Adviser to ECOSOC
New York, New York
April 20, 2023
The United States is pleased to join consensus on the 2023 Financing for Development outcome document. We welcome the flexibility shown by delegations to produce a consensus document that focuses on scaling-up public and private investment to support achievement of the Sustainable Development Goals. We appreciate the efforts of the co-facilitators, Portugal and Rwanda, as well as the President of ECOSOC’s efforts to find consensus and keep us focused on our shared objectives.
The United States is committed to the full implementation of the 2030 Agenda for Sustainable Development. Part and parcel to this is the bedrock principle, repeated in the Addis Ababa Action Agenda, that primary responsibility for development lies with each country. We also stress that full implementation of the SDGs depends upon maintaining a multilateral trade system and economic ecosystem that fosters inclusive economic growth and productivity gains.
We all agree on the value and importance of the SDGs, even if we sometimes differ on the best methods and mechanisms to get us there. We would like to take this opportunity to clarify U.S. policy positions on several issues found in the outcome document.
The United States is firmly committed to the full achievement of the SDGs. We highlight our mutual recognition, in paragraph 58 of the 2030 Agenda, that implementation of the 2030 Agenda must respect and be without prejudice to the authority and independent mandates of other processes and institutions and does not prejudge or serve as precedent for decisions and actions underway in independent fora. Accordingly, we do not view the UN as having the remit to convene the IFIs or other independent bodies, such as the G20.
In particular, in the context of this document, we note that the multilateral development banks and International Monetary Fund are important sources of development finance. The MDBs and IMF have their own governance structures, mandates, and decision-making processes that are essential to helping ensure that they remain fiscally solvent and continue to support development. As such, it is inappropriate – and potentially undermines the intended function of these entities – for the UN to seek to directly influence or to make specific recommendations targeting the MDBs and IMF.
Along those lines, with respect to the proposed Biennial Summit, we do not support complicating the structures and processes of the G20 or the international financial institutions by directly involving, or creating new dialogues with, the UN and highlight the potential damage of confusing or duplicating existing workstreams.
Additionally, we strongly underscore that several of the underlying proposals of the SDG Stimulus Plan are appropriately addressed in fora outside of the UN. While we appreciate the Plan’s intent to galvanize renewed global ambition to accelerate progress towards the SDGs, we do not support many of the suggestions, and note that a number of them have already been and are continuing to be discussed at length in the G20 Finance Track and the Boards of the international financial institutions. As previously noted, it is not appropriate for the UN to seek to direct or influence those independent bodies.
We underscore our position that trade language negotiated or adopted by the General Assembly and Economic and Social Council or under their auspices, has no relevance for U.S. trade policy, for our trade obligations or commitments, or for the agenda at the WTO, including discussions or negotiations in that forum. While the UN and WTO share common interests, they have different roles, rules, and memberships. This includes calls to adopt approaches that may undermine incentives for innovation, such as technology transfer that is not both voluntary and on mutually agreed terms.
The appropriate tool to assess debt sustainability is an IMF/World Bank debt sustainability analysis (DSA). Our consent to the language in item 63 referencing a multidimensional vulnerability index (MVI), should in no way be interpreted as the United States providing a general endorsement for the use of an MVI in the determination of debt sustainability. We recognize the IMF/World Bank may choose to incorporate metrics and indices, such as an MVI, into their DSAs —based on the policy direction provided by independent boards— however we do not recognize an MVI as having any validity as an alternative to IMF/World Bank DSAs.
We recognize that sovereign debt ratings play a role in determining the terms upon which all countries can access credit. Credit rating methodologies are carefully and intentionally designed to accurately measure the borrower’s risk of default. To maintain the trust of creditors, and thereby the flow of capital to developing countries, it is critical that credit rating agencies remain free of political influence or pressure. Any efforts to the contrary risks obscuring the true risk incurred by investors, thereby undermining investor trust and reducing credit availability to developing countries.
The United States strongly supports the political commitment made by more than 140 jurisdictions to reform the international tax architecture and stabilize the international tax system using a two-pillar approach and outlined in detail in the Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalization of the Economy on October 8, 2021. The October 2021 OECD/G20 Inclusive Framework’s Two-Pillar Solution for resolving the key outstanding questions on international taxation is a once-in-a-generation accomplishment for economic diplomacy. Once implemented, it will end the race to the bottom on corporate tax rates and inbound investment incentives being offered by developing countries, level the playing field for business, and improve fairness for workers around the world. We firmly believe that approach will make the international tax system fairer and better fit for the 21st century economy. We also reaffirm our 2015 commitment to the Addis Ababa Action Agenda of the Third International Conference on Financing for Development.
The United States strongly supports the notion that transparency and exchange of tax information can benefit developed countries, developing countries, and businesses alike. But the United States also strongly believes that, in order for transparency and exchange of tax information instruments and mechanisms to be beneficial rather than harmful, they must be developed with care and adopted with all appropriate safeguards necessary to ensure the confidentiality that is required, as well as proper limitations on the use of such information.
While the United States acknowledges the UN system increasingly uses the term “illicit financial flows,” we continue to have concerns that this term lacks an agreed-upon international definition. Without an agreed-upon definition, resolutions should be clearer about the specific underlying illegal activities, such as embezzlement, bribery, money laundering, other corrupt practices, and other crimes that produce or contribute to the generation and movement of illicit finance. Ultimately, we urge all Member States to implement their existing obligations and commitments to prevent and combat corruption and money laundering enshrined in the existing international architecture.
The United States welcomes the publication of the first year of data under Sustainable Development Goal target 17.3: “Mobilize additional financial resources for developing countries from multiple sources.” We applaud the reliance on Total Official Support for Sustainable Development for the indicator used, bringing transparency to the wide range of international development cooperation providers. We welcome the implementation of the conceptual framework on South-South Cooperation as a complement to North-South Cooperation, supported by UNCTAD. Full visibility of all financial flows enables developing countries to better plan and manage all resources available to them toward their progress in achieving the SDGs.
The United States proudly stands as the largest single provider of official development assistance (ODA), disbursing nearly $55 billion in 2022, on a preliminary net basis, which is an all-time high. The United States has not committed to the UN targets of 0.7 percent of GDP or to 0.15-0.2 per cent of GNI to Least Developed Countries. The United States attaches exceptional importance to our relationships with – and the needs of – our partners and friends. Regarding concessional assistance, the proper forum to discuss eligibility and allocation, as well as the use of a Multidimensional Vulnerability Index is the Organisation for Economic Cooperation and Development.