New social contract

The role of foundations in supporting sustainable peace

Development Matters New social contract , ,

By Sandra Breka, Member of the Board of Management, Robert Bosch Stiftung

The level of peace around the world in 2020 declined for the ninth time in twelve years. The coronavirus pandemic has led to a decrease in overall conflict levels, but roughly 120,000 people were killed by political violence and 45.7 million were internally displaced in 2020. Violent conflict has a profound impact on economies and impedes the reduction of poverty and hunger. Violence cost the world $14.5 trillion in economic activity in 2019 according to the Institute for Economics and Peace. 

The effects of violent conflict are devastating – and remain neglected by philanthropy. In 2020, only one percent of philanthropic funding supported peace and security, according to the non-profit sector tracker Candid. The share is even smaller according to OECD data, with only 0.11% of total philanthropic funding in 2019 dedicated explicitly to conflict, peace and security in developing countries.

There are multiple reasons for this: private foundations considered peacebuilding too political, too short on hard evidence on successes and too difficult to measure, according to Candid. Despite the persistent call for multi-stakeholder approaches to global issues, many philanthropic organisations also perceived it as an area reserved to governments and other official donors, and beyond the mandate and means of private foundations or civil society groups.

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The morning after

Development Matters New social contract , ,

By Pablo Ferreri, Public Accountant and former Vice Minister of Economy and Finance of Uruguay

Today, more than a year into the pandemic, we are still witnessing a humanitarian drama on a global scale. Mass vaccination offers a glimmer of hope at the end of the tunnel; however, that light is much further away for developing countries. While we see developed countries moving closer to herd immunity, we also see huge lags in the rest of the world. Moreover, beyond the health drama, the ensuing social and economic crisis will persist for a long time to come. We must focus on “the morning after”, as the health crisis recedes and as vaccination progresses. The morning after the pandemic ends, we will be left with an impoverished and, above all, much more unequal global economy.

Recovery to pre-pandemic levels of global gross domestic product can probably be achieved relatively quickly, but the effects on inequality will be much more long lasting. There will be clear losers in each society, with the poorest being hardest hit. Developing countries will suffer the most severe consequences, as their ability to return to pre-COVID levels of activity and wealth will be severely limited. To get an idea of the magnitude of this crisis, it is enough to recall a recent UN report calling it the worst recession in 90 years, resulting in the loss of 114 million jobs and pushing some 120 million people into extreme poverty. Moreover, by the time the market is in a position to reabsorb many of those who have lost their jobs, their skills will be outdated.

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Regularisation of informal settlements in Latin America: when civil society influences policy-making processes

Development Matters Latin America and the Caribbean, New social contract , ,

By Felipe Bosch, Editor at Le Grand Continent and Co-founder of the Groupe d’études géopolitiques’ Americas Programme

The pandemic has shed light on the unavoidable need for concrete answers to the challenges of urban informality. The “best practices” discourse tends to oversimplify policy-making processes aimed at providing such answers. While regularisation policies are mainly associated with technical prescriptions imposed from a top-down perspective by international organisations, a detailed study of them in Latin America, based on a comparative case study of Mexico and Argentina[1], elucidates how bottom-up solutions to development problems might arise.

It is true: since the 1970s, through their recommendations, international organisations have had an incredible influence on policy-making processes for the regularisation of informal settlements. With the rise of neoliberal restructuring, these processes evolved from an exclusive focus on granting legal security of tenure to comprehensive packages of urban integration measures. However, it is essential to understand regularisation policies at the national level in relation to their specific socio-political contexts; in other words, to understand them as governance strategies. As such, the challenges of urban informality acquire a privileged position on the public and political agenda when threats emerge to the political system’s stability and/or when the latter endures low levels of legitimacy. It is possible to discern how civil society might take an active role (or not) in (re)formulation by building an initial theoretical model of the fragmented and conflictive institutional environments in which these kinds of policies are constantly (re)formulated.

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Do resource rich economies have better or worse human development outcomes?

Development Matters Natural Resources, New social contract ,

By Antonio Savoia, Senior Lecturer (Associate Professor) at the University of Manchester and a Non-Resident Senior Research Fellow at UNU-WIDER and Kunal Sen, Director of UNU-WIDER

Although increasingly challenged, we often hear that being resource rich can adversely affect growth prospects. Here we concentrate instead on a lesser-known aspect: how resource rich economies fare in terms of education, health, income inequality and poverty. The IMF classifies over 50 developing and emerging economies as resource rich. Many are in Africa, where a significant share of the world’s poor lives. With the increasing prices of many internationally traded commodities in the post-COVID recovery, resource revenues could provide a welcome boost to development spending for such governments.

