be monitored through OECD above, the Addis Agenda focuses on ensuring trade data, as well as from inputs from Task Force agen- and investment agreements would not undermine cies engaged in capacity building in this area, with countries’ ability to pursue public policy objectives further detail included above under Aid for Trade. (91). In this respect, the Addis Agenda puts forward Action Area II.G also contains information about the following commitments: following up on capacity building support. Qualita- tive information and case studies can examine the Endeavours to craft trade and investment agree- use of safeguards in treaties. ments with appropriate safeguards so as not to The request to UNCTAD to continue its exist- constrain domestic policies and regulation in ing programme of meetings and consultations on the public interest (91) investment agreements will, among other matters, Commits to implement such agreements in a be addressed at the upcoming Fourteenth session transparent manner (91) of UNCTAD (UNCTAD 14), due to take place in Commits to support capacity building including July 2016 in Nairobi, Kenya, which will agree on through bilateral and multilateral channels, in the organization’s plan of action for 2017–2024. The particular to least developed countries, in order IIA Conference at UNCTAD’s World Investment to benefit from opportunities in international Forum, held back-to-back to UNCTAD 14, is the trade and investment agreements (91) next key event implementing this mandate. Requests UNCTAD to continue its existing programme of meetings and consultations with 4 4. . Gender/women as producers and traders Member States on investment agreements (91) Throughout its chapters, the Addis Agenda estab- UNCTAD publishes recurrent analysis of lishes a strong link between gender equality and trends in international investment agreements (IIAs) women’s empowerment on one hand, and achieving and investor-state dispute settlement (ISDS), includ- sustained, inclusive and equitable economic growth ing in its World Investment Report series, which and sustainable development on the other. Moreover, includes data on investment agreements and their it calls for gender mainstreaming in the formulation provisions. UNCTAD’s IIA 6 and ISDS 7 navigators and implementation of all financial, economic, envi- can be used for assessing whether the contents of ronmental and social policies, as discussed in the IIAs constrain domestic policies and regulation in chapter on cross-cutting issues and its subsection on the public interest. In addition, the WTO’s Trans- gender. In its chapter on international trade as an parency Mechanism for RTAs and the Regional engine for development, the Addis Agenda: Trade Agreements Information System provides information on existing RTAs, which may be used Affirms that trade can help promote produc- for assessing whether the contents of a trade agree- tive employment and decent work, women’s ment constrain domestic policies and regulation in empowerment and food security, a reduction in the public interest. inequality, and can contribute to achieving the

5 See Report of the Secretary General, Implementation of the Vienna Programme of Action for Landlocked Develop- ing Countries for the Decade 2014-2024, A/70/305. 6 The IIA Navigator, see http://investmentpolicyhub. unctad. org/IIA, offers the world’s most comprehensive collection of IIAs. 7 The ISDS Navigator, see http://investmentpolicyhub. unctad. org/ISDS, provides information on close to 700 known ISDS cases. 100 Addis Ababa Action Agenda — Monitoring commitments and actions

SDGs under the condition that appropriate sup- tant elements in this regard have been suggested porting policies, infrastructure and an educated by the UNCTAD Secretary-General in his report work force are in place (79) (UNCTAD (XIV)/1 Rev.1) to the Conference, Recognizes women’s critical role as produc- which elaborates the actions that need to be taken ers and traders, and commits to address their at the national, regional and international levels to specific challenges in order to facilitate women’s ensure that trade and related issues make a strong equal and active participation in domestic, commitment to achievement of the 2030 Agenda. regional and international trade (90) 4 .6 . United Nations Commission on The Addis Agenda is unique in that it links International Trade Law issues in the global partnership for sustainable development, including trade, to gender issues. Out- The Addis Agenda recognizes international trade as comes in the gender and trade area can be assessed an engine for inclusive economic growth and pov- by having gender disaggregated trade data, such as erty reduction and that it contributes to the pro- the female share of seasonal and permanent jobs in motion of sustainable development. The Agenda export-oriented sectors, gender wage gaps, female specifically: share of high-skilled and managerial jobs in export- Endorses the efforts and initiatives of the United oriented sectors, and work conditions and social Nations Commission on International Trade benefits for women in the export sector relative to Law as the core legal body within the United the domestic sector. Specific policies to address the Nations system in the field of international challenges women face to equal and active participa- trade law (89) tion in trade can be presented in case studies such as those conducted by UNCTAD. Disaggregated firm Achievement of these targets as they relate to level information that would allow reconciling trade the United Nations Commission on International information with gender economic empowerment Trade Law (UNCITRAL) can be monitored through assessments could be derived, among others, from data that is already collected on: Treaty actions and the World Bank Group Enterprise survey database, enactments of UNCITRAL texts; relevant court ITC Business surveys on non-tariff measures. and arbitral decisions applying and interpreting 4 .5 . Strengthen the important role of the UNCITRAL texts that are reported and publicized United Nations Conference on Trade and through the Case Law on UNCITRAL texts system Development (CLOUT); participation in UNCITRAL sessions by States, intergovernmental organizations (IGOs) In relation to policies and actions to realizing the and nongovernmental organizations (NGOs); coop- potential of trade for inclusive growth and sustain- eration and coordination activities involving UNCI- able development, the Addis Agenda reiterates the TRAL participation; technical assistance activities, important role that has been played by UNCTAD teaching, training and capacity building conducted in this area. In this respect, the Addis Agenda: by UNCITRAL. Data collected can be disaggregated, as appropriate, by reference to factors such as Commits to strengthen the important role of type of activity, topic, gender, country, region, and UNCTAD as the focal point within the United level of development. Nations system for the integrated treatment of trade and development and interrelated issues 4 7. . Illegal wildlife trade/fishing/logging/ in the areas of finance, technology, investment mining and sustainable development (88) Legal and sustainable trade in natural resources can UNCTAD’s 194 member States will meet at be beneficial for economic growth, conservation of the Fourteenth session of UNCTAD, in July 2016 natural resources and livelihoods, while failure to in Nairobi, Kenya. The agreed theme of the Confer- regulate it can undermine the livelihoods of people, ence, “From Decisions to Actions” will address how species, ecosystems, and businesses alike. However, specifically to meet this commitment. Some impor- the Addis Agenda recognizes the challenge many International trade as an engine for development 101

countries face in combating illegal wildlife trade, the CITES trade database. Second, data on illegal illegal unreported and unregulated (IUU) fishing, trade (seizures) is collected by both CITES and the illegal logging, and illegal mining. World Customs Organization, which is compiled In its chapter on International trade as an by the United Nations Office on Drugs and Crime engine for development, the Addis Agenda: (UNODC) in a global database. At present, the CITES trade database and the UNODC seizures Resolves to enhance global support for efforts to database contain over 15 million transactions (grow- combat poaching and trafficking of protected ing at about 1 million per year) and 125,000 seizure species, trafficking in hazardous waste, and incidents, respectively. trafficking in minerals, including by strengthen- The Donor Roundtable on Wildlife and Forest ing both national regulation and international Crime, established in 2015 and comprised of CITES, cooperation, and increasing the capacity of local the United Nations Development Programme communities to pursue sustainable livelihood (UNDP), UNEP, UNODC, and the World Bank opportunities (92, MoI 15. c) Group and held at UNDP, is currently undertaking Commits to enhance capacity for monitoring, a study to analyse multilateral, bilateral and other control and surveillance of fishing vessels to international funds used to finance efforts directly effectively prevent, deter and eliminate illegal, addressing the illegal wildlife trade crisis. The results unreported and unregulated fishing (92) and recommendations of this study will provide a Over the past years, we have seen an increased baseline and indicators with which international recognition on the economic, social and envi- coordination and scaling up of global support ronmental impacts of illicit trafficking in wildlife, actions may be more effectively considered. and on the need to tackle both the supply of, and CITES has developed a handbook that assists demand for illicit wildlife products. By virtue of it parties in making a rapid assessment of the effects of being illicit, conducting a quantitative assessment the application of CITES-listings on livelihoods in of the impact caused by the illegal taking and traf- poor rural communities, and guidelines to mitigat- ficking of natural resources remains difficult. The ing the negative effects while enhancing the poten- information on the market dynamics of trafficking tial benefits of legal and sustainable trade in wildlife. in these products, as well as their broader environ- The continuing work by CITES parties in utilizing mental and socio-economic implications is largely these tools and developing good practice case studies speculative. The primary challenge on monitoring is may lead to a discussion on the possible indicators therefore in keeping the evidence base under review, for monitoring the impact of wildlife trade on liveli- through strengthening available information and hoods in the future. filling the gaps in data and knowledge. The trend, The second part of the Addis Agenda will however, is considered to be increasing at such a rate require measuring the degree of capacity for imple- that trafficking in wildlife may become one of the menting the FAO Agreement on Port State Measures most lucrative kinds of transnational crimes, similar to Prevent, Deter and Eliminate Illegal, Unreported to trafficking in narcotics, humans and arms. and Unregulated Fishing. FAO is currently under- The SDG indicator can be used as an input in taking a series of regional workshops to raise aware- the Addis Agenda follow-up process is 15.c.1/15.7.1 ness about the Agreement, as well as to facilitate Proportion of traded wildlife that was poached or illic- knowledge and skills development for port manag- itly trafficked. The baseline data on legal trade is ers and inspectors in strengthening good govern- already collected by the 182 Parties of the Conven- ance, harmonization and coordination of port State tion on International Trade in Endangered Species measures, and exchange of national experience in of Wild Fauna and Flora (CITES) and submitted combating IUU fishing. annually, which is compiled and maintained in

Chapter II.E Debt and debt sustainability

1. Introduction (HIPCs) by the support of the international com- Borrowing, both by governments and private enti- munity. Yet some developing countries are currently ties, is an important tool for financing investment in debt distress, and several countries have external critical to achieving sustainable development, as well debt exposures that leave them vulnerable to debt as for covering short-term imbalances between rev- difficulties from external shocks, such as falls in enues and expenditures. Government borrowing can commodity prices or natural disasters. In addition, also allow fiscal policy to play a countercyclical role some low-income countries (LICs) are now access- over economic cycles. However, high debt burdens ing international capital markets, introducing new can impede growth and sustainable development. financing opportunities along with new risks, such Debt has to be well managed in both public and as exposure to volatile international capital flows. At private spheres. the same time, domestic debt issuance has increased Developing countries made considerable pro- in many developing countries (see chapter II.B), cre- gress in reducing their external debt in the early ating new opportunities for financing while reduc- part of the century (see figure 5), assisted especially ing currency mismatches for domestic borrowers. in the case of the heavily indebted poor countries Nonetheless, domestic debt overhang can be costly

Figure 5 External debt of developing countries, 2000 – 2014 (Percentage of GDP)

70 Low-income countries

60 Lower-middle-income countries Upper-middle-income 50 countries All low- and middle- 40 income countries

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: United Nations, World Economic Situation and Prospect, 2016, based on data of the International Monetary Fund. Note: Debt includes US dollar value of external public and publicly guaranteed and private non-guaranteed long-term debt, use of IMF credit, short-term debt and arrears. 104 Addis Ababa Action Agenda — Monitoring commitments and actions

and, like other forms of debt, needs to be managed. Commit to support the maintenance of debt Private debt in emerging market countries has also sustainability in those countries that have grown substantially since the financial crisis, posing received debt relief and achieved sustainable systemic risks related to currency and maturity mis- debt levels (94) matches. Indeed, there is a risk that some liabilities Invite the IMF and World Bank to strengthen could get shifted to the public balance sheet in the the analytical tools for assessing debt sustain- event of large-scale defaults. ability in an open and inclusive process with the Managing sovereign debt and addressing debt United Nations and other stakeholders (95) crises when they do occur has been on the agenda of Financing for Development (FfD) since the Monter- To evaluate countries’ debt sustainability, it is rey Consensus, and is addressed in section II.E of the necessary to monitor debt trends along with emerg- Addis Agenda and in this chapter in the Task Force ing domestic and external vulnerabilities and sys- report. Mitigating the danger of private debt build- temic risks that threaten debt sustainability. The ups is also addressed in the discussion of financial SDG means of implementation indicator 17.4.1 regulation in chapter II.F on systemic issues, while (debt service as a proportion of exports of goods and ser- promoting long-term finance and the development vices) can be used as an input for this. However, this of local capital markets is discussed in chapter II.B needs to be supplemented by additional data. Indeed, on the private sector. as noted in the 2015 Millenium Development Goal (MDG) Gap Task Force Report “statistical indica- 2. Debt crisis prevention tors sometimes fall prey to anomalies that require The Addis Agenda recognizes the need to assist explanation so as not to mislead. … External debt developing countries in attaining long-term debt servicing as a share of export revenues presents some sustainability, including through fostering appro- telling examples. For instance, a spike was recorded priate debt financing, debt relief, debt restructuring in the debt-servicing ratio of low-income countries and supporting sound debt management, as appro- in 2006. This reflected a standard practice in bal- priate. Strengthening the monitoring and prudent ance-of-payments accounting in which debt that was management of assets and liabilities is an important being written down following debt relief was shown element of comprehensive national financing strate- in the accounts as a principal repayment outflow off- gies and is critical to reducing vulnerabilities. The set by a grant inflow. … This did not mean, however, Addis Agenda emphasizes that debtors and creditors that the debt was being paid down per se.” 1 have to work together to prevent unsustainable debt The Task Force will thus look at a basket of situations. While it notes that maintaining sustain- indicators and data, which can include but are not able debt levels is the responsibility of the borrowing limited to: total external debt in percent of gross countries, it also acknowledges that lenders have a domestic product (GDP) and by creditor as a share responsibility to lend in a way that does not under- of total (multilateral, bilateral and commercial); mine a country’s debt sustainability. total public debt, total private debt, private exter- 2 1. . Maintaining debt sustainability nal debt and total external debt in percent of GDP; and improving debt sustainability the share of short-term debt in total external debt, assessments by original maturity; gross fiscal financing needs, in percent of GDP (i.e., the sum of the fiscal defi- In the Addis Agenda, countries agree to support cit and the principal of public debt falling due); efforts to maintain debt sustainability, as well as to and external financing requirements, in percent of strengthen analytical tools for assessment. Specifi- GDP to capture both the current account deficit cally, Member States: and principal repayments of external debt falling due. The International Monetary Fund (IMF) also

1 http://www.un.org/en/development/desa/policy/mdg_gap/mdg_gap2015/2015GAP_FULLREPORT_EN.pdf, page 4. Debt and debt sustainability 105 publishes risk ratings for external debt distress (for The DSA for market-access countries is used LICs, see below), foreign reserve adequacy metrics, to assess debt vulnerabilities for countries that have and other vulnerability indicators discussed in durable access to external market financing. In rec- chapter II.F on systemic issues. The importance of ognition that vulnerabilities to debt sustainability in any individual indicator depends on country cir- these countries were not adequately identified in the cumstances. In addition, debt sustainability analy- years leading up to the 2008-09 financial crisis, the ses that stress test debt sustainability under a range IMF revised the DSA in 2011 and implemented it in of different macroeconomic and financial shocks 2013. The reform introduced greater consideration of and alternative scenarios provide a more thorough the reality of baseline macroeconomic assumptions assessment of risks. and uncertainty around those assumptions in the In this regard, the IMF has developed and assessment of debt sustainability, liquidity risks cap- periodically reviews and revises a debt sustainabil- tured by gross financing needs, and vulnerabilities ity analysis (DSA) for market access countries, and associated with the debt profile. the IMF and World Bank Group have together The United Nations Conference on Trade and developed a methodology, which is also periodically Development (UNCTAD) Global Policy Model reviewed and revised, for assessing LICs’ debt sus- provides a macroeconomic analytical framework, tainability. The IMF and World Bank Group (the with an integrated macro-financial model for the latter in the case of the LICs Debt Sustainability world economy, which can provide additional sce- Framework, DSF) also conduct outreach with stake- narios for analysis of debt sustainability. holders to facilitate better understanding of these The IMF and World Bank Group staff plan a frameworks, as well as provide training to country review of their joint LIC DSF in 2016/2017, to be authorities using these frameworks. conducted in consultation with key relevant stake- The LIC DSF incorporates a standardized, holders, including civil society. Another factor that forward-looking analysis of debt and debt service could be reviewed is the World Bank Group’s Coun- dynamics under a baseline and alternative scenarios, try Policy and Institutional Assessment (CPIA), and in the face of plausible shocks. The analysis which is used in setting the thresholds for LICs. The produces a risk rating for external debt distress (low, Addis Agenda invited the IMF and the World Bank moderate, high or already in debt distress) for each Group to make those reviews open, inclusive and country by seeing whether the projected evolution involve the United Nations and other stakeholders. under standard scenarios or shocks of a set of debt The Task Force can report on these experiences. It burden indicators (debt stock or debt service rela- thus could, along with the broader FfD follow-up tive to measures of repayment capacity) crosses one process, be a conduit to bring additional voices and or more of the empirically estimated thresholds for perspectives into the discussion. those indicators. Some countries conduct their own 2 .2 . Improving public debt management debt sustainability assessments, which can be drawn on by the Task Force where they exist. Many Governments seek to further strengthen their Support in maintenance of debt sustainability capacity to appropriately manage public debt and in LICs needs to strike a balance between maintain- ensure borrowing in the interest of maintaining ing sustainable debt levels and the need to meet the sustainable debt levels. The Monterrey Consensus sustainable development goals (SDGs) and enhance recognized that technical assistance for external debt growth through critical investments, such as in management and debt tracking can play an impor- infrastructure. Institutional frameworks also need tant role and should be strengthened. Similarly, in to accommodate the availability of a wider range of the Addis Agenda, Governments: external financing opportunities for LICs, as well as limits on concessional financing. Work to prevent Welcome efforts to strengthen analytical tools for the re-occurrence of debt distress should also seek to … prudent public debt management (95) capture risks from contingent liabilities and natural Encourage international institutions to con- disasters. tinue to provide assistance to debtor countries 106 Addis Ababa Action Agenda — Monitoring commitments and actions

to enhance debt management capacity, manage as well as debt data recording, operations, reporting risks, and analyse trade-offs between different and statistics. The report will include a description sources of financing, as well as to help to cush- of the different technical assistance activities of the ion against external shocks and ensure steady relevant international organizations, for example and stable access to public financing (95) it could include the number of training missions, including by the World Bank, IMF, UNCTAD, Several different tools are available to assist regional institutions, the Commonwealth Secretar- countries in assessing and improving their debt iat, United Nations Department of Economic and management functions, many of which are being Social Affairs (DESA), and other sources. It should improved in response to changing needs. They be possible to track overall technical assistance in include diagnostic tools such as the DSF (see above), debt management using the number of countries the Debt Management and Performance Assess- that are receiving debt management capacity support ment (DeMPA), the Medium Term Debt Strategy and the financial resources allocated to this purpose tool and recording and reporting systems such as by donors and other stakeholders. the Commonwealth Secretariat CS_DRMS and 2 .3 . Towards responsible sovereign UNCTAD’s Debt Management and Financial borrowing and lending Analysis System (DMFAS). The fast-paced evolution of financial markets and developing countries’ The Monterrey Consensus stated that “debtors and use of increasingly diverse financing instruments creditors must share the responsibility for prevent- and borrowing sources warrant continuous efforts ing and resolving unsustainable debt situations.” As to strengthen their debt management capacity. By noted above, the Addis Agenda reaffirms that both the same token, the tools themselves will need to be sovereign borrowers and lenders must be responsible. kept under review and adapted, while the need for In this regard, in the Addis Agenda, Governments: new tools may also be recognized over time. Reiterate that debtors and creditors must work Moreover, in the broadest sense, debt manage- together to prevent unsustainable debt situ- ment should be seen as part and parcel of public ations (97) financial management. The Public Expenditure and Commit to work towards a global consensus on Financial Assessment (PEFA) framework measures guidelines for debtor and creditor responsibili- performance of a country’s public financial manage- ties in borrowing by and lending to sovereigns, ment system using quantitative indicators, as dis- building on existing initiatives (97) cussed in chapter II.A on domestic public resources. Assessments on indicator 13 of the PEFA look at There has been considerable emphasis in recent several dimensions of debt management including years on the importance of both borrowers and lend- recording and reporting of debt and guarantees, ers taking responsibility for their actions, and for approval of debt and guarantees, and debt man- their role in ensuring debt sustainability. There have agement strategy. Country Policy and Institutional been several initiatives on this. The Addis Agenda Assessment (CPIA) scores, DeMPA assessments, takes note of the UNCTAD Principles on Respon- and reports from technical assistance providers such sible Sovereign Lending and Borrowing, recognizes as UNCTAD’s DMFAS Programme can also be the applicable requirements of the IMF debt limits complementary. IMF work on its Fiscal Transpar- policy and the World Bank Group’s non-concessional ency Code (see chapter II.A is also germane. The borrowing policy, and also notes that the OECD Task Force will be able to report on progress in all Development Assistance Committee has introduced these areas. new safeguards in its statistical system to enhance Reporting on the efforts of international the debt sustainability of recipient countries. organisations will provide an overview of the techni- The UNCTAD Principles specify a set of 15 cal assistance and capacity building provided. It will principles and best practices for lenders as well as cover assistance in debt management, including diag- borrowers, created after a consultative process. The nosis, debt strategy and debt sustainability analysis, principles do not create new legal rights or obliga- Debt and debt sustainability 107

tions for endorsing parties, but provide a normative and Malaria since 2007. 2 An example of a debt-for- approach to defining relevant guidelines and their nature swap is the one agreed between Seychelles, implications for borrower and lender behaviours. three Member States of the Paris Club (Belgium, UNCTAD’s DMFAS will start collecting data on France and Italy) and the Nature Conservancy in the use and implementation of some of these Princi- 2015. 3 Such swaps do not necessarily create addi- ples, across its coverage of developing countries from tional fiscal space, as the swap requires that the gov- 2017. UNCTAD also is currently providing capac- ernment spend on the promoted social or environ- ity-building assistance to five LDCs on implement- mental project at least some of the funds that would ing the Principles to identify gaps in the regulatory have been used for debt servicing. Nevertheless, the and institutional frameworks in these countries and additional public resources can be a highly valuable suggest suitable policy reform options. use of public monies and can support sustainable The Task Force can report on implementa- development and implementation of the SDGs. tion and development of the initiatives in this area, State-contingent financial instruments are including those mentioned above, building on the designed to provide automatic, market-based, pro- regular in-house reviews by the relevant international tection against pre-defined shocks. This can insure organizations. Indeed, understanding the impact of sovereigns against adverse shocks, often by reduc- these initiatives, including how they impact behav- ing debt service requirements during difficult eco- iour, can provide important case studies to help nomic times. Such instruments would also reduce shape the work towards a consensus on new guide- the likelihood of debt restructurings and the need lines. The Task Force will report on steps toward a for pro-cyclical fiscal policy. Some of these instru- global consensus on such guidelines for lenders and ments could even attenuate overspending during borrowers, and can also help to support this effort. a boom by limiting a sovereigns’ ability to spend 2 4. . Innovative instruments for managing windfall income in good times. Examples of such debt burdens instruments include GDP-linked securities, where principal and interest payments are linked to eco- Outside Islamic finance, debt repayment obligations nomic growth rates, and catastrophe or pandemic are fixed other than through a debt restructuring. bonds, where some form of debt relief is provided in Two kinds of innovations have broken with this the event of a pre-defined disaster. A third example model. One is a swap of a public debt obligation for would be ‘sovereign CoCos’ (contingent convertible specified additional public social or environmental bonds), which envisage a maturity extension under expenditure. The other is ‘state-contingent finan- pre-defined triggers. Future monitoring reports can cial instruments’, which include contractual provi- summarize analytical work by experts on these pro- sions altering the debtor’s obligations contingent posals, and report on country experiments with new on pre-defined events or data outturns. Thus, the instruments. The Task Force will also report more Addis Agenda: broadly on public sector finance, including new instruments, in other areas of this report (includ- Encourages the study of new financial instru- ing chapter I on cross cutting issues, chapter II.A on ments for developing countries …noting experi- domestic public finance, and chapter II.C on inter- ences of debt-to-health and debt-to-nature national cooperation.) swaps (102) 2 .5 . Improving debt data and reporting Among the first type of innovation, debt-to- health swaps have been launched under the UN- Comprehensive debt statistics are crucial for both backed Global Fund to Fight AIDS, Tuberculosis debt crisis prevention and resolution. The Addis

