Harnessing rather than suppressing informal trade can give Africa a boost

Photo: ©Sebastian Liste/NOOR for FAO

Seeds for sale in Sierra Leone.

25 May 2017, Kigali – Africa’s vast but informal cross-border trade can contribute to improving livelihoods and increasing regional integration across the continent, according to a new report presented at a conference here.

Informal cross-border trading, in which transactions are not compliant with local tax and other rules,  accounts for a large share – between 20 and a hefty 70 percent – of employment in sub-Saharan Africa, and putting it on a regular footing can lift sustainable prosperity and markedly improve prospects for women, says FAO’s new publication, Formalization of informal trade in Africa.

Around half of all intra-African cross-border trade is classified as informal, indicating its large if officially invisible role. Proactive policies that recognize such activity, tapping its potential with the aim of steering it towards proper regulatory status, are to be preferred over heavy-handed approaches to eradicate or seek rents from entrepreneurs, according to FAO.

“Facilitating formalization is the only viable policy option for Africa’s transformation agenda to realize its objectives,” says Suffyan Koroma, FAO senior economist and lead author of the report. 

“Despite the significant contribution of the informal sector to African economies, the policy makers quite often have no information on ICBT due to lack of quality data, this has hampered the development of supporting policies to the sector,”said Clement Onyango from the Nairobichapter of Consumer Unity and Trust Society, a non-governmental organization that is co-hosting the conference with FAO.

A huge role for women

Informal cross-border trade activity is largely a second-choice option taken by people in the absence of clearly defined formal alternatives. It consists of trade in goods and services, often agricultural in nature, and in times of food crises and other shocks has proven to be more responsible than legal channels.

Off-the-radar economic activity, not all of it involving international trade, accounts for around 40 percent of GDP in Africa, higher than in Latin America or Asia.

The trade is rarely illegal. In most cases it is informal because practitioners have poor access to all the appropriate business licenses, administrative skills and knowledge of import and custom-tax laws to act otherwise. While such activity is an important source of household income, practitioners are often prey to corruption and their weak access to credit means their activities are rarely stable or sustainable.

 Women constitute the largest share of such informal traders, comprising more than half in Western and Central Africa and about 70 percent in Southern Africa, the FAO report found.

Patterns differ by region: In Tanzania, women dominate trade in manufactured products while men handle mostly raw or semi-processed agricultural products, whereas the opposite is the case in Cameroon. Women and men tend to differ in which foodstuffs – fresh produce or commodity staples – they trade as well. Appropriate policies must take such facts into account.

The Kigali conference is part of ongoing FAO-supported work in the country, along with UN Women and other development partners, aimed at enabling women to benefit more from agri-food chains, a project geared to allowing women small traders access useful information as well as start-up capital.

Local agricultural produce and livestock account for two-thirds of Rwanda’s exports, most of which are informally traded, with the bulk going to neighboring countries, notably the Democratic Republic of Congo. Rwanda encourages informal small traders to form cooperatives as a step towards regularization.

Women trading between the border posts of Kenya and Uganda and between Rwanda and Burundi prefer to use brokers who appear to shield them from what they perceive as unprofessional behavior of customs officials, the report notes.

FAO, working with Catholic Relief Service, has also organized open-door events on the Rwanda-Congo border where women cooperatives were invited to learn more about the cross-border tax regime directly from custom officials and government representatives.

“Rwanda has emerged as a model of best practice for cross border trade through its efforts to integrate the informal economy by easing trade channels for small-scale agricultural traders,”said Attaher Maiga, FAO’s Representative in Rwanda.

Policy recommendations

Aware that “ICBT-blindness” in national and regional trade policies and poverty reduction strategies may be hampering progress, African governments are increasingly making efforts to identify dynamics in the sector. In Uganda, both the Bureau of Statistics and the central bank monitor such flows and the government is discussing whether an approach focusing on quality control and value-added potential so that traders can earn more should take priority over a laisser-faire approach or actions aimed at suppression.

Key priorities to facilitate the formalization of informal cross-border trading according to FAO, include the simplification of licensing requirements, tax  incentives, fostering partnerships, radio, television and town-hall outreach to participants in the informal economy, and intensifying efforts to tackle official corruption. 

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Raising Domestic Revenues, Resisting Protectionism Key to Funding Sustainable Development Goals, Speakers Tell Economic and Social Council Forum

The Economic and Social Council Forum on Financing for Development follow-up opened its expert segment today with a panel discussion and set of three thematic round tables dedicated to garnering the vast resources required to achieve the 2030 Agenda for Sustainable Development.

Alexander Trepelkov, Director of the Financing for Development Office in the Department of Economic and Social Affairs, said the Forum’s expert segment would focus on the state of implementation in all “action areas” of the Addis Ababa Action Agenda, adopted in 2015 to fund the world’s sustainable development framework.  “The next two days present an excellent opportunity to identify success stories and the lessons drawn from them to apply in our countries and contexts,” he said.

In the morning, the Forum took part in a panel discussion on the “2017 report of the Inter-Agency Task Force on Financing for Development”, formed in 2015 to follow up on the Addis Agenda.  Five panellists highlighted the report’s findings and offered proposals for spurring global growth.

Yonov Frederick Agah, Deputy Director-General of the World Trade Organization (WTO), said a central recommendation was that Governments should work together to resist inward-looking and protectionist pressures.  While trade generated higher productivity, inadequate attention to those left behind by globalization had raised concerns.  The policy response should recognize that trade was only one factor contributing to economic change, along with technology and innovation.

Another major focus must be to raise domestic revenues, said Siddarth Tiwari, Director of the Strategy Policy and Review Department of the International Monetary Fund (IMF).  The Fund had increased support for doing that by one fifth since 2015.  While easier said than done, it required the most attention.

Richard Kozul-Wright, Director of the Division on Globalization and Development Strategies at the United Nations Conference on Trade and Development (UNCTAD), said the biggest problem was the global slowdown in public and private investment.  The reasons for that included sluggish global demand following policy mistakes in advanced economies, corporate rent-seeking that had dampened productive investment, and high debt dependence.  He called for a new global strategy to achieve the inclusive outcomes embedded in the Sustainable Development Goals.

The morning also featured a round table on “domestic and international public resources”, covering action areas A and C of the Addis Agenda.  Four panellists outlined ways to mobilize resources, with Darrell Bradley, Mayor of Belize City, stressing that subnational governments generated as much as 40 per cent of public investment.

On that point, Philippe Orliange, Director of Agence Française de Développement, said that with 23 national, regional and international development banks, and $3 trillion in assets, the International Development Finance Club had a key role to play in domestic resource mobilization as it could finance local governments.

Jorge Moreira da Silva, Director of the Development Cooperation Directorate of the Organization for Economic Cooperation and Development (OECD), said his organization was catalysing investment in “Sustainable Development Goal-critical” sectors, and collaborating with the United Nations to develop the “total official support for sustainable development” – a new measure to better understand today’s global financing landscape.

Two afternoon round tables took up issues of “domestic and international private business and finance” and “debt and systemic issues”, respectively.  In the first, moderator Preeti Sinha, Senior President of the YES Institute, said “Sustainable Development Goal finance” should be led by the private sector, as $3 trillion would be needed annually.  The major question hinged on balancing that need with the funds available, $218 trillion of which was in global capital markets and $75 billion in the “impact industry”.

In the second round table, panellist Patricia Miranda, Senior Officer on Finance for Development at Latindadd Fundación Jubileo in Bolivia, said that if developed countries fell into debt distress, it would have a systemic impact on the global economy.  It had taken Latin America two decades to recover from the effects of debt on the most marginalized peoples.  As such, it was essential to provide the right framework to encourage early debtor-creditor engagement towards efficient and timely restructuring.

The Forum on Financing for Development follow-up will reconvene at 9:30 a.m. on Thursday, 25 May, to continue its expert segment.

Opening Remarks

ALEXANDER TREPELKOV, Director of the Financing for Development Office, Department of Economic and Social Affairs, opened the expert segment of the Economic and Social Council Forum on Financing for Development follow-up, which he said would focus on the state of implementation in all action areas of the Addis Ababa Action Agenda.  It also would allow for addressing new and emerging topics, with the Inter-Agency Task Force on Financing for Development report serving as a guide for the discussion.  Led by the World Bank Group, International Monetary Fund (IMF), World Trade Organization (WTO), United Nations Conference on Trade and Development (UNCTAD) and the United Nations Development Programme (UNDP), the report contained input from more than 50 United Nations agencies, funds, programmes and offices, regional commissions and others.  “The next two days present an excellent opportunity to identify success stories and the lessons drawn from them to apply in our countries and contexts,” he said.  The goal was for the Task Force analysis to support States in implementing the Addis Agenda and the Sustainable Development Goals.

Panel Discussion

The Forum held a panel discussion on the “2017 report of the Inter-Agency Task Force on Financing for Development”, moderated by Shari Spiegel, Chief, Policy Analysis and Development, Financing for Development Office, Department of Economic and Social Affairs.  The panel featured presentations by Yonov Frederick Agah, Deputy Director-General, WTO; Siddarth Tiwari, Director, Strategy Policy and Review Department, IMF; Richard Kozul-Wright, Director, Division on Globalization and Development Strategies, UNCTAD; Pedro Conceição, Director, Bureau for Policy and Programme Support, UNDP; and David Kuijper, Adviser, Financing for Development, World Bank Group.

