Brussels-based organisation Eurodad has published a discussion paper which analyses the evolving nature of debt in developing countries and investigates currently available solutions for change. In a context where developing country debt is increasing, despite taking a relative downward path between 2000 and 2010, this report aims to figure out the reasons behind this debt burden increase, analyse the risk of new debt crises and to examine the changing nature of the type of debt countries are now facing. It also makes recommendations for sustainable and progressive solutions to prevent further debt crises and to improve policy processes of crisis resolution and management.
DFI and OIF helped prepare and facilitate a session at the Caucus of African Governors of the IMF and World Bank, held in Cotonou, analysing how to enhance the role of the BWIs in assisting African governments with revenue mobilisation.
The session discussed the role of the two institutions in providing policy advice, technical assistance and capacity-building support, as well as the potential for the World Bank to stop asking for tax exemptions on World Bank and especially IFC projects, and for it to drop the Doing Business tax sub-criterion which encourages cuts in corporate tax rates. The conclusions of the meeting were incorporated into a Memorandum by African governors, to be discussed with Managing Director Lagarde and President Kim in October.
DRI chaired a plenary Development Cooperation Forum session as part of the UN ECOSOC meeting of the High-Level Political Forum on the SDGs. The subject of the session was how to monitor the contribution of private and blended development cooperation, and broader private flows, to progress on the SDGs. The session was based on a background report written by DFI for the DCF, and discussed how the effectiveness and impact of these flows could be assessed, and how to overcome financial, political and technical barriers to achieving this.
Stakeholders from the official and private sector all agreed that this should be a priority going forward and undertook to participate in further discussions during the next 2016-18 phase of the DCF.
DFI spoke at the Houses of Parliament in a session of the Commonwealth Parliamentary Association (CPA UK) conference entitled “Parliamentary Financial Oversight of Aid Effectiveness”. The event gathered parliamentarians from all Commonwealth countries to discuss the role of Parliaments in holding developing countries’ governments and donors accountable for results from aid.
The presentation highlighted the progress made by some developing countries in building accountability through aid policies and capacity-building support to parliaments, but also suggested that further progress will be difficult because donor support for aid effectiveness has waned. It was based on a background study written for the Inter-Parliamentary Union available here.
On 30 June -1 July, Kyoto welcomed the inaugural meeting of the ‘inclusive framework’, a new body allowing interested countries and jurisdictions to implement Base Erosion and Profit Shifting (BEPS) measures in a harmonised manner.
Under the auspices of the OECD’s Committee on Fiscal Affairs, the event gathered representatives of more than 80 countries at various stages of development and of international organisations and regional fiscal bodies. Their work focused on the manners in which to implement the measures which came out of the OECD’s BEPS Project, and which were endorsed in November 2015 by the G20 leaders at the Antalya Summit.Read more...
DFI took part in the first meeting of a civil society advisory panel on Social Spending in IMF Programmes, which will input into the redesign of IMF conditionality related to social spending.
IMF staff and panelists discussed the scope of the review, including the sectors to be covered, the need to take account of broader IMF work on inequality and therefore to look at comprehensive education, health and social protection coverage, and the successes and failures of existing conditionalities such as indicative social spending floors. They also contributed ideas on existing analysis including the GSW reports and database, as well as names of other experts for the reviewers to contact. Further meetings will be held, culminating in a public discussion at the BWI Annual Meetings in October.
DFI chaired a session at a Commonwealth meeting on “Perspectives on the Panama Papers”, looking at the current efforts being made to combat illicit financial flows by sharing information among countries and citizens. Panelists debated the role of “tax havens” in developed and developing countries and discussed a series of measures which small island developing states and UK crown dependencies in particular could take to contribute to global tax transparency and accountability. The outcome statement from the event is available here.
To coincide with the seminar, the Commonwealth published this report on the impact of anti-money laundering and counter terrorist financing (AML/CFT) regulations in Commonwealth Developing Countries.
DRI participated in the first meeting of the Jubilee Debt Campaign Academic Advisory Network. Participants exchanged information on their latest studies of debt issues ranging from analysis of the debt crisis and negotiations in Greece, through to latest analysis of debt sustainability in developing countries, the role of PPPs, and the impact of the Argentine vulture funds’ decisions on future debt resolution mechanisms. DRI highlighted its recent work on debt sustainability and its forthcoming work on productive spending and debt.
DFI helped to facilitate a meeting in New York on the role of the IFIs (G20, UN, IMF, World Bank, OECD and FSB) in combating in-country income inequality. The meeting was co-organised by New Rules for Global Finance and the Friedrich Ebert Stiftung and assembled academics, representatives of the IFIs and independent analysts to examine how their mandates could be interpreted to fight inequality in an SDG context.
The meeting reached strong conclusions on key “transmission mechanisms” through which the institutions should be expected to reduce inequality. It will be a key input into a New Rules report on the IFIs and Inequality to be launched early in 2017.
The latest Regional Economic Outlook for Sub-Saharan Africa published by the IMF reveals that despite a recent extended period of strong economic boost, many sub-Saharan African countries have borne the brunt of multiple economic shocks and are experiencing a sharp fall in growth.
This report points to the decline in commodity prices, tighter financing conditions and a severe drought in southern and eastern Africa for causing the trends currently affecting most sub-Saharan African countries. Growth fell in 2015 to its lowest level in some 15 years and is expected to slow further to 3 percent in 2016, affecting countries to varying degrees according to circumstances, and with the exception of oil importers which register a robust economic activity.
While the IMF projects that the region’s medium-term prospects remain favourable, it urges countries to adopt a policy reset to promote growth and makes recommendations to respond to the current macroeconomic challenges.
DRI participated in the World Bank Debt Management Facility Stakeholder Forum in Lusaka, taking part in the ICG governance meeting of the facility, and making a presentation on Debt Sustainability Status and Prospects in the Forum itself. The presentation, based on recent work for DFID and the AfDB, emphasized that an increasing number of countries have unsustainable debt burdens which are crowding out spending on the SDGs, and another round of global debt relief is on the cards.