2 See http://www.theglobalfund.org/documents/replenishment/2007b/Replenishment_2007BerlinD2H_FAQ_en/. 3 A special Seychelles trust will purchase $30 million of Seychelles debt obligations at a discount and devote the scheduled debt servicing payments to marine conservation and climate adaptation (see http://www.nature.org/ ourinitiatives/regions/africa/wherewework/seychelles.xml). 108 Addis Ababa Action Agenda — Monitoring commitments and actions

Agenda recalls the need to strengthen information- (the BIS, Commonwealth Secretariat, European sharing and transparency in debt sustainability Central Bank, Eurostat, IMF, OECD, Paris Club, assessments. Specifically, the Addis Agenda: UNCTAD and the World Bank Group). Presently, there is no centralised database of Encourages Governments to improve transpar- instances of sovereign debt crises and restructuring, ency in debt management, and strengthen although there have been a number of efforts to bring information-sharing to ensure that debt sustain- together historical data sets on debt restructuring. 4 ability assessments are based on comprehensive, A comprehensive database could help draw lessons objective and reliable data (97) from past debt restructurings to improve approaches Invites relevant institutions to consider the in the future. Information on litigation and holdouts creation of a central data registry including by creditors in a restructuring would also aid analy- information on debt restructurings (96) sis of good faith by creditors in debt restructurings The World Bank Group, IMF, the Organiza- and enable identification of weaknesses in the archi- tion for Economic Cooperation and Development tecture for sovereign debt restructuring. The Task (OECD), the Bank for International Settlements Force will report on the development of any such (BIS) and UNCTAD have worked with governments databases, including by international organizations. and central banks to help produce standardized data on different components of external debt. Technical 3. Debt crisis resolution assistance to developing countries to improve their The Addis Agenda makes clear that in addition to recording and managing of government debt data preventing debt crises, debtors and creditors must has long been provided by the World Bank, UNC- work together to resolve unsustainable debt situ- TAD and the Commonwealth Secretariat, as well as ations when they do occur. While it recognises by private entities. that important improvements have been made in For the benefit of international economic enhancing the process for cooperative restructuring monitoring, the World Bank collects, standardizes of sovereign obligations, it also recognizes that there and makes publicly available external debt data of is scope to improve the arrangements for coordina- its developing country members through its Debtor tion between public and private sectors and between Reporting System. The OECD collects data from its debtors and creditors, to minimize moral hazard members for standardized reporting from the public and to facilitate fair burden-sharing and an orderly, creditor side in its Creditor Reporting System. The timely, efficient and fair restructuring that respects BIS collects data on bank and non-bank financial the principles of shared responsibility. It notes that institution assets (e.g., loans) vis-à-vis banks and a workout from a sovereign debt crisis should aim non-banks in other countries, as well as data on to restore public debt sustainability, while preserv- liabilities (e.g., deposits) and their sources in other ing access to financing resources under favourable countries. Bloomberg also publishes data on public conditions, and acknowledges that successful debt bond issuance, as well as secondary market prices, as restructurings enhance the ability of countries to do private banks, such as J.P. Morgan. There is, how- achieve sustainable development and the SDGs. ever, no database on bond owners, who are generally institutional investors, in part because ownership 3 1. . Actions by official creditors frequently changes hands on the secondary market. In addition, while improving, data on domestic bond Since the Monterrey Consensus, Member States of markets is generally not robust (see chapter II.B). To the United Nations have welcomed initiatives to further develop the methodology for collecting debt reduce debt overhangs when countries are under statistics and to strengthen debt management capac- debt distress, especially as regards LDCs, whose ity of governments through training, nine institu- main creditors are in the public sector. In this regard, tions formed the Task Force on Finance Statistics in the Addis Agenda, Governments:

4 http://www.bankofcanada.ca/wp-content/uploads/2014/02/tr101.pdf Debt and debt sustainability 109

Recognize the need to assist developing coun- In addition, the international community tries in attaining long-term debt sustainability has certain international support measures to assist through coordinated policies aimed at fostering vulnerable countries in handling unexpected emer- debt financing, debt relief, debt restructuring gencies, such as natural disasters. There are various and sound debt management (94, MoI 17.4) instances in which debt relief or special financing to Commit to support the remaining HIPC- assist in staying current on debt servicing was offered eligible countries that are working to complete to countries hurt by such shocks. For example, begin- the HIPC process (94); Commit to explore, on ning in 1998, the Paris Club has taken joint action a case-by-case basis, initiatives to support non- to unilaterally offer to defer scheduled repayments in HIPC countries with sound economic policies to cases of natural disasters, internal political conflicts enable them to address the issue of debt sustain- or “rocketing” international food and fuel prices. 5 ability (94) Also, following the devastating earthquake in Haiti Aims to restore public debt sustainability, while in 2010, the IMF established a Post-Catastrophe preserving access to financing resources under Debt Relief (PCDR) Trust that allows the IMF to favourable conditions (98) join international debt relief efforts for very poor Encourages consideration of further debt relief countries impacted by the most catastrophic natural steps [for severe natural disasters and social or disasters. Following the 2014 Ebola outbreak in West economic shocks that undermine a country’s Africa, in 2015 the IMF transformed the PCDR into debt sustainability], where appropriate, and/ the Catastrophe Containment and Relief (CCR) or other measures for countries affected in this Trust to provide grants for debt relief for very poor regard, as feasible (102) countries in the context of public health disasters Implementation of the HIPC Initiative and (such as fast-spreading epidemics of infectious dis- the Multilateral Debt Relief Initiative is nearly com- eases) as well. In addition, the IMF has expanded its plete, with 36 countries having reached the “com- emergency lending toolkit through the Rapid Credit pletion point” under the HIPC Initiative. In April Facility (RCF) and Rapid Financing Instrument 2015, Chad became the latest country to reach the (RFI). As indicators to mitigate the impact of exter- completion point. Three pre-decision-point coun- nal shocks on debt sustainability, the IMF proposes tries — Eritrea, Somalia, and Sudan — have yet to to evaluate annually and cumulatively post-2015 the start the process of qualifying for debt relief under number of times the CCR, RCF and RFI are tapped. the HIPC Initiative. While creditor participation in Similar reporting can cover emergency debt relief the initiatives has been strong among the multilat- provided by other international institutions. As per eral and Paris Club creditors, accounting for most the Addis Agenda, the adequacy of the full package of the debt targeted for reduction, participation of of such steps, including the use of public and private some non-Paris Club official bilateral and private finance with contingent repayment obligations (see commercial creditors continue to be a challenge. section 2.4), could be monitored. Efforts to reduce debt burdens in least developed countries and other vulnerable countries will 3 .2 . Additional mechanisms, including be reported by the Task Force. Monitoring can involving private creditors include levels of concessional and non-concessional official lending to countries that have received debt As more developing countries tap the international relief and/or are identified as at high risk of debt dis- financial markets and more countries draw upon tress In addition, to monitor incidences of problems alternative sources for sovereign financing, the num- in servicing debt, any pre- or post-default debt oper- ber of countries for which a more comprehensive ations such as debt restructurings, debt swaps and approach to debt crisis workouts is needed may grow, debt buy-backs involving official or private creditors especially in a challenging global environment. The will be reported. Monterrey Consensus welcomed consideration of an

5 See http://www.clubdeparis.org/en/communications/page/exceptional-treatments-in-case-of-crisis. 110 Addis Ababa Action Agenda — Monitoring commitments and actions international debt workout mechanism. Since then, tual provisions, and informing the Executive Board international agreements have focused on market- and the public by providing periodic progress reports based solutions, such as contractual clauses in bond with respect to the status of sovereign issuers’ inclu- contracts. The Addis Agenda: sion of the enhanced contractual provisions. The Task Force can follow-up on IMF progress reports in Affirms the importance of debt restructurings this area, the first of which was issued in September being timely, orderly, effective, fair and negoti- 2015 and showed that a large majority of new issu- ated in good faith. (98) ances since October 2014 included enhanced CACs. Welcomes reforms to pari passu and collective In addition, in December 2015, the IMF’s action clauses proposed by International Capi- policy on non-toleration of arrears to official bilat- tal Market Association (100) eral creditors was amended to allow the IMF to Encourages countries, particularly those issu- lend in the presence of arrears to official bilateral ing bonds under foreign law, to take further creditors under carefully circumscribed circum- actions to include those clauses in all their bond stances. The reform is designed to strengthen issuance (100) incentives for collective action when official sector Recognizes the “Paris Forum” initiative by support is required, and prevent non-contributing Paris Club (99) official bilateral creditors from impeding an IMF- Takes note of ongoing discussion of debt issues at supported programme. Furthermore, in January the IMF and the United Nations (99) 2016, the IMF approved an important reform to The IMF Executive Board in October 2014 the institution’s policy on lending to countries that endorsed key features of enhanced collective action request large-scale financing. This reform will allow clauses (CACs) and the pari passu clause, aimed IMF lending decisions to be better calibrated to at reducing vulnerabilities to holdout creditors members’ debt vulnerabilities, while avoiding that could delay or block an agreement on a debt unnecessary costs for the member, its creditors, and restructuring with other cooperating creditors. The the overall system. It also includes the removal of proposals were consistent with a number of features the systemic exemption to limits on allowed bor- of the clauses that had recently been adopted by the rowing from the Fund, which had been introduced International Capital Market Association as pro- in 2010 in the wake of the global financial crisis. posed standard features in new international sov- In the context of a review of its lending-into- ereign bond contracts. While the introduction of a arrears policy for private creditors, the IMF is study- new generation of CACs might facilitate future debt ing issues related to debtor-creditor engagement in restructurings by limiting opportunities for creditor sovereign debt restructurings in the light of expe- holdouts, the existing stock of outstanding bonds rience with such engagement since 2002 (both in without enhanced CACs, valued at around US$ 860 pre- and post-default cases) with a view to assess- billion, leaves risks for disorderly debt workouts in ing the adequacy of existing modalities in promot- the coming years. Tracking the spread of the new ing efficient resolution of sovereign debt crises. The clauses (and further refinements of them) can, to an Task Force can report on policy proposals made in extent, inform the international community of the this regard. degree to which risks remain to smooth debt work- The Paris Club together with the Group of 20 outs, at least as concerns debts owed to private credi- continues their series of consultations in the annual tors. In the context of its October 2014 endorsement, “Paris Forums”, which in November 2015 brought the IMF Executive Board also called on IMF staff to together more than 50 sovereign creditors and debt- follow up by collecting detailed information on the ors and international organizations to express their CACs and pari passu provisions in the stock of exist- positions on ways to improve the current framework ing international sovereign bonds, engaging with the of coordinated and orderly sovereign debt restructur- membership on the merits of the enhanced contrac- ing processes. 6 In recent conferences organized by

6 See http://www.clubdeparis.org/en/communications/press-release/paris-forum-2015-20-11-2015. Debt and debt sustainability 111

academics, 7 UNCTAD, DESA, multilateral devel- This policy debate has in part been reignited by opment banks, such as the Inter-American Devel- the success of litigating creditors in capturing signifi- opment Bank, senior legal scholars and economists, cantly larger repayments than what had previously practitioners and officials informally exchanged been accepted by the creditors that cooperated in views on sovereign debt workout reforms. These a country’s debt restructuring. National legislative issues have also been raised by UN GA resolution actions have been taken in certain creditor coun- A/RES/69/319 that defines nine “Basic Principles tries to limit disruptive activities by non-cooperative on Sovereign Debt Restructuring Processes” and in creditors. The relevant commitments in the Addis the UNCTAD Roadmap and Guide to Sovereign Agenda build on the welcoming “of recent steps Debt Workouts. taken to prevent aggressive litigation against HIPC- The Task Force will monitor and report on any eligible countries” in the Doha declaration (60), and follow-up efforts to these and other events. The UN extends the commitment to promote measures to General Assembly agreed by consensus to encour- limit aggressive litigation by non-cooperative minor- age the Forum on FfD Follow-up to consider how ity bondholders beyond HIPC-eligible countries. to improve the process of sovereign debt restructur- The Task Force can provide a summary over- ing (A/RES/70/190). If requested by Member States, view of past activities of non-cooperative minority the agencies involved in the Task Force will be in bondholders in sovereign bond markets and their a position to contribute their expertise in support impact on sovereign debt restructurings, together of such deliberations, owing in particular to their with an assessment of existing arguments for and international mandates. against these activities. It can also provide a survey 3 .3 . Legislative efforts to address non- of existing national legislative and policy initiatives cooperative minority creditors to prevent and/or minimize the activities of such creditors and assess, where possible, their effective- While the new CACs aim to reduce the ability of ness and limitations up to date. It can also identify non-cooperating bondholders to undermine a pend- ways in which existing national legislative actions in ing and otherwise agreed voluntary restructuring some countries can be adapted to other countries. It of sovereign debt, the success of ex post litigation can also report on institutional mechanisms through has highlighted a gap in the architecture for debt which LDCs have accessed advisory legal services crisis resolution. The Addis Agenda expressed con- and the provision of donor country financial sup- cern about the ability of such creditors to disrupt port to LDCs facing such litigation, including for the willingness of the large majority of bondholders legal assistance. to accept a sovereign restructuring, and noted legis- Subsequent Task Force reports can also draw lative steps taken by some governments to prevent on any advances related to data on litigation by cred- such disruptive activities. Thus, the Addis Agenda: itors after debt restructurings to report on progress in regard to relevant national legislation and legisla- Encourages all Governments to take (legislative) tive projects. Case/country studies can highlight spe- action (on non-cooperative minority bond hold- cific aspects and impacts of litigation and legislation. ers), as appropriate (100) While this section will focus primarily on national Welcomes provision of financial support for legislative initiatives, it can also briefly take account legal assistance to LDCs and commit to boost of national policy initiatives such as improvements international support for advisory legal ser- in the contractual features of sovereign bonds and vices (100) the use of new financial instruments, where these Commits to explore enhanced international directly affect the activities of non-cooperative credi- monitoring of litigation by creditors after debt tors. In addition, the General Assembly agreed to restructuring (100) focus continued international attention on this issue

7 See http://wwwf.imperial.ac.uk/business-school/sovereign-debt-restructuring-conference/ and http://www.law. georgetown.edu/academics/centers-institutes/iiel/debtcon/index.cfm 112 Addis Ababa Action Agenda — Monitoring commitments and actions

by holding a special event in its Second Committee domestic capital market development in chapter II.B in 2016 on lessons learned from the legislative steps on private business and finance. taken by certain countries and other actions to limit With the increased volume of domestic sover- the vulnerability of sovereigns to holdout creditors eign debt, it becomes increasingly important to spec- (A/RES/70/190). This event will inform the work of ify how the bonds will be treated in the event of dif- the Task Force. ficulty in maintaining normal payments. Although 3 4. . Strengthening national legislation to legal frameworks will vary by country, Task Force address domestic sovereign debt reports could survey core features of national legislative frameworks in both developing and devel- There has been an increasing issuance of sovereign oped countries. It could report on increased issu- bonds in domestic currency under national laws. ance of sovereign bonds in domestic currency under The Addis Agenda: national legislation, and identify both strengths and common shortcomings and corresponding areas of Notes the possibility of countries voluntarily and guidelines for improvements. A certain amount strengthening domestic legislation to reflect of analytical work in this regard has been completed guiding principles for effective, timely, orderly in the UNCTAD Roadmap and Guide to Sovereign and fair resolution of sovereign debt crises (101) Debt Workout Mechanisms, 8 as well as in work by Developing countries increasingly find they the Financing for Development Office at DESA. are able to issue sovereign bonds in domestic cur- The Task Force could also provide progress reports rency and under domestic law to domestic and for- on national legislative initiatives to govern the issu- eign investors, helping to attenuate currency mis- ance and restructuring of domestic sovereign bonds matches. Monitoring of the size and data on local on a case study basis. bond markets is further elaborated in the section on

8 See http://unctad.org/en/PublicationsLibrary/gdsddf2015misc1_en.pdf. Chapter II.F Addressing systemic issues

1. Introduction Addis Agenda, developing countries are still exposed Chapter II.F of the Addis Agenda includes com- to the risk of spillover effects. mitments and action items related to institutional The Inter-agency Task Force intends to moni- structures and governance of the international tor all relevant quantitative and qualitative indica- financial architecture, building on the Monterrey tors of progress. Macroeconomic data is prevalent Consensus. The Addis Agenda reflects Monterrey’s and already well monitored. Careful monitoring is emphasis on the importance of coherence and con- also already in progress for the implementation of sistency of the international financial, monetary and financial regulatory reforms. However, the challenge trading systems, but it goes further to integrate the remains that data on progress in implementing such three dimensions of sustainable development into reforms are sometimes only available in relation to the coherence agenda, including environmental and the Group of 20 (G20) members and a select few social issues, such as the international movement of additional countries with large financial centres. people, alongside economic issues. In addition, a key issue in the Addis Agenda is the In the Addis Agenda, Governments reiterated impact of regulations on incentives for investment in their commitment from Monterrey to further gov- countries most in need and areas important for sus- ernance reform in international economic decision tainable development, which is difficult to monitor. making. In an important development in this regard, Monitoring progress in implementing this section the International Monetary Fund (IMF) quota and of the Addis Agenda will largely take the form of governance reforms, agreed to in 2010, became effec- narratives on policy development and change in that tive in January 2016, paving the way for continued many of the actions discussed in this section do not efforts to strengthen the voice and participation of lend themselves to monitoring through quantitative developing countries in global governance. indicators. The Monterrey Consensus further recognized Migration issues are covered in the chapter the need to strengthen the international monetary and concern is also expressed about violence and and financial systems in support of development, crime, which can impede the intended functioning including emphasizing that reforms to the interna- of the international system. In this area, there are tional financial architecture should aim at poverty significant efforts at data collection on outcomes, eradication. As noted in the Addis Agenda, the 2008 but fewer on policy development. world financial and economic crisis highlighted risks 2. Strengthening global and vulnerabilities in the international system. Since the crisis, important reforms have been put in place governance to improve its functioning, stability and resilience. The Addis Agenda calls for reforms to the inter- The global financial safety net has been strengthened, national architecture, including that international new coordination mechanisms have been estab- mechanisms and institutions should keep pace with lished, and regulatory reforms have been initiated. the increased complexity of the world and respond Nonetheless, vulnerabilities remain in the banking to the imperatives of sustainable development. The system and international capital flows continue to Addis Agenda builds on the Monterrey Consensus be highly volatile. At the same time, as noted in the in calling for the implementation of governance 114 Addis Ababa Action Agenda — Monitoring commitments and actions reforms to ensure a more inclusive and representa- Group, the IMF, the Basel Committee on Banking tive international architecture. Supervision (BCBS) and other major international Specifically, the Addis Agenda: regulatory standard setting bodies. The indicator for sustainable development goal (SDG) 10.6, percent- Commits to take measures to improve and age of members and voting rights of developing coun- enhance global economic governance to arrive tries in international organizations (10.6.1, 16.8.1), at a stronger, more coherent and more inclusive will inform progress in implementing these commit- and representative international architecture ments; but the indicator is not comprehensive and for sustainable development (103) will need to be supplemented by additional measures. Recommits to broaden and strengthen the voice The annual reports of the institutions themselves are and participation of developing countries in a primary resource for assessing progress in govern- international economic decision-making and ance reform and resource increases. The institutions norm-setting and global economic governance also periodically publish policy documents on spe- (106, SDG 16.8) cific voice and participation matters, particularly in Commits to further governance reform advance of board discussions on these topics, as well in both the IMF and the World Bank to as in progress reports to the G20, which also moni- adapt to changes in the global economy tors these issues. Many of the institutions also annu- (106, SDG 10.6) ally publish information on staff diversity, such as Invites the Basel Committee on Banking Super- the World Bank Group’s staff diversity index and the vision and other main international regulatory IMF’s annual diversity report. Qualitative informa- standard setting bodies to continue efforts to tion on leadership selection processes and outreach increase the voice of developing countries in efforts of these institutions can also be gathered. norm setting processes (106, SDG 10.6) For example, reports are regularly produced by the Commits to open and transparent, gender-bal- Basel Committee’s Basel Consultative Group and anced and merit-based selection of the heads of the Financial Stability Board’s (FSB) Regional Con- main international financial institutions, and sultative Groups. to enhance diversity of staff (106) Follow-up on these issues has also been part of Indeed, there has already been progress to the Financing for Development (FfD) monitoring report in this area, as the quota and governance process since Monterrey, and is included in United reforms agreed in the IMF in 2010 became effective Nations meetings, particularly in the FfD pro- on 26 January 2016. The reforms doubled the quota cess. Various United Nations bodies, including the resources of the IMF and realigned quota shares to United Nations Conference on Trade and Develop- increase the aggregate voting rights of developing ment (UNCTAD) and the United Nations Depart- and emerging market countries, as well as improve ment of Economic and Social Affairs (DESA), have their representation on the IMF board. The share produced additional materials on global economic of quotas and voting rights of the IMF’s poorest governance issues. member countries were protected, with the aggregate quota share of developing and emerging market 3. Improving cooperation, countries increasing by 2.8 per cent to 42.4 per cent. coordination and policy All board members will henceforth be elected, elimi- coherence nating the right to appoint an executive director that had been enjoyed by the five largest shareholders. 1 The Addis Agenda recognizes that institutional The Addis Agenda recommits governments to “silos” need to be broken down through cross-fer- additional governance reform in international eco- tilization of ideas and more effective coordination nomic decision-making, such as at the World Bank of actions, as well as the importance of addressing