Ms. SPIEGEL said the Task Force report contained an opening segment on the implementation of the Addis Agenda, a thematic chapter, and subsequent chapters on each area of that instrument.  It had found that slow growth and a challenging economic environment, while improving, had hampered implementation of the Agenda.  It was unlikely that the goal of eliminating poverty would be achieved by 2030.  The Task Force also had found that long-term investment in infrastructure and addressing vulnerabilities through social protection floors and a global safety net were needed.  Those two issues, if done right, could create a positive cycle, by helping to achieve the Goals and fostering growth.

Mr. AGAH said one of the report’s central recommendations was that Governments should work together to resist inward-looking and protectionist pressures.  The benefits of opening trade were broad and deep.  Trade generated higher productivity, increased competition, more choice and better prices in the marketplace.  Yet, inadequate attention to those left behind by globalization, trade and technology had raised concerns about the trade system.  Governments must ensure its benefits reached more people.  The policy response should recognize that trade was only one factor contributing to economic change, along with technology and innovation.  WTO had a unique role in fostering equitable trade relations underpinned by common rules agreed by its members.  Strengthening the WTO was essential, he said, calling on Governments and institutions to ensure that the benefits were better understood.  Unequal levels of digital development had limited some countries’ participation in e-commerce.  While access to information and communications technology was necessary, it was not the only factor required for all people to benefit from online trade.

Mr. TIWARI said there was no silver bullet that would “get us to the end” of the Addis Agenda.  International, regional, national and subnational efforts across all areas were needed.  Following the 2008 financial crisis, public and private investment in infrastructure had fallen.  Yet infrastructure was vital for sustaining growth in many countries.  In more than half of low-income countries, the revenue-to-gross domestic product (GDP) ratio hovered around 15 per cent, which was generally inadequate to provide even basic services, minus wage and other payments.  Thus, a key focus moving forward would be to raise domestic revenues.  The Fund had increased support for doing that by one fifth since 2015.  While “easier said than done”, it required the most attention.

Mr. KOZUL-WRIGHT said the report’s first chapter called for a new growth strategy to achieve the inclusive outcomes embedded in the Goals.  “We don’t have that growth strategy yet,” he said.  Since the 2008 crisis, growth had slowed and inequality had risen, what the IMF called the “new normal”.  The biggest challenge today was the slowdown in public and private investment, and as the Goals represented a call for the biggest investment push in modern history, a major question centred on why investment had slowed.  There were three reasons, first of which was slowing global demand, which impacted profit expectations and was attributed to policy mistakes in advanced economies, notably a one-sided reliance on monetary policy to stimulate demand, which had increased global instability, and distributional constraints.  The second reason was the “financialization of corporate strategies”.  Corporations had moved into short-term, rent-seeking behaviour which was detrimental to long-term productive investment.  The third reason was the drag from high debt dependence, with debt stocks having risen by $50 trillion since 2008.  Investment had declined across the board in both developed and developing countries.  In seeking a new global growth strategy, those systemic challenges must be addressed.  There was an essential need for developing countries to expand their fiscal space, while a far more ambitious set of mechanisms must be created to address debt overhang and related problems.

Mr. CONCEIÇÃO said the Goals were “coming to life”, known by the public and increasingly being integrated into national plans, strategies and budgets.  Countries today were asking UNDP how to prioritize their plans to achieve the Goals, and then finance those priorities.  One Addis Agenda recommendation had to do with integrated national financing frameworks, which he called visionary, as countries required a holistic approach.  Part of those efforts involved aligning resources to implement the Goals.  The report referred to development finance assessments, which helped countries establish a baseline for financing flows and policy institutions to help them formulate national financing frameworks.  Another recommendation had to do with vulnerability.  It was becoming clear that a major risk to implementation of the Goals had to do with how countries suffered shocks, whether from conflict, trade or climate.  Thus, the report addressed social protections and financing instruments that allowed countries to address systematic shocks, and referred to State-contingent financing instruments in that context.

Mr. KUIJPER addressed the issue of countries and markets that were under stress — whether from fragility, environmental factors or displacement.  Three quarters of the global poor lived in such countries and it was important to tackle the transformation required in them in an innovative manner.  The main obligation was to connect growth opportunities to the global financial system, with a view to connecting them to long-term finance.  There were two ways to do that.  One was through official development assistance (ODA).  The fundamentals that fostered risk could not be addressed unless there were significant channels of ODA to those countries.  A second way centred on gender.  Globally, some countries were losing 5 to 30 per cent of growth due to a lack of gender-sensitive policies and others that led to the advancement of women’s position in the economy.

Mr. TIWARI, responding to a second question by Ms. Spiegel, said the medium-term forecast for developing countries was lower than projected in 2015, with growth between 2015 and 2020 weaker mainly for oil producers and exporters.  Budget revenues had fallen, as had net flows to low-income countries.  As to why investment was not increasing, he said there was no liquidity in terms of raising capital.  Before 2008, productivity and the share of labour income were falling, which likely had constrained investment.  Public balance sheets were strained.  “Productivity needs to rise,” he said.  Without it, neither public nor private investment would increase.  Innovation, a major productivity driver, also must increase and be inclusive.  He advocated skills development, without which large parts of the population would be left behind.  He cited Denmark and Singapore with national strategies and skill development programmes as two countries that had kept up with a changing landscape.

Mr. KOZUL-WRIGHT said “getting the macroeconomics right” was fundamental to building the sustainable growth path that the world needed.  The 2030 Agenda for Sustainable Development was rightly ambitious.  It was unclear, however, whether there was an ambitious environment in which to pursue it.  He called 1947 “the year that multilateralism started”.  The IMF had opened, the General Agreement on Tariffs and Trade (GATT) had been initiated, the United Nations had been established, its regional commissions had held their first conference, importantly, on trade and employment, and the Marshall Plan — the most ambitious development cooperation plan in history — had been inaugurated.  Ambition was an issue to place on the table.

Mr. CONCEIÇÃO agreed that productivity must increase, especially through technology use.  However, evidence had shown a delinking between labour productivity increases and average family earnings in both developed and developing countries.  “We have to examine the role of technology,” he said.  On one hand, there was no lack of savings.  On the other, investment needs were massive, even without the Goals and notably for infrastructure.  ODA was relevant for countries that had shifted to a higher income level but were still vulnerable.

Mr. KUIJPER agreed that the spirit of 1947 must return.  “We need to create a similar kind of momentum behind this Agenda,” he said, citing an enormous challenge of “getting the financing for development process right”.  The creation of good ideas required a process in which many ideas could flow.

Mr. AGAH said the issue of inclusive growth must start with trade, markets productive capacity and competitiveness.  Each country, depending on its economic and political situation, could adapt complementary policies in investment, infrastructure or other areas to achieve its goals.

In the ensuing discussion, a speaker from the Organization for Economic Cooperation and Development (OECD) commented that its data and measurement frameworks were global public goods.  Bangladesh’s delegate asked Mr. Tiwari whether it was possible to address domestic resource mobilization, without addressing illicit flows, through international cooperation.  A speaker from the World Health Organization (WHO) said that page 33 of the Task Force report referred to tobacco taxation, which he called a “low-lying fruit” as a revenue stream for financing development.  Algeria’s delegate said the report’s section on trade did not fully consider recommendations of the joint report by WTO, the World Bank and IMF, and asked whether its content would be integrated into the next Task Force report.  The European Union representative welcomed the well-balanced report, and contributions by OECD, asking whether the 2018 Forum, to be held from 23 to 26 April, would have the latest data available.  Ms. SPIEGEL replied to the latter question that the Task Force could not update the report with the latest OECD data, due to printing deadlines.  However, the website could be updated.

Responding to those queries, Mr. CONCEIÇÃO said there was potential for innovative financing mechanisms.

Mr. KUIJPER, on the issue of tobacco taxation, said lessons could be learned from other experiences in innovation.

Mr. AGAH said that how well countries negotiated outcomes from the Doha round of trade talks depended on those involved.  The report by WTO, IMF and the World Bank had a slightly different focus.  Trade gains could never be equally distributed.  There would always be losers.  He advocated for examining competitiveness, and how well countries participated in markets.

Mr. TIWARI said a chapter in IMF’s World Economic Outlook examined labour income, which had fallen over the years, due in part to technology.

Mr. KOZUL-WRIGHT said trade gains were always significant in a perfectly competitive and informed marketplace and uncertain in an imperfect one.

Round Table A

Following the panel discussion, the Forum held a round table on “domestic and international public resources”.  Moderated by Pooja Rangaprasad, Policy Coordinator, Financial Transparency Coalition, it featured presentations by Darrell Bradley, Mayor of Belize City; Elfrieda Steward Tamba, Commissioner General, Liberia Revenue Authority; Philippe Orliange, Director, Agence Française de Développement; and Jorge Moreira da Silva, Director, Development Cooperation Directorate, OECD.

Opening the discussion, Ms. RANGAPRASAD said that the Addis Agenda recognized the centrality of mobilizing and effectively using domestic resources to achieve the Sustainable Development Goals and of complementing those efforts through scaled-up international public financial support, especially in the poorest and most vulnerable countries.  Policies to increase tax revenues had important implications for gender bias since women spent a larger portion of their income on basic goods while also getting paid lower wages than men.  Therefore, it was necessary to look into gender budgeting as a tool while also increasing commitments for dedicating aid and resources for gender equality.

