Atle Hetland
Today, I shall focus on the need for greater transfers from the rich North to the South – in a time when President Trump and the USA, and many other Western countries, reduce aid. I shall argue that transfers must grow and be in different forms, and the multinationals and the rest of the private sector must be included in committal ways – for social, health, climate change and other reasons, and for contributing to overall growth and a fairer distribution of wealth in the developing countries. There is much to be done, belatedly, since the end of the Colonial Time, and since the United Nations’ and the West’s attempt to create a New International Economic Order (NIEO) in the 1970s. The work was coordinated by the UN Conference on Trade and Development (UNCTAD), established in 1964, but in spite of good intentions, the work failed; the Geneva-based organisation is still there, quietly; its important objectives and work should be revived. Last week, though, it held the ‘4th International Conference on Financing for Development’ (FFD4) in Sevilla, Spain, where no less than a roadmap for a better world was adopted.
The Norwegian Minister of Development Cooperation, Åsmund Aukrust, was a key speaker at the conference in Sevilla. He said: “The world has never been richer – why is there still poverty?” In his article, with Lisetta Trebbi, the Acting Director General of NORAD, the Norwegian Agency for Development Cooperation, in ‘Panorama Nyheter’, Oslo, 03.07.25, further facts and issues were presented. First, the article says that in a world with war, climate crisis and high prices, it is easy to think that we cannot afford further expenses. But they say it is the opposite, and they refer to data from the ‘Global Wealth Report’, which says that the total saved assets in the world are now more than USD 500,000 billion, and that is enough to eradicate abject poverty – several times. “There are funds but they are taken out and away from the developing countries,” write Aukrust and Trebbi.
“The gap between what is needed to reach the UN sustainable development goals and what is actually invested is higher than ever. Every year, there is a deficit of USD 4-5,000 billion – equivalent to one percent of the worldwide private savings that people have. At the same time, there are cuts in development aid budgets of the rich countries. What is it that goes on? The great paradox is the use of tax havens, hidden transfers of funds, and an increasing concentration of wealth,” write Aukrust and Trebbi.
In the final statement from the meeting, called ‘Compromiso de Sevilla’, four main steps were listed in what is called a roadmap to a more just world for the poorest countries. First, the development aid must be increased. Second, the ability to, and systems for, a much higher tax collection in developing countries must be developed, assisted by the donor countries. Third, the private sector must play a greater role in positive development for the developing countries, not the opposite. Sometimes, private companies need greater predictability for future operations and then there may be need for guarantees from the donors. Fourth, new systems for the handling of developing countries’ huge debts must be developed, including debt relief. Many countries pay more in debt servicing than they spend on their own education and health budgets.
Aukrust and Trebbi say in their article that the Sevilla summit gives new hope for the financing of development. 192 of the UN member countries still support the efforts, although the USA pulled out of the process a few weeks ago. “The Sevilla declaration sends a clear signal: Another world is still possible. Now, the words must be made into action, and here Norway will continue to be in the lead,” the two Norwegian leaders in development aid promise. The country played a key role in the twelve-month preparation period for the conference, with Mexico, Nepal and Zambia, and contributions from all the rest of the UN member countries, NGOs, and the private sector.
I am less optimistic for implementation than Aukrust and Trebbi, and there is not much new in the promises either – similar to UNCTAD’s ideas for a NIEO in the 1970s. Well, maybe the greater role of the private sector is quite new. But there is little concrete from Sevilla about what the donor countries will actually do and how, in magnitude and ways of delivering aid and improving cooperation with the poor countries. I believe that dramatic changes must be made; otherwise, little improvement will be seen – and as in my youthful years, when we thought highly of UNCTAD and NIEO, it will become a ‘Sevilla dream’ only.
There is need for a historical analysis as well as a future forecast, showing mistakes of the rich countries but also why they, too, will benefit from creating a new and fairer world order, inter alia, as concerns migration and the creation of dynamic and hopeful local environments for all people. That certainly means better, less corrupt and truly democratic rule in the developing countries themselves. In many cases, new institutions, in the developing countries, must be created for the handling of the new and larger international transfers, to include the government, the NGOs and the local and international private sector, with the big multinationals. A new setup with joint local and international leadership is needed, to make people in the North and the South trust the new system and implementation of activities.
In connection with a Conference of the Parties (COP) summit a few years ago, a new system for major transfers of funding to mitigate climate change and environmental disaster was proposed, including compensation to correct earlier exploitation of poor countries by rich countries. An important aspect was that the rich countries should contribute to correcting earlier and current mistakes. Good and well, but it seems little concrete has happened towards reaching the goals, including the creation of a large fund. At the most recent conference, COP29, held in Azerbaijan in November last year, participation and publicity had shrunk as compared to earlier meetings. In spite of the great Sevilla ideas, the fate of them can be similar to the COP ideas, again, like the fate of the UNCTAD and NIEO ideas in the 1970s. I may be wrong about COP’s fate and also that of the Sevilla roadmap. In any event, special steps must be taken to succeed.
Who will take such special steps to realise the Sevilla ideas? What comes to mind first is the group that was involved in the conference planning, indeed with Norway in the lead as the only donor country in the group, with the UNCTAD offices in Geneva. Time must be up for giving great promises and creating high hopes only. That is counterproductive to the trust in development aid, which today has a questionable reputation for high cost and lacking results. We must have a new and drastically increased development aid and entirely new implementation systems. The recipient countries must be in the driver’s seat with the donors. The people in the poor countries see the need for improvements in social and economic conditions every day. The rich countries, too, need moral renewal, also for the sake of their own people, and they cannot go on increasing their military budgets as much as they do today. We must all think about and implement positive actions on the way to creating the better world we all want.
The writer is a senior Norwegian social scientist with experience from university, diplomacy and development aid. He can be reached at atlehetland@yahoo.com
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