Category: Development finance

Development finance, Green transition

The Green Eureka Moment: Investing and Inventing to Stop Climate Change

By Raluca Anisie, Carbon Impact Analyst and Paul Hailey, Head of Impact, responsAbility Investments AG

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A family bakery in Ecuador that used a green loan from a GCPF investee to buy a more energy-efficient oven. Photo: José Jacomo

In the 3rd century B.C., Archimedes declared: “Give me a place to stand and with a lever I will move the world.” This phrase speaks to the potential of the right tools at the right time, but as anyone who has tried to build flatpack furniture will confirm, not having the right tools can derail any project, however grand.

In 2019, our quest to find and use the right tools to move the world is more urgent than ever. As UNEP stated at COP24, we are the last generation that can stop climate change. This challenge requires a mobilisation of investment on an unprecedented scale, yet enormous gaps remain, especially in the developing world. Filling these gaps will require ground-breaking investment approaches like blended finance, a method that uses public money to improve the risk profile of investments to catalyse private funding. However, tools such as blended products will also need to credibly demonstrate impact to attract and retain public and private investors. Continue reading “The Green Eureka Moment: Investing and Inventing to Stop Climate Change”

Development Matters
Building resilience, Development finance, Gender, Women and Girls, Least developed countries, Trade

Three trade challenges for LDCs to converge and eradicate poverty

By Anabel González, Nonresident Senior fellow at the Peterson Institute for International Economics; Former Costa Rica Minister of Trade, World Bank Senior Director for Trade & Competitiveness, and World Trade Organization Director for Agriculture

This blog is part of a special series marking the 3 July 2019 launch in Geneva of the joint OECD/WTO publication Aid for Trade at a Glance 

AFT coverBangladesh is preparing to graduate from the category of least developed countries (LDCs). Robust multi-year economic growth of more than 6-7% has helped this South Asian nation make remarkable progress in reducing extreme poverty from 44.2% in 1991 to 13.9% in 2017. In parallel, life expectancy, literacy rates and per capita food production have increased significantly. Rapid growth enabled Bangladesh to reach the lower middle-income country status in 2015; it now aspires to become an upper middle-income country by its 50th anniversary in 2021. Trade has been at the heart of this success story (see Figure 1). Exports of textiles and garments are driving integration into the global economy, with new products becoming part of the country’s export basket. Will Bangladesh be able to continue to rely on trade for increased growth? Will conditions remain for other LDCs to follow?

Continue reading “Three trade challenges for LDCs to converge and eradicate poverty”

Lia Beyeler
Green bank concept
Building resilience, Development finance

A perspective from the financial sector on sustainable business

By Professor Angela Sansonetti, Golden for Impact Foundation

This blog is part of a special series exploring subjects at the core of the Human-Centred Business Model (HCBM). The HCMB seeks to develop an innovative – human-centred – business model
based on a common, holistic and integrated set of economic, social, environmental and ethical rights-based principles. Read more about the HCBM here, and check out an event about it here
The HCBM project originated in 2015 within the World Bank’s Global Forum on Law, Justice and Development and is now based at the OECD’s Development Centre.

For too long, the financial system worked on its own set of principles focused on attracting clients and maximising short-term profits. These principles, growth within a capitalist and closed economy, are no longer suitable in a circular and sharing economy focused on customer needs as well as on environmental, social and governance rules. Today, several forces are pushing towards a new framework oriented to sustainable development, social innovation and human-centred approaches based on these rules.

In this transition environment, the financial system, plays a key role in driving economic growth towards values of sustainability based on promoting, amongst other factors, greater environmental responsibility, climate resilience, low-carbon, human rights, gender equality, social inclusion and sustainable economic growth. The financial system results from a long-term evolution related to global economic growth and founded on macro-economic choices as well as defined legal, technological and government rules. However, nothing is irreversible. So, in this changing context, sustainable finance plays a key role to support the shift from traditional economies based on high-impact and high-carbon industries to clean-energy and low-carbon sustainable industries.

Continue reading “A perspective from the financial sector on sustainable business”
Development Matters6 Comments
Development finance, Development in Transition, Reviving multilateralism

Triangular, the shape of things to come?

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By Alicia Barcena, Executive Secretary, ECLAC, Mario Pezzini, Director, OECD Development Centre, and Stefano Manservisi,

This blog is part of an ongoing series evaluating various facets
of Development in Transition

As the global community gathers in Argentina to mark the 40th anniversary of the United Nations Conference on Technical Cooperation among Developing Countries, we have an additional opportunity to discuss, debate, and design a reinvigorated international co-operation system.

And something as small as what is currently called “triangular co-operation” can take centre stage in that system. Just like few imagined that the European Coal and Steel Community created in 1950 would grow into what the European Union is today, we think triangular co-operation’s future potential could very well dwarf its current status.

Rather than rationalise business as usual, we believe triangular co-operation could give us, instead, wide space for unleashing new thinking about the promise and value of multi-partner engagements to advance inclusive and sustainable development.

Continue reading “Triangular, the shape of things to come?”

Lia Beyeler3 Comments
Development finance, ODA, Policy, Reviving multilateralism

The Future of Development Co-operation: Not the end, just the beginning of a new era?

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By Andy Sumner, King’s College London

Yesterday’s blog listed five areas of change related to global poverty and economic development in developing countries. What do these changes mean for development co-operation?