A look at the data suggests that countries with greater income from natural resources do not seem to have a clear relationship with human development outcomes. The scatter plots in the figures 1-3 below show that there is a weak negative correlation for education and health outcomes and no correlation for poverty and inequality measures. The data also show significantly varying experiences among resource rich countries. For example, in Figure 1, Chad and Malaysia have very similar levels of resource rents as a ratio of GDP, but Malaysia’s school enrolment rate is over 70 percent while the corresponding figure for Chad is approximately 20 percent. Likewise, Somalia and Egypt have similar levels of resource abundance, but Egypt’s under-five mortality rate is less than 30 per 1,000 live births, while the corresponding figure for Somalia is about five times bigger (Figure 2). This suggests that countries with similar levels of resource rents can end up with significantly different achievements in terms of poverty, inequality, health, and education. The challenge is to explain why.  

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Divergent recoveries from COVID-19 in Africa require intentional action

Development Matters Africa, Building resilience, Covid-19, New social contract ,

By Anzetse Were, Senior Economist FSD Kenya

Accra, Ghana, during regional lockdown, March 2020. Photo: Shutterstock

The COVID-19 pandemic has had divergent impacts within and between economies. 2021 is already being defined by multispeed and divergent recoveries. Rich economies with USA in the lead, and China, are set for a strong recovery, mainly linked to their willingness to support incomes and deploy unprecedented fiscal and monetary support and quick COVID-19 vaccine rollouts. Low-income countries however face grimmer economic prospects due to limited access to COVID-19 vaccines and weak public finances; they will suffer more significant medium-term losses, especially affecting countries that rely on tourism and commodity exports, and those with limited policy space to respond.

In Africa, the AfDB estimates that real GDP contracted by 2.1% in 2020 with projected growth at 3.4% in 2021. Although all African economies have been affected by the pandemic, tourism-dependent economies, oil-exporting economies and other-resource intensive economies have been hit especially hard. Within countries, the sectoral impacts of COVID-19 have been varied, and women continue to be disproportionately affected by the socio-economic effects of the pandemic. This has led to divergent impacts at sector, firm and household levels. Many African households have had to resort to coping mechanisms such as reducing food consumption, dipping into savings, selling assets, looking for new forms of work, and accruing debt, with millions falling into poverty.

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COVID-19 impact on higher education in Africa

Development Matters Africa, Building resilience, Covid-19, Education, New social contract , ,

By Peter Koninckx, Strategic and Commercial Advisor, Cunégonde Fatondji, Analyst Intern, and Joel Burgos, Senior Project Manager, ShARE

Beyond the death toll and illness of millions of people due to COVID-19, businesses, healthcare, culture and education have had to cope with severe disturbances. But in our opinion, one could argue that higher-education students are amongst the most affected populations, particularly those in Africa. Although Africa is the continent with the least reported cases, the closure of higher education institutions was more widespread, and mitigation measures less effective than in other regions, according to a survey we conducted with more than 165 students across 21 African countries. No quick-fix solution exists, but the current crisis has highlighted the weaknesses in higher education in Africa, indicating where governments, international institutions, NGOs, and the private sector should focus their efforts.

Strong initial reaction to the COVID-19 crisis…

According to the Association of African Universities (IAU) Global Impact Survey on COVID-19, university closures in Africa in response to the pandemic were very effective: 77% of African universities compared to around 55% in Europe, Asia, and the Americas. However, while the percentage of higher education institutions where teaching was entirely cancelled remains low in all other regions (~3%), in Africa it is currently reported to be at 24%. Furthermore, over 40% of institutions in Africa were still developing alternative solutions at the time of the study, while other regions had already implemented them. Based on our own study, 88% of the surveyed students said that their school had discontinued in-person classes because of COVID-19.

