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international development finance and cooperation

Can business help finance the Post-2015 Agenda? Yes, But…

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A participant at the Latin America regional consultation on 'Engaging with the Private Sector' in Cartagena, Colombia. Photo credit: (AECID)

Diplomats and their governments are in the middle of a huge exercise to update the world's development agenda. Attention has now started to shift from the ‘what' of the agenda to the ‘how' – policy choices, capacities, institutions, and technology to name but a few. Yet where will the hard cash come from to fund these lofty aspirations? Some of the poorest and least developed countries will be looking for a clear commitment from richer countries that they will meet previous commitments on official development assistance (ODA), including the international benchmark of 0.7% of GNI. But the economies of many rich countries are still struggling, and their governments are finding it difficult to justify to domestic taxpayers that their money is being spent abroad rather than at home. At the other end of the spectrum, some governments have emphasized that the private sector will step in and shoulder the burden of financing the new goals and targets. The discussion on the validity or means of this claim has not been very deep. More cynically, some have suggested that focusing on the private sector's role is a deliberate tactic to steer the debate away from aid commitments. But this critical question remains... Read more

How well is the rich world supporting development?

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Miners in the Democratic Republic of Congo. The mining sector is characterized by conditions of extreme danger, without any security and health framework with negative consequences for the environment. Photo: Benoit Almeras-Martino/UNDP DRC

We all know that many factors influence a country’s progress on poverty reduction and development. Policies and institutions at the domestic level are probably the most important driver. But it’s also true that the policies and actions of other countries – and especially rich and powerful nations – also influence the developing world’s development prospects. In this spirit, MDG 8 was elaborated. This MDG differs from all the others; it measures the developed world’s efforts to do things like increase development aid, cancel the debt of the poorest countries, make international trade fairer and provide access to affordable medicines. These measures, many argue, are just as important as the steps developing country governments can take at home to ‘improve their lot’. Every year, the UN monitors progress on how well the rich world is doing and launched its latest ‘update’ report recently. UNDP partners in this annual monitoring effort. So what’s the verdict? Is the rich world living up to its MDG commitments? On development aid (ODA), the report notes that, despite an increase last year, ODA still was US$180 billion short of the commitment. It’s also heavily concentrated in a few countries; in 2013, just 10 countries absorbed over 34%... Read more

Crowdfunding for development: fad or future?

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Children picking olives at Ostrog Primary School which was made energy independent, through a crowfunding campaign supported by UNDP and the Kaštela Energy Cooperative. Photo: Marina Kelava/UNDP Croatia

Steady growth and, for now, no end of the trend in sight: the crowdfunding market keeps expanding across the globe. Crowdfunding describes the practice of securing funding for a specific project or business venture by a dispersed group of people with some shared interests, “the crowd”. Most crowdfunding initiatives are dependent on whether they raise the targeted amount from the crowd. If the funding goal is not met, the project will not take off. It thus differs to charitable donations which usually support the respective organization’s general mission without knowing exactly how the money will be spent. UNDP has been experimenting with philanthropic crowdfunding and has had some early successes. For example, colleagues in Croatia successfully raised $10,000 for an energy-independent school in Croatia. The sum might be fairly small but the experience showed: crowdfunding can create a buzz for development work and social causes as the unwritten rules of crowdfunding require development organizations to communicate constantly and in a non-technical jargon what concretely was achieved. UNDP has also had some experience ‘failing’ with crowdfunding initiatives. As the saying goes: “Failure is only the opportunity to begin again more intelligently”. Based on lessons thus far, we developed guidance document for UNDP... Read more

Financing Post-2015: A quick run-down of the expert committee’s report

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Drip irrigation system introduced in the farmlands of Akmola region in Kazakhstan. Photo: UNDP in Kazakhstan

The UN’s inter-governmental committee of experts on sustainable development financing met for the last time this month to put the final touches to their much anticipated report on how the world should finance the post-2015 Sustainable Development Goals – or SDGs. I’ve had the opportunity to attend many of the committee’s sessions, and they’ve had a mammoth task. So what have they come up with? You can read the full report here, but below is a quick heads-up. The range of issues they’ve had to cover is massive: from assessing how much cash is needed to finance sustainable development to thinking about where the cash could come from and where these funds should be directed. The report draws up a ‘menu of options’ for the financing of sustainable development. This allows policymakers in different countries to make choices as to what policies and financial instruments are most suited to them. That makes perfect sense of course; the strategy that will be best for a climate-vulnerable small island state such as the Maldives won’t necessarily be the same for a larger resource-rich country such as Kazakhstan. On the other hand, it could also lead governments to ‘cherry-pick’ among the ideas presented, and... Read more

Development at the crossroads: reflections from the Arab Region

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Syrian refugees in Zaatari camp in the village of Zaatari, Jordan. photo: UNDP

Recent years have seen dramatic changes in the Arab region and two aspects in particular are important for the region’s relationship with issues of development finance.  First, the expanding role of the region itself as a provider of official development assistance (ODA), with the Arab Gulf countries providing more than $3 billion to countries around the world each year - Saudi Arabia alone provided over $100 billion to almost 90 countries since the 1970s. While the volume of Arab ODA has attracted attention, important issues for the future will be a growing focus by Arab partners on development effectiveness, alignment with post-2015 priorities like sustainable access to energy and water, and applying social and environmental quality standards to manage risks in recipient countries.  Furthermore, while most Arab ODA has operated through bilateral cooperation channels and Arab multilateral platforms in the past, there are benefits to connectivity with other Southern donors. The centre of gravity in the global economy is shifting East at speed, and this means shifting lines of development cooperation as well.  Strategic alliances between Asian and Arab donors could be a powerful force for the common goal of supporting new development solutions in Africa, with both Arab and Asian... Read more

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