Mr. BRADLEY citing a recent OECD study which showed that subnational governments currently generated as much as 40 per cent of the public investment, said that, when 30 per cent of national resources were granted to local governments, they were able to produce 50 per cent of the public investment.  In Belize, cash transfers from the central Government represented only 6 per cent of the annual budget for the Belize City council and the actual sum transferred had remained constant for the past 15 years despite an increasing population.  Local governments in Belize had filled the finance gap through creative strategies, which in turn required strong local leadership with a commitment to transparency and meaningful citizen engagement.  National Governments must create and supplement the legal, structural and policy frameworks that allowed empowered local governments to develop into relevant, effective and complementary branches of government.

Ms. TAMBA, noting that Africa hosted 65 per cent of the world’s ultra-poor and Liberia stood third among the least developed countries in the region, recalled the dip in Liberia’s economy due to the Ebola outbreak.  Nevertheless domestic revenue had increased between 2006 and 2013 due to strong growth and smart reforms in revenue administration.  She cited effective tools for public financing at the local level such as budget appropriations through the Country Development Fund and social contracts with endowed countries through the Social Development Fund.  In the last five years, Liberia had received $238 million in grants and $191 million in loans from international sources, representing 9 per cent and 7 per cent of the country’s total revenue respectively.  Stressing the importance of strengthening local systems for better resource management, she said that development banks had an important role in providing financing for sustainable development in Liberia.  The impact of ODA could also be maximized by building a social contract for eliminating leaks in revenue flow caused by transfer pricing, money-laundering, poor legislation and illicit flows.

Mr. ORLIANGE, calling development finance the “third pillar of development”, said that with 23 national, regional and international development banks, and cumulative assets of $3 trillion, the International Development Finance Club had a key role in domestic resource mobilization which could finance local governments.  There was also international recognition of the role of development banks as key implementing entities for international funds such as the Green Climate Fund.  The Club provided a collaborative platform for practitioners of development finance, as members could exchange experiences, disseminate best practices, identify areas of common interest for cooperation, and combine their financial and intellectual resources.  The Club’s key aim was to advocate for measuring and mainstreaming climate finance and facilitating access to financing for projects and their preparation.  The Club was fully aligned with the development finance agenda, he said, calling on the United Nations system and the Forum to bear in mind the potential of development banks.

Mr. DA SILVA, noting that his organization was the custodian of ODA, said that development aid had reached a new peak in 2016 as refugee costs had increased.  ODA still represented as much as 70 per cent of external financing for many least developed countries, and his organization was also catalysing investment in Sustainable Development Goal-critical sectors and strengthening development finance accountability and incentives.  Going beyond ODA statistically and analytically, it was necessary to put in place better measurement frameworks.  His organization was collaborating with the United Nations systems in developing the total official support for sustainable development which would help better understand the new international financing landscape.  Turning to the global outlook on financing for development, he said that OECD was supporting that through innovative research on financing, policy synergies and trade-offs, as well as by creating a nexus between external thinkers and practitioners.

A speaker from the IMF then took the floor, saying that while there had been enormous progress, figures showed that in half of the lowest income countries, less than 15 per cent of GDP was being raised through tax revenues.  The Fund aimed to help developing countries with revenue outcomes by improving the structure and fairness of national tax systems.  Highlighting the importance of international cooperation in revenue reforms, she said that it was crucial to harness synergies between major international financial institutions.  The Fund had worked with partner institutions to create a platform for collaboration on taxation.

In the ensuing discussion, the representative of Algeria asked the panellists how to improve accountability in the use of public financing.  A representative of Citigroup commented on the importance of harnessing private-sector resources to improve development financing.  Belgium’s representative said his Government followed a policy of giving tax exemptions to public financing projects, while a civil society representative noted that some countries in both the North and South followed regressive taxation policies which adversely affected resources available for public financing.

Responding to those queries, Mr. DA SILVA said that total official support for sustainable development could provide an added value to the discussion on transparency and accountability.  Stressing the importance of new sources of information, he added that it was important to get the total official support for sustainable development methodology endorsed widely so that it could be used for effective stock-taking.

Mr. ORLIANGE said that development banks were built to take risks that others couldn’t take, and therefore, instead of focusing on short-term gains, they could provide financing over the long term, whether for infrastructure or social programmes.  On the question of regressive taxation, he said that it was difficult to finance public policy if taxation rates were too low.  Countries had to take national decisions about their own policies but “if you have regressive taxation, you are digging the inequalities deeper,” he said.

Ms. TAMBA said that domestic resource mobilization was especially crucial in Africa and with the changing international taxation landscape, Liberia and Africa as a whole stood to benefit.  She called on developed countries to “walk the talk.”

Mr. BRADLEY said that in order to be meaningful, all strategies and interventions for improving the quality of life should be owned by the community.  Decentralization was crucial to achieving that, and a multilevel government framework based on transparency and trust would enable people to see local government as a relevant development partner.  The magic of local government was that it was closest to people, and it was positioned to listen to the concerns of women, indigenous people and other vulnerable groups.

Round Table B

In the afternoon, the Forum held a round table on “domestic and international private business and finance”.  Moderated by Preeti Sinha, Senior President, YES Institute, it featured presentations by Courtney Rattray, Permanent Representative of Jamaica to the United Nations; Hervé Duteil, Managing Director, Head of Corporate Social Responsibility and Sustainable Finance for the Americas, BNP Paribas; Naohiro Nishiguchi, Executive Managing Director, Japan Innovation Network; Nidia Reyes, Chief of Competitive Intelligence, Banca de las Oportunidades, Colombia; and Leora Klapper, Lead Economist, Development Research, World Bank Group.

Ms. SINHA quoted Mahatma Gandhi to say “the rich must live more simply so that the poor may simply live”.  All countries were developing countries in that they were struggling to address climate change and other social issues.  The 2030 Agenda offered a way to bring public and private finance together.  YES Bank, founded by Rana Kapoor, had a market capitalization of $10 billion, showing that “emerging markets do offer returns”.  Sustainable Development Goals finance should be led by the private sector, followed by the United Nations, as $3 trillion would be needed annually.  The major question hinged on balancing that need with the funds available, $218 trillion of which was in global capital markets and $75 billion in the “impact industry”.

Mr. RATTRAY said following the Addis Agenda, many felt that “something was missing”.  There was a need for a State-based mechanism that would unlock the trillions of dollars needed per year to finance development.  The new body — the Group of Friends — had 56 members, many of whom were ambassadors, along with experts from the United Nations, the private sector and think tanks.  States had a legitimate role in reorienting the financial system towards the Goals.  Most assets under its management were held by insurance, private wealth and mutual funds.  Central to its efforts to attract capital was convening a broad array of stakeholders.  The Group of Friends engaged stakeholders to holistically assess risk by having investors price in externalities.  It also worked with regulators to prevent capital from being misallocated.  There was a need to foster domestic capacity to develop “bankable” projects, he said, noting that the Group was working with Blackrock in that context.

Mr. DUTEIL described the need to place the goal of financing sustainability “on the business map”.  BNP Paribas had traditionally mapped its business along economic, civic, environmental and social pillars, but then further mapped it along the 17 Goals, setting targets and incentives.  As a result, the first of its 13 public key performance indicators was that 15 per cent of its loans to companies must finance projects or companies that directly addressed one of the Goals.  Today, that percentage was 16.5 per cent.  Realizing those 13 indicators would also directly affect the compensation of its top officers.  BNP Paribas was also implementing a shadow carbon price into the credit analysis of its counterparties in key sectors.  In unlocking private pools of capital, much of the challenge revolved around return, risk, liquidity and time horizons.  Noting that $41 trillion would change hands from the “Baby Boomers” to the “Gen X” and “Millennial” generations, he said that impact investing, which represented less than 0.5 per cent of portfolios, would remain small and “the privilege of the happy few who have a few billion to spare”.  The good news was that banks were in the business of creating bridges between capital and projects in need of funding.  As an example, he described a sustainable bond linked to the Goals that was recently issued by the World Bank and underwritten by BNP Paribas.  The bond directly financed sustainable projects around the world supported by the World Bank but offered to investors a return linked to the stock performance of a basket of equities issued by corporations which directly supported the Goals through at least 20 per cent of their activities.  While banks could create new financing tools for the Goals with the support of partners like multilateral development banks, those products still had to be distributed and bought.  That was where positive regulation that encouraged impact investing could solve part of the conundrum.

Mr. NISHIGUCHI said that in 2016, UNDP and the Japan Innovation Network had launched the Sustainable Development Goals Holistic Innovation Platform to engage the private sector in increasing the pipeline of bankable projects to help achieve the Goals.  The Platform had 300 individual members and 75 companies, with more expected to join this year.  It was critical for any private-sector player to create a “passage” between the Goals and cash flow.  To do so, it was important to understand the innovation process, especially the incubation stage.  It was important to have a high-quality incubation stage, as it would articulate the challenges (the Goals), the client value and the business model.  The operational stage captured the business plan, the finance and the roll out.  He underscored the need to look at the Goals, not as corporate social responsibility, but as a business programme.  Thematic sessions organized for specific Goals had produced hypothetical business models and involved countries including Kenya, Cameroon, Ethiopia, Egypt, Madagascar, South Africa and the United Republic of Tanzania.  To increase the pipeline, the private sector must regard the Goals as an innovation not an operational project, as well as connect multiple Goals as a way to deepen solutions.  A typical enemy was a silo mentality, he said, stressing that achieving the Goals required a collaborative approach.

