1. International Resource Mobilization and Partnerships Presented at Starting Strong : the first 1000 days of the SDGs Asian Regional Dialogue Colombo 18-19 May 2016 Posh Raj Pandey Executive Chairman South Asia Watch on Trade, Economics and Environment (SAWTEE)

2. Presentation outline Backgrounds on sustainable development goals Official development assistance Climate finance International trade Some proposals

3. Sustainable Development Goals (SDGs)

4. Goal 17 Strengthen the means of implementation and revitalize the Global Partnership for Sustainable Development Finance Technology Capacity building Trade Systemic issues: policy and institutional coherence Multi-stakeholder partnership Data, monitoring and accountability

5. Official Development Assistance (1) Proportional changes in DAC donor’s ODA, 2014-2015 Source: Development Initiatives 2016 Collectively ODA from 28 DAC donors increased by 6.89 percent in 2015 ( US$ 146.7 billion in 2015 compared to 137.2 billion in 2014). 22 of the DAC countries reported a real term increase in ODA.

6. Official Development Assistance (2) Amount spent on refuses in donor countries Source: Development Initiatives 2016 Most of the rise in ODA was due to increased spending on refusee within donor countries, When spending on refuses in donor countries is subtracted from the total, ODA increase by US$ 2.2 billion or 1.7 percent. ODA.

7. Official Development Assistance (3) Net ODA as percent of GNI Source: Development Initiatives 2016 Six DAC donors- Sweden, Denmark, Norway, Luxembourg, UK and Netherland - meet 0.7 percent of GNI, Collectively 28 DAC countries provide only 0.3 percent as aid.

8. Official Development Assistance (4) Bilateral ODA from DAC donors to LDCs Source: Development Initiatives 2016 DAC to LDCs increased in 2015 compared to 2014, but is still significantly below its 2011 peak.

9. Official Development Assistance (5) Bilateral ODA to LDCs as percent of GNI Source: Development Initiatives 2016 Just seven donors – Luxembourg, Sweden, Norway, UK, Denmark, Finland and Iceland - meet 0.15 percent of GNI as ODA to LDCs, In 2014, ODA to LDCs made up 31% of the total – just the same as the average of the past 15 years.

10. Official Development Assistance (6) Small island developing states (SIDS) - total net ODA to SIDS stood at just over US$4bn in 2014, falling each year since 2010. Countries in conflict and post conflict situation- OECD list of ‘fragile states’- numbering 50 countries- received US$50.3bn of ODA in 2014 – a reduction of US$3bn from 2013 and US$800m lower than in 2010.

11. Climate Finance (1) Climate finance from developed to developing countries, 2013 Source: Development Initiatives 2015 Global climate finance reached US$331 billion in 2013- of which public finance constituted US$137 billion or 42 percent, Just under half of global finance was invested in developing countries of which 20 percent came from developed countries and rest developing countries financed themselves.

12. Climate Finance (2) Composition of bilateral climate finance Source: Development Initiatives 2015 Most of the bilateral finance goes to mitigation and only 26 percent goes to adaptation and 16 percent for both adaptation and mitigation.

13. Climate Finance (3) A large proportion of adaptation-related ODA is allocated to countries with low level of vulnerability Source: Development Initiatives 2015 In 2013, just 9% of country-allocable adaptation-related ODA targeted countries with the highest levels (the upper quartile of countries) of vulnerability to climate change

14. Emerging challenges in mobilizing foreign aid Downside risk and vulnerabilities of global economy due to volatile capital flows, a large drop of commodity prices, rebalancing policies of China, the shock of potential UK exit from EU and increasing debt in emerging market; Escalated geopolitical tension and increasing number of refugees in DAC countries;

15. International trade (1) LDCs share in world exports Source: WTO 2016 LDCs were able to increase their shares in world exports of goods and commercial services from 0.5% in 1995 to 1.1% in 2013, LDCs' world market share of exports of commercial services stayed more or less stable at 0.4% until 2008, and thereafter started to increase - also during the crisis - registering 0.7% in 2013.

16. International trade (2) Share of top three LDC products in their total merchandise exports exports Source: WTO 2016 On average, almost 70% of total merchandise exports depended only on three main products in 2014. However, composition varies from LDC to LDC.

