Bridging the green investment gap in Latin America: what role for national development finance institutions?

By Maria Netto, Lead Capital Markets and Financial Institutions Specialist, Inter-American Development Bank, and Naeeda Crishna Morgado, Policy Analyst – Green Growth and Investment, OECD              

Green-investmentThe developing world urgently needs more and better infrastructure. Affordable and accessible water supply systems, electricity grids, power plants and transport networks are critical to reducing poverty and ensuring economic growth. The way new infrastructure is built over the next 10 years will determine if we meet the Sustainable Development Goal (SDGs) and the Paris Agreement objectives. Considering the long lifespan of most infrastructure projects, the decisions developing countries make about how they build infrastructure are critical: we can either lock-in carbon intensive and polluting forms of infrastructure, or ‘leap frog’ towards more sustainable pathways.

Many countries in Latin America are making this shift: thirty-two of them have committed to cut their emissions and improve the climate resilience of their economies, in infrastructure and other sectors, through Nationally Determined Contributions (NDCs). The cost is estimated at a staggering USD 80 billion per year over the next decade, roughly three times what these countries currently spend on climate-related activities. What is more, this is in addition to a wide investment gap for delivering development projects and infrastructure overall – the World Bank estimates that  countries in Latin America spend the least on infrastructure among developing regions in the world.
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The lost secret of aid efficiency

By Simon Scott, Counsellor, OECD Statistics Directorate

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Wilson Schmidt (1927-81). Photo courtesy of Lisa Hill Corley and George Mason University

In 1963 John Pincus of the RAND Corporation suggested redefining aid to reduce all forms of aid to their value as grant or subsidy, and in 2014 the OECD’s Development Assistance Committee (DAC) agreed to his suggestion. (See an earlier post about this evolution.)

Of course, in the meantime, DAC members had not just been sitting around for 51 years. In 1969 they used Pincus’ “grant equivalent” method in a Recommendation to soften the terms of aid, and in 1972 they used it again to decide which loans were soft enough to count as official development assistance. The World Bank and the IMF also used the method in measures to keep the lid on developing countries’ debt, and the Paris Club used it to equalise creditors’ efforts under different debt relief options.

Yet one potential use of grant equivalents has been thoroughly neglected. Ironically it was the very application of the method that was most discussed 50 years ago, namely its potential to ensure the most efficient use of aid funds.

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2030 began yesterday

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By Mario Cerutti, Chief Institutional Relations & Sustainability Officer, Lavazza

To learn more about countries’ strategies for economic transformation, learn about the 9th Plenary Meeting of the OECD Initiative for Global Value Chains, Production Transformation and Development hosted by the Economic and Social Commission for Asia and the Pacific (ESCAP) in Bangkok, Thailand on November 2017.

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Image taken from the Lavazza Sustainability Report 2016

On 25 September 2015, 193 countries agreed to 17 Sustainable Development Goals (SDGs) that seek to ‘’end poverty, protect the planet and ensure that all people enjoy peace and prosperity.’’1

Making that vision a reality calls on us all, including business, to renew our commitment to sustainability. What does this mean in practical terms?

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Climate Action and Trade Governance: Prospects for Tourism and Travel in Small Island Developing States

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By Keith Nurse, Senior Fellow, Sir Arthur Lewis Institute of Social and Economic Studies; World Trade Organization Chair, University of the West Indies.

To learn more about countries’ strategies for economic transformation, learn about the 9th Plenary Meeting of the OECD Initiative for Global Value Chains, Production Transformation and Development hosted by the Economic and Social Commission for Asia and the Pacific (ESCAP) in Bangkok, Thailand on November 2017.

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Damage caused to the island of St. Maarten following hurricane Irma. Photo: Shutterstock

2017 will go down as a landmark year given the huge impact of hurricanes on the economic, social and ecological environments in the wider Caribbean. The decimation of several island territories, such as Dominica, Anguilla, Barbuda, St. Maarten, Turks and Caicos, US and British Virgin Islands, and Puerto Rico have taken hundreds of lives and destroyed livelihoods in key sectors like tourism. Take the case of Dominica that had a direct hit from category 5 hurricane Maria on September 18, 2017.1 It is estimated that 35% of the reefs at dive sites in Dominica were damaged, and a month later only 43% of accommodation properties are operational. Hurricane Maria went on to hit Puerto Rico that is now facing a humanitarian crisis.2

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What can governments do to harness the potential of new technologies?

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By Eduardo Bitran, CEO and Deputy Chairman of the Chilean Economic Development Agency (CORFO).

To learn more about countries’ strategies for economic transformation, learn about the 9th Plenary Meeting of the OECD Initiative for Global Value Chains, Production Transformation and Development hosted by the Economic and Social Commission for Asia and the Pacific (ESCAP) in Bangkok, Thailand on November 2017.

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Facilities to refine the copper from the mine in Chuquicamata, Chile

Chile is considered a success case, and Chileans today are much better off than a decade ago. However, inequality is persistent and the knowledge base of the country is still limited. What the country also faces is a productivity challenge. Chile’s total factor productivity growth has decreased from 2.3% per year in the 1990s, to a yearly rate of 0.3% from 2000 to 2009, and then to -0.2% after 2010. These trends lasted through several government terms. So, what needs to be done to sustain the country on its path towards development?
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Policy pathways for addressing informality

By Juan R. de Laiglesia, Senior Economist, OECD Development Centre

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Vendor selling fresh vegetables in Galle, Sri Lanka

The prevailing international discourse on informality has shifted. The conceptual “discovery” of the informal sector by the ILO’s Kenya mission in 1972 noted not only its scale but also that it was “…economically efficient and profit-making…” Today, the view that informality is a drag on productivity growth and progress has gained ground in the international community and is consistent with the recommendation that the informal economy should be formalised.

One contention is that balanced development and policy action that lifts the financial, technological, institutional and human capital constraints to productivity will also enable higher productivity in informal firms and thereby formalisation. A growth-inducing productivity agenda is a necessity, but growth alone is not enough to reduce informality.
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Girls’ Leadership Matters!

By Alda, an 18 year old Plan International girl activist from Indonesia


 To mark the 2017 International Day of the Girl today, the author was tapped to serve as Secretary-General of the OECD on 11 October 2017
during a special girlstake over event organised by Plan International.


day-of-the-girlWhen someone asks me to describe an ideal girl, in my head, she is a person who is physically and mentally independent, brave to speak her mind, treated with respect just like she treats others, and inspiring to herself and others. However, I know that the reality is still so much different from what I have in mind.

When I was 12 years old, my friend in school was pregnant. As soon as everyone in her family and school knew, she dropped out of school and I have never heard about her again. Three years later, I attended the wedding of another friend, who was pregnant at the age of 16. I was really confused at her wedding and feeling sad for her because she looked unhappy and very quiet. I imagine that it was a hard time for my friend to accept. After the wedding, she dropped out of school and moved in with her husband’s family.
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