1 Full details on the reforms, including the results for individual countries and groups, can be found at http://www. imf.org/external/np/pp/eng/2010/103110.pdf. Addressing systemic issues 115 inconsistencies in the system. This was recognized coherence across the three dimensions of sustainable in the Monterrey Consensus, which highlighted the development should aim at consistency of multilat- urgent need to enhance coherence, governance and eral financial, investment, trade, development and consistency of the international monetary, financial environment policies, institutions and platforms. and trading systems. Within international economic and financial insti- Specifically, in the Addis Agenda, governments: tutions this could be monitored in part by the institutions themselves, were they to prepare annual Commit to strengthen international cooperation reports on their efforts to align their work with sus- and to pursue policy coherence and an enabling tainable development and the SDGs. 2 Many of the environment for sustainable development at multilateral development banks already have cor- all levels and by all actors (9, 105) and to take porate performance scorecards or other monitoring measures to arrive at a stronger and more coher- systems that could be aligned with the SDGs. In ent international architecture for sustainable terms of coherence among international institutions, development (103, MoI 17.14) the 2030 Agenda and FfD processes have already Expand the coherence agenda to include served to increase cooperation between United economic, social and environmental challenges Nations agencies, the World Bank Group and the (103) and commit to strengthen the coher- IMF, as well as among development banks. Indeed, ence and consistency of multilateral financial, the very nature of the Task Force can serve to fur- investment, trade, and development policy and ther increase collaboration between international environment institutions and platforms (113) institutions. Qualitative assessments of incoherence Call upon countries to assess the impact of between different international policies can be raised national policies on sustainable development by the Task Force in future reports. (103) The Economic and Social Council’s Call on IFIs to align their business practices (ECOSOC) special high-level meeting with the with the 2030 Agenda for Sustainable Devel- IMF, World Bank Group, UNCTAD and the opment (107) World Trade Organization, now being incorpo- Stress the importance of ensuring that agree- rated into the Forum on FfD Follow-up, is also an ments, rules and standards are consistent with important platform for strengthening international each other and the SDGs (107) coherence, and its outcomes can serve as a source Commit to take better advantage of relevant of information. Its prominence and participation in United Nations forums for promoting universal its discussions can serve as an assessment of whether and holistic coherence and international com- Governments are taking better advantage of rele- mitments to sustainable development (113) vant United Nations forums. UNCTAD’s forums Call for increased cooperation between major are also relevant in this regard, and information can international institutions (113) be presented about participation in intergovern- As called for in the Addis Agenda, the Task mental discussions under their auspices, especially Force will monitor policy coherence across interna- the quadrennial conference, the next of which will tional agreements and institutions. The Task Force be in Nairobi, Kenya in July 2016. The ECOSOC is also responsible for assessing coherence between Development Cooperation Forum also provides international agreements and domestic policies, as space for Governments and other stakeholders to well as across domestic policies, with the goal of have open exchanges about challenges and opportu- incentivizing collaboration and sustainable develop- nities in development cooperation, and its participa- ment impact. Coherence at the international level tion, deliberations and findings can provide infor- is multi-faceted. As identified in the Addis Agenda, mation on progress. The outcomes of the ongoing

2 Eve de la Mothe Karoubi and Jessica Espey with David Durand-Delacre (2016), “Indicators and a Monitoring Framework for FfD: Proposals for Follow-up and Review of the Addis Ababa Action Agenda”, SDSN Working Paper. 116 Addis Ababa Action Agenda — Monitoring commitments and actions

ECOSOC dialogue on the longer term positioning developing countries. In the Addis Agenda, specifi- of the United Nations Development System will cally Governments: also be useful to the Task Force. Commit to pursue sound macroeconomic poli- The Quadrennial Comprehensive Policy cies that contribute to global stability, equi- Review (QCPR) of the General Assembly also offers table and sustainable growth and sustainable a tool for guiding, assessing and monitoring system- development, while strengthening our financial wide policy coherence, including of funding prac- systems and economic institutions (105); and tices. The next QCPR cycle, to be adopted at the to strengthen international coordination and end of 2016, is an opportunity to strategically guide policy coherence to enhance global financial and policy coherence of operational activities for devel- macroeconomic stability (105, MoI 17.13) opment in these first years of implementation of the Commit to work to prevent and reduce the risk 2030 Agenda. and impact of financial crises, acknowledg- Coherence at the national level may be moni- ing that national policy decisions can have tored through the indicator 17.14.1 number of systemic and far-ranging effects well beyond countries with mechanisms in place to enhance policy national borders, including on developing coherence of sustainable development. However, the countries (105) methodology for deciding whether or not a coun- Call on international financial institutions to try has such a mechanism is not yet decided. The further improve early warning of macroeco- number of countries with national sustainable devel- nomic and financial risks (107) opment strategies could provide an indication of a Recognize the importance of strengthen- commitment to coherence, although there is cur- ing the permanent international financial rently no international repository for such strategies. safety net (107) Case studies and peer reviews, for example at the Encourage increased dialogue among regional regional level, which show successful implementa- financial arrangements and strengthened coop- tion of development strategies could provide guid- eration between IMF and regional financial ance. Voluntary national reporting at the Forum on arrangements (107) FfD Follow-up or the High Level Political Forum Urge the IMF to continue efforts to provide could also be of use. more comprehensive and flexible financial 4. Enhancing global responses to the needs of developing countries (107) macroeconomic stability with Call on International financial institutions to sustainable development support developing countries in developing new instruments for financial risk management and A stable global macroeconomic environment is a capacity building (107) public good that can help create sufficient space Request international financial institutions for, and facilitate the implementation of, policies to provide support to developing countries that contribute to sustainable development. This pursuing sustainable development to assist them section looks at how countries’ policies and inter- in managing any associated pressures on the national organizations’ support can contribute to national balance of payments (107) both macroeconomic stability and sustainable Look forward to the special drawing rights development in a complementary manner. Policies review (107) related to macroeconomic management, financial market governance, and social and environmental The IMF is responsible to the global com- goals must be coherent and mutually reinforcing. In munity for identifying imbalances and policy this regard, the Addis Agenda recognizes that pub- inconsistencies with international impact, both lic policies, regulatory gaps and misaligned incen- through its annual Article IV national surveil- tives pose risks, including to financing sustainable lance consultations and its multilateral surveil- development, and that there are spillover risks to lance reports on the global economic and financial Addressing systemic issues 117 system. 3 In addition, the United Nations moni- presence of spillover effects, as are the IMF’s Finan- tors global macroeconomic and financial condi- cial Soundness Indicators. In addition, the Bank for tions through its World Economic Situation and International Settlements (BIS) compiles relevant Prospects and through the comparable economic data on the activities of international banks and on assessment and forecasting reports by UNCTAD global liquidity and credit market conditions. As and the secretariats of the United Nations regional noted in the Addis Agenda, national policy deci- commissions. These independent assessments and sions can have systemic and far-ranging effects well forecasts, along with those of the Organization beyond national borders, including on developing for Economic Cooperation and Development and countries. Policy decisions taken by some countries other organizations in the public and private sector, have greater systemic implications than decisions by provide a fuller picture for judging the evolving others, and qualitative and quantitative information state of the global macro economy and its policy on policy spillovers can be presented by the Task needs. All are resources that the Task Force may Force, building on existing economic monitoring consult in its monitoring responsibilities. The such as that done by the regional economic com- sources of information described above will also missions. Within the United Nations System, the inform the construction of the “Macroeconomic Global Policy Model is a tool for investigation of Dashboard” of SDG indicator 17.13.1, but it is not policy scenarios for the world economy which allows clear which exact indicators would be used on such analysis of the impacts of such policy spillovers. a dashboard. As part of the IMF’s responsibility for assess- Governments produce data on economic per- ing macroeconomic and financial vulnerabilities and formance and data is also available on the activities risks across its membership, the IMF prepares Finan- of financial markets. In some cases Member States cial System Stability Assessments (FSSAs) at least have also started to more closely monitor inequality every five years for 29 countries with systemically and sustainability criteria. The G20 has developed important financial sectors and at longer intervals a Framework for Strong, Sustainable, and Balanced for other countries. The IMF also undertakes semi- Growth which guides their policies. Within this annually an institution-wide Vulnerability Exercise framework they provide inputs to the G20 Mutual and a joint IMF-FSB Early Warning Exercise. The Assessment Process (MAP), which asks, inter alia, latter is presented to the IMF’s International Mon- the extent to which Member country policies are etary and Financial Committee (IMFC) and will mutually consistent and the size of imbalances that inform the Task Force. The IMF’s debt sustainability policymakers might wish to address. In November framework for market access countries and the joint 2014, the G20 members committed to lift their IMF-World Bank low income country (LIC) debt gross domestic product by 2018 by more than 2 per sustainability framework (see chapter II.E) also help cent above the trajectory implied by polices in place alert policy makers to emerging sovereign debt risks. in 2013. Progress in implementing the associated They are now routinely included in national Article growth strategies was assessed at the 2015 G20 Sum- IV consultations and are available for global assess- mit and updated accountability assessments from ments of sovereign debt vulnerabilities. future summits will inform the Task Force. Importantly, the effectiveness of these and Data on key financial market indicators such other surveillance efforts is reviewed periodically, as exchange rates, interest rates, asset price indices, including in the IMF’s Comprehensive Surveillance and capital flows, as well as their volatility, is use- and FSAP Review (both planned for 2019), which ful in understanding global stability risks and the could inform the monitoring effort. 4 A periodic Cri-

3 In addition to the semi-annual flagship publications (including the World Economic Outlook, the Global Financial Stability Report and the Fiscal Monitor), other multilateral surveillance products include periodic updates to the flagship publications, G20 Surveillance Notes, Spillover Reports and External Sector Reports, among others. 4 The IMF’s Independent Evaluation Office (IEO) recently reviewed the IMF’s self-evaluation activities: http://www. ieo-imf.org/ieo/pages/CompletedEvaluation260.aspx. 118 Addis Ababa Action Agenda — Monitoring commitments and actions sis Program Review assesses the IMF’s effectiveness disbursements (concessional and non-concessional) in preventing and mitigating the impact of financial can be used to assess the comprehensiveness and crises and propose avenues for reform, as needed. 5 flexibility of the international community’s financial Other relevant periodic reviews address the IMF’s responses to the macroeconomic support needed by programmes of assistance, including the Review of developing countries. Similarly, the level of support Conditionality and the Design of Fund-Supported provided to countries through the IMF’s Extended Programs (next planned for 2017), the Review of the Credit Facility (ECF), in particular to countries Policy on Debt Limits in Fund-Supported Programs that encounter balance-of-payments problems asso- (next planned for 2018), the Review of Concessional ciated with investments in sustainable development, Facilities (next planned for 2018), and the Review of may provide useful monitoring information for the the (non-concessional) Flexible Credit Line and the Task Force. Precautionary and Liquidity Line of Credit, and the More generally, the Task Force could survey concessional Rapid Financing Instrument (on which the scope and effectiveness of ongoing initiatives to a stocktaking of experience is planned for 2018). In strengthen dialogue about the comprehensiveness addition, the Review of Eligibility for the Poverty and complementarity of the multiple instruments Reduction and Growth Facility (next planned for of multilateral financial cooperation. In this regard, 2017) and the Review of Interest Rates on drawings a forthcoming report by the IMF to the G20 on from the Poverty Reduction and Growth Trust (next the Adequacy of the Global Financial Safety Net planned for 2016) will cover the access to and the Architecture (planned for 2016) will provide a use- terms of concessional financing by the IMF. ful diagnostic to guide and monitor future steps to In addition, more work on possible steps to strengthen safety nets. Separately there will be a broaden the use of the special drawing rights (SDR) series of reports on the adequacy and composition is envisaged in the context of the IMF’s broader work of the IMF’s finances, including the 15th General agenda on international monetary system reform Review of Quotas, which can now begin in earnest (with a diagnostic paper planned for 2016). because of the implementation of the 2010 govern- The effort to monitor progress in implementa- ance reforms. The assessment of progress in cooperation of many of the commitments related to mac- tion with regional financial arrangements can draw roeconomic policy development and institutional on a forthcoming review of the IMF’s modalities of design will be able to draw on the periodic reviews engagement with other organizations (planned for undertaken by the multilateral institutions and other 2017). Independently, input from the regional eco- stakeholders. For example, the IMF’s Global Policy nomic commissions could provide information on Agenda, presented to the IMFC twice a year, pro- the scope and effectiveness of regional financial and vides regular assessments of national and multilateral monetary arrangements. policy priorities to enhance financial stability and Ultimately, stability of the system is a means report on their implementation.6 Along these lines, for sustainable and equitable growth and sustain- a number of possible near term inputs for the moni- able development. Monitoring macroeconomic toring effort can already be identified. The annual and financial market risks can be complemented by volume of financial support provided by the IMF the examination of data related to socio-economic and other multilateral organizations is readily moni- outcomes such as unemployment levels and wages, tored, as the commitments and net disbursements by which are higher frequency than poverty assessments the institutions for these purposes are regularly pub- based on household surveys, as well as trends in ine- lished. Indeed, data on lending commitments and quality between and within countries.

5 These reviews are often complemented by reviews by the IMF’s IEO, such as the forthcoming evaluation of the IMF’s response to the Euro Area crisis in the second half of 2016. See http://www.ieo-imf.org. 6 The latest GPA is available at http://www.imf.org/external/pp/longres.aspx?id=4987. Addressing systemic issues 119

5. Shaping financial market Member States further acknowledge that: regulation for sustainable When dealing with risks from large and volatile development capital flows, necessary macroeconomic policy adjustment could be supported by macro- In the midst of the 2008-2009 financial crisis, prudential and, as appropriate, capital flow United Nations and G20 conferences highlighted management measures (105) the major failures in the financial sector and of financial regulation and supervision. The Addis Monitoring of financial market regulatory Agenda emphasizes the importance of strengthen- frameworks will focus on systemic risks, as well as ing regulatory frameworks at all levels to further on ensuring access to finance in a balanced man- increase transparency and accountability of financial ner. Work in this area is in large part overseen by institutions, and to address the regulatory gaps and activities of the FSB and the IMF. The FSB promotes misaligned incentives in the international financial international financial stability through informa- system. The follow-up process needs to be concerned tion exchange and cooperation of national financial with how well regulatory frameworks foster stabil- authorities and international standard-setting bod- ity and sustainability, while also promoting access ies, and by encouraging coherent implementation of to finance and sustainable development. Learning policies across sectors and jurisdictions. The BCBS about the relationship among these issues is crucial sets standards for prudential regulation and sound to help countries find ways to boost access and sus- supervision of banks and provides a forum for coop- tainability without compromising financial safety. eration on these matters. The International Associa- Within the Addis Agenda, Member States tion of Insurance Supervisors (IAIS) is the inde- commit to: pendent global insurance standard-setter. The FSB promotes cooperation among international financial Work to strengthen regulatory frameworks to regulatory policies among its member jurisdictions. increase transparency and accountability of It assesses vulnerabilities affecting the global finan- financial institutions (25, SDG 10.5) cial system on an ongoing basis to reduce systemic Hasten completion of the reform agenda on risk, and considers the regulatory, supervisory and financial market regulation (109) related actions needed to address these vulnerabili- Address the risk created by “too-big-to-fail” ties. However, measuring the strength of interna- financial institutions and address cross-border tional standards and national implementation of elements in effective resolution of troubled sys- them is not straightforward because of the evolving temically important financial institutions (109) nature of financial risks, and due to limits on com- Sustain or strengthen frameworks for macro- prehensive oversight by regulatory boundaries. prudential regulation and countercyclical A key issue stressed in the Addis Agenda, buffers(109) including in chapter II.B, is the impact of regula- Assess and if necessary reduce the systemic risks tions on access to credit in areas that might be par- associated with shadow banking, markets for ticularly important to achieving sustainable develop- derivatives, securities lending, and repurchase ment, as well as to countries most in need. The FSB, agreements (109) as well as the global standard setting bodies, also Reduce mechanistic reliance on credit rating monitor implementation and the effects of reforms. agency assessments, including in regulations This includes what are called “unintended conse- (110); promote increased competition and avoid quences” of reforms on developing countries, includ- conflict of interest in the provision of credit rating issues of access to credit. The FSB monitors these ings (110); support building greater transpar- spillover effects in developing countries through ency requirements for evaluation standards of country surveys as well as through meetings of its credit rating agencies and commit to continue Regional Consultative Groups, which include rep- ongoing work on these issues, including in the resentatives from 65 countries. In November 2015, United Nations (110) the FSB published its inaugural annual report on the 120 Addis Ababa Action Agenda — Monitoring commitments and actions implementation and effects of financial regulatory developing economies and by the IMF in developed reforms, which includes a summary assessment on economies, involves comprehensive assessments of implementing reforms in developing countries. the stability of the country’s financial sector and its The IMF also monitors financial spillover risks potential contribution to growth and development. as part of its regular surveillance. This monitoring The FSAP’s components include an examination of informs, among other things, the IMF’s semi-annual vulnerabilities and resilience of the financial sys- Global Financial Stability Report (GFSR), which tem, financial sector policy framework, and finan- provides an assessment of the global financial system cial safety nets. The FSAP assessments conducted and markets, including financial spillovers. Each since 2009 increasingly analyse macroprudential edition of the GFSR presents data on indicators that frameworks as well as inward and outward financial the IMF considers relevant to current market condi- spillovers. An overall review of the IMF-World Bank tions, and analysis of systemic issues that could pose Standards and Codes Initiative 7 is also underway a risk to financial stability. This can include meas- and its outcomes could potentially inform the Task ures of credit, credit impairment and credit growth; Force’s monitoring efforts. corporate, household and sovereign debt; interest Monitoring implementation of bank regu- rates; equity and other assets prices; and a host of latory standards is a continuous process involving other areas. The BIS’ data in this area, mentioned both assessments and self-reporting. The Regulatory above, are also relevant. Consistency Assessment Programme (RCAP) of the In coordination with the BIS and the FSB, the BCBS assesses and promotes consistency in imple- IMF is also drawing out the key elements of effec- mentation of bank capital and liquidity require- tive macroprudential policy frameworks and tools, ments, in particular of Basel III. For example, they which could in turn guide and assess their use in have completed assessments of the risk-based capital the future. The BCBS also contributes to implemen- framework for 14 jurisdictions and implementation tation of macroprudential regulation, in particular of the liquidity coverage ratio (LCR) for five juris- implementation of the countercyclical capital buffer. dictions, with further assessments to be completed A forthcoming stocktaking exercise by the IMF this year. In addition, the RCAP reports include (planned for late 2016) of country experiences in assessments of the implementation of capital buffers. dealing with capital flows for the G20 will draw les- Finally, thematic assessments have been completed sons and examine emerging issues, including with (and are ongoing) through the RCAP process. The respect to the framework to manage capital flows BCBS also publishes semi-annual progress reports articulated by the IMF’s institutional view. The on the adoption of each element of the Basel reg- United Nations System has also done work on capital ulatory framework for G20 and other countries account management, including publishing a com- with systemically significant financial sectors, with pendium of capital account management measures numerical ranking of each country based on their used globally. Future work in this area building on progress on a scale of 1–4. existing capacities can inform the Task Force. Work Furthermore, the FSB is implementing a in this area is also done by academics and research policy framework agreed by its members aimed at institutes, as well as by national institutions. Case transforming shadow banking into resilient market- studies on country experiences could be included in based finance. As part of this, the FSB conducts an the Task Force reports and discussed in the Forum annual monitoring exercise covering global trends on FfD Follow-up. and risks of the shadow banking system. It provides Also on the individual country level, the quantitative assessment of the activities of shadow Financial Sector Assessment Program (FSAP), done banks in 26 jurisdictions. However, the attempt to jointly by the IMF and the World Bank Group in quantify risks from these activities has encountered

