A/HRC/37/63 III. Obstacles to and recommendations for the progressive achievement of a democratic and equitable international order 15. Since the beginning of the mandate, the Independent Expert has consulted with members of permanent missions, intergovernmental organizations and NGOs, think tanks and the academic communities of several countries in order to learn what they perceive as obstacles to a more democratic and equitable world order. As many observers have pointed out, the prevailing neo-liberal economic model, which focuses on competition instead of cooperation and on short-term profit rather than long-term development, risks sacrificing inclusive development for exclusive economic growth. The deregulation of trade, markets and financial services has fuelled financial speculation and institutionalized corporate impunity on an international scale, with devastating human rights consequences in terms of corruption, labour exploitation, economic inequality, environmental degradation and corporate abuse. In addition, as economists have warned, current manifestations of extreme, free-market capitalism only function with continuous, inequitable levels of growth, which cannot be indefinitely sustained. The resulting boom and bust cycles have caused untold misery to billions of human beings, and future major financial crises and economic depressions cannot be excluded.15 16. There have been many proposals for overcoming some of these obstacles, including through the adoption of binding international standards and the ratification of a binding instrument for transnational corporations, setting out their social and environmental obligations. The Independent Expert has supported this proposal — particularly given the so-far unsatisfactory outcomes of self-regulatory frameworks on business and human rights. The Independent Expert has further called for the future instrument to be equipped with appropriate enforcement mechanisms. Beyond this, at the national level, States should develop and enforce civil and penal sanctions for business activity that has criminal consequences or results in adverse human rights impacts. It is regrettable that efforts at the United Nations to call on transnational corporations to show due diligence have largely failed and that the drafting of a legally binding instrument has not enjoyed the support of many developed States. 17. Secondly, considering that trillions of dollars will be required to address the consequences of climate change and the achievement of the Sustainable Development Goals, the Independent Expert has encouraged States to significantly reduce military budgets and transform military economies into peacetime economies equipped to finance climate change mitigation and the improvement and expansion of social services. To this end, in his 2014 report to the Council (A/HRC/27/51), the Independent Expert proposed that States develop conversion strategies16 to reorient resources formerly used for military expenditure towards social services, the creation of employment in peaceful industries and greater support to the post-2015 development agenda. 18. In the same vein, the Independent Expert has condemned tax evasion and tax avoidance practices as robbing Governments of funding that might otherwise be directed to fulfilling positive human rights obligations. In his 2016 report to the General Assembly (A/71/286), for example, the Independent Expert called on States to ensure individuals and corporations pay their fair share of taxes, including by recovering back taxes, repatriating kleptocrat deposits abroad, abolishing tax havens, adopting effective measures to outlaw the registration of fake companies and banning profit-shifting by corporations. Moreover, the adoption of tax legislation on financial transactions in Member States would be a significant step towards ensuring States can finance programmes to achieve the Sustainable Development Goals and take other measures to advance the right to development. 15 16 8 See www.theguardian.com/commentisfree/2016/sep/19/its-time-to-junk-the-flawed-economicmodels-that-make-the-world-a-dangerous-place. See www.ips-dc.org/blog/demilitarizing_the_economy_a_movement_is_underway.