Ms. REYES focused on collaborative approaches to ensure innovation in the provision of financial services.  Colombia’s financial inclusion policy was based on an 11-year commitment to provide resources and transfer both capital and innovation to the private sector to help meet the needs of low-income people.  Simplified mechanisms had been created, establishing limits to the amounts that could be held in products that could reach low-income people, such as inclusive insurance.  In the case of microcredit and small loans, which did not exceed $460, the bank tried to make interest rates more flexible to incorporate the risk involved in supporting a segment of the population that would otherwise not be able to access lending.  In the future, Colombia would focus on raising more financial products and using them effectively, as well as deepening financial inclusion in the rural sector, as many products in Latin American countries were concentrated in urban areas.  Alternative mechanisms were needed to help small businesses access financing.  Colombia had brought together all Government and private entities involved in raising the level of economic and financial education.

Ms. KLAPPER said today’s discussion on raising financing for Governments and the private sector must be widened to include households and small- and medium-sized firms, as well as savings and payments.  The Bank’s Findex data measured how people saved, borrowed and managed payments, she said, explaining that there had been double-digit growth since 2001, when data were first collected.  India’s biometric identification system allowed the Government to roll out 200 million such accounts for people to access cheap food and fuel.  In China, merchant store keepers could now do financial transactions in rural areas.  Indeed, access to digital payments could help achieve the Goals.  In India, the roll out of bank branches had reduced poverty by 15 percentage points, while insurance projects in Ghana had also reduced poverty.  Financial inclusion could promote innovation.  In India and Bosnia and Herzegovina, giving entrepreneurs access to savings products and credit had led to growth, and in turn, more women’s economic empowerment.  In Kenya, Nepal, the Philippines and elsewhere, offering a woman an account had led to greater spending on food and household goods, even washing machines.  There were obstacles, especially for small- and medium-sized enterprises, which had a $2 trillion shortfall in needed credit, which was hampered by a weak credit information structure and “movable collateral registries” which made it difficult for banks to assess risks.  Research by Harvard University had found that firms investing more in sustainable standards had higher market performance and profitability.

In the ensuing discussion, a speaker from the United Nations Global Compact said foreign direct investment and corporate capital investment should be driven by a principles-based approach.  Otherwise, fundamental rights could be undermined.  A revolution was needed for new financial instruments that cut across the asset classes and Goals alike.  He asked about public policy frameworks that could mobilize private finance.  Japan’s delegate asked for ideas on a risk-sharing mechanism, and about the Government’s role in the Sustainable Development Goals Holistic Innovation Platform.  Chile’s delegate asked about challenges in implementing the various projects, while Uganda’s delegate asked about mobile money transfers substantively contributed to poverty reduction or simply “income smoothing”.  Peru’s delegate asked about progress in expanding financial services to people in poverty, as well as best practices for financial literacy and consumer protection.

A speaker from PRI, an association of 1,700 financial organizations managing $70 trillion, said one question commonly raised was whether a mechanism was in place to monitor the allocation of capital to be used for the Goals.  Canada’s delegate asked how the United Nations could help develop the pipeline of bankable projects, and more broadly about the asymmetry of information regarding risk, small- and medium-sized enterprises, and whether the Sustainable Development Goals Holistic Innovation Platform accepted companies from outside Japan.  A speaker representing civil society described an erosion of public interest by public-private partnerships, in part because of heavy contractual clauses with implications for Governments.  There was a great role for private financing, especially through small enterprises, which required different types of business support to build capacity and participate in markets.

Mr. RATTRAY responded that in mobilizing resources, countries must be assisted in developing capital markets, which was not simple.  They must also be encouraged to have a higher savings rate, which similarly would not happen overnight.  “We are conscious that the clock is ticking,” he stressed.

Mr. DUTEIL replied that public policy could mobilize capital at scale.  France had enacted a “90:10” scheme for companies with more than 50 employees, obliging them to offer employees access to funds that invested 5 to 10 per cent in impact investing, allocated to non-listed small- and medium-sized enterprises.  The result had been massive and offered an example of how public policy could be positive without being coercive.  Another example was the Tropical Landscapes Financing Facility, whereby investors invested in well-known entities, which in turn, redistributed the funds to small farmers.

Mr. NISHIGUCHI said the Platform would work with private sector, Governments and non-governmental organizations from any country, and was particularly interested in speaking with start-up communities.  Governments could help connect the Platform with start-ups and support the incubation stage, which would be a huge boost to creating bankable projects.

Ms. REYES said supporting the private sector in taking a risk on high-risk sectors involved co-financing incentives, as well as transferring technical assistance to them.  There was much to be done in terms of technology transfer.  On financial literacy, it was important to define objectives in a work plan coordinated among all players.

Ms. KLAPPER said financial inclusion should reduce poverty because it allowed people to invest in education and business opportunities.  It also prevented poor adults from falling into poverty during a crisis, such as the death of a family member.  There was evidence that in an emergency people received support from a geographically and socially wider group of friends.  On financial literacy, no academic literature had found that traditional textbook-based financial literacy worked.  What appeared to be better were “teachable moments” for explaining interest compounding, for example.  Fintech had positively impacted rural farmers repaying credit loans in sub-Saharan Africa, for example.

Round Table C

The Forum then held its final round table for the day, on “debt and systemic issues”.  Moderated by Siddharth Tiwari, Director, Strategy and Policy Review Department, IMF, it featured presentations by Angus Friday, Ambassador of Grenada to the United States; Camillo von Müller, Economist, Federal Ministry of Finance, Germany; Marilou Uy, Executive Director, International Group of 24 (G24) Secretariat; and Patricia Miranda, Senior Officer on Finance for Development, Latindadd Fundación Jubileo, Bolivia.

In his opening remarks, Mr. TIWARI said that the IMF was committed to strengthening global financial architecture.  The issues ranged from completing IMF quotas in governance reform to addressing gaps in global safety nets.  It was essential to provide the right framework to encourage early debtor-creditor engagement towards efficient and timely restructuring.

Mr. FRIDAY said that from the lens of a small island developing State such as his, it was necessary to acknowledge debt sustainability challenges and recognize the need for urgent solutions.  Since 1950, there had been 184 natural disasters in the Caribbean, resulting in damages worth $8 billion.  In Grenada alone, the hurricane in 2004 caused a 200 per cent loss of its GDP.  Emphasizing the links between years of extreme weather events and high levels of indebtedness, he said that debt restructuring had not worked successfully because there was a stepping up of interest rates and not enough local ownership.  The financial crisis and the impact on tourism had caused Grenada to default on its debt payments at the end of 2014.  In response, Grenada had brought together civil society and Government to create a social compact on spending and financing.  Grenada had also introduced a hurricane clause in its contracts with lenders, noting that the debts would be deferred in the event of a hurricane.  As of Tuesday, the IMF had completed its sixth review of Grenada and the country had passed with flying colours.

Mr. VON MULLER said that state-contingent debt instruments had an important role to play in the international financial architecture, in building resilience and improving sustainability.  Noting that the finance ministers and central bank governors of the G-20 had formulated a clear mission with regard to such instruments in the Chengdu communiqué, she said that during its G-20 presidency, Germany had responded to the call for further analysis of their technicalities, opportunities and challenges.  The history of state-contingent debt instruments showed the importance of contract designs, as well as the incentives and data credibility.  While GDP-linked bonds could be beneficial instruments when designed to generate fiscal space in difficult economic times, it was necessary to take steps to reduce the costs of insurance and carefully assess international demand.

Ms. UY said that global financial reforms had a wide range of effects on developing countries.  The Addis Agenda had acknowledged the importance of creating a coherent and inclusive global financial architecture.  The international monetary system must mitigate tensions and promote stability while supporting growth strategies of individual countries.  That was particularly important for emerging economies, whose growth rates had slowed recently.  While macroeconomic and structural policies constituted the first line of defence, in a highly interconnected globe efforts to manage global economic headwinds needed to be supported by multilateral action.  While the opening of financial borders had helped create capital flows, there were persistent problems with capital flow measures.  Policy differences between different countries could cause exchange-rate volatility, which in turn, created uncertainty and disrupted investment.  Better policy coordination was necessary and the IMF could play an important role in that.

Ms. MIRANDA said that it was vital to understand the composition of debt, which could originate from a variety of sources.  Besides traditional external credits for fiscal gaps, there were also sovereign bonds issued by other countries, including lower middle-income countries.  Furthermore, there was domestic debt and corporate debt, which had been rising in the last few years.  Subnational debt, from local governments and State-owned enterprises, could lead to fiscal risk.  Moreover, public-private partnerships could also give rise to debt.  While the Addis Agenda had reaffirmed the importance of a timely and independent debt restructuring process, it was necessary to go beyond those principles.  Reminding the Council that if developed countries fell into debt distress, it would have a systemic impact on the global economy, she called attention to the negative social impacts of debt, saying that it had taken Latin America two decades to recover from the effects of debt on the most marginalized peoples.

In the ensuing discussion, representatives of civil society highlighted the importance of responsible investment and safety nets, and asked about the growth of the shadow banking system, which included lightly regulated hedge funds.  Yet another representative of civil society asked about the lack of movement in regulating financial markets while a fourth representative noted that the “elephant in the room” underlying the debt issue was the classical mismatch between currencies.

