A high level UN conference which closes in Doha yesterday has turned into a lost opportunity for instituting reforms to the global financial system to help poor countries, say leading development agencies Christian Aid and ActionAid.
The two organisations are particularly critical that the conference, held to examine funding for development, failed to recommend the upgrading into an intergovernmental body of a UN committee dealing with co-operation between states on tax matters.
Such a move would have helped undermine the secrecy offered by tax havens which is exploited by unscrupulous businesses trading internationally to evade tax in developing countries.
The conference did agree that the UN’s economic and social council should be asked to examine the ‘strengthening of institutional arrangements,’ including the tax committee.
But, according to Christian Aid policy manager Alex Cobham: "The proposal made is not as strong as it should have been. Doha was a chance for rich countries to demonstrate their commitment to helping poorer countries during the present financial crisis. It was a lost opportunity."
Christian Aid has calculated that tax revenue lost to poorer countries annually through evasion amounts to US$160bn. If used according to current spending patterns, the money could save the lives of 350,000 children under the age of five each year.
Anna Thomas, ActionAid’s head of economic and social development, warned: "Commitments made in the conference outcome document to address detrimental tax evasion are weak and the essential upgrading of the UN Committee of Experts on International Co-Operation in Tax matters into an intergovernmental body was fudged."
The failure to take strong action was in marked contrast to the importance attached to combating tax evasion to help the developing world by speakers including Ban Ki-moon, Secretary-General of the United Nations, Angel Gurría, head of the Organisation for Economic Co-Operation and Development, and Trevor Manuel, South Africa’s Finance Minister.
Mr Gurría said taxes were "the lifeblood of government services." He added: "To succeed, developing countries must create effective tax systems and, with the developed countries’ help, tackle the curse of corruption, tax havens and tax evasion."
Norway, France, Germany and South Africa all pushed hard for a strong resolution on tax but opposition to the move was led by the United States.
One positive outcome from the conference, however, was the agreement that a ‘UN meeting at the highest level’ will now be held in 2009 to discuss the causes and impact of the economic and financial crisis on developing countries. This was opposed by a number of richer countries, led once again by the US, but the views of the developing world prevailed.
The Doha conference was called to assess the progress made towards realising the 2002 Monterrey Consensus on Financing for Development, which signposted how public and private funds could be used to help poor countries.
The consensus was reached in 2002 in Monterrey, Mexico between more than 50 heads of state and 200 ministers of finance, foreign affairs development and trade, as well as heads of UN organisations, the International Monetary Fund, the World Bank and World Trade Organisation.