17. International trade (3) Share of LDCs’ exports entered duty free into developed countries merchandise exports exports Source: WTO 2016 In 2014, 84 percent of LDCs exports (excluding arms and oil) benefit from a duty-free treatment when imported by developed countries. Almost all (98 percent) agricultural exports and manufacture products (97 percent), except textile and clothing, from LDCs are exempted from duties in developed countries. (WTO 2016) Only 71 percent of LDCs textile products and 76 percent of clothing exports are duty free. (WTO 2016)

18. International trade (4) Share of LDCs’ exports entered duty free into developed countries merchandise exports exports Source: WTO 2016 Despite high duty free access, there is some erosion of the duty-free preference granted to LDCs in relation to other developing countries, leading to almost similar duty free treatment in 2014.

19. International trade (5) LDCs also enjoy duty-free access in a number of developing countries. In Hong Kong and Singapore,100 percent of all products are duty free on an MFN basis. China provides duty free access to 97 percent of tariff line; Korea over 86 percent; Thailand 73.2 percent; Brazil, India, Pakistan and South Africa between two-thirds to four-fifth. However, ‘true’ duty free treatment granted to LDCs on tariff lines that are dutiable under MFN is much lower. A service waiver for least developed countries was adopted in 2011 and by February 2015, 25 countries and regional groups had indicated sectors and modes where they intended to provide preferences to least developed country services and service providers. At the Tenth Ministerial Conference it was decided to extend the service waiver until the end of 2030.

20. International trade (6) Emerging challenges Emergence of global value chain (GVC) and high concentration of GVC within Europe-North America - East Asia triangle, many LDCs and developing countries outside the production process in GVC; Emergence of ‘mega’ regional preferential trade agreements (RTAs) such as Trans-Pacific Partnership Agreement (TPP) and United States- European Union Transatlantic Trade and Investment partnership (TPP).

21. Foreign Direct Investment (FDI) (1) Trends in FDI Source: UNCTAD 2015 In contrast to growth in GDP, trade, gross fixed capital formation and employment, world FDI is declining. However, FDI flows to developing economies increased by 2 per cent and to LDC by 4 percent in 2014.

22. Foreign Direct Investment (FDI) (2) Source: UNCTAD 2015 Prominent role of services in global FDI which accounted for 63 per cent of global FDI stock, more than twice the share of manufacturing, at 26 per cent. The primary sector contributed less than 10 per cent to global FDI.

23. Summing up (1) There exists huge resource gap for the implementation of SDG agenda and ODA is key to complement domestic resource mobilization, ODA is stagnant at 0.3 percent of DAC GNI and falls short of the commitment by many donors to achieve the target of 0.7 percent, There is declining trend of DAC resource flows to LDCs, SIDs and countries in conflict post conflict countries, Developing countries are managing 80 percent of climate finance on their own and out of remaining 20 percent coming from developed countries more than 75 percent goes to mitigation, Whatever resources are available for adaptation, they are not targeted to highly vulnerable countries,

24. Summing up (2) LDCs share in world trade is increasing but exports are concentrated in few products, Only 84 percent of LDCs exports enjoy duty free access, but margin of preferences is eroding, World FDI is declining and FDI is highly concentrated to services.

25. Some proposals (1) DAC countries consider to enact a law that requires to meet 0.7 percent of GNI as ODA commitment as well as 0.15-0.20 percent commitment for LDCs; DAC countries allocate a minimum of 40 percent total resources to the productive sectors such as agriculture and infrastructure development which leverage private sector investment, including FDI and job creation; Achieve better balance in climate finance towards adaptation- to start with consider 50:50 split between mitigation and adaptation finance; Strengthen coordination of support from public, private, bilateral and multilateral sources and implement a country- level planning process and tracking system;

26. Some proposals Ensure 100 percent duty free quota free (DFQF) market access for LDCs by delinking it from ‘single undertaking’ and negotiations in other sectors/areas; Safeguard right to regulate FDI to encourage private sector participation in key sustainable development sector such as infrastructure, health, education and climate change and also circumscribe expropriation; Ensure responsible investment through the clause on compliance with domestic laws and on corporate social responsibility.

27. Questions/comments are welcome posh.pandey@sawtee.org THANK YOU