Responding, Mr. FRIDAY agreed with the need for stronger safeguards and noted that more and more extreme weather events could be expected in the future.  Therefore, hurricane clauses should be automatically included, particularly for small island developing States.  Mr. MULLER said that GDP-linked bonds should be seen as part of a toolkit that contributed to debt sustainability.  Ms. UY said that it was time to assess the impact of financial sector regulatory reforms.

Mr. TIWARI said that the promise of jobs and higher incomes hinged crucially on creating the right environment for sustainable growth.  Infrastructure was a prerequisite for that kind of growth.  The strengthening of standards regulating financial instruments had resulted in unintended consequences such as the shift to shadow banks.  Ms. MIRANDA stressed the importance of transparency and open data, which she noted was a challenge not only for international financial institutions, but also for States.  Debt could be a symptom that there was something wrong in the economy, and therefore, it was necessary to look at the larger picture including tax systems, she said.

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Non-Governmental Organizations Committee Recommends 46 Groups for Special Status, Defers Action on 48 in Third Day of Session

The Committee on Non-Governmental Organizations today recommended 46 entities for special consultative status with the Economic and Social Council, while deferring action on the status of 48 others.

The 19-member Committee vets applications submitted by non-governmental organizations, recommending general, special or roster status on the basis of such criteria as the applicant’s mandate, governance and financial regime.  Organizations enjoying general and special status can attend meetings of the Council and issue statements, while those with general status can also speak during meetings and propose agenda items.  Organizations with roster status can only attend meetings.

Action on a number of applications was deferred as Committee members requested additional information from the candidates regarding funding, countries of operation and the ability to remain impartial and independent when a bulk of grants derived from Government sources.  In the afternoon, the Committee held a question-and-answer session, during which it heard from two non-governmental organizations, granting both consultative status.  During that session, the two members of civil society were given the opportunity to present their non-governmental organization and answer questions posed by Members.

The Committee on Non-Governmental Organizations will meet again at 10 a.m. on Thursday, 25 May, to continue its session.

Special Consultative Status

The Committee recommended that the Economic and Social Council grant special consultative status to the following 44 organizations:

Association Marocaine de Planification Familiale (Morocco)

Association de la continuité des générations (Tunisia);

Community Empowerment and Development Initiative, Warri (Nigeria);

Conglomeration of Bengal’s Hotel Owners (India);

Drishti Foundation Trust (India);

Education, Communication and Development Trust (EDUCATR) (India);

Heal the Land Initiative in Nigeria (Nigeria);

Initiative for Youth Awareness on Climate Change (Nigeria);

Initiative pour le Developpement de l’Afrique–I.D.A. (Senegal);

International Association for Religious Freedom, Co-ordinating Council for South Asia (India);

International Centre for Leadership Development Nigeria (Nigeria);

International Human Rights Council (India);

International Mayor Communication Centre Limited (China);

J.P. Foundation Inc. (Dominica);

Medical Women’s Association of Nigeria (Nigeria);

Millennium Network for Community Development Initiative (Nigeria);

Navjivan Foundation (India);

Neighbourhood Community Network (India);

Niger Delta Budget Monitoring Group (Nigeria);

Orji Uzor Kalu Foundation (Nigeria);

Pan African Institute for Entrepreneurship and Community Development (Ltd/Gte) (Nigeria);

Rwenzori Center for Research and Advocacy (RCPA) (Uganda);

Slum Child Foundation (Kenya);

Society for Environment and Development (India);

Society for the Widows and Orphans (Nigeria);

Somali Youth Development Foundation (SYDF) (Somalia);

The Red Elephant Foundation (India);

Women and Child Watch Initiatives (Nigeria);

Al-Hasaniya Moroccan Women’s Project (United Kingdom);

Albert Kunstadter Family Foundation (United States);

Canadian Council for Refugees (Canada);

Center for Media & Peace Initiative Inc. (United States);

Comisión Unidos Vs Trata (Mexico);

Deutsche Welthungerhilfe e.V. (Germany);

GenderCC-Women for Climate Justice e.V. (Germany);

INA (Māori, Indigenous & South Pacific) HIV/AIDS Foundation (New Zealand);

Insamlingsstiftelsen Kvinna till Kvinna (Sweden);

Institut international de recherches pour la Paix à Genève (GIPRI) (Switzerland);

International Right of Way Association (United States);

James Madison University (United States);

Partnership for Change (Norway);

Roads of Success (United States);

Saviour USA-One World Charity (United States);

Settlement Services International Incorporated (Australia);

The Committee postponed consideration of the following 48 organizations:

Association M’zab prévention routière et développement (Morocco) — as the representative of Iran requested further information on its activities.

Association organisation populaire pour l’enseignment des droits humains (Mauritania) — as the representative of Mauritania requested additional information on where in his country the organization was “combating slavery”.

Cameroon League for Development (CAMLEAD) (Cameroon) — as the representative of South Africa requested further information about its relationship with the Department of Health, particularly when carrying out its health-care projects.

Coordination Waï (Eveil) relative à l’unité nationale et la lutte contre l’esclavage (Mauritania) — as the representative of Mauritania requested information on its slavery-combating initiatives.

Creators Union of Arab (Egypt) — as the representative of Venezuela requested information on whether it was registered in Kuwait and Oman.

Dalit Welfare Organization (Nepal) — as the representative of India requested additional details and a list of its international sponsors and projects.

Danjuma Atta Eye Foundation (Nigeria) — as the representative of Azerbaijan requested additional details of its work in women’s empowerment.

Eaglesworth Human Empowerment Foundation (Nigeria) — as the representative of South Africa requested additional information on its health-care services.

Emperor Gaza International Foundation (Ghana) — as the representative of South Africa requested additional information on its budget.

Establishment of Sheikh Thani bin Abdullah Al Thani for Humanitarian Services (Qatar) — as the representative of the Russian Federation requested additional information on its work in Syria and projects implemented.

Family Planning Association of Bangladesh (FPAB) (Bangladesh) — as the representative of Nicaragua requested additional information on its funds and projects.

Formation Awareness and Community Empowerment Society (FACES) Pakistan (Pakistan) — as the representative of Pakistan requested it elaborate further on a previously asked question.

Imam Khomeini Relief Foundation (Iran) — as the representative of the United States requested additional information on its programmes and how its relief reached ethnic and religious minorities.

Int’l Centre for Women Empowerment & Child Dev. (Nigeria) — as the representative of South Africa requested additional information on its work.

Islamic African Relief Agency (IARA) (Sudan) — as the representative of the United States requested details on its work with the Food and Agriculture Organization (FAO).

Legal Advice Centre (Kenya) — as the representative of Burundi requested additional details on its source of funding.

Mkokoteni Aid Development Organization (Kenya) — as the representative of South Africa requested further detail on how it planned to carry out its projects if it was not active in the field.

National Centre for Promotion of Employment for Disabled People (India) — as the representative of India requested additional information on its work.

Orion Projects Private Limited (India) — as the representative of India requested additional detail on its headquarters address.

Pak Special Persons Welfare Society (Pakistan) — as the representative of Pakistan requested clarification on its sources of funding.

Sheikh Eid Bin Mohammad Al Thani Charitable Association (Qatar) — as the representative of Iran requested a list of its activities.

Yay Gender Harmony (Indonesia) — as the representative of Cuba requested additional detail on its activities around the world, and the representative of India requested information on its partners.

Alliance internationale pour la défense des droits et des libertés (France) — as the representative of Guinea requested more information on sources of income.

American Human Rights Council (United States) — as the representative of China requested additional information on its activities in promoting Arab and Muslim heritage and culture, and the representative of South Africa requested additional clarification on its interventions and partnerships.

Arab-European Center of Human Rights and International Law (AECHRIL) (Norway) — as the representative of Cuba requested information on its projects focusing on the Palestinian people.

Association pour la défense des droits de l’homme et des revendications démocratiques/culturelles du peuple Azerbaidjanais-Iran – « ARC » (France) — as the representative of Iran requested clarification on its use of geographical terms.

Assyrian Aid Society of America Inc. (United States) — as the representative of Turkey requested additional details on its projects in education.

Bureau international pour le respect des droits de l’homme au Sahara Occidental (Switzerland) — as the representative of Azerbaijan requested additional information on its relationship with another organization.

Centre Zagros pour les Droits de l’Homme (Switzerland) — as the representative of Iran requested additional information on its campaigns.

Citizens’ Alliance for North Korean Human Rights (Republic of Korea) — as the representative of the Russian Federation requested additional information on its methods of work.

Dream Touch for All (Republic of Korea) — as the representative of Burundi requested information on what Governments financed it.

Embajada Mundial de Activistas por la Paz (Global Embassy of Activists for Peace) Corp. (United States) — as the representative of Turkey requested additional information on its “Justice for Peace” initiative.

Euro-Mediterranean Human Rights Network (Denmark) — as the representative of Turkey requested an updated financial statement.

Fondation Alkarama (Switzerland) — as the representative of the Russian Federation requested it clarify its definition of human rights.

Fundación Acción Pro Derechos Humanos (Spain) — as the representative of Cuba requested additional information on its work in Spain and whether it had projects in Latin America.

