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

Wilson Schmidt
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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With great data comes great responsibility

by Charlotte Petri Gornitzka, Chair, Development Assistance Committee
and Jorge Moreira da Silva, Director, Development Co-operation Directorate, OECD


This article is featured in the Development Co-operation Report 2017: Data for Development released today. Read the report and find out more about data for development.


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If USD 142.6 billion falls in the forest of development and no one hears it, does it matter?

That depends on who you are. While mothers in Afghanistan or South Sudan can tell you how their families’ lives have been transformed by effective development programmes every single day, strong data are needed to communicate how these billions of dollars improve the human condition and create more stable societies for all.

In 2016 official development assistance (ODA) to support development goals represented 0.32% of donor countries’ gross national income, an all-time high. However, aid to those who need it most, including least developed countries (LDCs), is declining. The June 2017 report card on the 2030 Development Agenda – the world’s roadmap to end poverty, inequality and injustice for all by 2030 through a set of 17 goals and 232 indicators – tells us progress is slow and data are incomplete.

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Improving sustainable development data is a task for all

by Martine Durand, OECD Chief Statistician and Director of the OECD Statistics Directorate


This article is featured in the Development Co-operation Report 2017: Data for Development to be released on 17 October 2017. Read the report and find out more about data for development.


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In an era of fake news and alternative facts, statisticians have a special responsibility. As the custodians of the evidence base for policy making, they must stand up for the right of all citizens to true, reliable and accessible information.

This is especially the case in the development field, and even more so since world leaders adopted the extraordinarily ambitious and wide-ranging 2030 Agenda for Sustainable Development in September 2015. At the heart of this global “plan of action for people, planet and prosperity” are 17 Sustainable Development Goals (SDGs) that “are integrated and indivisible and balance the three dimensions of sustainable development: the economic, social and environmental”, with the ultimate objective to leave no one behind. Achieving the SDGs will require informed choices about priorities and strategies, and for this we will need a better evidence base than we have today.

But statisticians – and especially statisticians in developing countries – cannot do this job alone.

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Financing African SMEs: can more of the same help bridge the gap?

Forum Afrique2017-Visual Identity - FR-3

By Rodrigo Deiana, Junior Policy Analyst, and Arthur Minsat, Head of Unit for Europe, Middle East and Africa (acting), OECD Development Centre


The topic discussed here builds on the success of the 2017 Africa Forum


Africa-SMEsAfrican firms don’t have it easy. Among the many constraints faced by formal companies, access to finance consistently ranks as a top issue. Almost 20% of formal African companies cite access to finance as a constraint to their business.1 Overall, African micro, small and medium enterprises (SMEs) face a financing shortfall of about USD 190 billion from the traditional banking sector.2 African firms are 19% less likely to have a bank loan, compared to other regions of the world. Within Africa, small enterprises are 30% less likely to obtain bank loans than large ones and medium-sized enterprises are 13% less likely.3

To bridge this gap, governments and market players need to strengthen existing credit channels as well as expand new financing mechanisms.

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Helping entrepreneurs thrive in Africa

Forum Afrique2017-Visual Identity - FR-3

By Rémy Rioux, Director General of Agence Française de Développement


Learn more about this timely topic at the upcoming
17th International Economic Forum on Africa
Register to attend


Africa-AFDAfrican entrepreneurs are a key driving force for the continent’s emergence. 80% of Africans view entrepreneurship as a good career opportunity. Take African start-ups. They pioneer social innovations. Thanks to the fintech industry, for example, the diaspora can connect with their relatives and directly finance their health expenses, as in the case of Leea. This company benefitted from Digital Africa, an initiative of the Agence Française de Développement (AFD) to help African start-ups through financing, coaching and business training. African entrepreneurs and customers show the way forward and accelerate the continent’s leapfrogging in terms of technology innovation in banking, health, agriculture, urban mobility, education, and more.

However, at a macro level, 80% of Africa’s labour force works in the informal sector. Unemployment is high, especially amongst the youth, who are three times more likely to be unemployed than adults. Development banks can play a role in addressing the macro policy, nurturing job-intensive growth across the continent and financing gaps. How?
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Development in transition

By Alicia Barcena, Stefano Manservisi and Mario Pezzini

3Understanding and supporting the development trajectories of countries have long been the driving force behind all of our careers. If we, as a global community, are serious now about ensuring prosperity for all through the universal and comprehensive 2030 Agenda and its Sustainable Development Goals (SDGs), then we must close all remaining gaps. And this means changing the way we think about development policy.

We can all agree we should continue to focus primarily on those left the furthest behind. However pockets of fragility also remain in those economies that have succeeded in climbing the economic ladder. While income inequality between countries may have reduced, inequality within countries has in fact risen. More than 75% of people in developing countries are living in societies where inequalities are higher today than they were 25 years ago. In Namibia, for example, which is considered an upper middle-income country, just over a quarter of its poorest inhabitants are covered by social protections, whereas Malawi, considered a low-income country, covers over 40%.

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