In Addis Ababa

Luke Shore

Over the last three years, the United Nations has been working to establish a global sustainable development agenda to succeed the eight Millennium Development Goals, which are about to expire. Unlike the MDGs, which were drawn up by bureaucrats behind closed doors, the new Sustainable Development Goals have been subject to the largest consultation in UN history. Negotiators came up with 17 goals and 169 targets covering everything from abolishing poverty to achieving gender equality to rescuing the planet from climate catastrophe. They are due to be adopted at a UN summit in New York in September. In Addis Ababa last month, member states met to agree on ways to pay for them. The cost of achieving the SDGs is estimated at between two and three trillion dollars a year for fifteen years: roughly 15 per cent of annual global savings, or 4 per cent of world GDP.

The G77 group of developing countries argued that the global financial system worked to their detriment and needed to be reformed. Multilateral financial institutions, they said, impose loans with strict conditions, dictated by developed nations. Regulatory failures mean that the developing world often loses more in outward illicit financial flows than it gains in international aid. And the international tax regime allows multinational corporations to make money in developing countries but only pay tax in the jurisdiction of registration. The G77’s central demand was that the OECD surrender regulatory powers to the UN, to allow developing countries a seat at the table and change the rules so that more of the money that’s earned in the developing world stays there.

Unsurprisingly, developed countries – led by the United States and the EU – had no interest in reform. Non-interventionist foreign policies, growing nationalist sentiment and domestic austerity programmes mean that international development is low on their list of political priorities. They were unenthusiastic about making new commitments and wouldn’t countenance changes to the international tax regime that would expand the tax base of developing countries and erode their own.

As the rain lashed down outside, developed nations laid down an ultimatum: either developing countries concede or there would be no deal. Late into the night on the penultimate day, the G77 blinked and it was settled: there would be no global tax reform, no new debt relief and no new money on the table. The following morning, the UN hailed the agreement as bold and groundbreaking but in private, G77 ministers were furious, describing the proceedings as ‘bullying’, ‘blackmail’ and ‘a new wave of colonialism under UN auspices’.

The USA and EU may have got their way in Addis, but they have also pushed the developing world closer to Russia and China, shifting power from the World Bank and International Monetary Fund to China’s Asian Infrastructure Investment Bank and the BRICS’ New Development Bank. And the damage goes further: the diplomatic tensions will continue into future intergovernmental negotiations, threatening both the SDG summit in New York next month and the COP21 climate summit in Paris in December.


  • 20 August 2015 at 6:58pm
    Eric Auerbach says:
    Re: Title: "Adaba"?

  • 24 August 2015 at 11:45am
    Simon Wood says:
    As ABBA sang, "Does she kiss, like I used to kiss you? Does it feel the same when she calls your name?" Will Russia and China be better bedfellows than we were? This warning from Luke Shore is as interesting as TTIP - not obviously, but eventually, definitely.

    I once went to Addis by mistake, on Ethiopian Airlines which was a small operation in those days, not the big one it is now. For some reason the first night of our journey to Kenya was spent in a hotel on the edge of Heathrow. This was the time of Mengitsu. The crew, unsettlingly, were not very happy.

    This meant the chain of connections was broken and since the plane stopped to pick up passengers on the way, there were many. We spent a night in Addis, then a forbidden Marxist city with the biggest market in Africa but nothing in it, except for some local handicrafts. I bought a fabulous painted wall hanging of a peaceable, feast scene - this was just before the Bob Geldof famine, there was no actual food on sale. There was one of the Battle of Adwa where Menelik beat the Italians, which I much preferred because it had loads of gun-shooting, but they wanted big bucks for that. Youths begged us for our spare, holiday t-shirts. Soldiers pointed their big guns at us outside the imperial palace. Anything that worked was Italian, old Fiats for instance, with their multiple reverse gears.

    Anyway, it was a far cry from today's tiger with its Chinese shoe and H&M factories and its chi-chi, specially-bred, miniature vegetables flown individually to our tables.

    The most memorable thing was the economy with which the terraced fields of the abysses of Ethiopia, seen from the air, were cultivated. Every last inch was planted. The ability to run their own country dated back to the Bible. It just need the irrigation of money. They didn't care whose. We all looked the same.

  • 24 August 2015 at 4:50pm
    Tierras Altas says:
    Maybe seen from a G7 country perspective, the problem is a cold war scenario. Seen from a Latin American and a developing country perspective, in general there are two problems. Multilateralism has been thrown away by the G7 because it does not want to recognise it has lost world power in terms of total GDP and total trade. Secondly, it is hard to believe that highly indebted rich countries like all of Europe, the US and Japan, with a very low growth perspective, have the nerve to control the financial architecture. Having financial institutions that have merited 300 billion dollars’ worth of fines for interfering the prices of interest rates, commodities and exchanges rates speaks of massive wrongdoing and of despair. As a consequence of all this we all land in a world where the highly indebted with no growth countries set the conditions for the financial architecture to operate for development in not very indebted high growth countries that have five times more international reserves on average. Multilateralism is being crushed by the G7 resistance to change and democratise UN agencies using their own criterion of votes according the GDP. The IMF and World Bank are two crying examples, and so they have turned negotiations into bilateral private negotiations. This gives reason to those who say there is no national interest anymore. Only money talks. The end result is increasing regionalisation as a response to the lack of multilateral institutions, from Europe to Asia and Latin America. So this is not a cold war scenario but a stop the nonsense scenario. And please stop recreating the 1950’s. We in the developing world already have the problem of how development is going to come about after the end of the commodities and export led era (The Global Trade Slowdown: A New Normal? A eBook, ed. Bernard Hoekman, 2015). A little like after the Korean war. The other problem is what are we going to do with climate change. Four more degrees in a hundred years will kill a lot of people. Maybe there is business in that as well?