7 The IMF and World Bank have endorsed internationally recognized standards and codes in 12 areas as important for their work and for which Reports on the Observance of Standards and Codes (ROSCs) are prepared. ROSCs covering financial sector standards are usually prepared in the context of the Financial Sector Assessment Program. Addressing systemic issues 121 difficulties in collecting data, which FSB members out annual monitoring of the progress made by FSB will address through greater data availability and member jurisdictions in aligning national resolution information-sharing. In this context, the BCBS has regimes for all financial sectors with this interna- focused its work on assessing risks associated with tional standard. The IAIS will be conducting G-SII banks’ exposures to and interactions with non- peer reviews focusing on the way in which insurance banks and other market-based financing. This has supervisors have incorporated policy measures into been addressed through a number of new or revised their regulatory and supervisory frameworks. The prudential and supervisory frameworks published Task Force report can make use of this work by the since 2013. There is ongoing work to identify and FSB and IAIS. measure “step-in risk” associated with shadow bank- In terms of implementing regulatory reforms ing. 8 The FSB is also coordinating implementation to insurance markets, the IAIS is conducting the- of agreed reforms to derivatives markets and pub- matic self-assessment and peer reviews designed to lishing semi-annual reports on implementation of assess all areas of insurance supervision reflected in the agreed reforms which assess countries on each the Insurance Core Principles over five years. 9 These measure on a scale of 1-3 in terms of their status of peer reviews assess levels of observance taking into implementation. account regulatory frameworks and supervisory An important post-2008 public policy concern practices and help strengthen the observance and is to reduce the systemic risks and the associated understanding of the Insurance Core Principles. The moral hazard problem created by financial institu- IAIS prepares both an individual jurisdiction report tions that are seen to be “too big to fail”. The FSB’s and an aggregate report. The individual report can systemically important financial institution (SIFI) assist the jurisdiction in developing an action plan, framework seeks to address this, first, with “global either independently or with partners, to address systemically important banks” (G-SIBs) being iden- weaknesses within the supervisory system. The tified by the BCBS and with “global systemically aggregate reports provide valuable information to important insurers” (G-SIIs) being identified by the the IAIS as part of a feedback loop on standard-set- IAIS. It further identifies policy measures to address ting activities and input to implementation partners the risks these institutions pose to the financial sys- on areas where there are global or regional challenges tem and recommends their inclusion in national reg- for implementation of the Insurance Core Principles. ulatory standards. Assessment of implementation is Where appropriate, the Task Force can report on be covered by the mechanisms described above, and these efforts. can inform the Task Force. The list of G-SIBs and With respect to the role of credit rating agen- G-SIIs is annually reviewed by the FSB based on cies (CRAs) in assessing the riskiness of the loan methodologies agreed by the standard setting bod- portfolios of financial institutions, the FSB issued ies and information provided by national authorities. Principles for Reducing Reliance on CRA Ratings Finally, should individual SIFIs need to be wound In 2010. In 2014 the FSB published a peer review up, the FSB has adopted Key Attributes of Effec- on member jurisdictions’ implementation of the tive Resolution Regimes for Financial Institutions as Principles. The FSB’s Implementation Monitoring an international standard for resolution of financial Network provides updates on implementation of institutions that could be systemic in failure, includ- the Principles and these are published on the FSB ing a particular focus on policies to enable effective website. The outcome of the BCBS’s ongoing review cross-border resolution, as these institutions typi- of the standardised approach to credit risk which is cally operate in multiple countries. The FSB carries being discussed as part of international bank regula-

8 Step-in risk refers to the risk that a bank will provide financial support to an entity beyond, or in the absence of, its contractual obligations should the entity experience financial stress. See http://www.bis.org/press/p151217b.htm. 9 To date, the IAIS has completed assessments on ICP 1 (Objectives, Powers and Responsibilities of the Supervisor); ICP 2 (Supervisor); ICP 4 (Licensing); ICP 5 (Suitability of Persons); ICP 7 (Corporate Governance); ICP 8 (Risk Management and Internal Controls); ICP 9 (Supervisory Review and Reporting); ICP 10 (Preventive and Correc- tive Measures); ICP 11 (Enforcement); and ICP 23 (The Group-wide Supervisor). 122 Addis Ababa Action Agenda — Monitoring commitments and actions

tory standards will also be reported. At the United The SDG indicators address a number of Nations, both the General Assembly and ECOSOC the concerns reflected in the above commitments, have held meetings on the impact of credit rating including 10.7.1 recruitment cost borne by employee agencies on financing for sustainable development. as a proportion of yearly income earned in country The Task Force can make use of self-reported data of destination; 10.7.2 number of countries that have from the CRAs, as well as monitor usage of CRA implemented well-managed migration policies; and, ratings in regulations and their use as thresholds in 8.8.1 frequency rates of fatal and non-fatal occupa- the investment policies of institutional investors. It tional injuries, by sex and migrant status. In addition, can also report on the establishment of new agen- SDG indicators are to be disaggregated by migra- cies, the market structure, and changes to the regu- tory status, among other dimensions, where relevant. latory structure for CRAs. Future United Nations The Addis Agenda is more expansive than the SDG meetings can serve as a venue for self-reporting and indicators, covering migration policies, migrants’ further discussion. social and economic outcomes, and the effective promotion and protection of the human rights of 6. Promoting safe migration all migrants. The migration-related commitments in the 2030 While the demands for reliable data on migra- Agenda for Sustainable Development, which focus tion have increased in recent years, timely and on the rights of migrants regardless of migration quality disaggregated data on migration are scarce, status, are complementary to those in the Addis especially as regards undocumented or irregular Agenda, which focus on both their rights and their migrants. Even when migration statistics exist, pol- economic activities. Comprehensive data are scarce, icy-makers may not make full use of them because which may necessitate a case study approach to they may be scattered among different stakeholders assessments of policy development. and within and across government ministries. Cur- Within the Addis Agenda, Member States: rently, the available data on migration is collected through population and housing censuses; national Commit to cooperate internationally to ensure household surveys; labour force surveys; population safe, orderly and regular migration, with full registers; administrative sources such as data on resi- respect for human rights (111, SDG 10.7) dence or work permits, asylum applications, registra- Endeavour to increase cooperation on access to tion of displaced persons, consular data and border and portability of earned benefits, enhance the collection data, and measurement of international recognition of foreign qualifications, education, remittances transfers; indicators of government poli- and skills, lower the costs of recruitment for cies; and public opinion polls. Other sources of data migrants, and combat unscrupulous recruiters, on migration include findings of human rights vio- in accordance with national circumstances and lations, which may come from a variety of sources, legislation (111) including national human rights institutions, as Endeavour to implement effective social com- well as expert judgements of national, regional and munication strategies on the contribution international expert bodies and non-governmental of migrants to sustainable development in organizations working with migrant communities, all its dimensions, in particular in countries where appropriate. of destination, in order to combat xenopho- The Office of the United Nations High -Com bia, facilitate social integration, and protect missioner for Human Rights (OHCHR) monitors migrants’ human rights through national the implementation of migrants’ rights by coun- frameworks (111) try through its programmes and the international Reaffirm the need to promote and protect human rights monitoring mechanisms. Additionally, effectively the human rights and fundamental the OHCHR has developed human rights indicators, freedoms of all migrants, especially those of which have been further adapted under the umbrella women and children, regardless of their migra- of the Global Knowledge Partnership on Migration tion status (111, SDG 8.8) and Development to increase their relevance for Addressing systemic issues 123 migrants and their families, with an initial focus on based index will assess government policies across the rights to health, education and decent work. As six key migration policy domains. 10 The survey data the methodology is used by national authorities, the will be drawn from and build upon DESA’s United data can be useful to the Task Force’s work. Nations Inquiry among Governments on Popula- Integrated application of non-traditional data tion and Development, which has directly surveyed sources such as big data, border interviews, aerial governments on changes in migration policy since surveys and satellite imagery offer new options for 1976. 11 Data on migration policies are also collected locating and supporting migrant populations. Geo- by IOM’s field offices. spatial mapping of population data offers countries The ILO has been working in a number of sub-national and small-area estimations of popula- regions towards mutual recognition of skills and tion and has the potential to locate out-of-school and qualifications. Reporting would have to be qualita- unemployed young people who are at higher prob- tive or case-study based to present the nuances and ability of migration. It is particularly important to details of these types of processes. Other tools could ensure that a range of data sources are utilized, given focus on measuring migrants’ economic and social that undocumented migrants are for the most part outcomes. Existing intergovernmental frameworks, not captured in socioeconomic and administrative such as the Programme of Action of the Interna- statistics. tional Conference on Population and Development Data compatibility, validity, availability, (ICPD), similarly offer means to support the Addis quality and collection capacity also remain major Agenda commitments. For example, a number of challenges in this field. The International Labour indicators, at various stages of development, were Organization (ILO) has begun efforts to develop included in the ICPD beyond the 2014 monitor- international standards on the measurement of ing framework, such as: existence of laws that labour migration statistics through the International ensure equal access to health services for interna- Conference of Labour Statisticians (ICLS), which tional migrants; bilateral and regional agreements established a working group with the aim of sharing on the recognition of qualifications of international good practices and developing a work plan for defin- migrants; bilateral and regional agreements signed ing international standards on labour migration sta- and implemented on portability of social security; tistics. The United Nations Statistical Commission, existence of legislation protecting against forced working with the United Nations High Commis- evictions; and existence of temporary protection sioner for Refugees, has initiated work to strengthen policies, including shelter, among others. statistics on displaced persons and to improve their incorporation into national statistical systems. 7. Combating transnational crime The International Organization for Migration The Addis Agenda commits to prevent all forms (IOM) and DESA are in the process of developing of violence, combat terrorism and crime, and end an “International Migration Policy Index”, which human trafficking and exploitation of persons, in covers a broad range of issues considered relevant particular women and children, in accordance with to “well-managed migration policies”. This survey- international human rights law. Lack of harmonised

10 The domains include: 1) Institutional capacity and policy – Is there at least one dedicated government entity responsible for designing and periodic reporting on an overall migration policy? 2) Migrant rights – Has the country ratified core international conventions pertaining to migrants, refugees and stateless persons? 3) Safe and orderly migration – Does the government collect and release data on the number of victims of trafficking and migrant fatalities? 4) Labour migration and recruitment costs – Recruitment costs have at the national level decreased as a percentage of the average yearly income for the first three years; 5) International partnerships – Has the country signed bilateral labour agreements concerning the movement of workers? 6) Humanitarian crises and migration policy – Does the government’s humanitarian policy include measures in relation to forced displacement of persons? 11 United Nations Department of Economic and Social Affairs (2013) International Migration Policies: Government Views and Priorities (see http://goo.gl/TSnsRY). 124 Addis Ababa Action Agenda — Monitoring commitments and actions standards in data collection and analysis, and the able for the implementation of victimization surveys, illicit nature of the activities involved can make fol- and for improving administrative records through low-up difficult in this area, but existing reporting the adoption of the International Classification of tools can be of assistance. Crime for statistical purposes. In the Addis Agenda, Governments: Collecting data, creating indicators and other means of monitoring progress on crimes and crime Commit to strengthen regional, national, and prevention remains difficult because (i) many coun- subnational institutions to prevent all forms of tries do not collect data related to crime trends; (ii) violence, combat terrorism and crime, and end when data do exist they often are not sufficient to human trafficking and exploitation of persons, lend themselves to time-series trend analysis; (iii) the in particular women and children, in accord- interpretation of data and the attempt to collect and ance with international human rights law (112, analyse data can be political in nature and, therefore, SDG 5.2, 8.7, MoI 16.a) open to manipulation; and (iv) certain types of avail- Commit to strengthen national institutions able data, especially those designed to reflect imple- to combat money laundering, corruption and mentation (for example trafficking seizures, prosecu- the financing of terrorism, which have serious tions, filing of mutual legal assistance requests), do implications for economic development and not clearly reflect trends (e.g., an increase in seizures social cohesion (112) could be the result of an increase in trafficking or Commit to enhance international cooperation an increase in the effectiveness of law enforcement). for capacity building in these areas at all levels, While there is broad data on various elements in particular in developing countries (112) related to adherence to and implementation of ele- Commit to ensuring the effective implementa- ments of the normative framework (adherence to tion of the United Nations Convention on various instruments, etc.) these may not be useful in Transnational Organized Crime (112) monitoring the extent (or impact) of “illegal activi- The SDG indicators address the commit- ties.” The report may draw on a range of selected ments on violence against women and child labour studies on transnational organized crime, includ- reflected above, including 5.2.1 and 5.2.2 related ing threat assessments and trafficking in persons. to physical, sexual or psychological violence against Efforts to follow-up on anti-money laundering and women and girls aged 15 or older; and, 8.7.1 propor- illicit financial flows were covered in chapter II.A on tion and number of children aged 5-17 years engaged domestic public finance. in child labour, by sex and age. The UN Office on UNODC and other relevant organizations Drugs and Crimes (UNODC) already monitors monitor and evaluate their own capacity-building crime trends and the justice interface. It regularly efforts through annual reports which also provide provides global statistical series on crime, criminal information on funding trends on capacity-building justice, drug trafficking and prices, drug produc- in these areas. The number of countries that have tion and drug use. There is some useful data from signed and ratified the United Nations Convention national population (and business-based) victimiza- on Transnational Organized Crime and changed tion surveys, but the quality, coverage and analytical their national legislation as a result of the Conven- relevance of administrative data varies, and quality tion will provide a measure of progress on its effec- can be improved. International standards are avail- tive implementation. Chapter II.G Science, technology, innovation and capacity-building

1. Introduction The STI capabilities of a country depend not only on access to a growing stock of science and In a major expansion of the Monterrey Consensus, technology, but also on the quality of interactions the Addis Agenda stresses the importance of science, among the innovation actors in what might be called technology and innovation (STI) for economic the ‘innovation system’. One of the major challenges growth and sustainable development and highlights in promoting technological innovation in develop- the need for capacity building. The Addis Agenda ing countries is the lack of an appropriate innovation notes with concern the uneven innovative capacity, system to ease interaction among key actors, which connectivity and access to technology that exists is much more complex because it involves the formal within and between countries. Commitments con- sector — enterprises, universities, research institutes, tained in Action Area II.G of the Addis Agenda aim the government and the financial system — along to address these inequities, incentivize research and with non-governmental organizations and the innovation for sustainable development and pro- informal sector, including grassroots innovators, mote greater access to technologies through domes- and local and indigenous knowledge. Bridging the tic policy and international cooperation. formal and informal sector is especially difficult in Currently, access to technology is uneven and circumstances of high social disparities. An effective unequally distributed. For example, 74 per cent of innovation system should encourage greater interac- populations in developed countries use the Internet, tion between groups. Such a system should foster compared to only 26 per cent in developing coun- investment in advanced technology and promote tries. Developing countries and least developed the development of affordable technology to meet countries (LDCs) in particular, spend significantly less on research and development (R&D) and inter- the needs of the poor. The Addis Agenda seeks to national collaboration in science. Despite these gaps, strengthen these interactions so as to improve the the view that technology is developed in the North contribution STI makes to the achievement of sus- and simply transferred to the South is misleading. tainable development, including the SDGs. Most innovation involves incremental improvements 2. Promoting information and and adaptations of existing technologies. Innova- tion, in this sense, is widespread in many develop- communication technology, ing countries, and firms in middle income countries, access to technology for all and in particular, are responsible for a growing share of social innovation global R&D spending. Some low-income countries have also begun to develop domestic technologi- In addition to being an important technology sector cal capacities. These experiences have underscored in its own right, information and communication the importance of interactive learning, information technology (ICT) is important for linking agents in exchange and coordination among governments, the innovation system. The Addis Agenda promotes firms, universities, research centres and other actors the use of ICT, greater access to technology for all in building an innovative economy. and social innovation: 126 Addis Ababa Action Agenda — Monitoring commitments and actions

Commits to promote the development and use groups if they are collected on a disaggregated basis of information and communications technol- by gender and age, as well as for rural and urban ogy, particularly in LDCS, LLDCs and SIDs, areas. Mobilizing the information to calculate “par- including rapid universal and affordable ity indices” (building on indicator 4.5.1: parity indices access to the Internet (114, MoIs 5.b, 9.c, (female/male, urban/rural, bottom/top wealth quintile 17. 6, 17. 8) and others such as disability status, indigenous peoples Commits to further facilitate accessible technol- and conflict-affected as data become available)), such ogy for persons with disabilities and to promote as for measuring the skills needed to take advantage access to technology and science for women, of specified technologies would prove useful. In the youth and children (114, 5.b) case of the disabled, this could include data for mon- Commits to promote social innovation to sup- itoring the availability of relevant assistive devices port social well-being and sustainable liveli- and technology drawing on disability data from the hoods (116) World Health Organization. Governments also committed to promote Advances towards fulfilling the commitments social innovation as a way to support social well- on development and use of ICT can be measured being and sustainable livelihoods. Within this con- directly by development and use of ICT infrastruc- text, a bottom-up approach of pro-poor innovation ture. The expansion of skill levels can also inform can tie in with the growing interest from both the measurement of this commitment, as this increases public and private sectors in social enterprises and the capacity for effective ICT use. Four SDG indica- social ventures from grassroots innovation. Monitor- tors on ICT infrastructure provide a basis for following this commitment will require a shared definition up. They include: proportion of population covered by of “social innovation” and the development of indi- a mobile network, by technology (9.c), proportion of cators that show how social innovation contributes to individuals who own a mobile telephone, by sex (5.b), social well-being and sustainable livelihoods. Con- fixed Internet broadband subscriptions per 100 inhab- siderations may include the results of the revision itants, by speed (17. 6.2) and proportion of individuals of the Organization for Economic Cooperation and using the Internet (17.8). Two additional indicators Development (OECD)/Eurostat’s Oslo Manual, the can serve as proxies to measure advances in the level adaptation of the Bogota Manual, and the experi- of skills in use of ICT: proportion of youth/adults with ences of the European Commission. Additional data ICT skills, by type of skills (4.4.1) and proportion of will be needed to more directly assess progress in this schools with access to the Internet and computers for area, such as on social innovation strategies or social pedagogical purposes (4.a.1). entrepreneurship policies adopted by countries. Cur- Monitoring of Addis Agenda commitments on rently, as this is an emerging field, no source reports ICT can also draw on the World Telecommunica- such data. Public presentations of social innovation tion/ICT Indicators database, which is maintained strategies at international forums such as the United by the International Telecommunication Union Nations Commission on Science and Technology for (ITU). It includes over 180 telecommunication and Development (CSTD) or country and regional case ICT indicators for 200 economies, to track global studies could supplement reporting on advances in developments on ICT infrastructure, access, use these commitments. and prices. In addition to the SDG indicators tracking ICT infrastructure, it will be useful to monitor 3. Developing national policy developments on International Internet bandwidth frameworks for science, per inhabitant. Data on broadband Internet prices technology and innovation can also be monitored. ITU collects data on both fixed and mobile broadband prices annually in most In the Addis Agenda, Governments: countries, including LDCs. Commit to adopt science, technology and The data for the indicators noted above could innovation strategies as integral elements of also provide information about disparities among Science, technology, innovation and capacity-building 127

our national sustainable development strat- that would give information on the innovative pro- egies (119) cess in a country would be to draw inferences on Commit to craft policies that incentivize the national STI strategies from ongoing activities. Sev- creation of new technologies, that incentivize eral SDG indicators are designed to do this, includ- research and that support innovation in devel- ing: R&D expenditure as a proportion of GDP (9.5.1); oping countries (116) proportion of medium and high-tech (MHT) industry There is currently no source reporting the value added in total value added (9.b); and number number of countries that have adopted legislative, of science and/or technology cooperation agreements administrative and policy frameworks for national and programmes between countries, by type of coopera- STI strategies, the number of countries covered by tion (17.6.1). independent reviews of national STI policy frame- For example, an increase in the share of works or the degree to which such strategies are medium and high-tech industry in value added integral elements of national sustainable develop- would reflect a structural shift towards higher- ment strategies. However, information on STI policy technology industries. The information provided frameworks could be gleaned from public presenta- by this indicator could be complemented by meas- tions of national STI policies at international forums, uring the degree of technology of traded goods such as the annual meetings of the United Nations (primary products, low-technology, etc.), participa- CSTD, where national STI policy reviews con- tion of ICT products on the level of exports and ducted by the United Nations Conference on Trade imports, and measures related to concentration and Development (UNCTAD) are discussed. It is and diversification of trade. Taken together, these important to note, however, that such presentations would provide a more comprehensive understand- are not mandatory and are not universal in covering of the output of the innovation process and age. The United Nations Educational, Scientific STI policies. Such data is collected and prepared and Cultural Organization (UNESCO) is building by UNCTAD and is available at country (covering a global database on STI policy instruments, legisla- more than 200 economies) and product group level tion and institutional frameworks, in the framework since 1995. R&D statistics and indicators, such as of its GO->SPIN Programme, which may serve as an 9.5.1 and other indicators collected and published additional source of information for direct monitor- yearly by UNESCO, give insights into the amount ing of these commitments in future. of research activities. However, other types of inno- To get a clear picture, country reporting on vations that are not R&D-based or R&D-intensive national STI strategies, their place within national and that are very relevant in developing countries strategies for sustainable development, and the pro- also need to be considered. More detailed informa- grammes put in place to implement them would be tion about the R&D sector would provide a better helpful. National policy documents, which generally indication of the status of policies and such data give high-level strategic policy directions, could be are usually collected at the national level, includ- the initial source of information for such monitoring in the UNESCO Institute for Statistics’ global ing; however, the stated intentions in these docu- R&D database. ments need to be complemented by other analyses, UNESCO also maintains a global database including of a qualitative character, to obtain a for innovation data, which contains information more nuanced picture of the intended role of pub- on firm level collaboration, among other indicators, lic policies in promoting innovation for sustainable covering this broader and more comprehensive per- development. Regional commissions could provide spective of innovation. Data could also be mobilized an additional source of information, for example in research publications by country of residence of based on national STI legislative gap analysis in the authors, which would need to come from commer- Economic and Social Commission for Western Asia cial databases, such as Elsevier or Thomson Reuters. (ESCWA) region. All these statistics are currently published and ana- The above approach aims to directly measure lysed every five years in the global UNESCO Sci- the adoption of STI strategies. A different approach ence Report. 128 Addis Ababa Action Agenda — Monitoring commitments and actions

