WASHINGTON – Rich and poor countries agreed on Thursday to overhaul global finance for development, unlocking money for an ambitious agenda to end extreme poverty, protect the environment and improve economic opportunity by 2030.
The United Nations announced the deal on its website, capping three days of tough negotiations in Addis Ababa on how to finance the new Sustainable Development Goals that world leaders are due to adopt in September.
“This agreement is a critical step forward in building a sustainable future for all,” U.N. Secretary General Ban Ki-moon said on the website.
“The results here in Addis Ababa give us the foundation of a revitalized global partnership for sustainable development that will leave no one behind.”
Development experts estimate that it will cost over $3 trillion each year to finance the 17 new development goals, which range from ending poverty and hunger to ensuring quality education for all, achieving gender equality and making cities safe and sustainable.
Central to the agreement is a framework for countries to generate more domestic tax revenues in order to finance their development agenda, rather than relying on foreign aid.
Countries agreed on widening their domestic tax base, improving tax collection and combating tax evasion and illicit financial flows, which rob countries of revenues they can use for development.
A key sticking point had been a demand by the Group of 77 developing countries to have a greater say in reforming the international taxation system, which they say bleeds them of desperately needed money by allowing multinational corporations to shift profits out of their countries into low-tax regimes.
Under the agreement, the U.N. Committee of Experts on International Cooperation in Tax Matters will be strengthened, the press release said. It gave no further details though the G-77 wanted a more powerful role for the U.N.
There was no agreement, however, for the world’s richest countries to increase their share of development aid. Rather, they pledged to live up to their commitment to spend 0.7 percent of gross national income on foreign aid.
Jubilee USA Network, an alliance against poverty, applauded the agreement that included strengthening measures on debt relief for countries, limits on vulture funds that trade on distressed debt and more transparency in credit arrangements.
“We can only end poverty if we address the systems that perpetuate poverty,” said Eric LeCompte, Jubilee’s executive director. “That’s why world leaders focus so specifically on debt, tax and trade policies.”
The agreement is due to be formally adopted at a U.N. meeting on Thursday.
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