Insamlingsstiftelsen Kvinna till Kvinna (Sweden) — as the representative of the Russian Federation requested additional information on its funding, and asked which projects were implemented using Government funds.

International Centre for Development Initiatives (ICDI) (United Kingdom) — as the representative of South Africa asked for more information about its projects in South Africa.

International Child Rights Center (Republic of Korea) — as the representative of Iran asked how it maintained a non-political stance when it dealt with child rights in other countries.

Jerusalem Institute of Justice (Israel) — as the representative of Cuba requested clarification on the small membership of the organization, given the extensive projects listed.

Jubilee USA Network Inc. (United States) — as the representative of South Africa asked if it had any relation to the organization called Jubilee Campaign.

Keeping Children Safe (United Kingdom) — as the representative of Nicaragua asked for more details on the projects the organization was carrying out with the United Nations.

Korea Human Rights Foundation (Republic of Korea) — as the representative of Iran asked for more information regarding project-based income for 2016, as well as a list of those projects.

Mangfoldhuset (Norway) — as the representative of Azerbaijan asked why the group considered itself an international organization, and also for more information about the geographical scope of its activities.

Parents and Friends of Ex-Gays and Gays, Inc. (P-FOX) (United States) — as the representative of Israel asked for a breakdown of its donations into companies and individuals.

Peace Islands Institute Inc. (United States) — as the representative of Azerbaijan reiterated a previous request, which asked for a list of private entities that provided funding.

Pirate Parties International Headquarters (Belgium) — as the representative of India asked what the organization meant by achieving its goals through the established political system rather than activism.  The representative of the United States said that the answer to that was self-evident as the Party ran for office in Belgium.  The representative of India reiterated his wish to hear from the Party itself.

Reprieve (United Kingdom) — as the representative of Cuba asked for a list of the countries in which the organization worked.  The representative of the United States said that the list was on the website, contained in the annual report.  The representative of Cuba said she would like to ask for a list of those countries as searching reports would take time.

Right Livelihood Award Foundation (Sweden) — as the representative of the Russian Federation requested further information on the organization’s work with educational institutions.

Interactive Discussion

The representative of the Education Above All Foundation said that the organization addressed the educational needs of the most disadvantaged populations across the globe.  It aimed to reduce the number of out of school children by improving access to education to millions of children.  It was active in over 50 countries and covered primary through higher education.  All of its projects were implemented through credible partners.  The projects that dealt with Syrian Refugees only dealt with United Nations agencies as implementing partners.

The Committee then recommended the group be granted special consultative status.

The representative of SAE International said it was a global society of 130,000 engineers and related technical experts.  It worked in such areas as producing consensus on road traffic safety standards.

The Committee then recommended the organization be granted special consultative status.

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Daily Press Briefing by the Office of the Spokesperson for the Secretary-General

The following is a near-verbatim transcript of today’s noon briefing by Stéphane Dujarric, Spokesman for the Secretary-General.


You will have heard today was the International Day of UN Peacekeepers.

Earlier today, the Secretary-General spoke at a wreath-laying ceremony honouring fallen peacekeepers.  He said that our mission for peace will never succeed without courageous people willing to put their lives on the line and that we owe them an enormous debt.  He added that peacekeepers continue to come under attack from armed groups, spoilers and increasingly by terrorists, but the closure of our operations in Côte d’Ivoire and Liberia over the coming months reminds us that the contributions, investments and sacrifices of UN peacekeepers have contributed to the transformation of these countries from battlefields to peaceful States.

He then conferred the Dag Hammarskjöld medal in honour of those who lost their lives last year serving under the UN flag.  He said that UN peacekeeping is one of the international community’s most effective investments to support peace, security and prosperity, and has a positive impact on the lives of millions of people around the world.  There are risks when deploying peacekeepers to a crisis area, but he said inaction may carry even greater risks.  The Secretary-General added that peacekeeping is the most important element of UN branding and the most important aspect of the UN’s image.


You will have seen that late yesterday, we issued a statement on the attack in Mali in which the Secretary-General condemned the attack on the MINUSMA [United Nations Multidimensional Integrated Stabilization Mission in Mali] patrol that killed two Chadian peacekeepers.

**World Health Organization

Also yesterday, the Secretary-General congratulated the new Director-General of the World Health Organization (WHO), Dr. Tedros Adhanom Ghebreyesus, for his election as the new head of WHO.

His leadership of WHO will be crucial to ensuring healthy lives and promoting well-being for all at all ages, he said in a tweet.

**Kyung-wha Kang

I have a statement on the departure of the Secretary-General’s Special Adviser on Policy, Ms. Kyung-wha Kang:  the Secretary-General thanks Ms. Kyung-wha Kang for her many years of service to the United Nations system, where she is widely recognized for her advocacy of human rights, humanitarian principles, gender equality and women’s empowerment.

Throughout her work for the Office of the High Commissioner for Human Rights (OHCHR), the Office for the Coordination of Humanitarian Affairs (OCHA) and in the Secretary-General’s Transition Team and Executive Office, Ms. Kang has earned a reputation as a person of principle and a voice of the voiceless.

Ms. Kang has driven the development of the Secretary-General’s gender parity and prevention strategies with passion and expertise, while acting as a role model and mentor to a new generation of women in the UN system.  The Secretary-General wishes Ms. Kang every success as she rises to meet a new challenge in the service of her country.


Tomorrow, the Secretary-General will be heading out of New York for Italy to attend the G-7 meeting.

On Saturday, he will participate in the outreach session of the summit, which is taking place in Taormina.  The focus of the discussion will be “Innovation and Sustainable Development in Africa.”  He will leave Taormina Saturday afternoon.

**South Sudan

The Head of the Peacekeeping Mission in South Sudan [UNMISS], David Shearer, briefed the Security Council this morning on the situation in the country.  He said that as rains have arrived in South Sudan, we are seeing the last push to position forces before roads become impassable.  While rains may bring a respite to large-scale military manoeuvres, they also greatly complicate the UN’s humanitarian response.

He welcomed the announcement by President [Salva] Kiir of a unilateral ceasefire and pledge to review the cases of political prisoners.  He added that while the National Dialogue launched on Monday could bring a welcome focus on reconciliation, for it to be credible, it will need the genuine participation of opposition constituencies.  Mr. Shearer also noted that a unified regional position on South Sudan remains critical and he called on the Council to unite on a common strategy to advance the political process.

Meanwhile, the heads of the Food and Agriculture Organization (FAO) and the World Food Programme (WFP) yesterday visited Unity State in South Sudan and called on all parties to the conflict to cease violence and work together to ensure that food and other lifesaving support can reach people to end famine and severe hunger.  More details online.


The Secretary-General’s Special Adviser on Cyprus, Espen Barth Eide, met today with the Greek Cypriot and Turkish Cypriot leaders in Nicosia.

He told reporters afterwards that both leaders seek to reconvene the Cyprus talks in Geneva, potentially in the near future, but he noted that there are still outstanding issues.

He said that shuttle diplomacy will continue to iron out those issues.


The High Commissioner for Human Rights, Zeid Ra’ad Al Hussein, expressed serious concern today at the mass hunger strike by Palestinian prisoners in Israeli prisons, as it entered its thirty-eighth day without resolution, and the health of hundreds of participating prisoners began to deteriorate significantly.

He added that he was especially alarmed by reports of punitive measures by the Israeli authorities against the hunger strikers, including restricted access to lawyers and the denial of family visits.  The right of detainees to access a lawyer is a fundamental protection in international human rights law that should never be curtailed.  More information in his statement online.


Jamie McGoldrick, the Humanitarian Coordinator for Yemen, said today that cholera is spreading at an unprecedented rate throughout Yemen.

In the past three weeks, health authorities have reported over 35,500 suspected cholera cases, a third of which are children, and 361 deaths in 19 of Yemen’s 22 governorates.

He called on Members States to provide financial and political support to help avert an additional and devastating blow to Yemen, where 17 million people are already food insecure, including 7 million people facing potential famine and 462,000 children in the grip of acute malnutrition.

The speed at which cholera is spreading among the population exceeds the capacity of the health system to respond, given its weakened state after more than two years of conflict, import restrictions and the lack of regular salary payments to health workers.

Hundreds of thousands of people are at a greater risk of dying as they face the “triple threat” of conflict, starvation and cholera.

Humanitarians are seeking over some $55 million to prevent and treat cholera at the national, governorate and community level over the next six months.  The UN and its partners thank the Government of Norway for an additional contribution of $1.2 million to this effort, on top of their pledge for the wider humanitarian response.


From Iraq, our humanitarian colleagues tell us that a floating bridge has been put in place by the Iraqi Security Forces north of Mosul’s Old City area, re-connecting west and east Mosul, after military operations had largely severed bridges in the city.

In addition to its military use, the bridge will be used to facilitate the transportation of displaced civilians.

The number of civilians displaced is expected to surge once military operations begin in the densely populated Old City, where some 200,000 people are reportedly still living under Da’esh control.  Protecting these civilians is a key concern for aid agencies.

A large number of civilians continue to flee Mosul, with nearly 8,000 people recorded as newly displaced from western Mosul just yesterday.

The Iraqi authorities report that nearly 743,000 people have been displaced from Mosul since the start of the military operations in October 2016.

Humanitarian partners continue to provide assistance in this extremely fast-moving emergency.  Since October, they have distributed food, water and other items to 2.8 million people in Mosul and surrounding areas.