A measure of the institutional capacity to policies are important contributors to an enabling put in place coherent policy frameworks for STI environment for STI, while the international envi- would also be desirable. Country reporting on an ronment needs to be supportive as well. innovation council/ministry or agency that leads On education, the Addis Agenda: and oversees the design and evaluation of national Commits to enhance technical, vocational STI policies may be an option. However, given the and tertiary education and training, ensuring variety of institutional frameworks that can be used equal access for women and girls and encour- to promote coherent policies, and the fact that the aging their participation therein, including existence of an agency does not guarantee a coherent through international cooperation (119, SDGs policy framework, it may be more relevant to look 4.3, 4.4, 4.5) at measures to strengthen STI policies and increase Commits to scale up investment in science, their coherence. However, as of today, such measures technology, engineering and mathematics are unavailable. education (119) International support for developing coherent Commits to enhance cooperation to strengthen policy frameworks for STI, which is meaningful for tertiary education systems and aim to increase a large number of developing countries, could be access to online education in areas related to measured through the percentage of official develop- sustainable development (119) ment assistance (ODA) resources committed to sup- Commits to increase the number of scholarships port science, technology and innovation. This would available to students in developing countries to provide an accurate insight regarding the level of enrol in higher education (119, MoI 4.b.) financial commitments. The classification currently used in ODA reporting does not specifically distin- SDG indicator 4.3.1 (participation rate of guish ODA committed to STI policy frameworks. youth and adults in formal and non-formal educa- As a proxy, aid to cross-cutting research and scien- tion and training in the previous 12 months, by sex) tific institutions, and aid to sector-specific research provides a general assessment of access to education. in agricultural extension, agricultural research, con- Additional and more specific information could be struction, education, employment, energy, environ- obtained from sources such as the World Develop- mental policy and management, finance, fishery, ment Indicators and SABER/EdStat, an initiative of forestry research, health, industry, mineral/mining, the World Bank Group to develop comparative data public sector, tourism and transport could be moni- and knowledge on education policies and institu- tored. The comprehensive mapping of existing STI tions. The commitment to scale up investment in initiatives, mechanisms and programmes currently science, technology, engineering and mathematics carried out by the United Nations Inter-agency (STEM) education can be monitored by changes in Task Team on Science, Technology and Innovation the number of PhD graduates or students enrolled for the SDGs will further contribute to monitoring in tertiary education by broad field of study, which international support in this area. is reported by the UNESCO Institute for Statistics. Assessment of equal access for women and girls 4. Creating a more enabling could draw on indicator 4.5.1 (parity indices). UNE- environment for science, SCO is also currently developing new indicators technology and innovation about the dynamics that shape women’s decisions to pursue STEM careers, which could inform future Efforts to promote STI are related to other policy monitoring by the Task Force. Information about efforts, such as competition, education, investment, the quality of education is more difficult to obtain. tax and trade policies. For instance, education policy International evaluations such as the Programme for has a major impact on university research and the International Student Assessment (PISA) can pro- availability of highly skilled labour in technology vide inputs, but PISA covers only 70 countries. intensive firms. Education policies, the intellectual Countries have also committed to comple- property rights (IPR) regime and a range of other menting domestic efforts through international Science, technology, innovation and capacity-building 129

cooperation. Progress towards enhancing coopera- through the Patent Cooperation Treaty (patents), tion to strengthen tertiary education systems could the Madrid System (trademarks) and the Hague be measured through the volume of ODA devoted System (designs). The Task Force can draw on these to post-secondary education. SDG means of imple- publications and the underlying dataset in its moni- mentation indicator 4.b (volume of ODA flows for toring efforts. scholarships by sector and type of study) would also provide useful information for monitoring this commit- 5. Institutions and mechanisms to ment, while outcome indicators as discussed above strengthen science, technology can further complement monitoring in this area. The commitment to increase the number of scholar- and innovation ships will be monitored by the means of implementa- Governments recognized in the Addis Agenda that tion indicator 4.b mentioned above. various mechanisms can be used to incentivize and An important element of the enabling environ- finance STI, including institutionalized or ad hoc ment is the IPR framework. The Addis Agenda partnerships among relevant stakeholders, innova- Recognizes the importance of adequate, bal- tion funds, business incubators and international anced and effective protection of intellectual support, and support to the traditional knowledge, property rights in both developed and develop- innovation and practices of indigenous peoples. ing countries in line with nationally defined 5 1. . National level priorities and in full respect of World Trade Organization rules (116) At the national level, the Addis Agenda: The World Intellectual Property Organization Encourages knowledge-sharing and the promo- (WIPO) is the United Nations specialized agency tion of cooperation and partnerships between mandated to lead the development of an effective stakeholders, including between Governments, and balanced IPR system for the cultural, social and firms, academia and civil society, including economic development of all. The Task Force will be linkages between multinational companies and able to draw on data compiled and analysis carried the domestic private sector to facilitate technol- out by WIPO. ogy development and transfer, on mutually The WIPO Office of Chief Economist pro- agreed terms, of knowledge and skills (117, duces the annual Global Innovation Index, using MoI 17.17) disaggregated data to assist policy makers to under- Commits to consider setting up innovation stand their national innovation strengths and weak- funds where appropriate, on an open, com- nesses, and to learn from the best practices and petitive basis to support innovative enterprises, strategies adopted by countries at similar stages of particularly during research, development and development. WIPO also publishes annual reports, demonstration phases (118) including the World Intellectual Property Indica- tors and World Intellectual Property (IP) Facts and Commits to promote entrepreneurship, includ- Figures, that chart the evolution of the international ing supporting business incubators (117) IP system on an annual basis to help policy mak- Recognizes that traditional knowledge, innova- ers and stakeholders assess progress at national and tions and practices of indigenous peoples and regional levels. local communities can support social well-being The WIPO Statistics Database contains data and sustainable livelihoods, and reaffirms that provided by national and regional IP offices. The indigenous peoples have the right to maintain, data are collected at an aggregate level by various control, protect and develop their cultural breakdowns such as number of patent filings or heritage, traditional knowledge and traditional grants by office and origin. In addition, the Statis- cultural expressions (117, SDG 2.5) tics Database contains data compiled by WIPO dur- Commits to consider using public funding to ing the application process of international filings enable critical projects to remain in the public 130 Addis Ababa Action Agenda — Monitoring commitments and actions

domain and strive for open access to research for tion easier. For example, innovation funds are often publicly funded projects, as appropriate (118) linked to government innovation programmes with associated mandates and performance indicators for There are a number of challenges and oppor- implementing organizations, which can facilitate tunities in setting out to monitor actions to pro- monitoring the innovation funds per se. The Task mote such mechanisms. For example, the indicator Force can also draw on case studies, such as from for target 17.17 refers to the amount committed to the Asia Pacific region, where the United Nations public-private partnerships and civil society partner- Economic and Social Commission for Asia and the ships, expressed in US dollars, which is much broader Pacific (ESCAP) is monitoring national govern- than the commitment in this chapter. This would ments’ efforts to nurture innovation and start-ups, combine in one aggregate number the various forms and industry-academy partnerships, or the Western of collaboration between the public and the private Asia region, where National Technology Transfer sectors and civil society, without differentiating their and Development Networks and Offices are being purpose. Moreover, partnerships between private established to support cooperation of the various agents, where the public sector may play a catalytic players in the STI landscape. As UNESCO’s GO- role without joining the partnership, are also rel- >SPIN database is extended to additional countries, evant to promote innovation. the information it collects on national innovation Innovation funds exist in a number of coun- funds will provide additional data for the Task Force. tries but one should be cautious when assessing these As regards monitoring the development of initiatives, as they can include very different prac- business incubators, there is a challenge as to how tices with different implications for investment in public resources are channelled, due to the high innovation. For example, differences in risk toler- degree of decentralisation, although the informa- ance as well as the type of financing provided (grants, tion provided by major universities can also be equity or debt) will affect how the investment fits important. For a number of countries, this informa- into the innovation cycle. This diversity may reflect tion can be combined with data on perceptions of policy preferences, the characteristics of the national venture capital availability and university-industry institutional setting or the relevance of different relations as used in the Global Competitiveness forms of support at various stages of development. Index of the World Economic Forum. In some Data to monitor these issues are not read- countries, innovation programmes have also tar- ily available in many countries and comparability geted closer linkages between the domestic sector remains a concern, which complicates interpretation. and multinational enterprises to foster innovation There are, nevertheless, experiences on which to but these efforts are rather limited and evidence of build. The United Nations Economic Commission impact remains elusive. for Europe carries out a programme of innovation The contributions of the traditional knowledge, performance reviews in countries with economies in innovations and practices of indigenous peoples, and transition that examines, among other things, dif- the related reaffirmation of indigenous peoples’ rights ferent policy initiatives to channel finance for inno- could be monitored by drawing on the data collected vation, including through the promotion of various in the context of monitoring the Aichi Biodiversity types of partnerships, innovation funds or busi- Targets. Indicators developed for Aichi Target 18 ness incubators. The statistical evidence is collected in particular (by 2020, the traditional knowledge, through official statistics and information collected innovations and practices of indigenous peoples and from agencies running different programmes, as well local communities relevant for the conservation and as from education and research institutions. sustainable use of biodiversity, and their customary Quantitative data in these areas need to be use of biological resources, are respected, subject to complemented by qualitative appraisals to assess national legislation and relevant international obli- progress. While data are often patchy and definitions gations, and fully integrated and reflected in the change, the almost exclusive role of public authorities implementation of the Convention with the full in driving the initiatives makes collecting informa- and effective participation of indigenous peoples and Science, technology, innovation and capacity-building 131

tion; rural infrastructure; agricultural research local communities, at all relevant levels) can serve to and extension services and technology develop- inform the Task Force report. WIPO maintains a ment; increase scientific knowledge, develop Database of Biodiversity-related Access and Benefit research capacities and transfer marine technol- Sharing Agreements, and a Database on Laws, trea- ogy) (120, 121, MoI 2.a, 3.b, 14.a) ties and regulations on the protection of traditional Endeavours to support developing countries to knowledge and traditional cultural expressions, and strengthen their scientific, technological and legislative texts relevant to genetic resources. These innovative capacity to move towards more may contribute to qualitative appraisals, rather than sustainable patterns of consumption and pro- quantitative data. duction through science and technology (120, Governments also committed in the Addis MoI 12.a.) Agenda to consider using public funding so that critical projects would be in the public domain. Monitor- To capture enhanced international coopera- ing this commitment will require careful assessment tion, the OECD statistics on sector allocation of to identify which projects are considered “critical”, ODA may be helpful, drawing upon the OECD which may depend on country circumstances. One creditor reporting system, which collects data from option would be to survey the existence of legislation individual projects and programmes. This would or regulations that mandate open access for publicly allow monitoring of ODA flows to relevant subsec- funded research. This information could be partially tors such as R&D in health, education and agricul- found in the UNESCO GO->SPIN database, which ture, in particular agricultural research, agricultural could be adapted for that purpose. Country case extension, forestry and fishery research; energy studies on experiences with measures to make pub- and other sectors; information and communica- licly funded research publicly accessible could also tion technology; and multi-sector education, train- serve to inform monitoring in this area. ing, research and technology projects. In addition, the Secretary-General’s annual Report on South- 5 .2 . International level South Cooperation brings together monitoring At the international level, countries commit to sup- work undertaken in this regard by United Nations port the efforts of developing countries to strengthen agencies, programmes, and specialized funds. For their scientific, technological and innovative capac- the Asia-Pacific region, ESCAP can also highlight ity. Specifically, countries commit to: collaboration efforts in the context of regional and sub-regional STI platforms, and similar reporting Enhance international cooperation in these could be carried out for other regions. The indicator areas, including ODA, in particular to LDCs, for means of implementation target 17.6: number of LLDCs, SIDS and countries in Africa and science and/or technology cooperation agreements and encourage other forms of international coop- programmes between countries, by type of cooperation eration in these areas, including South-South could capture another aspect of international col- cooperation (120) (MoI 17.6) laboration in STI. Another possibility would be to Endeavours to step up international coop- monitor the amount and percentage of their regular eration and collaboration in science, research, budget that international organizations devote to technology and innovation, including through STI programmes. public-private and multi stakeholder partner- Monitoring STI cooperation in specific sec- ships, and on the basis of common interest tors, including agriculture and health would also be and mutual benefit, focusing on the needs of pertinent. The indicator for target 2.a agriculture( developing countries and the achievement of the orientation index for government expenditures) focuses sustainable development goals (e.g. research and on domestic spending and thus will have to be com- development of vaccines and medicines, includ- plemented by additional data on international coop- ing relevant initiatives like GAVI; preventive eration and partnerships in agricultural research measures and treatments for the communicable and extension services and technology development. and non-communicable diseases; earth observa- OECD data on ODA for agricultural education, 132 Addis Ababa Action Agenda — Monitoring commitments and actions

Encourages the development, dissemination and training and research is one such data source. The diffusion as well as transfer of environmentally UNESCO Institute for Statistics collects R&D data sound technologies to developing countries on broken down by field of research, where agricultural favourable terms, including on concessional and veterinary sciences is one of the six fields of and preferential terms, as mutually agreed R&D reported. (120, MoI 17.7) An additional data source is agricultural R&D data collected in the framework of the ASTI (Agri- These commitments find their counterpart cultural STI) project run by the International Food in means of implementation targets 14.a and 17.7. Policy Research Institute. Specific funds and facili- Indicator 17.7.1 (total amount of approved funding ties can also be highlighted, such as the World Food for developing countries to promote the development, Programme’s Food Security Climate Resilience transfer, dissemination and diffusion of environmen- (FoodSECuRE) Facility, as a case study for agricul- tally sound technologies) can provide a basis for follow- tural partnerships, and CGIAR, the global agricul- up on technology transfer, while the indicators for tural research partnership. MoI 14.a do not directly address the issues covered In the health sector, indicator 3.b.2 (total net in this section. The development and diffusion of official development assistance to medical research and technologies is crucial to meeting the challenges of basic health sectors) would report on ODA flows for climate change and sustainable development, and medical research. To complement this and cover sup- fostering a rapid transition to a low-carbon economy. It is a broad and complex process which represents port of R&D of vaccines and medicines, the work of more than just the moving of equipment and other GAVI, the Vaccine Alliance, and other international so-called “hard” technologies, but also includes initiatives would be relevant. Support to developing know-how, goods and services, and institutional countries to strengthen their STI capacities for sus- procedures, and is influenced by enabling or hinder- tainable patterns of production and consumption ing policies. will be measured in indicator 12.a.1 (amount of sup- Activities on environmentally sound technolo- port to developing countries on R&D for sustainable gies (EST) are confronted with varying and, at times, consumption and production and environmental sound scarce data and indicators available to quantify their technologies). This should be complemented by moni- impacts. Many projects have long-term, diffuse toring ODA flows to green energy and other relevant impacts that are challenging to measure, assess and projects, and through case studies of other coopera- accurately attribute, which is why the Inter-agency tion projects in this area. The indicator for marine and Expert Group on Sustainable Development technology 14.a.1 (proportion of total research budget Goals chose the total approved funding of initia- allocated to research in the field of marine technol- tives as a general proxy indicator. Agencies conduct- ogy) focuses on domestic spending, which the Task ing initiatives that directly support the transfer of Force report can further complement by bringing in EST (such as the United Nations Environment Pro- a cross-border perspective. gramme) should be able to report on this indicator 6. Technology transfer by quantifying initiative funding, in addition to being able to provide procedural reporting inputs The Addis Agenda commits to a range of actions with on their activities, as well as substantive reporting the aim to directly and indirectly foster the develop- on trends and issues in future years. EST initiatives ment, dissemination and diffusion of technologies to (such as the Climate Technology Centre and Net- promote sustainable development. Specifically, the work, the International Environmental Technology Addis Agenda: Centre, United for Efficiency, En.Lighten, Global Fuel Economy Initiative, and WIPO GREEN) use Commits to transfer marine technology in different output and impact data and indicators to order to improve ocean health and to enhance assess their success, which relate to the specific initia- the contribution of marine biodiversity tive objectives. In addition to EST, several organi- (121, MoI 14.a) zations of the United Nations system promote the Science, technology, innovation and capacity-building 133

Commits to operationalize the Technology transfer of other technologies, such as aviation secu- Bank for Least Developed Countries by 2017 rity technology from the International Civil Aviation (124, 17.8) Organization. With respect to marine technology, the Inter- These commitments are partly covered in governmental Oceanographic Commission of two means of implementation targets under SDG UNESCO is mandated as a United Nations body 17 to strengthen the means of implementation and to promote scientific research, capacity development revitalize the Global Partnership for Sustainable and facilitate the transfer of marine technology. The Development. Global Ocean Science Report (GOSR) will function 7 1. . Implementation of the Technology as a monitoring framework to assess national and Facilitation Mechanism regional investment in marine research and related capacities. Disaggregated data to be included in the The Technology Facilitation Mechanism (TFM), GOSR will include investment in ocean science, mandated by paragraph 123 of the Addis Agenda and in particular expenditure on R&D in general and launched by paragraph 70 of the 2030 Agenda and ocean R&D specifically, indicators related to for Sustainable Development, consists of a United human resources, gender distribution, facilities/ Nations Inter-agency Task Team on Science, Tech- laboratories/field stations, and availability of key nology and Innovation for the SDGs (IATT), a equipment. The report will also include descriptors collaborative Multi-stakeholder Forum on Science, on geographical and thematic coverage of interna- Technology and Innovation to be convened by the tional, national, regional and local databases and the Economic and Social Council (ECOSOC) Presi- different user communities; research productivity dent, as well as an online platform as an information and science impact, including peer-reviewed publi- gateway to STI initiatives within and beyond the cations; and engagement in international collabora- United Nations. Work on the TFM is progressing tion. The data to be used to populate these indica- well: the IATT has been established and currently tors will be derived from national surveys, as well includes 29 members of the United Nations system; as existing Intergovernmental Oceanic Commission the 10-Member Group to Support the TFM, con- programmes on ocean observation and ocean data sisting of high-level representatives of science, civil exchange (Global Ocean Observing System and society and the private sector, has been appointed International Oceanographic Data and Information by the Secretary-General and is collaborating with Exchange), as well as the UNESCO Science Report, the IATT and the ECOSOC presidency to prepare Institute for Statistics and the OECD. the first STI Forum, which will take place from 6 to 7 June 2016 in New York. Reporting on the imple- 7. Actions within the United mentation of the TFM will be process-oriented and Nations or by the United Nations will be conducted by the IATT. system 7 .2 . Enhanced coherence of science, technology and innovation support The Addis Agenda commits to a range of actions measures in the United Nations system within or by the United Nations system in order to strengthen overall cooperation and support on sci- With respect to the mid- to long-term objective of ence, technology and innovation. Specifically, the increasing coherence and strengthening synergies Addis Agenda: among science and technology initiatives within the United Nations system, the establishment of the Commits to strengthen coherence and synergies IATT constitutes the first system-wide mechanism among science and technology initiatives within that can contribute to coordination, knowledge the UN system (122, 17.6) sharing and exchange of experiences, as well as joint Established a technology facilitation mechanism work on STI among those United Nations entities to support the SDGs (123, MoI 17.6) with activities and mandates relating to STI. The IATT is currently engaging in a mapping of STI 134 Addis Ababa Action Agenda — Monitoring commitments and actions

initiatives within and beyond the UN system, to Call for enhanced international support and enable further discussions on potential synergies. In establishment of multi stakeholder partner- general, there are limitations with regard to easily ships for implementing effective and targeted accessible data that would enable a quantification capacity-building in developing countries of synergies and coherence in the United Nations (115, SDG 17.9) system’s STI initiatives. As such, reporting will most Commit to reinforce national efforts in capac- likely be process-oriented and/or focus on qualitative ity-building in developing countries (115) factors. The question of how to potentially measure system coherence and synergy in the field of STI will The monitoring of capacity building efforts be part of future discussions in the IATT. can draw on broader efforts to monitor development 7 .3 . Establishment of the Technology Bank cooperation — official development assistance by traditional donors, South-South cooperation, UN The Instanbul Programme of Action called for the agency efforts, and philanthropic efforts. In each establishment of a Technology Bank and a Science, of these efforts, capacity building plays an impor- Technology and Innovation Supporting Mechanism tant role. The indicator for SDG 17.9, dollar value of for the LDCs, for which a feasibility study has been financial and technical assistance, (including through prepared. The Secretariat is pursuing the identifica- North-South, South-South and triangular cooperation) tion of perspective Council members, sources of vol- committed to developing countries, will also serve to untary funding and the finalization of legal require- provide a broad perspective on trends in capac- ments, including the conclusion of a host country ity building. agreement, so as to ensure the timely operationaliza- The capacity-building efforts of traditional tion of the Technology Bank and Science, Technol- donors can be monitored through OECD Devel- ogy and Innovation Supporting Mechanism for the opment Assistance Committee data. Although a LDCs in 2017. Reporting on the implementation of specific indicator for analysing ODA in support of the Technology Bank will be process-oriented and capacity building and technical assistance does not will be conducted by the United Nations Office of currently exist, OECD Common Reporting Stand- the High Representative for the Least Developed ard statistics allow for analysis of support to capacity Countries, Landlocked Developing Countries and building and technical assistance through the pur- Small Island Developing States (OHRLLS). Con- pose code system which is disaggregated by recipient tingent on the availability of data, OHRLLS will country and donor country on a commitment and also monitor the number of patents filed by residents disbursement basis. Capacity building is also a major and non-residents in LDCs, the number of scientific aspect of South-South cooperation. Projects includ- and technical journal articles by authors from LDCs, ing technical cooperation and capacity-building ini- and ODA for science, technology and innovation to tiatives represent around 75 per cent of South-South LDCs in future reports. cooperation, and broader trends in this area will thus be indicative of capacity development efforts as well. 8. Capacity building International organizations also engage in The Addis Agenda and the 2030 Agenda recognize capacity building. In this regard, Task Force mem- capacity development as an integral part of the bers will report on their capacity building initiatives. global partnership for sustainable development. The There are numerous examples of capacity building by Addis Agenda contains commitments to capacity international organizations across the Action Areas building in each of its seven action areas, as well as of the Addis Agenda, on which the Task Force can on data and statistics. In addition, there is an over- report in case studies. The Task Force will also report arching commitment contained in paragraph 115 of on efforts to achieve better coherence and increase this chapter on STI and capacity building. In the the effectiveness of capacity development. In addi- Addis Agenda, governments: tion, some international organizations periodically review or audit their own activities, which the Task Force can report on. Chapter III Data monitoring and follow-up

