With very little attention from the media and the public at large, the international community of States adopted the UN 2030 Agenda for Sustainable Development in September 2015. In the view of Alliance Sud, the document has the potential to contribute substantially to a more just world.
SDG 17 is a key starting point. It addresses the financial and non-financial resources required for implementation. Prominent among financial resources are tax issues as well as official development assistance. The non-financial resources pertain to making trade policy more equitable.
But target 17.14 states most importantly that the strengthening of policy coherence is a prerequisite for sustainable development. It is the first time that this goal is being expressly included in a global reference framework. In this way, States declare their readiness to formulate their foreign trade and fiscal policies in terms of sustainable development. They are thus committing to analyse their policies for their impacts in other fields and to take steps to enable the sustainable development of other players as well.
The five fields of action of Alliance Sud in the light of the 2030 Agenda:
1. Finance and tax policy
Two specific questions arise from the standpoint of international fiscal and finance policy. One concerns the distribution of wealth and assets as well as the question of funding the implementation of the 2030 Agenda. SDG 10 contains the aim of reducing inequality within and among countries, and target 10.4 expressly mentions fiscal policy. With over CHF 3,000 billion in foreign assets under management, the Swiss financial centre is still the world's largest offshore haven and one of the world's favourite low-tax areas for global corporations. Not only does this "business model" reinforce the inequality of asset distribution domestically, it is also a key driver of global inequality.
According to UN estimates, realizing the various SDGs calls for annual investments of US$5000-7000 billion. Much of these funds are to be raised in the countries themselves (SDG 17.1). Developing countries are therefore expected to be in a position, thanks to taxes and other government revenues, autonomously to fund the infrastructure and basic supplies they need for their sustainable development. Prerequisites for this are not just technical expertise in tax administrations and in the formulation of tax legislation, but no less importantly, halting the massive outflows of taxable revenues through profit-shifting abroad and the use of tax loopholes, whether legal or illegal. With its aggressive low-tax policies for privately-held assets and multinational corporations, Switzerland continues to be a strong magnet for such illicit financial flows. Through SDG 16.4, the 2030 Agenda establishes the clear goal, including for Switzerland, of following radically different paths in this regard.
2. Trade and investments policy
Trade policy can severely restrict the policy space available to States for determining and implementing their sustainable development. SDG 17.15 calls for each country's policy space to be respected. Already concluded as well as future free-trade or investment agreements must be measured against this principle. Agreements will therefore need to include binding sustainability chapters requiring the observance of human and labour rights as well as environmental standards.
3. Business and human rights
Much is expected of the private sector when it comes to implementing the 2030 Agenda. As bringer of capital and payer of taxes, as an employer and a driver of technological progress, the private sector is seen by many governments as having a central role in the implementation of the 2030 Agenda. At variance with this is the fact that multinational corporations are mentioned just once in the 17 SDGs, in SDG 12.6 on sustainable consumption and production patterns. Even so, they are not bound to anything but merely encouraged "to adopt sustainable practices and integrate sustainability information into their reporting cycle." No criteria or monitoring are stipulated in that regard, however.
On the one hand, Alliance Sud focuses its work in this field on the necessary State regulation, and on the other, on dialogue with private sector representatives. It has two main expectations of the private sector. First, companies should be substantial taxpayers and help provide States with the funds needed to enable them to independently determine and realize their sustainable development. They should also pay taxes in the places where value creation takes place. Second, private companies too must give practical expression to the universality and interconnectedness of the 2030 Agenda. To this end, firms should not merely report on the SDGs to which they contribute positively, but also provide a comprehensive analysis. It ought not to be, for example, that combatting hunger by increasing food production goes hand-in-hand with land grabbing, or negatively impacts the health of the local population.
The implementation of the 2030 Agenda also calls for government regulation. In Switzerland, government and administration are nonetheless somewhat hesitant about taking appropriate measures. This was evidenced by the recent adoption – after a long wait – of the national action plan for the implementation of the UN Guiding Principles on Business and Human Rights.
4. Climate and environment policy
In the realm of climate and environment, Alliance Sud gives a central place to Switzerland's decisions and activities which impact the global public good that is the environment, and which have direct or indirect environmental and ecosystem effects. Such is the case, for example, of cross-border environmental pollution from CO2 emissions. With its footprint of 3.3 earths, Switzerland is a far cry from any sustainable use of natural resources as called for in SDG 12.2.
The current focus is on the integration of the Paris Agreement on climate change into national policies (Goal 13.2). Progress in Switzerland in this regard is rather sluggish and is not fulfilling the guidelines. To meet the goal of stabilizing global warming clearly below 2°C, the Federal Council would need to set a domestic CO2 emission reduction target of -60% by 2030, as compared to 1990. In the revision of the CO2 Act, which is now on the Agenda for the autumn session of Parliament, the Federal Council proposes -30%, or targets only half as ambitious.
Moreover, Switzerland has neither a long-term strategy nor a plan for raising additional funds for climate protection and adaptation measures in developing countries. SDG 13.8 confirms support by OECD countries for developing countries to the tune of US$100 billion per year. It is calculated that Switzerland must make an annual contribution of CHF 1-1.3 billion to this amount. The calculations are based on Switzerland's economic strength, which accounts for 1% of the OECD's economic output, and Switzerland's overall responsibility in CO2 emissions of about 15 tonnes of CO2 per capita and per annum.
5. Development cooperation
Within the Federal Administration, government players in Switzerland's development cooperation are already quite familiar with the 2030 Agenda. The Swiss Agency for Development and Cooperation (SDC) was very much involved in the formulation of the 2030 Agenda, and after the Millennium Goals, being guided by a global reference framework is nothing new to the Agency. Yet existing programmes should not simply be continued just as hitherto. Development cooperation must also incorporate the main new elements of the 2030 Agenda and pursue activities in an interconnected and partnership-based manner. What is of utmost importance is that when debating policy, development cooperation players should insist strongly on policy coherence from a development standpoint.
The 2030 Agenda makes clear that Official Development Assistance (ODA) funds are not enough to pay for the implementation of the SDGs. ODA will nonetheless have to continue to play a crucially important role especially in the poorest countries and in public services such as education and health. This will call for increased ODA. Accordingly, the decades-old promise to increase ODA spending to 0.7% of GNI has been renewed in the 2030 Agenda (SDG 17.2). Yet wealthy Switzerland has gone into reverse: after meeting the Parliament's target of 0.5% in 2014, the Federal Council has now cut back the target for the next four years to about 0.48% of GNI. The funds in fact available for development cooperation are substantially less, since the cost of caring for asylum seekers for the first year of their stay in Switzerland are being charged to ODA funds. Every seventh ODA franc therefore remains in Switzerland and goes towards asylum spending, which although necessary, is of no relevance to development.
Switzerland still has much to do
This rough analysis of the need for action in connection with the 2030 Agenda clearly shows, from a development standpoint, that Swiss policies are not on a path of sustainability. Instead, Switzerland is moving in the opposite direction in the realm of international fiscal and trade policy. The need for action has in fact been acknowledged as pertains to climate policy and business and human rights, but the necessary measures are being implemented far too slowly.
With the 2030 Agenda for Sustainable Development, States have acknowledged the path that should be taken towards a fair and just world. In addition to the insights laid out in this reference framework, countries must now display genuine political willingness to orient themselves accordingly. In so doing they would be giving precedence to their common, long-term interest in a peaceful and sustainable world over short term vested interests.