following the Ninth Plenary Session, 25 June 2011
The Leading Group held its ninth plenary Session under the authority of the President of the Republic of Mali on 24 and 25 June 2011 in Bamako.
Over five years, innovative financing mechanisms have raised more than $5 billion for development. Recognized as part of the solution for achieving the Millennium Development Goals, they enable the activities that have benefited the most from globalization to contribute to greater global solidarity.
The exemplary theme of innovative financing mechanisms has been taken up by international forums: the United Nations, Africa, LDCs, Europe, G8 and G20 attach much importance to it; international organizations (UNDP, FAO, FTI, World Bank, GAVI, UNITAID etc.), NGO coordination bodies and major philanthropic foundations have also placed this theme on their agendas; additional countries are choosing this avenue to supplement their traditional ODA.
Innovative financing mechanisms provide more predictable assistance flows to fund, at a manageable risk level, long-term vital needs such as food security, health and education. Its countercyclical effect has increased as a result of 2008 economic and financial crisis.
Innovative financing is based on various mechanisms put in place by countries with very different development levels: loan guarantees, market mechanisms, micro-taxes, citizens’ contributions, lottery mechanisms, or debt management methods.
It constitutes a legitimate contribution from the activities that have benefited the most from globalization, corrects certain negative externalities and innovates in terms of both fund raising and expenditure to achieve ongoing improvement in the aid effectiveness.
With its 63 member countries and international organizations, NGOs, and foundations associated with its work, the Leading Group on Innovative Financing for Development has discussed these new resources, exchanging expertise and best practices, to identify new avenues and intensify international development activity.
To this end, the Leading Group pioneers pilot solutions aimed at responding to the international community’s call for progress on the Millennium Development Goals (about $180 billion required). It calls on its partners to effectively “scale up” international solidarity financing, particularly in the context of the G20 and the achievement of the Millennium Development Goals.
- Compliance by developed countries with their commitments, including an ODA level of 0.7% of GNI by 2015, and compliance with the principles of aid effectiveness are critical. But this will not be sufficient. To cope with global sustainable development challenges, it is necessary to innovate by seeking new resources.
- These resources should be complementary to traditional ODA and present a greater stability and sustainability so as to shield development financing from the vagaries of budgetary fluctuations and enable it to play a countercyclical role at times of economic and financial crisis.
- The partners of the Leading Group have experimented with several mechanisms to raise more than $5 billion for development. Their experience offers avenues for collective action on a larger scale.
- The sectors that have benefited the most from globalization, such as finance, air and sea transport, communications and tourism can contribute, in various forms, to solidarity.
- The discussions conducted by the Group on its priority themes (education, financial transactions, migrant remittances, food security, health, illicit flows and tax evasion) focused expertise and advocacy on tangible progress.
- The growing success of the theme of innovative financing mechanisms in international forums, notably the UN, Europe, Africa, the G8 and the G20, as well as recognition of the pivotal role played by the Leading Group confirm our ambition.
3. Recommendations and achievements of the Ninth Plenary Session
- Coordination of the agenda of African regional organizations and programs with the agenda of the Leading Group;
- Adoption, experimentation or exploration by each member country of an innovative financing mechanism within a year;
- Regular review of innovative financing implemented by member States;
- Promotion of the experts’ Report on activities that have benefited from globalization;
- Terms of reference for a new task force on food security and agriculture;
- Signature by additional countries of the Declaration on Financial Transactions (Mali, Benin, Burkina Faso, Congo, Guinea, Mauritania, Senegal and Togo);
- Call for a group of pioneering countries to set up a pilot contribution on financial transactions for Development;
- In that context, encouraging countries introducing a financial activities tax to earmark part of the revenue for international development;
- Exploration of the advisability of linking innovative financing mechanisms to the assistance efficiency agenda, notably in the context of the Busan Conference;
- Welcoming OIF as new member of the Leading Group;
- Transfer of the Presidency of the Leading Group to Spain;
- Request to the United Nations and the G20 that they maintain innovative financing mechanisms as a development financing agenda priority.
12 July 2011