1. Introduction status, disability, and other characteristics relevant in national contexts (126, MoI 17.18) The final chapter of the Addis Agenda considers Requests the Statistical Commission, working how the international community should monitor with relevant international statistical services implementation of the agreed actions. It emphasizes and forums, to regularly assess and report on the importance of high quality disaggregated data the adequacy of international statistics related for policy making and monitoring the progress of to implementing the sustainable development implementation of the Addis Agenda and the 2030 agenda (126) Agenda for Sustainable Development and prior- Calls on relevant public and private actors to itizes capacity building in this area. put forward proposals to achieve a significant The Addis Agenda marks the first time that increase in global data literacy, accessibility and data issues have received such comprehensive treat- use, in support of the 2030 Agenda (128) ment in the Financing for Development (FfD) conferences and follow-up processes. This reflects a The commitment to increase and use disag- deeper appreciation of the importance of statistical gregated data is also contained in SDG means of systems and data administration and their role in implementation target 17.18, with indicators 17.18.1 strengthening domestic capacity in all areas, as well (proportion of sustainable development indicators pro- as promoting transparency and accountability. Yet duced at the national level with full disaggregation data also needs to be turned into useful, actionable when relevant to the target, in accordance with the information. Fundamental Principles of Official Statistics), 17.18.2 This section follows up on the commitments (number of countries that have national statistical leg- on data completeness, data quality, disaggregation islation that complies with the Fundamental Principles and availability. It also addresses the development of Official Statistics) and 17.18.3 (number of countries of specific measures and tools; transparency and with a National Statistical Plan that is fully funded needs assessment; and capacity building efforts in and under implementation, by source of funding). this context. The first indicator will allow the monitoring of data availability, including the level of disaggre- 2. Data availability, adequacy and gation. Furthermore, the Inter-agency and Expert standardisation Group on Sustainable Development Goal Indicators (IAEG-SDGs) proposed to include an overarching 2 1. . Availability (including disaggregation) principle of data disaggregation to accompany the and adequacy list of SDG indicators in its report to the 47th session of the Statistical Commission: “Sustainable Devel- The Addis Agenda commits to increase the avail- opment Goal indicators should be disaggregated ability and use of high-quality, timely and reliable where relevant by income, sex, age, race, ethnicity, disaggregated data. Specifically, the Addis Agenda: migratory status, disability and geographic location, Seeks to increase and use high-quality, timely or other characteristics, in accordance with the Fun- and reliable data disaggregated by sex, age, damental Principles of Official Statistics.” The -Sta geography, income, race, ethnicity, migratory tistical Commission is expected to regularly assess 136 Addis Ababa Action Agenda — Monitoring commitments and actions

data availability for the SDG indicators, and their sent the focus is mainly on macroeconomic and adequacy, as part of its regular work, also from the financial data, the coverage could be expanded at perspective of assessing the need for building the nec- each country’s choosing to bring other data into essary monitoring capacity in Member States. When the public domain, such as SDG indicators. Many considering data availability, it should be taken into international organizations, including some United account that the available data may be of a different Nations agencies, such as the United Nations nature, and that some data may be estimated. Industrial Development Organization (UNIDO) Data accessibility to users is a major concern and The United Nations Educational, Scientific and for statistical agencies. There is a need to create effi- Cultural Organization (UNESCO), have already cient online platforms in countries to allow easy data established ODPs to ensure the transparency of access to users. Measures of usage of those databases their own information, expenditure and program- are usually available and could be utilized to assess matic activities. The Global AIDS Response Pro- accessibility and use. Furthermore, providers of offi- gress Reporting provides another example that can cial data at the national, regional and global levels inform approaches to monitoring progress on other often actively strive to increase data literacy and health and development challenges. Countries actual data use, and individual efforts to measure report on progress against commitments made to those are being undertaken. their AIDS responses, engaging a diverse range of Although statistical agencies have a long stakeholders, including non-state actors, in the col- standing interest in making their products acces- lection and validation of data. sible, government data more generally are becoming The Task Force’s reporting on data transpar- available through the “open data” movement. The ency will also draw on the IMF’s enhanced Gen- concept of open data, which is derived from the eral Data Dissemination System (e-GDDS), which “open” licensing environment, originated from the is part of its Data Standards Initiatives aimed at belief that the enormous amount of information promoting data transparency globally. Data is to be routinely collected by government entities should be published through a national summary data page. At available to all citizens. In the late 2000s, govern- the regional level, the Statistical Yearbook for Asia ments and official entities began to allow a greater and the Pacific was revamped and provides a bench- number of users to access these resources. When data are made widely available and easy to use, the mark for SDG monitoring in the region. benefits can be significant: they can help streamline 2 .2 . Standardization of data government services, stimulate economic opportunities, encourage innovation, improve public safety, Statistical products maximise their impact when strengthen accountability in public life and reduce they measure things the same way across time and poverty. On the other hand, this must be balanced across geographic locations. In this context, the with ensuring privacy and data protection. It will Addis Agenda: take time to fully understand the complexity and Commits to support efforts to make data stand- broad potential of open data. As it is still in its early ards interoperable (128) stages, best practices and communities are just beginning to emerge. This involves using comparable questions in The World Bank Group will work with others surveys and following common concepts, classifica- to report on the number of member states that are tions and methods — that is, following a common undergoing open data readiness assessments, as standard. For key socio-economic indicators, stand- well as the number that are implementing open ards have been developed and endorsed by a majority data programmes. The International Monetary of member states. For example, all countries strive Fund (IMF) has been partnering with the African to measure gross domestic product (GDP) the same Development Bank to support African countries way conceptually, recognizing that data limitations to create and use open data platforms (ODP) for in low-capacity countries limit the quality, frequency the dissemination of relevant data. While at pre- and timeliness of GDP publication. Data monitoring and follow-up 137

Standards that describe data have also been 2 .3 . Data on specific issues, in particular developed. Better descriptions of data (referred to resource mobilization as “metadata”) facilitate communication between organizations and software systems to improve the The Addis Agenda aims to improve data availability quality of statistical documentation provided to on specific issues. Specifically, the Addis Agenda: users. The Statistical Commission and the seven Calls on relevant institutions to strengthen and sponsor organizations (Bank for International Set- tlements, the European Central Bank, Eurostat, the standardize data on domestic and international IMF, the Organization for Economic Co-operation resource mobilization and spending, as well as and Development (OECD), the United Nations data on other means of implementation (126) Statistical Division and the World Bank Group) are Requests the Statistical Commission, working working towards the implementation of the Statisti- with relevant international statistical services cal Data and Metadata eXchange (SDMX), which and forums, to facilitate enhanced tracking of aims to develop and use more efficient processes for data on all cross-border financing and other the exchange and sharing of statistical time series economically relevant financial flows that data and metadata among international organiza- brings together existing databases (126) tions and their member countries. Progress and The World Bank Group, the IMF, the OECD recent activities, also with respect to the implemen- and the United Nations Conference on Trade and tation of SDMX for the SDG indicators, can be Development have considerable experience in the reported on. compilation of data on domestic resource mobili- Metadata for detailed cross-sectional data, zation, foreign direct investment, remittances and such as the data collected by household surveys, are other private flows, official development assistance also guided by international standards. The Data and other international public finance. They will Documentation Initiative metadata standard has report on these flows in the Task Force report chap- been developed especially for this purpose and is ters on domestic public resources, domestic and used for documenting surveys in statistical agencies international private finance, and international and academia. The World Bank Group will work development cooperation. As discussed in chapter with other partners to assess progress in countries adopting these standards. II.A, there are also a number of multi-stakeholder Besides standards for data documentation and partnerships — such as the International Budget transfer, there are efforts to describe production pro- Partnership, Open Contracting Partnership and cesses for data such as the adoption of a Common Government Spending Watch — which focus on Statistical Production Architecture and the Generic data standards and data collection related to public Statistical Business Process Model, which helps to expenditure. produce statistics that are coherent across informa- There are also a range of SDG targets that tion domains. will also require data on domestic and international Interoperability of statistical data requires resource mobilization and cross-border financial compliance with international classification, stand- flows. It is expected that as part of the SDG moni- ards and recommendations prescribed by the United toring and the work on the annual SDG Progress Nations Statistical Commission. Specialized agen- Report, efforts will be undertaken to compile stand- cies such as UNIDO not only contribute to the ardized data for relevant indicators, which have been development of those standards but also monitor the referenced throughout this report. compliance of member states, and standardize data to ensure international comparability. UNESCO’s 3. Development of specific Institute for Statistics also contributes to supporting measures and tools efforts to make data standards interoperable in terms of its work on the International Standard Classifica- The Addis Agenda aims to develop specific measures tion of Education. and tools. Specifically, the Addis Agenda: 138 Addis Ababa Action Agenda — Monitoring commitments and actions

Calls on the UN system, in consultation with ment (or mainstream) certain aspects of sustainable the international financial institutions, to development such as, for example, targets 1.b, 6.5, develop transparent measurements of progress 6.b and 8b. More broadly, the chapters of this report on sustainable development that go beyond per speak to mainstreaming sustainable development capita income; these should recognize poverty in across different areas. The Task Force’s monitoring all of its forms and dimensions, and the social, of sustainable tourism can draw on data collected for economic and environmental dimensions of indicators 8.9.1 (tourism direct GDP as a proportion domestic output and structural gaps at all levels of total GDP and in growth rate), and 8.9.2 (number (129, MoI 17.19) of jobs in tourism industries as a proportion of total jobs Commits to seek to develop and implement tools and growth rate of jobs, by sex). to mainstream sustainable development, as well 4. Transparency and needs as to monitor sustainable development impacts for different economic activities, including for assessment sustainable tourism (129, MoI 12.b) On data and transparency, the Addis Agenda: Recognizes that greater transparency is essential Many countries and several international and and can be provided by publishing timely, com- regional organizations have discussed and developed prehensive and forward-looking information on measures of progress and sustainable development. development activities in a common, open, elec- The United Nations Development Programme’s tronic format; takes note of the International (UNDP) Human Development Index (HDI) and Aid Transparency Initiative (127) UNDP’s Multi-Dimensional Poverty Index are some Stresses the importance of preparing country of the relevant measures here. Some academics have needs assessments for the different priority areas also done work in this area, including the Commis- to allow for greater transparency and efficiency sion on the Measurement of Economic Performance by linking needs and support, in particular in and Social Progress, which was established in 2008 developing countries (127) by then President of the French Republic, Nicholas Sarkozy. Work has also been carried out by the Sta- Transparency of data includes that informa- tistical Commission to report on and survey such tion must be publicly available, on time, and in an measures, on which the Task Force can report. 1 accessible language and format, taking into account, SDG indicator 1.2.2 (proportion of men, women and where relevant, considerations such as literacy levels, children of all ages living in poverty in all its dimen- age, disability, language and cultural background. sions according to national definitions) should also be Transparency need not relate only to the publication useful since it incorporates non-economic dimen- of data, but can apply throughout the data collec- sions of poverty. The full set of SDG indicators can tion process. also be understood to provide a measure of progress The IATI Standard is based on publication of on sustainable development. data at the level of individual activities — projects Regarding tools to mainstream sustainable and programmes — and it can help in monitoring development, the Task Force can draw on SDG of FfD commitments and SDG targets, especially indicator 12.1.1 (number of countries with Sustainable at the national level (see chapter II.C). The Task Consumption and Production (SCP) national action Force can report on progress in implementing the plans or SCP mainstreamed as a priority or target into IATI standard. national policies), and there are several other targets International and regional organizations are and related indicators that refer to the existence of expected to conduct national needs assessments for laws, policy frameworks, plans or measures to imple- the priority areas. In the area of statistics, the United

1 For details please see respective background documents to the 45th and 46th session of the Statistical Commission available at: http://unstats.un.org/unsd/statcom/. Data monitoring and follow-up 139

Nations Fundamental Principles of Official Statistics data on technical and financial support to statistical state that official statistics that meet the test of prac- development and the implementation of national tical utility are to be compiled and made available statistical plans worldwide. Contributors to the on an impartial basis by official statistical agencies to PRESS can also present additional data in the Task honour citizens’ entitlement to public information. Force report, for example the IMF can report on 5. Efforts to strengthen statistical its Statistics Department’s enhanced provision of such technical assistance and training to developing capacities countries. The Task Force will also be able to draw To strengthen statistical capacities, the Addis Agenda: on the indicators for SDG targets 17.18 and 17.19, including in particular 17.18.3 (number of countries Commits to enhance capacity building sup- with a national statistical plan that is fully funded port to developing countries, including LDCs, and under implementation, by source of funding) and LLDCs and SIDS [to increase and use high- 17.19.1 (dollar value of all resources made available to quality, timely and reliable disaggregated data] strengthen statistical capacity in developing countries). (126, MoI 17.18, MoI 17.19) International organizations and others are conduct- Commits to provide international coop- ing or are expected to conduct country needs assess- eration, including through financial and ments for statistical capacity building. Some regions technical support, to further strengthen the have already engaged in national needs assessments capacity of national statistical authorities and and those efforts can be reported on. For addi- bureaux (126) tional details on the monitoring of commitments The Partner Report on Support to Statistics to capacity building more broadly see also chapter (PRESS) by the Partnership in Statistics for Devel- II.G on science, technology, innovation and capac- opment in the 21st Century (PARIS21) presents ity building.

Appendix A

Linkages between the means of implementation of the Sustainable Devel- opment Goals and the Addis Ababa Action Agenda The Addis Agenda contains, in its comprehensive financing framework for sustainable development, the means of implementation for the 17 SDGs. Their placement in the Addis Agenda is laid out in detail in below table.

Goal 1. End poverty in all its forms everywhere 1.a. ensure significant mobilization of resources from a cross-cutting variety of sources, including through enhanced development cooperation to provide adequate and predictable means for developing countries, in particular LDCs, to implement programmes and policies to end poverty in all its dimensions 1.b. create sound policy frameworks, at national, regional and cross-cutting international levels, based on pro-poor and gender-sensitive development strategies to support accelerated investments in poverty eradication actions Goal 2. End hunger, achieve food security and improved nutrition, and promote sustainable agriculture 2.a. increase investment, including through enhanced 121: To reach food security, we commit to further investment, international cooperation, in rural infrastructure, agricultural including through enhanced international cooperation, in research and extension services, technology development, earth observation, rural infrastructure, agricultural research and plant and livestock gene banks to enhance agricultural and extension services, and technology development by productive capacity in developing countries, in particular in enhancing agricultural productive capacity in developing least developed countries countries, in particular in least developed countries, for example by developing plant and livestock gene banks. 13: We will support sustainable agriculture, including forestry, fisheries and pastoralism. We will also take action to fight malnutrition and hunger among the urban poor. 2.b. correct and prevent trade restrictions and distortions in 83: In accordance with one element of the mandate of the world agricultural markets including by the parallel elimination Doha Development Agenda, we call on WTO members to of all forms of agricultural export subsidies and all export correct and prevent trade restrictions and distortions in world measures with equivalent effect, in accordance with the agricultural markets, including through the parallel elimination mandate of the Doha Development Round of all forms of agricultural export subsidies and disciplines on all export measures with equivalent effect. 2.c. adopt measures to ensure the proper functioning of food 108: We will adopt measures to ensure the proper functioning commodity markets and their derivatives, and facilitate timely of food commodity markets and their derivatives and call for access to market information, including on food reserves, in relevant regulatory bodies to adopt measures to facilitate order to help limit extreme food price volatility timely, accurate and transparent access to market information in an effort to ensure that commodity markets appropriately reflect underlying demand and supply changes and to help limit excess volatility of commodity prices. 142 Addis Ababa Action Agenda — Monitoring commitments and actions

Goal 3. Ensure healthy lives and promote well-being for all at all ages 3.a. strengthen implementation of the Framework Convention 77: Parties to the World Health Organization Framework on Tobacco Control in all countries as appropriate Convention on Tobacco Control will also strengthen implementation of the Convention in all countries, as appropriate, and will support mechanisms to raise awareness and mobilize resources. 32: We recognize, in particular, that, as part of a comprehensive strategy of prevention and control, price and tax measures on tobacco can be an effective and important means to reduce tobacco consumption and health-care costs, and represent a revenue stream for financing for development in many countries; 3.b. support research and development of vaccines and 121: We will support research and development of vaccines medicines for the communicable and non-communicable and medicines, as well as preventive measures and treatments diseases that primarily affect developing countries … for the communicable and non communicable diseases, in particular those that disproportionately impact developing countries. 3.b. cont.: … provide access to affordable essential medicines 86: We reaffirm the right of WTO members to take advantage and vaccines, in accordance with the Doha Declaration on the of the flexibilities in the WTO Agreement on Trade-Related TRIPs Agreement and Public Health, which affirms the right Aspects of Intellectual Property Rights (TRIPS) and reaffirm of developing countries to use to the full the provisions in the that the TRIPS Agreement does not and should not prevent TRIPS agreement regarding flexibilities to protect public health members from taking measures to protect public health. To and, in particular, provide access to medicines for all this end, we would urge all WTO members that have not yet accepted the amendment of the TRIPS Agreement allowing improved access to affordable medicines for developing countries to do so by the deadline of the end of 2015 121: We will support research and development of vaccines and medicines … We will support relevant initiatives, such as Gavi, the Vaccine Alliance, which incentivizes innovation while expanding access in developing countries. 3.c. increase substantially health financing and the 77: We commit to … substantially increase health financing recruitment, development and training and retention of and the recruitment, development, training and retention of the health workforce in developing countries, especially in the health workforce in developing countries, especially in LDCs and SIDS least developed countries and small island developing States. 3.d. strengthen the capacity of all countries, particularly 77: We commit to strengthening the capacity of countries, developing countries, for early warning, risk reduction, and in particular developing countries, for early warning, risk management of national and global health risks reduction and management of national and global health risks … in developing countries, especially in least developed countries and small island developing States. Goal 4. Ensure inclusive and equitable quality education and promote life-long learning opportunities for all 4.a. build and upgrade education facilities that are child, 78: Achieving sustainable development of delivering quality disability and gender sensitive and provide safe, non-violent, education to all girls and boys … will require … providing safe, inclusive and effective learning environments for all non-violent, inclusive and effective learning environments for all. We will scale up investments and international cooperation to allow all children to complete free, equitable, inclusive and quality early childhood, primary and secondary education, including through scaling-up and strengthening initiatives, such as the Global Partnership for Education. We commit to upgrading education facilities that are child, disability and gender sensitive…, including through international cooperation, especially in least developed countries and small island developing States. 4.b. by 2020 substantially expand globally the number of 119: We will increase the number of scholarships available to scholarships for developing countries in particular LDCs, students in developing countries to enrol in higher education. SIDS and African countries to enrol in higher education, including vocational training, ICT, technical, engineering and scientific programmes in developed countries and other developing countries Appendix A 143

4.c. by 2030 substantially increase globally the supply of 78: We commit to … increasing the percentage of qualified qualified teachers, including through international cooperation teachers in developing countries, including through for teacher training in developing countries, especially international cooperation, especially in least developed LDCs and SIDS countries and small island developing States. Goal 5. Achieve gender equality and empower all women and girls 5.a. undertake reforms to give women equal rights to 41: We resolve to undertake legislation and administrative economic resources, as well as access to ownership and reforms to give women equal rights with men to economic control over land and other forms of property, financial resources, including access to ownership and control over services, inheritance, and natural resources in accordance with land and other forms of property, credit, inheritance, natural national laws resources and appropriate new technology. 6: We recommit to adopting and strengthening sound policies and enforceable legislation and transformative actions … to ensure women’s equal rights, access and opportunities for participation and leadership in the economy and to eliminate gender-based violence and discrimination in all its forms; 5.b. enhance the use of enabling technologies, in particular 114: We will promote the development and use of information ICT, to promote women’s empowerment and communications technology (ICT) infrastructure, as well as capacity-building … We will promote access to technology and science for women, youth and children. 5.c. adopt and strengthen sound policies and enforceable 6: We recommit to adopting and strengthening sound policies legislation for the promotion of gender equality and the and enforceable legislation and transformative actions for empowerment of all women and girls at all levels the promotion of gender equality and women’s and girls’ empowerment at all levels Goal 6. Ensure availability and sustainable management of water and sanitation for all 6.a. by 2030, expand international cooperation and capacity- 115: We call for enhanced international support and building support to developing countries in water and establishment of multi stakeholder partnerships for sanitation related activities and programmes, including implementing effective and targeted capacity-building water harvesting, desalination, water efficiency, wastewater in developing countries … to support national plans to treatment, recycling and reuse technologies implement all the sustainable development goals … It is also critical to reinforce national efforts in capacity-building in developing countries in such areas as … water and sanitation related activities and programmes. 34. We will support cities and local authorities of developing countries, particularly in least developed countries and small island developing States, in implementing resilient and environmentally sound infrastructure, including energy, transport, water and sanitation … 6.b. support and strengthen the participation of local 34 (cont): … In these efforts, we will encourage the communities for improving water and sanitation management participation of local communities in decisions affecting their communities, such as in improving drinking water and sanitation management. Goal 7. Ensure access to affordable, reliable, sustainable, and modern energy for all 7.a. by 2030 enhance international cooperation to facilitate 49: We will promote both public and private investment in access to clean energy research and technologies, including energy infrastructure and clean energy technologies including renewable energy, energy efficiency, and advanced and carbon capture and storage technologies … We will enhance cleaner fossil fuel technologies, and promote investment in international cooperation to provide adequate support and energy infrastructure and clean energy technologies facilitate access to clean energy research and technology 7.b. by 2030 expand infrastructure and upgrade technology 49 cont: We will … expand infrastructure and upgrade for supplying modern and sustainable energy services for all technology for supplying modern and sustainable energy in developing countries, particularly LDCs, SIDS and LLDCs, in services to all developing countries, in particular least accordance with their respective programmes of support developed countries and small island developing States. Goal 8. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all 8.a. increase Aid for Trade support for developing countries, 90: We will focus Aid for Trade on developing countries, in particularly LDCs, including through the Enhanced Integrated particular least developed countries, including through the Framework for LDCs Enhanced Integrated Framework for Trade-Related Technical 144 Addis Ababa Action Agenda — Monitoring commitments and actions

