Commonwealth Finance Ministers Meeting 2014

Commonwealth Finance Ministers met in Washington DC on 8 October 2014 on the theme of ‘Financing the Post-2015 Development Agenda.’ We discussed the implications of OECD-DAC’s current proposals for statistical reform on the measurement of development finance and Official Development Assistance (ODA); the report of the UN Intergovernmental Committee of Experts on Sustainable Development Financing; and priorities for engagement with the G20.

OECD-DAC Reforms
Ministers were apprised of the OECD-DAC proposals for reform on the measurement of development finance and ODA. These include a new measure of total official support for development (TOSD), reconceptualising ODA to better reflect donor effort and recipient benefit, establishing a clear and quantitative definition of concessionality and revising ODA targets to ensure that aid goes to where it is needed most.

We recognised and highlighted the continued crucial role played by ODA and concessional resources in Commonwealth developing countries. We made a strong call for the international community to meet existing ODA commitments. We highlighted that the reforms should not detract from this commitment and that there is a need to maintain support and focus on poverty eradication in the light of the possible introduction of a new measure of TOSD. We also noted that the measurement of South-South cooperation should remain distinct from North-South cooperation, with a recognition of the particular value of South-South cooperation in sharing country experiences and approaches. We supported further work by the Commonwealth to feed Commonwealth perspectives formally into OECD-DAC high level deliberations and provide on-going policy research and technical support to members as the OECD-DAC reforms proceed.

Report of the UN Intergovernmental Committee of Experts on Sustainable Development Financing
We welcomed a presentation by the co‑chair of the UN Intergovernmental Committee of Experts on Sustainable Development Financing on the Committee’s report, which contains a comprehensive set of high-level considerations and options. The Commonwealth has a profound interest in Financing for Development given its diverse membership which contains both providers and recipients of Financing for Development, and we discussed key issues and next steps towards securing a strong outcome at the forthcoming third international conference on financing for development.

We recognised that substantial further work is required to flesh out the post-2015 financing framework into concrete proposals which can be discussed and advanced by the conference next July. Ministers noted the opportunity for dialogue and peer learning as this issue is taken forward, and supported plans for on-going work by the Secretariat to help advance discussions in areas such as: the development of a new set of development finance principles to underpin the post-2015 financing framework; strengthening system coherence and global economic governance; strengthening an international accountability framework and a monitoring and follow-up process; and fostering a concerted discourse on innovative finance for development.

A key theme of interventions throughout the meeting was innovative financing and we welcomed the Commonwealth Toolkit on Innovative Finance. Our discussions highlighted the need to identify specific proposals that can unlock additional new financing. These might include: recapitalisation of development banks; the use of specific taxes to raise development finance; and efforts to strengthen tax collection. The specific needs of small states was highlighted, both in terms of their need for concessional financing, but also for options tailored to their needs. One approach, for example, is the mobilisation of resources through the diaspora. Another was to focus on approaches that have not yet been fully leveraged, such as revenue streams from carbon services, for example, from forest resources.

Some concerns were expressed surrounding anti-money laundering and counter-terrorist financing and the impact of the regulation on remittances. Ministers also recognised that countries will rely increasingly on their own resources to finance development, and that efforts are needed on domestic resource mobilisation to unlock resources that can be directed towards development priorities.

Strengthening the Commonwealth and the G20
We discussed the potential of the Commonwealth to provide a forum which brings together G20 and non-G20 members to allow mutual concerns to be expressed and discussed. We noted the strong foundations that have been built to establish this relationship and that the Commonwealth – G20 relationship had delivered strong outcomes since we last met. We heard substantive priorities for the G20, and the Australian Presidency; and were challenged to consider areas where Commonwealth poor, small and vulnerable countries might engage with the G20 further.

Future Finance Ministers Meetings 
We reviewed options presented by the Secretariat to strengthen CFMM. These recommendations were based on insights provided by an external study and a survey amongst Ministers themselves. We agreed the following, to: hold CFMM in the wings of the World Bank and IMF annual meetings and the location will be the same venue as the annual meetings; seek to hold CFMM on the Thursday immediately before the annual Meetings; adopt a volunteer Troika chairing system to start at the next CFMM; introduce a focal point network; and make more use of: Ministerial Working Groups, High-Level Ministerial Missions and High-Level Panels to provide the opportunity for more regular ad-hoc dialogue and engagement on issues. We agreed to meet again in Peru in the wings of the World Bank/IMF annual meetings in 2015.

Progress on Debt Challenge of Small Vulnerable Economies and the Commonwealth Small States Trade Financing Facility
We heard a report on progress with development of a Small States Trade Finance Facility, as directed by the November 2013 Kotte Statement of the Commonwealth Heads of Government. This is undergoing a feasibility study and we look forward to further updates.

The Secretariat reported on its contribution to the UN Conference on Small Island Development States on resilience and debt concerns of small states: influencing the SAMOA Pathway; and presenting options such as an innovative debt-for-climate change swap at the Conference itself. The Secretariat indicated its current engagement with the World Bank on progressing core recommendations, and plans to engage with member states on these issues during preparations for the third international conference on financing for development.

We endorsed a report on meetings of Senior Officials, who focused their discussion on the OECD-DAC reforms and innovative financing; and Central Bank Governors, who had focused their discussions on the implementation of international financial regulation, and a risk-focussed approach to Anti-Money Laundering and Countering the Financing of Terrorism.