UNICEF has issued a new report today saying that conflict is threatening the lives of more than 24 million children in Yemen, Syria, the Gaza Strip, Iraq, Libya and Sudan.

They say that children are having difficulties accessing essential health care, water and sanitation services and nutritious food.  More information online.

**Financing for Development

Yesterday evening countries taking part in the ECOSOC [Economic and Social Council] Forum on Financing for Development follow-up agreed on a series of measures to accelerate the implementation of the Addis Ababa Action Agenda to finance and support the SDGs [Sustainable Development Goals].

The new measures include:  stepping up efforts to invest in women and girls, supporting infrastructure to make cities more resilient, facilitating market access for least developed countries and sharing experiences on how to finance social protection systems, among others.

These will help guide deliberations of this year’s High-level Political Forum on Sustainable Development which will take place in July.


Just two more notes: to mark the Holy Month of Ramadan this year, ShareTheMeal, the official app of the World Food Programme (WFP), is launching two simultaneous fundraising campaigns — one to help prevent famine in Yemen and another supporting Syrian refugee children and Lebanese children in Lebanon.

With the app, users can share vital food and nutrition with hungry communities around the world by simply tapping on their smartphone and donating some money.  For the first time this year, a function gives users the power to choose where they send their donation.


Lastly, I was asked this morning offline by a number of people on press reports that said that an UNMOGIP [United Nations Military Observer Group in India and Pakistan] vehicle was targeted by the Indian Army along the Line of Control near the Khanjar sector.  I can say to you that this afternoon in Bhimber District, in Pakistan-administered Kashmir, UNMOGIP military observers accompanied by Pakistani army escorts heard gunshots in their vicinity.  There is no evidence that the UNMOGIP military observers were targeted by the gunfire.  No UN military observer was injured.

**Questions and Answers

Khalas.  Masood‑ji?

Question:  Thank you, sir.  As… as the last statement that you read… read out, it shows that the hostilities between India and Pakistan on the border in its way continue to expand.  And the Secretary‑General was promised again… time and again that he will look into this problem between India and Pakistan and, particularly, in reference to Kashmir, where many human rights — what do you call — violations are recorded and… when will the Secretary‑General get around to this particular question?

Spokesman:  I think, you know, as we’ve said to you, we’re obviously concerned at the situation in Kashmir, and it’s an issue that the Secretary‑General is following closely.  Rosiland?

Question:  I wanted to ask about the Trump Administration’s budget proposal for the UN and related agencies.  General contributions would be cut by about $400 million for fiscal year ’18.  The peacekeeping budget, in particular, would be cut by 90 per cent.  Other international organizations and programmes would get no funding from the United States.  Granted, as Mr. [Atul] Khare noted that this is early days, that Congress has to negotiate the budget, what contingencies is the Secretariat making in case more of the money that the Administration wants to cut is actually cut in the final budget?  What is the message to UN staff and affiliates about the potential for a big loss of funding from the US?

Spokesman:  I think we’re… as Mr. Khare said, we’re obviously studying the budget, going through some of the numbers. You know, I think, from where we stand, I think looking at the budget, as it’s proposed now, would make it simply impossible for the UN to continue all of its essential work advancing peace, development, human rights, and humanitarian assistance around the world.  The budgetary process in the US is what it is.  It is going through a legislative process.  So we will wait to see what comes out of that legislative process.  I think it goes without saying it, but it bears repeating that we’re obviously extremely grateful for the financial contributions the United States has been making and is making to the United Nations over the years as its largest financial contributor.  You know, I don’t want to get into contingency plans.  Obviously, everybody’s following very closely.  And I think the Secretary‑General has been… I mean, even before this budget came out, has been very vocal on, first of all, the need to reform and is engaged on… is committed and will continue to work on reform ensuring that the UN is fit for purpose, delivers what it’s meant to deliver.  I mean, already, I think, since he’s come into office, he’s been very conscious of cost cutting, asking people to limit travel, asking Mr. Khare to do a review of how we use our air assets, which are a big, big part of the peacekeeping budget.  So we’ll see what the situation unfolds.  But we will need resources to deliver on our mandates.  Yes, sir?

Question:  Stéphane, Rohit Vyas, TV Asia.  Follow‑up to that.  So, in the meantime, are there any plans to ask all departments across board in the United Nations to start conserving money for the future should something… should the US budget…

Spokesman:  The Secretary‑General has already asked all departments — and this has been for a few months now — to ensure… see where… how they can spend the money more wisely.  I mean, this is an effort we can always be making, and it’s an effort that he expects staff to make.  Matthew and then Benny.

Question:  Sure. I have a budget question as well, but I wanted to ask you the question that I’d asked; maybe you’ll take a stab at it.  If a single country, France, has controlled peacekeeping more than 20 years in a row, five heads of department in a row… I tried to ask Mr. {Jean-Pierre] Lacroix what the benefit of it was, as you heard, I’m sure you heard; you seemed to be back there.  But Mr. Khare seemed to say he’s not… he doesn’t see him as French, which is fine.  But I guess I wanted to know… you speak for the Secretary‑General.  What was the process for selecting a new head of peacekeeping?  And I’m sure there is a benefit of having France head it.  What is that benefit?  And does it outweigh the downside, which some people have articulated?

Spokesman:  Heads of departments, like any UN staff member, are here as international civil servants.  They are here to serve the Organization and not serve their own country, and that applies to everyone who serves, whether in a position of responsibility… of greater responsibility or of lesser responsibility.  The process for appointing heads of departments at the UN has been what it is for a long time and the Secretary‑General has, I think, chosen the person he feels could best provide the leadership for the Department of Peacekeeping Operations (DPKO).

Question:  Did he consider… I mean, I’m aware that it’s happened and it’s happened five times in a row, but given that he’s self‑described as a reformer, when he came in, did he consider shaking things up, i.e. not leaving DPA [Department of Political Affairs] with the US, OCHA with the UK, and can you just confirm that he asked for [inaudible] candidates?

Spokesman:   I think the reform…  No, I’m not going to confirm it, because it’s the Secretary‑General’s prerogative to appoint heads of departments as he sees fit.  Some jobs are advertised.  Some are not advertised.  It’s the prerogative of the Office of the Secretary‑General.  So I don’t know what else to say.

Question:  But shouldn’t the process be… I guess my… if he’s a reformer, shouldn’t the process be transparent…?

Spokesman:  I think the Secretary‑General’s results on reform should be judged at the end of his term, and I think we’ve already seen that he has changed things on how we operate here.

Question:  And on the budget, could I just… it’s a factual question.  You’ve listed today at 3 presenting his pro… proposed programme budget for the biennium 2018‑19 to ACABQ [Advisory Committee on Administrative and Budgetary Questions]. One, is it open?  Two, can we see the budget?  And if… three, if not, why not?

Spokesman:  The process remains the same.  This is a budget that has start… that was elaborated before the sec… this Secretary‑General came into office.  As you know… as you may not know, but it’s kind of a long process.  This is the first step.  It will go to the ACABQ and then go to the Fifth Committee.  The Fifth Committee deliberations are often open, and then I think we’ll get a clearer picture then.  Benny?

Question:  Yeah.  Following up on your discussion yesterday on rights… human rights for all sexual orientations, today the Supreme Court in Taipei became the first in Asia to declare… to approve gay weddings, gay marriages.  Does the Secretary‑General commend the Government of Taiwan for being… becoming the first one to do so?

Spokesman:  I think the Secretary‑General believes that everyone should enjoy the same rights in any country, regardless of their sexual orientation.

Question:  And following up on our geography lessons yesterday, where is Taipei, what country?

Spokesman:  As you know, the United Nations follows a one China policy, but we’ll… I look forward to tomorrow’s question on geography.  Rosiland?

Question:  The White House said that at the end of President [Donald] Trump’s meeting with Pope Francis that Mr. Trump announced $300 million to deal with famine in the countries which the Secretary‑General has highlighted in the past — Yemen, South Sudan, Somalia, and north-eastern Nigeria.  Is that a direct pledge to the United Nations?  Has the US communicated that as such?

Spokesman:  I haven’t seen that, but I will… obviously, if that is the case, that is very welcome news.  But I need to confirm it on our end.

Correspondent:  Thank you.

Spokesman:  Thank you.

Correspondent:  It was announced on Al Jazeera… [inaudible].

Spokesman:  I have… I don’t doubt the veracity of Al Jazeera’s facts.  I just have to confirm it myself.  Matthew and… go ahead.

Question:  Sure.  I wanted to ask you, today in Yaoundé, Cameroon, Amnesty International had scheduled a press conference about three teenager students sentenced to ten‑year prison sentences for joking in text messages about Boko Haram.  So, I wanted to know, they… basically, this was closed down. The press conference was disallowed.  Many human rights groups have said it’s an outrage. And I noticed yesterday evening, the Deputy Secretary‑General and the Chef de Cabinet were both at the National Day of Cameroon on 73rd Street in New York.  So, I wanted to know, what does the UN think of… of this country that just recently celebrated its National Day with these two officials shutting out Amnesty International, sentencing students to ten‑year prison sentences…

Spokesman:  I’ll look into the case.  I have not…

Question:  Did you ever look into the testing thing?  I’d asked you about administering a test…

Spokesman:  Yes, I think… we were given some guidance by UNESCO [United Nations Educational, Scientific and Cultural Organization], and I will share that with as soon as I find it.  Yep? [He later said that the United Nations Office in Central Africa, UNOCA, has informed that there have been reports of abstentions from the examinations in the north-west and south-west regions of the country.  We are not aware of any reports of these tests being taken at gunpoint.  Nonetheless it is of concern that these examinations were held, despite school closures and the internet blackout for over three months, which disrupted normal activities.  However that is an issue for the relevant national authorities to respond to.  UNOCA, in close cooperation with the Acting Resident Coordinator, is monitoring the situation in the north-west and south-west regions of Cameroon and will continue to liaise with the authorities to promote a peaceful resolution to the grievances of the Anglophone population.]