Assistance to Least Developed Countries. We will strive to allocate an increasing proportion of Aid for Trade going to least developed countries, provided according to development cooperation effectiveness principles. 8.b. by 2020 develop and operationalize a global strategy for 16: We also commit to developing and operationalizing, youth employment and implement the ILO Global Jobs Pact by 2020, a global strategy for youth employment and implementing the International Labour Organization (ILO) Global Jobs Pact. Goal 9. Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation 9.a. facilitate sustainable and resilient infrastructure 14: To bridge the global infrastructure gap, including the $1 development in developing countries through enhanced trillion to $1.5 trillion annual gap in developing countries, financial, technological and technical support to African we will facilitate development of sustainable, accessible and countries, LDCs, LLDCs and SIDS resilient quality infrastructure in developing countries through enhanced financial and technical support … As a key pillar to meet the sustainable development goals, we call for the establishment of a global infrastructure forum.. to identify and address infrastructure and capacity gaps in particular in least developed countries, landlocked developing countries, small island developing States and African countries. 34. We will support cities and local authorities of developing countries, particularly in least developed countries and small island developing States, in implementing resilient and environmentally sound infrastructure 9.b. support domestic technology development, research 116: We will craft policies that incentivize the creation of and innovation in developing countries including by ensuring new technologies, that incentivize research and that support a conducive policy environment for inter alia industrial innovation in developing countries. We recognize the diversification and value addition to commodities importance of an enabling environment at all levels, including enabling regulatory and governance frameworks, in nurturing science, innovation, the dissemination of technologies, particularly to micro, small and medium-sized enterprises, as well as industrial diversification and value added to commodities. 9.c. significantly increase access to ICT and strive to provide 114: We will promote the development and use of information universal and affordable access to internet in LDCs by 2020 and communications technology (ICT) infrastructure, as well as capacity-building, particularly in least developed countries, landlocked developing countries and small island developing States, including rapid universal and affordable access to the Internet. Goal 10. Reduce inequality within and among countries 10.a. implement the principle of special and differential 84: Members of WTO will continue to implement the treatment for developing countries, in particular least provisions of special and differential treatment for developing developed countries, in accordance with WTO agreements countries, in particular least developed countries, in accordance with WTO agreements. 10.b. encourage ODA and financial flows, including foreign 52: We recognize the importance of focusing the most direct investment, to states where the need is greatest, concessional resources on those with the greatest needs and in particular LDCs, African countries, SIDS, and LLDCs, in least ability to mobilize other resources. In this regard we note accordance with their national plans and programmes with great concern the decline in the share of ODA to least developed countries and commit to reversing this decline. 45: We recognize the important contribution that direct investment, including foreign direct investment, can make to sustainable development, particularly when projects are aligned with national and regional sustainable development strategies … We will … incentivize foreign direct investment to developing countries, particularly least developed countries, landlocked developing countries, small island developing States and countries in conflict and post-conflict situations; Appendix A 145

10.c. by 2030, reduce to less than 3% the transaction costs of 40: We will work towards reducing the average transaction migrant remittances and eliminate remittance corridors with cost of migrant remittances by 2030 to less than 3 per cent of costs higher than 5% the amount transferred. We are particularly concerned with the cost of remittances in certain low volume and high cost corridors. We will work to ensure that no remittance corridor requires charges higher than 5 per cent by 2030, mindful of the need to maintain adequate service coverage, especially for those most in need. Goal 11. Make cities and human settlements inclusive, safe, resilient and sustainable 11.a. support positive economic, social and environmental 34: We will enhance inclusive and sustainable urbanization and links between urban, peri-urban and rural areas by strengthen economic, social and environmental links between strengthening national and regional development planning urban, peri-urban and rural areas by strengthening national and regional development planning, within the context of national sustainable development strategies. 11.b. by 2020, substiantially increase the number of cities and 34: By 2020, we will increase the number of cities and human settlements adopting and implementing integrated human settlements adopting and implementing integrated policies and plans towards inclusion, resource efficiency, policies and plans towards inclusion, resource efficiency, mitigation and adaptation to climate change, resilience to mitigation and adaptation to climate change, and resilience to disasters, develop and implement in line with the Sendai disasters. We will develop and implement holistic disaster risk Framework for Disaster Risk Reduction 2015–2030, holistic management at all levels in line with the Sendai Framework. disaster risk management at all levels In this regard, we will support national and local capacity for prevention, adaptation and mitigation of external shocks and risk management. 11.c. support least developed countries, including through 34: We therefore commit to scaling up international financial and technical assistance, for sustainable and resilient cooperation to strengthen capacities of municipalities buildings utilizing local materials and other local authorities. We will support cities and local authorities of developing countries, particularly in least developed countries and small island developing States, in implementing resilient and environmentally sound infrastructure, including energy, transport, water and sanitation, and sustainable and resilient buildings using local materials. Goal 12. Ensure sustainable consumption and production patterns 12.a. support developing countries to strengthen their 120: We will continue to support developing countries to scientific and technological capacities to move towards more strengthen their scientific, technological and innovative sustainable patterns of consumption and production capacity to move towards more sustainable patterns of consumption and production, including through implementation of the 10-year framework of programmes on sustainable consumption and production patterns. 12.b. develop and implement tools to monitor sustainable 129: We will seek to develop and implement tools to development impacts for sustainable tourism which creates mainstream sustainable development, as well as to monitor jobs, promotes local culture and products sustainable development impacts for different economic activities, including for sustainable tourism. 12.c. rationalize inefficient fossil fuel subsidies that encourage 31: We reaffirm the commitment to rationalize inefficient wasteful consumption by removing market distortions, fossil-fuel subsidies that encourage wasteful consumption in accordance with national circumstances, including by by removing market distortions, in accordance with national restructuring taxation and phasing out those harmful circumstances, including by restructuring taxation and phasing subsidies, where they exist, to reflect their environmental out those harmful subsidies, where they exist, to reflect their impacts, taking fully into account the specific needs and environmental impacts, taking fully into account the specific conditions of developing countries and minimizing the needs and conditions of developing countries and minimizing possible adverse impacts on their development in a manner the possible adverse impacts on their development in a that protects the poor and the affected communities manner that protects the poor and the affected communities. Goal 13. Take urgent action to combat climate change and its impacts 13.a. implement the commitment undertaken by developed 60: We recognize that, in the context of meaningful mitigation country Parties to the UNFCCC to a goal of mobilizing jointly actions and transparency on implementation, developed USD100 billion annually by 2020 from all sources to address the countries committed to a goal of mobilizing jointly $100 billion needs of developing countries in the context of meaningful a year by 2020 from a wide variety of sources to address the mitigation actions and transparency on implementation needs of developing countries; 146 Addis Ababa Action Agenda — Monitoring commitments and actions

and fully operationalize the Green Climate Fund through its capitalization as soon as possible 61: We welcome the successful and timely initial resource mobilization process of the Green Climate Fund, making it the largest dedicated climate fund and enabling it to start its activities in supporting developing country parties to the United Nations Framework Convention on Climate Change. We welcome the decision of the Board of the Green Climate Fund to aim to start taking decisions on the approval of projects and programmes no later than its third meeting in 2015 as well as its decision regarding the formal replenishment process for the Fund. 13.b. Promote mechanisms for raising capacities for effective 115: We call for enhanced international support and climate change related planning and management, in LDCs establishment of multi-stakeholder partnerships for and SIDs, including focusing on women, youth, local and implementing effective and targeted capacity-building in marginalized communities developing countries, including least developed countries, landlocked developing countries, small island developing States, African countries, and countries in conflict and post- conflict situations, to support national plans to implement all the sustainable development goals … It is also critical to reinforce national efforts in capacity-building in developing countries in such areas as … climate services, including planning and management for both adaptation and mitigation purposes. Goal 14. Conserve and sustainably use the oceans, seas and marine resources for sustainable development 14.a. increase scientific knowledge, develop research 121: We will increase scientific knowledge, develop research capacities and transfer marine technology taking into account capacity and transfer marine technology, taking into the Intergovernmental Oceanographic Commission Criteria account the Criteria and Guidelines on the Transfer of Marine and Guidelines on the Transfer of Marine Technology, in order Technology adopted by the Intergovernmental Oceanographic to improve ocean health and to enhance the contribution Commission, in order to improve ocean health and to enhance of marine biodiversity to the development of developing the contribution of marine biodiversity to the development countries, in particular SIDS and LDCs of developing countries, in particular small island developing States and least developed countries. 14.b. provide access of small-scale artisanal fishers to marine 108: We will also provide access for small-scale artisanal fishers resources and markets to marine resources and markets, consistent with sustainable management practices as well as initiatives that add value to outputs from small-scale fishers. 14.c. Enhance the conservation and sustainable use of oceans 64: We recognize that oceans, seas and coastal areas form an and their resources by implementing international law as integrated and essential component of the Earth’s ecosystem reflected in the United Nations Convention on the Law of the and are critical to sustaining it and that international law, as Sea, which provides the legal framework for the conservation reflected in the United Nations Convention on the Law of the and sustainable use of oceans and their resources, as recalled Sea, provides the legal framework for the conservation and the in paragraph 158 of “The future we want” sustainable use of the oceans and their resources. Goal 15. Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss 15.a. mobilize and significantly increase from all sources 63: We encourage the mobilization of financial resources from financial resources to conserve and sustainably use biodiversity all sources and at all levels to conserve and sustainably use and ecosystems biodiversity and ecosystems. 15.b. mobilize significantly resources from all sources and at all 63 cont: We encourage the mobilization of financial levels to finance sustainable forest management and provide resources from all sources and at all levels to conserve and adequate incentives to developing countries to advance sustainably use biodiversity and ecosystems, including … sustainable forest management, including for conservation promoting sustainable forest management … We commit to and reforestation supporting the efforts of countries to advance conservation and restoration efforts, such as the African Union Great Green Wall Initiative, and to providing support to countries in need to enhance the implementation of their national biodiversity strategies and action plans. Appendix A 147

15.c. enhance global support to efforts to combat poaching 92: We resolve to enhance global support for efforts to combat and trafficking of protected species, including by increasing poaching and trafficking of protected species, trafficking in the capacity of local communities to pursue sustainable hazardous waste, and trafficking in minerals, including by livelihood opportunities strengthening both national regulation and international cooperation, and increasing the capacity of local communities to pursue sustainable livelihood opportunities. Goal 16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels 16.a. strengthen relevant national institutions, including 112: We will strengthen regional, national and subnational through international cooperation, for building capacities at institutions to prevent all forms of violence, combat terrorism all levels, in particular in developing countries, for preventing and crime, and end human trafficking and exploitation of violence and combating terrorism and crime persons, in particular women and children, in accordance with international human rights law. We will effectively strengthen national institutions to combat money-laundering, corruption and the financing of terrorism, which have serious implications for economic development and social cohesion. We will enhance international cooperation for capacity-building in these areas at all levels, in particular in developing countries. 16.b. promote and enforce non-discriminatory laws and 21: We will promote and enforce non-discriminatory laws, policies for sustainable development social infrastructure and policies for sustainable development. Goal 17. Strengthen the means of implementation and revitalize the global partnership for sustainable development Finance 17.1. strengthen domestic resource mobilization … 20: Building on the considerable achievements in many countries since Monterrey, we remain committed to further strengthening the mobilization and effective use of domestic resources. 17.1. cont.: … including through international support to 22: We recognize that significant additional domestic developing countries to improve domestic capacity for tax and public resources, supplemented by international assistance other revenue collection as appropriate, will be critical to realizing sustainable development and achieving the sustainable development goals … In this regard, we will strengthen international cooperation to support efforts to build capacity in developing countries, including through enhanced official development assistance (ODA). 17.2. developed countries to implement fully their ODA 51: ODA providers reaffirm their respective ODA commitments, commitments, including to provide 0.7% of GNI in ODA to including the commitment by many developed countries to developing countries of which 0.15-0.20% to least-developed achieve the target of 0.7 per cent of ODA/GNI and 0.15 to 0.20 countries; ODA providers are encourged to consider setting a per cent of ODA/GNI to least developed countries. target to provide at least 0.20 per cent of ODA/GNI to LDCs 17.3. mobilize additional financial resources for developing cross-cutting countries from multiple sources 17.4. assist developing countries in attaining long-term 94: We recognize the need to assist developing countries in debt sustainability through coordinated policies aimed at attaining long-term debt sustainability through coordinated fostering debt financing, debt relief and debt restructuring, as policies aimed at fostering debt financing, debt relief, debt appropriate, and address the external debt of highly indebted restructuring and sound debt management, as appropriate. We poor countries (HIPC) to reduce debt distress will continue to support the remaining HIPC-eligible countries that are working to complete the HIPC process. On a case-by- case basis we could explore initiatives to support non-HIPC countries with sound economic policies to enable them to address the issue of debt sustainability. We will support the maintenance of debt sustainability in those countries that have received debt relief and achieved sustainable debt levels. 17.5. adopt and implement investment promotion 46: We resolve to adopt and implement investment promotion regimes for LDCs regimes for least developed countries. Technology 17.6. enhance North-South, South-South and triangular 120: We will encourage the development, dissemination and regional and international cooperation on and access to diffusion and transfer of environmentally sound technologies 148 Addis Ababa Action Agenda — Monitoring commitments and actions

science, technology and innovation, and enhance knowledge to developing countries on favourable terms, including on sharing on mutually agreed terms … concessional and preferential terms, as mutually agreed. We will endeavour to step up international cooperation and collaboration in science, research, technology and innovation, including through public-private and multi stakeholder partnerships, and on the basis of common interest and mutual benefit, focusing on the needs of developing countries and the achievement of the sustainable development goals. 17.6. cont: … including through improved coordination 122: We invite specialized agencies, funds and programmes among existing mechanisms, particularly at UN level … of the United Nations system with technology-intensive mandates to further promote the development and diffusion of relevant science, technologies and capacity-building through their respective work programmes. We commit to strengthening coherence and synergies among science and technology initiatives within the United Nations system, with a view to eliminating duplicative efforts and recognizing the many successful existing efforts in this space. 17.6. cont.: and through a global technology 123: We decide to establish a Technology Facilitation facilitation mechanism Mechanism. The Mechanism will be launched at the United Nations summit for the adoption of the post-2015 development agenda in order to support the sustainable development goals. 17.7. promote development, transfer, dissemination and 120: We will encourage the development, dissemination and diffusion of environmentally sound technologies to developing diffusion and transfer of environmentally sound technologies countries on favourable terms, including on concessional and to developing countries on favourable terms, including on preferential terms, as mutually agreed concessional and preferential terms, as mutually agreed. 17.8. fully operationalize the Technology Bank and STI 124: We look forward to the recommendations of the (Science, Technology and Innovation) capacity building Secretary-General’s High-level Panel on the Technology mechanism for LDCs by 2017 … Bank for Least Developed Countries on the feasibility and organizational and operational functions of a proposed technology bank and science, technology and innovation capacity-building mechanism for least developed countries. We will take into account the High-level Panel’s recommendations on the scope, functions, institutional linkages and organizational aspects of the proposed bank, with a view to operationalizing it by 2017, and will seek to promote synergies with the Technology Facilitation Mechanism. 17.8. cont: … and enhance the use of enabling technologies in 114: We will promote the development and use of information particular ICT and communications technology (ICT) infrastructure, as well as capacity-building, particularly in least developed countries, landlocked developing countries and small island developing States, including rapid universal and affordable access to the Internet. Capacity building 17.9. enhance international support for implementing effective 115: We call for enhanced international support and and targeted capacity building in developing countries establishment of multi stakeholder partnerships for to support national plans to implement all sustainable implementing effective and targeted capacity-building in development goals, including through North-South, South- developing countries, including least developed countries, South, and triangular cooperation landlocked developing countries, small island developing States, African countries, and countries in conflict and post- conflict situations, to support national plans to implement all the sustainable development goals. Trade 17.10. promote a universal, rules-based, open, non- 79: We will continue to promote a universal, rules-based, open, discriminatory and equitable multilateral trading system transparent, predictable, inclusive, non-discriminatory and under the WTO … equitable multilateral trading system under the World Trade Organization (WTO). 17.10. cont.: … including through the conclusion of 83: As a means of fostering growth in global trade, we call on negotiations within its Doha Development Agenda WTO members to redouble their efforts to promptly conclude Appendix A 149

the negotiations on the Doha Development Agenda and reiterate that development concerns form an integral part of the Doha Development Agenda, which places the needs and interests of developing countries, including least developed countries, at the heart of the Doha Work Programme. 17.11. increase significantly the exports of developing 82: We will endeavour to significantly increase world trade in countries, in particular with a view to doubling the LDC share a manner consistent with the sustainable development goals, of global exports by 2020 including exports from developing countries, in particular from least developed countries with a view towards doubling their share of global exports by 2020 as stated in the Istanbul Programme of Action. 17.12. realize timely implementation of duty-free, quota- 85: We call on developed country WTO members and free market access on a lasting basis for all least developed developing country WTO members declaring themselves in a countries consistent with WTO decisions, including through position to do so to realize timely implementation of duty-free ensuring that preferential rules of origin applicable to imports and quota-free market access on a lasting basis for all products from LDCs are transparent and simple, and contribute to originating from all least developed countries, consistent with facilitating market access WTO decisions. Systemic issues Policy and institutional coherence 17.13. enhance global macroeconomic stability including 105: We will continue to strengthen international coordination through policy coordination and policy coherence and policy coherence to enhance global financial and macroeconomic stability. 17.14. enhance policy coherence for sustainable development 9: We commit to pursuing policy coherence and an enabling environment for sustainable development at all levels and by all actors, and to reinvigorating the global partnership for sustainable development; 103: We recognize the importance of policy coherence for sustainable development and we call upon countries to assess the impact of their policies on sustainable development; 105: We will continue to strengthen international coordination and policy coherence to enhance global financial and macroeconomic stability. 17.15. respect each country’s policy space and leadership to 9: We will respect each country’s policy space and leadership establish and implement policies for poverty eradication and to implement policies for poverty eradication and sustainable sustainable development development, while remaining consistent with relevant international rules and commitments. Multi-stakeholder partnerships 17.16. enhance the global partnership for sustainable 9: We commit to … reinvigorating the global partnership for development complemented by multi-stakeholder sustainable development; partnerships that mobilize and share knowledge, expertise, technologies and financial resources to support the achievement of sustainable development goals in all countries, particularly developing countries 10: The enhanced and revitalized global partnership for sustainable development, led by Governments, will be a vehicle for strengthening international cooperation for implementation of the post-2015 development agenda. Multi-stakeholder partnerships and the resources, knowledge and ingenuity of the private sector, civil society, the scientific community, academia, philanthropy and foundations, parliaments, local authorities, volunteers and other stakeholders will be important to mobilize and share knowledge, expertise, technology and financial resources, complement the efforts of Governments, and support the achievement of the sustainable development goals, in particular in developing countries. 150 Addis Ababa Action Agenda — Monitoring commitments and actions

17.17. encourage and promote effective public, public-private, 76: We recognize that genuine, effective and durable multi- and civil society partnerships, building on the experience and stakeholder partnerships can play an important role in resourcing strategies of partnerships advancing sustainable development. We will encourage and promote such partnerships to support country-driven priorities and strategies, building on lessons learned and available expertise; 46: We encourage the use of innovative mechanisms and partnerships to encourage greater international private financial participation in LDCs, LLDCs, SIDS, many MICs and countries in conflict and post-conflict situations; 48: We recognize that both public and private investment have key roles to play in infrastructure financing, including through … tools and mechanisms such as public-private partnerships; 117: We will encourage knowledge-sharing and the promotion of cooperation and partnerships between stakeholders, including between Governments, firms, academia and civil society, in sectors contributing to the achievement of the sustainable development goals. Data, monitoring and accountability 17.18. by 2020, enhance capacity building support to 126: We will seek to increase and use high-quality, timely developing countries, including for LDCs and SIDS, to increase and reliable data disaggregated by sex, age, geography, significantly the availability of high-quality, timely and reliable income, race, ethnicity, migratory status, disability, and other data disaggregated by income, gender, age, race, ethnicity, characteristics relevant in national contexts. We will enhance migratory status, disability, geographic location and other capacity-building support to developing countries, including characteristics relevant in national contexts for least developed countries, landlocked developing countries and small island developing States, for this purpose and provide international cooperation, including through technical and financial support, to further strengthen the capacity of national statistical authorities and bureaux. 17.19. by 2030, build on existing initiatives to develop 129: We further call on the United Nations system, in measurements of progress on sustainable development that consultation with the international financial institutions, to complement GDP, develop transparent measurements of progress on sustainable development that go beyond per capita income, building on existing initiatives as appropriate. These should recognize poverty in all of its forms and dimensions, and the social, economic and environmental dimensions of domestic output and structural gaps at all levels. 17.19. cont.: and support statistical capacity building in 126: We will seek to increase and use high-quality, timely developing countries and reliable data disaggregated by sex, age, geography, income, race, ethnicity, migratory status, disability, and other characteristics relevant in national contexts. We will enhance capacity-building support to developing countries … for this purpose and provide international cooperation, including through technical and financial support, to further strengthen the capacity of national statistical authorities and bureaux. Appendix B

