The FfD4 Sevilla Commitment: Boosting hopes, if not finance

Heads of states approved the outcome document at the opening of the conference without discussion. Despite reservations from some countries (for instance, referring to the UN for discussing debt issues is definitely not to everyone’s liking), the so-called Compromiso de Sevilla – or Sevilla Commitment – held up. No one wanted to challenge the hard-won consensus.

Trump has probably been of great help. By withdrawing from the process after already isolating itself in opposing the Sustainable Development Goals, gender, trade, tax and financial regulations, among others, the US has provided the final impetus to all other members to ensure a comprehensive outcome.

And comprehensive it is. The 42-page outcome document covers a wide range of issues, including domestic resource mobilisation, international trade, debt, private sector mobilisation, corruption, illicit financial flows, finance regulations, reform of the international financial architecture, development cooperation, and south-south and triangular cooperation, to mention a few issues.

In the heat of Seville, the Commitment looks like a Christmas tree. Everybody can find some elements to please them, while complaining about weak or missing items (see IDOS, Afrodad and ourselves at ECDPM, for instance).

While the lack of focus is certainly a weakness, it has the advantage of preventing a strong antagonism between the Global South and Global North (although neither is truly global but increasingly fragmented). 

My initial fear was that the south would mainly ask for legitimate systemic reforms and a significant scaling up of finance, which the north would struggle to respond to in a geopolitically fragmented international landscape and fiscally constrained environment. While the north would make some efforts to advance a more pragmatic development agenda, this would lead to a mismatch of expectations and frustration on both sides due to the lack of recognition and common ground. The outcome document mainly avoids this pitfall… for the time being.
      
This might explain Seville’s rather good mood and dynamic spirit. Spare for the standstill traffic jams caused by security roadblocks across town and the conference compound, one session after the other highlighted positive initiatives and goodwill. 

We all seemed happy to be together, re-energised by our sense that narrow self-interest and conflictual approaches might not be overriding international relations, and that the common good, the sense of common destiny and ‘common decency’ (no longer so common these days, even among world leaders and in diplomatic circles) would prevail after all.

Yet, the Seville outcome document is just that – a document. Rather than focusing on what’s missing and how it could have been even better, the focus should be on how to implement at least some of its recommendations. The platform of action initiatives is expected to play a key role in this regard.

A cynical European financier ironically suggested that while ‘the billion to trillion’ agenda was dead, we are instead moving from ‘billion to million’, revealing the fear of many development actors. Another dismissed the false hopes of the current mantra of “doing more with less” and lamented that, while NATO leaders commit to 5% of GDP spending on defence, the world is unable to gather a fraction of this to save our planet and humanity. The Sevilla Commitment should serve as a reminder of our ambitions and help hold leaders more accountable.

As a pragmatist, I see three immediate major takeaways that could be derived from Seville, from both the FfD4 process and outcome.

First, development finance is not about developing countries; it concerns everyone. The donor-recipient relationship and divide are fast eroding. This is not to say that development cooperation and dominant relationships will cease.

However, the balance of power is shifting, traditional models are becoming obsolete, and co-creation is increasingly needed. Donors have to reinvent themselves fast. Development financiers have to up their game, building on numerous innovative initiatives, many of which originate from the South and their institutions. These include debt swaps, local currency, securitisation and special drawing rights, to mention just a few. These efforts should align with countries’ national strategies and priorities.

Second, economic interests, social justice, equity, gender and sustainable development are closely related and cannot be disentangled. Yet, appropriate instruments should be developed for each. For Europe, this implies adopting the appropriate policies and tools, better combining its domestic and international agenda (for example, around competitiveness, sustainability and the twin – digital and green – transition), and the priorities and institutions of its partner countries and international institutions.

To be concrete, the Global Gateway strategy must better engage and support the European private sector – via export credit agencies under the forthcoming European Competitiveness Fund, for example – and at the same time engage and support European, international, regional and national financial institutions for development and beyond. It should promote locally-owned initiatives and project origination, while supporting transformative dynamics through pipelines and portfolios of intervention approaches.

This investment approach should be complemented, when appropriate, by macro-financial assistance, policy-based lending and support for domestic public finance management and resource mobilisation, including gender-responsive budgeting, as outlined in the outcome document.

Third, greater attention should be devoted to governance reforms of the international architecture. In practice, Europe should actively pursue coalitions of the willing with like-minded partner countries, in both the south and north, through plurilateral initiatives and agreements, and adopt common positions in international fora whenever possible. The motto should be co-creation and partnerships. Europe should act now to show goodwill and strengthen relationships, rather than wait until it’s too late and the system totally collapses.

In doing so, the EU should adopt more pragmatic and tailored approaches, engaging with thematic and geographic priorities with its counterparts. Take the example of China. The EU characterised it as a systemic rival. Yet, cooperation with China can be fruitful in many specific areas and geographies, from critical raw minerals to solar energy and hydrogen development, where China has a clear dominance in producing solar panels and electrolysers, which is beneficial for many EU partner countries.

Back in Brussels, Europe should be inspired by the Sevilla Commitment to further elaborate on its comparative advantage and soft power in strengthening its dynamics among EU member states and institutions, as well as with its partners. You can count on ECDPM to facilitate, stimulate, support and help bridge that process.

The views are those of the author and not necessarily those of ECDPM.

Our work on FfD4

Explore our dossier featuring ECDPM’s work around the fourth International Conference on Financing for Development.