Question:  Thank you, Mr. Stéphane.  International Day of Peacekeepers is ahead of us, and I am from Bangladesh, as you know, and my country is the number one troop-contributing country for the peacekeeping, and their contribution and effort is reported by the world; they are doing very hard work.  But, within the country, Bangladesh… this law enforcement agency, Bangladesh Government using to eliminate the political opponent.  So, how does Secretary‑General observing these issues in Bangladesh, though they are very much active around the globe and they are doing very good work.  But within the country, the Government is using very wrongly, so what is the observation?

Spokesman:  I don’t have anything for you on Bangladesh.  Let me check and get back to you.  Thank you.

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Boko Haram: Down but far from out

The Nigerian government has declared victory over the Boko Haram insurgency. The capture at the end of December of Camp Zero in Sambisa Forest, the last stronghold of the jihadists, seemed to herald the formal beginning of the post-insurgency phase in northeastern Nigeria. 

The negotiated return last month of 82 of the kidnapped Chibok schoolgirls (an estimated 113 are still in captivity) has been presented as further evidence that the back of the seven-year-old insurgency has been broken.

The government and its development partners are already starting post-war reconstruction in the three most affected states of Borno, Yobe, and Adamawa. Humanitarian conditions remain dire, but houses and schools are being rebuilt, seedlings distributed, and empowerment training schemes launched.


Amid all this optimism, it is important to acknowledge lingering causes for concern.

While Camp Zero has been dismantled, the reality is that Boko Haram is an adaptable foe. It is reportedly both forming new enclaves in the Lake Chad Basin and melting back into civilian communities.

The rumours are of profitable business partnerships being formed – especially in the fish and cattle trade. Some fishermen, for example, are supplying their catch to Boko Haram middlemen who sell on their behalf.

And Boko Haram’s network is far deeper than commonly realised. The State Security Service is regularly turning up insurgents across northern Nigeria, and in one case as far away as the western state of Ekiti.

Boko Haram is known for its attacks on civilians and suicide bombings. So far in May there have been 12 suicide bombings (by nine women, three men) – a tempo that suggests the insurgency is far from over.

But since the movement split into two factions led by Abubaker Shekau and Abu Musab al-Barnawi back in August, there has been a change of tactics. Al-Barnawi’s group had criticised Shekau for attacking soft civilian targets, tactics that won Boko Haram few voluntary recruits. Al-Barnawi’s group is much more explicitly targeting the military.

Since November, 11 military installations have been attacked, with 40 soldiers killed. In April alone, 20 soldiers died in raids on four army posts. The weaponry they have captured, and the motorbikes instead of vehicles they favour, means they are mobile and well-armed.

Al-Barnawi’s faction still loots villages for food, fuel, and medical supplies, even if it does appear to be deliberately avoiding killing civilians – as long as they don’t resist.

The government’s inability to completely block the sources of financing for the insurgents continues to pose a challenge. Boko Haram still has money to wage its war, typically raised through kidnapping, extortion, armed robbery, cattle rustling, and taxes/levies on businesses.

The strained relationship between the vigilante Civilian Joint Task Force and the military is also affecting the government’s prosecution of the conflict. Since the arrest in February of the founder of the CJTF, Bah Lawan, over his alleged links to Boko Haram, some vigilante leaders are refusing to cooperate with the army.

The CJTF, one of the most effective weapons the military has against Boko Haram, has also been reportedly weakened by factionalism and indiscipline. Regular complaints of irregular pay from the Borno State government and the lack of health insurance and even fuel for their vehicles is affecting morale.

Power of the word

Boko Haram’s ideology, that Westernisation is evil, still has resonance. Rural northeastern Nigeria is highly conservative. While the insurgency’s violence is not approved of, its broad worldview has power and can still attract sympathy.

One 45-year-old woman who was held hostage in Sambisa, and served as a teacher in the camp, was honest enough to tell me she now regretted leaving Boko Haram.

Alleged corruption and sexual exploitation by security forces and aid workers also plays into the militants’ messaging. There is a powerful narrative that girls and women in IDP camps are either being sexually abused or forced into sex-for-food arrangements. Reports of the flagrant use of alcohol and drugs by the army and the CJTF also do not sit well with traditional cultural norms.

The government has a disarmament and reintegration plan dubbed Operation Safe Corridor. More than 4,500 former combatants have surrendered, but the framework for the strategy remains opaque, and it contains real risks.

There are fears that some so-called “deradicalised” Boko Haram are not repentant at all. There are questions over their screening, certification, and whether communities are ready for their return and reintegration.

Some ex-combatants have been deeply indoctrinated. As one man told me: “You cannot believe in one part of the Koran and not in the other part of the Koran, [which includes] killing”. 

Then there are the detainees accused of being Boko Haram – those who have suffered abuse at the hands of the security forces and have likely been radicalised as a result of that experience but are then released.


Hope that the freeing of the Chibok schoolgirls could be a step towards possible negotiations was dealt a blow by Shuaibu Moni, one of the (at least) five Boko Haram commanders swapped for the released school girls.

In a video released barely a week after he gained his freedom, he was threatening to bomb Abuja and denying there could be any dialogue with the government. “Only war is between us!” he declared.

While we must give kudos to the military and the Nigerian government for improving security in the northeast, it is safe to say the conflict is far from over.

There is still some way to go.

The government must immediately prioritise a hearts-and-minds approach. The focus of the war now should be on combatting the ideology of Boko Haram; there should be an emphasis on healing trauma in a society scarred by the violence.

And while the path of dialogue is a difficult journey, the idea of peace through negotiation must not be jettisoned.


TOP PHOTO: Nigerian refugees in Cameroon returning home

This series of features and commentary on violent extremism in Nigeria and Sahelian Africa is part of a project with the Open Society Initiative for West Africa (OSIWA)

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Help Prevent Famine With WFP’s ShareTheMeal App During Ramadan

ROME – To mark the Holy Month of Ramadan this year, ShareTheMeal, the official app of the United Nations World Food Programme (WFP), is launching two simultaneous fundraising campaigns — one to help prevent famine in Yemen and another supporting Syrian refugee children and needy Lebanese children in Lebanon.

Ramadan is a time when families around the world share meals together. With ShareTheMeal, users have the opportunity to provide vital food and to help others share moments of joy and togetherness.

“Through ShareTheMeal, everyone in the global community can make a difference in the lives of our brothers and sisters in Yemen and Lebanon,” said WFP Executive Director David Beasley. “What we all do together truly does save lives and change lives, step by step.”
WFP is funded entirely by contributions from governments, companies and individuals. This year for the first time, ShareTheMeal for Ramadan has a function giving users the power to choose where to send their donation. The first two countries to be included are Yemen and Lebanon.

With the app, users can share vital food and nutrition with hungry communities around the world by simply tapping on their smartphone and donating US$0.50 or more. The ShareTheMeal community recently contributed to WFP’s famine response in South Sudan, where users shared 1 million meals with those people in need in just over one month.

Recent features in Google Play and the Apple App Store, including Apple’s current ‘Ramadan Essentials,’ allow ShareTheMeal to reinforce its mission to engage as many smartphone users as possible in WFP’s efforts to achieve Zero Hunger.

On 18 May, ShareTheMeal won the 2017 Google Play Award for Best Social Impact app during Google’s I/O conference. WFP’s app has engaged a new generation in supporting the fight against hunger. More than 830,000 people have downloaded the app and shared over 13 million meals with thousands of vulnerable children in Jordan, Syria, Lebanon, Malawi and Cameroon.  

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WFP is the world’s largest humanitarian agency fighting hunger worldwide, delivering food assistance in emergencies and working with communities to improve nutrition and build resilience. Each year, WFP assists some 80 million people in around 80 countries.

ShareTheMeal allows smartphone users to share their meals with hungry people via a free iOS and Android app. ShareTheMeal is an initiative of the World Food Programme Innovation Accelerator.  

Download the app here: https://app.adjust.com/u0ts56
For additional media material, please visit: www.sharethemeal.org/media

Follow us on Twitter @wfp_media  and @ShareTheMealorg

For more information please contact (email address: firstname.lastname@wfp.org):
Katharina Weltecke, WFP/Rome, Tel. +39 06 65133108, Mob. +39 348 2811 922
Abeer Etefa, WFP/Cairo, Tel. +202 2528 1730 ext. 2600, Mob. +201066634352
Jane Howard, WFP/Rome, Tel. +39 06 65132321, Mob. +39 346 7600521
Gregory Barrow, WFP/London, Tel.  +44 20 72409001, Mob.  +44 7968 008474
Gerald Bourke, WFP/New York, Tel. +1-646-5566909, Mob.  +1-646 525 9982

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