Voluntary initiatives and commitments announced in conjunction with the Addis Ababa conference In the context of the Third International Conference A full list of the initiatives directly submitted on Financing for Development, multiple voluntary to the United Nations Department of Economic initiatives and commitments were announced. These and Social Affairs (DESA) by governments or other announcements complement the commitments in actors can be retrieved from the website of the the Addis Agenda and are expected to support its Addis Conference: http://www.un.org/esa/ffd/ffd3/ implementation. Announcements were made by all commitments.html. More details about the direct actors – governments, international organizations, submissions can be also found in the forthcoming including development banks, businesses, civil soci- publication on side events and voluntary commit- ety, and the philanthropic community. Several ini- ments from the Addis Ababa conference. However, tiatives also form new partnerships among different the list should not be seen as complete. While it actors that join forces to achieve shared goals. covers most of the initiatives announced directly These initiatives and commitments cover virtu- at the Addis Ababa conference, it does not include ally all action areas of the Addis Agenda, with a par- other announcements made in conjunction with ticular concentration in domestic public resources, the conference. Furthermore, as much as the imple- private business and finance, international develop- mentation of the Addis Agenda is a dynamic process, ment cooperation, and science, technology, innova- additional initiatives and commitments will emerge tion and capacity building. From a sector perspective, in the coming years, for example during the annual initiatives are focused on - but not limited to - tax, ECOSCOC Forum on Financing for Development infrastructure finance, private sector investment risk Follow-up. reduction, financing of social needs, in particular Therefore, DESA and the Task Force in the health and education, climate change and data. future may also include additional initiatives in its In future years, the Task Force will include reporting that are particularly relevant to the financ- updates on these voluntary initiatives and coming for development process and means of implemen- mitments in its reporting on the Addis Agenda as tation. DESA and the Task Force want to encour- a separate appendix. The Task Force invites leaders age all actors to continue sharing information not from all initiatives to actively report on the progress only about existing initiatives, but also about newly achieved, to describe how their initiatives contrib- established initiatives in support of the financing for ute to the financing for development process and to development process. This will enable the compila- share lessons learned. Reporting on the voluntary tion of an extensive and systematic database that will initiatives will support the implementation of the make a meaningful contribution to the monitoring Addis Agenda by ensuring accountability, giving and follow-up mechanism of the Addis Agenda, the visibility to success stories and allowing actors to overall financing for development process and the benefit from each other’s experience. means of implementation of the SDGs. 152 Appendix C — Mapping of select Addis commitments and actions in support of the SDGs

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r , o n o ti e

q s , 4 9 ) t f d a n

l r S d i s o l 1 5 ) ( h

e t o 1 4 ) r a r i o

f (

1 5 ) s n m e n r

t g

n i t c

( ,

…

M i i i ( e

s t t d y 1 2 ) u s

r e 1 9 ) p

n e

n , s , ( E g

n d d t ( f a n , s e d 1 2 ) t f g

c n t e b

o t y

i n 1 2 ) ( i e

r T r d s l a l e f n i o

n e a n n o g

y n n r a l

g d

r r a ti o g

( p s

ti e e a n e a c v e a n S m e o s g

n 1 4 ) m e

o o t y n t e o m i n e v o u n h a n ( n i n l ti s r o a ti

e 1 4 )

p o e l t e h c i p o t u t u s 1 6 ) a t e o t y m

c p l e n ( t r l l o c t e i c ( e c o o t

s n i n n . o o i a ti o

a ti a ti t a ti

t m e i

i o a c o d l m i e l s s u u o i u c n ,

e e e l p s e e n c a n c s v s a r a ti n w . c i a ti i d a r s n c c a c e r e e e p m o d e r d d c p i i u u h u h E c e c e o h m a n d a l e e i e s m v m h v a p v d r r o v o a n c o s u a c o u v d n d c o c s c s n ﬀ e o e v c r e o o n f s r a p e C i i l e i M o a c m v a n S r e d e v e e i S n e e n 1 9 ) c … P i t e a g c C a g r p d S t e d i m v r d d d D A d ( w a c e w t P

a l

i s , e s

c … a l r v

… ,

t y

e b t o a d o

4 9 )

i f ,

a n t y (

v r f e o l , … i

a l

d d

l n i 1 0 6 )

n l i n e d o h f , o i

f , ( a n s i y e l

p c o

l p

f o o n e t g s i 1 ) s g

i m t o ﬁ

g r a n ( o a s o 1 0 8 ) a l o n n

p g f

1 2 ) n s i g

n ( a n u r a ti g e t a b n b i (

ti o c n n i

o e - 1 0 5 ) s o h o m o n s 1 0 4 ) i i n n

a l t s n

n l ( p

r … c r t e i ( i o ti i n t s e

k o ﬁ n

g e o o , c e e c a n o u t s d e u c

ti s t m e c c s g a ti r n a n r

t r d c n u c ti n a n s i e u k e e c r o m m m o u d a s c . ti o e n e a n s h d ﬁ e h d s a n d c g l u i

s i s o o o a ffi c e o n e o v e n f n ff n r e e r e e r r r d 1 0 5 ) n n l o u r f c C n w t e s i o G ( e fi m a c c e R m i R e … c i P t e m a r M f e f

t h

s ,

, f

) f

) n

f l l

m s

o o a n o . a n

o t h o 4 8 t o e

e r

4 8

t o e

… ti ( , l r r ( r

r r n g g

g n n a s a l a s ,

u t o . b t o . t o

o t o l

n n t o e t t u f , f i , t u f i o g n t g t

o n )

) t e c n r h c c c n i

m e f s n m e s n

s - 1 0 2 ) e u i i

a ti c p e u e e s ( e e e 1 0 2 ) r 9 3 i g 9 3

e g a n n a n t a n t a n t ( l t r e w w l m o t r ti s t m e e

ti i ( r n ( r t m e - t o i e n n n a g i e b … a g o l s o i o s t s l s d

o o i ti a s r i t r r i r ti r e , a s k s e a b ﬁ a p ﬁ b e r G r G r r

s n t r a n r e n c n r r f v a n f v e p d o o a b n D o b w D a b u p u o o o o i n n m p m p . i n n 9 ) D M s c l i i … f S B i f S B i e o M c l i i … x o h t o t o ( D d e C c s

r ,

n t o

t i

o s a l , c s e r g n t h f n

ﬁ e

n ti …

i o

d t 7 9 )

w r t u

f f a d m c , c e ( 7 9 ) l n t o ti n i

n o u m e . i ( t o

o l o o e i

c u t t r

a n r

g e i r

n b c p s

g n v a s s n

i 8 3 ) e n

f n s n n t h o a n u t r e r (

e i e

r n o s

o o r p g e s 8 6 ) v r g w t e o ti a l

a s ( n e

s m e m e a ti ti a g n t s

t e

ti o

A p t e

ti n n r . . y c a s e

r c a ti e r c

t y r

g l r d , g , e o c S e o e t h r m o k e l u i t o i e m e l n g r v d t e r . m b e a l t o o g a d r d m o r t e t I P o a l e d o r s o r v a d h e o o o 8 7 ) 9 0 ) i r o a d a d n e r o R ( T f i p r A c ( w r o r m p r r m a r w t r d C p h t a k i p m e T n … e T p p e p

B s n

t s ,

B t D s

n o g … r n

7 5 ) . e

s a l D a l e

ti i (

n i i o M y y e , ti

7 )

t h i d d

… c t t c c

r ( r , f ,

ﬀ m i i

M a l

e n

u n s t o

i o o o d s a r o e r r p

e l a n

f a l

a l e o 5 7 ) a l a l c s y s e d ,

, 7 8 ) n i a l

( o n h g ( S s n m n n u u o l 1 2 ) 1 2 )

s f t u a l o g t e h

n t - r n a l r b m

( (

e o e g q q o o c e n n c s t o e t o n e g e n o e n g t t o s

1 2 ) g p l t v t e e n l o u n o r a r t h o ( s

o n t h t t d o o n

u n f a f u e t i a ti . a ti l r r m

i ti

a ti a ti r y r o i

t u t

e c s t r r a l a ti a c a c a ti r , . d t e e e s n

o r c s

d a ti n p n

n o o

a ti o w a ti d i r ) m p a ti o r e a ti n t t y , , o

k . d d r c r h a c . e c n p S p p a s h h n r r e s d l e c

n o o w f p i

e n n o , t t p r r r a n , e r u , m p m p p e p l 7 0 p u p s t e t e o m f o a t e a n a l c A a l e e e ( L t e o l n e 7 5 ) 5 3 ) v a l a l o s o u u m o d p t c o o a d n e o b g ( a l g ( R e t o D n … s i c I n ﬁ s c I n m e e o o r r 1 3 ) o t o e c a l S i u o n 6 8 ) 5 2 ) n w ( s t i C

h h . c ( s I p e c ( g t h O

s o . o a l

a s t

e ,

s u

c e a t e s

o c r i t h s , g i q n n r v e ti

r e … k s s s i n e e a r

i , c o u

ti n 4 9 ) r

n o r e u , i ti i a r h ( y o a m t l o

m p

, n

a n n c s s

d c

t r c g i n i a ti a r

s ﬁ n o y y

… 4 5 ) 1 3 ) e b r

g ' e

e g g s

y n n ( ( e b 4 1 ) g

l t tt a n g g o r

, f i

e e n n

( w a n r

n t s u

i l

n c o o o g t l o c e a l e e c s n n l l r r l i y n

b ti

n b s a b r r a d r a ti n m i s

a l

t o i r i

e i

o e o o i 4 0 ) o m b

I t m e m i p p r e e f a s i s m m h ( … e v w i c t

n n

t u t u t u s r . o ti o t w e … e o n e D o o r n ,

l l l

. s c v

m o

o j l e i t c h h , e , i a t e r , i

a n t t m e F n n n w o o s t s u u u a l ti d ) s o

n r a n c c c v

n v s h e h m d , s c c c o r o o i e u p p r l o e n i i i 3 7 ) u n n e g r a r c c c i s o i r t e c t e i P w h ( i b a n f r F r r 3 9 ) 4 1 ) o p 3 5 v e ( r ( e f F R e p c ( a d e a n P e u 3 9 ) n ( a g a g s a g i R

s l

e .

c e a

… r .

i r d

. r

l ti

, …

n n

u i n

, t , . i

d e … b o t f c

a )

e a

t a x

e s

n n , n , c ,

d t

a t o

u a t i 8 o r r

t h v y t , e , t

s e s … n a n 1 3 ) u

i ti n k n , ) p n

d n 1 p

s i e i n g

t 2 ) (

t r n ti r l i ,

e s e ( i s n a l e t l r

2 3 0 ) ( a e i e l t u m e t

i a c e n e

n s c l c

n 1 2 ) o g (

c a s a s e e c s s 1 c , i i g u p

( t s a n

v t s m i m a r c s o

( e m t e f n

a i n e e n

v i m h v

w t , u h o g

t w i n v r i n ti 3 2 ) n p r

v p n

o r l

r r s e e s v n v y o n r i c m s ( i f e m p c t n e g n g m e

c e r t r g e g

g o c o c e e e e s o e o t m e o ti l a s d n e u e i n i h g o

s e l o v e ti i n s s v s n r n o a r . t e i s 2 1 ) p t t r a ti n e m

i c a ti u e r d i

e n i

n c s . p e a s ( - e c l s n

i t g . a e t m e c e t m e v d c r n y a

r c p c d i o r o u

a ti p d d ti i t c

… d r c s

g - i o y t s s d , s

n c l s i f v

e e r m i , l l u s o c i t a l p , ) r , , n n u l e u s a c k r l a s u d n u i e e m e f . e b d s d p e i I l ) ) l n n n

e s n

b l b u 4 v c r b i p r i i I n e n c b v v f c u o c u n 3 2 v c t a e 3 u u n d n a w a u n o 1 2 ) ( o s s i p I 3 1 n r b l n E n n n 1 2 ) e i p I n ( e m e t o b ( ( i i p p I n I S ( t a x

, , , ,

ti ti

ti ti .

. . . .

ﬀ

Appendix C — Mapping of select Addis commitments and actions in support of the SDGs 153

s s y

…

s s

e e

, y

, i

e d e

d c d d ) ) g r i c i c r

g i

g y … o g n

n n n 5 0

l e g n a g y

y v ﬁ

o o o l , i

a l n

l a e a l a r 1 2 f

) l , p

o l i

l n

s n , ti a

l l , d l n , t o e 1 1 o

l a 0

t a a d t e n n t s b n o g n n i o a ( ( o o l s t o t n

n c

d 2

d c n i

n a

c o o n

e a e o n u f n , n n s i e n i i n i h r f n

h 1 r n e

e n u

e n e ti ti ti b f a ti ( o e h c f a ti g e , t e c h i e c g e p

a ti a o

i v a n b

m a o s c a

p c c c g

m n f e a t o a a l . s s e m

- r h

y m o

o o r ti o l i

. m n ti m t . p t r l t n e l . t n n e t y t ﬁ d n h ﬁ n r e .

n r e p i

. c ti p . . i i m e t i

t o s g t i a m n

ﬁ n . e o c g . o r

t y o s e

o , , f t r i ti i e o … i e

e m i

h o l , r d

s u o i i i u

v u l ) n ) , n f , v l o r f l o m e n s a m d t n

s d , r n s n c n i s s e i e ) ) n s d c r a r r o 0 5 i h i e e e

e w l e

i e i u n n s h n ﬁ e e tt v l v u 0

a c u n d 1 u o e c r

r r r i s 2 1 v n s v l v a n s s v o c . u u v d r a u e a p c d e s n 2 r t b i 2 a r o ﬀ s d m i c i c o ﬀ s a n s e r o a n s i 1 1 o e n e i i a p c n i i n n 1 6 ) o o p p c o f r i s t S n ( s e t e d ( f C 1 o r 1 o u u a p n ( d i t e D ( 1 5 ) s t e d D d i r ( f k m C c t s t e d D d ( a n a d p C b - -

, …

… r n ,

…

t o y o s o

, )

f i

o i y i , c f f f e f s i s

c s … e o …

l i

i c i

r o o o 1 0 8 ) l , s g

c t

c (

e s

1 0 3

t o f

t a l

e u n . e n n

1 0 3 ) ( n p a l a l h 1 3 )

. e

i n

o t a n ( p n

n n ( . d o o t s

d u s o

n i

c g

n i g

e g n u

h s

e t s y

, o ﬁ e g 1 0 6 ) o c n 1 0 6 ) d o a c n c n d s c e s n c

o e i ( n i e e c ( k e

c r a c

a ti i a ti n a l e

m e

n r e

c e c n i e g p e p c

i m n i c a l p p h g a n m i a ti g e a n m i a ti n e t c e n i a c i

n o t

e o n e r

t m a c n t r l o n n a t r l - s c o n o e c d r g

e l e t s l e a n o n i r e a n r r r m a r l e i n e n i n n a n ti s c ti i

e c n ti s v h i r e s i h i v m a t e v l u o e u o h v e ti t u o n s d i h a l t e t e o n ti a k e o . o l o e a r r c u e a r v s c o o n n a k e r o h n n v n t m a l c o h e o n c T m a k i e i c d p V m a k i e i c d p V c e c e T P s a r m a r a n . c ﬁ n a c i l , i n S c m e i n

…

, e f t )

m . r

d , o … e 4 8 t o e

r … n , (

r r f d n ) , a t u o

o r 4 t b t u f n

n t s n - n 3 1 0 2 ) o

l c n

g ( ( m e e 9 8 ) s u i

e u ( h s e h e

s e p s - t o g t t i i s r t r k o t ti t m e e g n c i r a g e e i a p l s b k n i s ti a s v n

i e e a b l r e w n r o a n t a r u f v r D s s W o s c a b . o t n i n m s m E M c i l i

, ,

e s ,

g f

O e n n . t e i e s e r n i o i . a d t

t o i

s 8 7 )

h g ti g g a s h f

, e ( t t r n

t h t o … a l

e c i )

W T c , n n n f o c p

o n i i i b s w a c n p 2

a o i n

i s

e a l

n s

i n k k n

o n 9 o

s n d o i

s g r s l s c c ( g g t o e

a l g

e 8 0 ) d

d s p e o p u n g a i u s (

s n n n s n i

ti t m e e e n a n l i t o t h o h i e t h i t e e t

p n n i a t e a ﬃ a ﬃ l k a i k i k i a a t

a ti c i g c d c d l g m d … r r r

… r c o c c e r

i r a l p b

. t t e t r l n , s n i i ti r

e , e e s g a t l a r t e , t e c e c e n E e e m i m n z u m b h b a t m e o s i o . s v a ffi e u a ffi a ffi t e s a r o i o t r ff a z r o u t r y e r 8 3 ) a l M i e 9 2 ) p o m a n d h p t a n d C fi s ( S d 8 4 ) s m u C s ( h t r p t r C v … I n S ( t r c d d S

e n

t y

i . ,

e c

. s t e x )

i . s d

… n e

… e

, e 0 n

h e

, v

r n , i a

o c f a l l r , c t ) e

e e a g . ti n … a o d ti n ( r n

c d t o

ti f

t 4 c

f d e

, a r l a t , n c

t h

ﬁ t a

e a t u u o s i a o s

)

…

a i n e t t

6 3 ) e c o n t n u t g

l l ( 6 2 )

a n n k l

m a n o 2 n

c … s u n i , a a n e

m ( n g

( f h m

e d n s

y n s

a n u n s s i n t i n t

o f s

a i 6 i 7 5 ) , , c m a n n i t o

c t l e n l e d o o (

( y d i

e e n e o e r e o d t y

g n r i e

c , b l t r

c r

m v l ﬁ i m e

s r i B n c r t

a t e 7 5 ) i o

m a g

m s

l n g o r

r m g a n r m p p s a n d i e t o a r

( i f g t e a n t h n t r

5 2 )

t y u D t

e n c e p n i

a ti a s d r t n

i ti e e s p m p m , s a b n i n ti i o c i e n a u i g n o r a l

m s e o t e s r i e b z s ( t e l o n c s s e e i

c r o o d r c e c h i n t f l fi c o n fl r r … fi r g s g l a l l c M n s i ti m e y k s l

m e i r t e s c - v e

i s a c d u u o n n i , ,

t e e l . s n y c e i a n s s e e , t t e e a s d v v c ) ) t c d u a o s a t o a n v m s o d s a b v a v i n m e s t a i o d o s a n e 7 6 s t h c e a n n n i o a n t r s a f y r a p n e n e i c e r o e o h e c s i o o c o o e o l n e o d e b s S s o r S c a c a n d n e i c o 5 4 ) d e p o ( 6 ( 6 p e C d e h u m d fi d c c fi M e e o a n d h r p C u r w F n c B f ( fi M fi t o e b s

, ,

t t , s e e … s t … s a l

y n

n n

, r n s t s e

3 7 ) a n t

r 4 5 ) , r a )

o t e ft r c i ti

) , e

( s c … t ( o l e

d l e e I t o f

v e

d 6

o e 5 l t ti r i … , e , p n ti

t m h i a m n t

o l 3 tt a r r c , n

r a l b ,

a n c s s u t s t

t a o o ( ( 4 a u

) s a

a t F p a n p a t a k e s o y o

u a ﬁ n o t

e e t n , t

n t f

o q e

7 g c

p s e r

L r l f

n 3 6 ) e F p a tt l p r a c n

t c q l . e

f n i s

o n n e a ti n

( 3 9 )

n u , o n o n e ﬁ o a d o p e v b f z e a ,

l i s e ( ( b a

z g e l n e o i e r f o e l i e m s c

a n o s s t n t m p t a s m e e r c ti a s e a n I o n b v i

b e n o t s g t o n t v r m p ti p ti

r m p t a b d s I s e

s m i m m

e n n c t r n a a i 4 5 ) n i i ti l e t a r D a e u s n r s m c i t t m e n o e a o

t u

a t s ti ( e D n r r i a n d … r n o s n f a o

ti - c F t d r s t e n ti s r n c n

o o ti s . i i u

F d i a n n r f n o r e o d u e , c s u m u m

d r r , c t t g u a l l a r e

e p c e n e i i e e o d a u r e a i v i o

) l i g e a l v s i n c a l i r h e t e ) , m a t e e C s v u s v n l o n t p v i v i c r p c c p r i i r c 7 o u e

r r s o d u c ti

a n s u e v

o u v s 5 o l o r e c n c n o r u p e u i n D n e t t u s t o r 1 3 ) i l p 4 s s I n u s n m B p c i n o u o o F a c e s i L … G t T F R G ( s ( V i p O v i e … s B a c n n o f c o n s p r s ( 3 c o n s m B r i g s i e c S

e l e s s k

d g l e s e

g … . e u i e e

n u e n … i u f

, ti , r n

a i e ti

a n i e n i r , c , t

- l …

. l i r

y c e ) i l , s b a . … l o

i n

d c

i e t y e

. c s

, ti

u g a r 7

i e ,

t u , i a g a tti s o 1 7 ) o s g c 3 0 ) ) ti n t o s t t , , d l r a

a b i t s , 1

s ( 2 0 ) t d d n r ) l c e p a 1

f n y ( o

(

o a

( 1 2 )

a n d , n o z f e n 4

c r o

l i t y r s o 3 u (

e s o t ti b ti i

f i s l 3 1 )

s e k s a n

n n e

t e ( a l m b

l r r 3 y n a u o p c t (

n p

p l n

i r n z n r t s a

e ( e f , e o e r k m s e m a n a i t o g s

e m

a l p u c n a c a m t o s c i o s

e e o o o n t m e i a l p

g ti r h v c o s t o r

. e o r g n e , e t i u p p e o a l a

n a r a c o ti . t i . l ti t t e t t h ti t , i n s o a n ti i t n i t l t , a ti ti r . s . s r m w a ti o n l i z r t n i e s l i s

w m e s e n g s

a ti . c c s d e o c s i t c g p f

c c p o r e d i o r

, s , r o e i i e c r i o e

i e a y e , g o n k r l s y ) ) t u u r n d a r , e n n u s d e e e

r ) h e i n n

n v p ﬃ r i m p s t e s r t ﬃ c i e e a w r 4 3 . n ti p

d f h n r ti e r b a ti d m e t h 4 h i v a h e d e a r r u u r p o o o e o l o r a c 3 3 s n n n e t a m e t o u x a m a p c 3 u b s o f n r o r ( i ( n i A c i o l d N m c n r c t r 3 2 ) o u e r r ( a d p m i s i R a ti n m m a u t o m c S e a c o u n t b i ( i n s t C e a n d p f t ﬁ e c s C S d o i C f p a n t e e

, ,

ti ti ti

ti tt .

ﬁ .

, .

ti tt ,

, ti .

, .

, ti

ﬀ