Austerity and its impact on the post-2015 development agenda

Austerity and its impact on the post-2015 development agenda

New York—28 February 2014

Can the world effectively more forward with a post 2015 development agenda if most countries are mired in policies of economic austerity?

And what is the relation between domestic cut-backs in social programs and the rising tide of protests around the world?

These were among the main questions addressed at an informal breakfast meeting on 28 February 2014 at the offices of the Baha’i International Community on the topic of “Austerity measures and the new development agenda.”

The event was the 17th in a series of discussions between diplomats, UN officials, and representatives of civil society on the post-2015 development agenda, sponsored by the BIC and International Movement ATD Fourth World.

In opening remarks, Matthew Cummins, a policy specialist in UNICEF’s Public Finance and Local Governance Unit, said domestic austerity measures taken in the wake of the 2008 global financial crisis had severely reduced budgets – and especially social programs – in most of the world.

“About 50 percent of countries worldwide cut their budgets in 2010-2012 – and the overall size of that contraction was about 2.2 percent,” said Mr. Cummins. “And if we look at spending through this year, which I call the ‘intensification of contraction’ phase, we can see that 100 countries are going to be cutting their budgets by an amount of 3.3 percent of GDP.”

These kinds of cuts will leave little room to fund the post-2015 development agenda, said Mr. Cummins, since overseas development aid is declining and “what we are really talking about in funding development is domestic resource mobilization.

Mr. Cummins identified seven areas where governments could find enough “financial space” to provide more funds for development.

These ideas included: efforts to make taxes more progressive, the elimination of tax havens, and the restructuring of debt, among other things.

Sara Burke, a senior policy analyst with Friedrich-Ebert-Stiftung, a German NGO, said she believes the austerity policies of governments around the world have been a major factor in the increasing number of anti-government protests in recent years.

She cited conclusions from a recent study she co-authored for FES that analyzed world protests between 2006 and 2013. 

She said the main grievance expressed during the 843 anti-government protests they analyzed was a call for economic justice and anti-austerity.

“People need decent jobs, living wages and acceptable living conditions,” she said. “They want food they can afford.”

Another key demand was “the cry for real democracy,” she said, noting that nearly half of the protests indicated some level of “discontent with the workings of government.”

“The problem is much more than austerity,” she said. “A real transformation is needed in terms of policy shifts” if the world is to meet any kind of development agenda.

In a wide-ranging dialogue that followed, participants in the meeting offered a number of further points and ideas. Government representatives in the room stressed the difficulty of meeting social needs in the face of multi-party systems that cause political fragmentation.

Members of civil society who were present stressed the need to get at the root of the inequalities seen in the world today.

To read notes of the meeting, click here.