Continue reading “The Future of Development Co-operation: Not the end, just the beginning of a new era?”
Development Matters
Africa, Development finance, Français, SDGs

Comprendre l’initiative P20 : Une nouvelle approche de la définition de la pauvreté et des moyens de la combattre

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Par Abdoulaye Bio Tchané, Ministre d’État du Plan et du développement, Bénin

Pour en savoir plus sur ce thème:  Coopération pour le développement 2018 : Agir ensemble pour n’oublier personne

(Lire ce blog en anglais)

En tant que décideurs et responsables de l’action publique en Afrique, l’une des questions qui nous posent toujours problème est de définir et d’identifier clairement ce qu’est l’extrême pauvreté, et qui en sont les victimes. Au vu de mon expérience d’ancien Ministre des Finances et d’actuel Ministre d’État du Plan et du développement du Bénin, nos budgets nationaux ont toujours été par essence sociaux. Qu’entend-on par là ? La pression que font peser sur nous la pauvreté, la fragilité et la vulnérabilité nous condamne à gérer l’urgence ; et l’urgence en Afrique revient à garantir la survie au quotidien de nos concitoyens.

Toutefois, en dépit de lourds investissements dans des programmes sociaux, les frontières de la pauvreté ne reculent pas aussi vite que nous l’aurions espéré. Il y a à cela de multiples explications possibles, mais notre mission est de trouver des moyens de résoudre la question – et ce, de façon à atteindre en priorité les plus défavorisés. C’est à cette fin que le Gouvernement du Bénin, en partenariat avec le Gouvernement de la Suisse et l’ONG Development Initiatives, a lancé l’initiative P20 dans le but de remédier à la pauvreté et à la vulnérabilité, et d’honorer notre engagement de ne laisser personne de côté.

Continue reading “Comprendre l’initiative P20 : Une nouvelle approche de la définition de la pauvreté et des moyens de la combattre”

Lia Beyeler
Development finance, Humanitarian, ODA

Fit for purpose means continuous change

by Susanna Moorehead, Chair, OECD Development Assistance Committee (DAC)

As I arrived in Paris last week to take up office as Chair of the OECD Development Assistance Committee (DAC), the 30 DAC Members gathered for a Senior Level Meeting. It was a great opportunity for me to meet people and understand the DAC’s role in helping to achieve the Sustainable Development Goals (SDG).

Continue reading “Fit for purpose means continuous change”
Lia Beyeler
Green bank concept
Development finance, Private Sector, SDGs

Trillions for the SDGs? Time for a rethink

By Nancy Lee, Senior Policy Fellow, Centre for Global Development, and moderator during the PF4SD Conference

In 2015, the world enthusiastically signed on to the challenge of transforming billions to trillions of dollars of private finance for the Sustainable Development Goals (SDGs). The idea was to use public and private development aid to unlock much more commercial private finance for sustainable growth and poverty reduction in developing countries. Four years later, the hoped-for trillions are nowhere in sight. In fact, we have reached the stage where we need to decide whether to change the goals we set in 2015 or take a hard, critical look at the institutions we rely on to propel mobilisation of private finance for sustainable development.

Continue reading “Trillions for the SDGs? Time for a rethink”
Lia Beyeler3 Comments
Development finance, Private Sector

Getting Private Sector Engagement on the Right Track: Four Essential Ingredients

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By Andrew C. Wilson, Executive Director, and Kim Eric Bettcher, Director, Knowledge Management, Center for International Private Enterprise

To learn more about this timely topic explored during
the Private Finance for Sustainable Development Week,
please visit the PF4SD and GPEDC websites.

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 The Kenya Private Sector Alliance (KEPSA) engages President of Kenya, H.E. Uhuru Kenyatta, in pursuit of an enabling business environment in Kenya.

Developing countries face complex challenges that require solutions from a strong private sector in partnership with government and society. Many in international development are actively contemplating how to move such partnerships forward. Notably, USAID issued a new Private Sector Engagement Policy to “embrace market-based approaches as a more sustainable way to support communities in achieving development and humanitarian outcomes at scale.” As part of Private Finance for Sustainable Development Week, the Global Partnership for Effective Development Co-operation (GPEDC) is hosting a Specialised Policy Dialogue on Private Sector Engagement through Development Co-operation, which will identify actions to scale up private-sector partnerships in ways that effectively use public resources and attract business investments to create shared value.

Business is now starting to make its mark on the Sustainable Development Goals (SGDs) with innovative initiatives for clean energy, water stewardship and green cities, to name a few. Around 80% of United Nations Global Compact companies are acting on the Global Goals. Business has already been an integral part of past development successes, driving economic growth and creating nine out of ten jobs. Still, the current trajectory is not adequate. The business sector has more to do to fulfill its potential as a responsible investor in emerging markets and an effective partner with the development community.

Continue reading “Getting Private Sector Engagement on the Right Track: Four Essential Ingredients”

Development Matters7 Comments
Development finance, Development in Transition, Policy, Reviving multilateralism

What does it take for a Development Bank to succeed?

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By João Carlos Ferraz, Instituto de Economia, Universidade Federal do Rio de Janeiro, Brazil

This blog is part of an ongoing series evaluating various facets
of Development in Transition. The 2019 “Perspectives on Global Development” on “Rethinking Development Strategies” will add to this discussion

bank-finance-growth-financePublic finance institutions, or development banks, have “development DNA”. But, can they effectively engage in financing “development in transition” or the call to rethink international co-operation to help countries at all levels of income sustain their development gains? What would it take for such institutions to succeed? How can they anticipate and effectively respond to societal and market needs and aspirations?

Political space for this does exist. A consensus exists that development banks must have at least four priorities: infrastructure, innovation, sustainable environment and firms of smaller size. That’s the easy part! No policy maker or analyst in their right mind would be against these priorities. But, consider the nature of these priorities: each one is time- and place-specific but evolving permanently; they are moving targets. More importantly, they are risk-intensive, given the duration and unpredictability of associated projects and/or the potentially low credit worthiness of economic agents pursuing these priorities.
Continue reading “What does it take for a Development Bank to succeed?”

Development Matters1 Comment