The outcome document, or ‘Compromiso de Sevilla’, endorsed on 17 June by governments marks a significant moment in the global discourse on development finance. As the world confronts interconnected crises, the need for a robust and inclusive financial framework has never been more pressing.
The Compromiso presents some steps forward, but it also reveals critical shortcomings that must be addressed to put democracy and social justice at the heart of the international financial architecture.
Strengths of the Compromiso de Sevilla:
- Welcome focus on decent work: The commitment to invest in productive sectors, decent job creation, formalisation and skills development are a positive step. To maximize impact, this ambition will need to be matched with clear implementation strategies and a strong push for the formalization of the informal economy, particularly of undeclared and misclassified workers in enterprises.
- Financing for social protection: The document includes a measurable target for developing countries to increase social protection coverage by two percentage points per year, a commitment advocated by the International Labour Organization and supported by experts like UN Special Rapporteur Olivier De Schutter. This target aims to address the significant gaps in social protection coverage, with nearly half of the world’s population currently lacking any form of coverage. Additionally, the document highlights the need for predictable, adequate, and uninterrupted funding for social protection during shocks and crises, recognizing the importance of international financing mechanisms to support low-income countries in closing their social protection financing gaps.
- Advancing fair taxation: There is a commitment to promote tax progressiveness within the framework of gender-just tax systems, improve international tax transparency, and ensure fair taxation of corporations and the ultra-wealthy. Crucially, it supports efforts to strengthen international tax cooperation, including through engagement in the process towards a UN Framework Convention on Tax—an important step toward curtailing tax avoidance and building a more inclusive and equitable global tax system.
Despite these positive aspects, several critical issues are inadequately addressed or absent.
Areas of concern of the Compromiso de Sevilla:
- Weak debt architecture reform: With 3.3 billion people living in countries that spend more on debt interest payments than on healthcare or education, one of the most glaring shortcomings is the lack of a robust mechanism for debt restructuring. Due to the systematic blocking from Global North countries, the document proposes an intergovernmental process to promote voluntary principles on sovereign borrowing and lending, but stops short of endorsing the need for a permanent multilateral debt resolution mechanism. This omission leaves developing countries vulnerable to unsustainable debt burdens without a clear path to relief.
- Limited commitment to Official Development Assistance (ODA): While the document reaffirms the importance of ODA, it lacks concrete and time-bound commitments to increase aid levels or to ensure that aid is used effectively. In the context of dramatic aid cuts, this vagueness is alarming.
- Better criteria to make private finance work for development: Private capital was supposed to move SDGs financing ‘from billions to trillions’. The bad news is, as the World Bank’s Chief Economist recently admitted, that it “all turned out to be a fantasy”. Still, the Compromiso de Sevilla calls for more private capital mobilisation and blended finance in development, with vague references to the monitoring and accountability mechanisms to align private finance with the SDGs.
Urgent pending issues
To transform the Compromiso de Sevilla into a truly transformative framework for development finance, the following actions are essential:
- Establish a UN-led debt mechanism: This should include clear principles for debt relief and to ensure that countries facing unsustainable debt burdens can access fair and transparent processes.
- Increase and ensure effective ODA: Commit to specific targets for increasing ODA and establish mechanisms to ensure that aid is used effectively, with a focus on transparency and accountability.
- Keep private finance accountable: Governments’ development policies cannot depend on corporate interests. When private companies manage public funds (for example development cooperation funds), they must promote decent job creation and be in line with ILO standards, due diligence and responsible business conduct. That is why we need a binding UN treaty on multinationals and human rights.
Conclusion
ITUC Secretary General Luc Triangle said: “This document falls short because there is a lack of international solidarity, specifically in the reform of the international financial system that is far too small. Debt relief was and is the key for many countries to finally be able to invest in healthcare and education. Until this is fundamentally reformed, progress towards social justice will be unforgivably blocked.
“The ITUC’s call is clear: finance must serve people and planet – not profit and power.”
“Workers around the world demand democratic and transparent institutions capable of delivering the New Social Contract. It is time to turn principles into practice, and pledges into policies. The 2nd World Summit for Social Development will be our next opportunity to show ambition and put social justice at the heart of sustainable development.”
发表回复