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Migración urbana y COVID-19: Las ciudades están en la primera línea de una respuesta inclusiva y de la recuperación

Development Matters Migration, New social contract, Reviving international co-operation , ,

Por Samer Saliba, Líder de Proyectos, Mayors Migration Council1

Foto: Manoej Paateel / Shutterstock

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La comunidad internacional no está haciendo suficientes esfuerzos para apoyar económicamente a quienes más hacen por las personas migrantes, refugiadas y desplazadas durante la pandemia global: los Gobiernos de las ciudades. Aunque numerosas Alcaldías tienen el mandato de atender a las personas en situación de vulnerabilidad, tales como migrantes y residentes desplazados, frecuentemente las ciudades no cuentan con suficientes recursos económicos para responder a las crecientes necesidades de quienes van llegando. Asimismo, los Gobiernos locales de las ciudades han dejado de percibir ingresos debido a los impactos económicos del COVID-19, lo cual este año limita aún más su capacidad de brindar servicios fundamentales a los residentes. Según algunas estimaciones, los Gobiernos de las ciudades experimentarán una pérdida de ingresos de hasta un 25 % en el 2021, precisamente cuando necesitan incurrir en un mayor gasto para impulsar la recuperación y para atender a una población que crece continuamente. En una encuesta reciente, 33 funcionarios a cargo de las finanzas municipales de 22 países de todos los continentes expresaron que ya se observa una disminución del 10 % en el ingreso total y un aumento de aproximadamente 5 % en el gasto. Este “efecto tijera” de los ingresos y gastos de los Gobiernos locales tendrá un mayor impacto en las ciudades de países en desarrollo. Las ciudades africanas, por ejemplo, podrían dejar de percibir hasta un 65 % de sus ingresos en el 2021.      

Si bien la comunidad internacional está cada vez más atenta a las finanzas municipales en relación con el cambio climático, el desarrollo sostenible y el desarrollo urbano en general, no puede decirse lo mismo respecto a la migración y al desplazamiento urbanos. Pocos mecanismos de financiamiento municipal se centran exclusivamente en la atención de personas migrantes y desplazadas en las urbes, a pesar de que la mayoría de ellas reside en las ciudades. Además, muchas veces las agencias donantes con baja tolerancia al riesgo no toman en cuenta a los Gobiernos de ciudades en países de medianos y bajos ingresos.  Atendiendo a estas necesidades no satisfechas de las ciudades, mi organización, el Mayors Migration Council (MMC), lanzó recientemente el Fondo de Ciudades Globales para una Respuesta Inclusiva a la Pandemia, con el fin de apoyar a cinco Alcaldías en la implementación de programas de respuestas inclusivas y recuperación diseñados por ellas.

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Time to accelerate debt relief to finance Africa’s recovery

Development Matters Africa, New social contract ,

By Marin Fouéré, Policy Analyst, OECD Development Centre and Daniele Fattibene, Research Fellow at Istituto Affari Internazionali (IAI)

The COVID-19 pandemic continues to take a heavy toll on African economies, home to the fastest growing population in the world. The burden of the crisis adds to the fact that Africa’s per capita real GDP growth over the period 2009-2019 was 1.3% per year, which is half the global average of 2.5%.

Ahead of tomorrow’s Summit on Financing African Economies, gathering African and other world leaders and international organisations, President Emmanuel Macron called for a New Deal for financing Africa’s sustainable recovery through profoundly innovative solutions.

Against this backdrop, on 9 April 2021, the OECD Development Centre and the T20 Co-Chair International Affairs Institute (IAI), engaged in a conversation to inform the G20 process, exploring how it could support African-led initiatives to leverage on new liquidity to mobilise more investment in the continent’s sustainable development.

The Italian G20 Presidency can do more to ensure international debt relief efforts are channelled towards Africa’s sustainable development. As the COVID-19 crisis intensifies pressure on fiscal resources, the international community is exploring ways to address the issue of debt sustainability above the scope of the G20’s Debt Service Suspension Initiative (DSSI) and Common Framework for Debt Treatments beyond the DSSI. These initiatives allow for 73 low-income and Least Developed Countries to request either a temporary suspension of payments or further treatment, from rescheduling to restructuring, of their public debt owed to G20 and Paris Club member countries. Although these initiatives can be considered as a step in the right direction, they will not cover the magnitude of the current crisis.

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Why governing data is key for the future of cities

Development Matters Data, Latin America and the Caribbean, New social contract , ,

By Carlos Santiso, Director and Marcelo Facchina, Lead Smart Cities Specialist, Digital Innovation in Government Directorate, Development Bank of Latin America

Leer este blog en español

Technology is changing city dwellers lives, as well as how urban centres evolve to meet their needs. The pandemic has accelerated this transformation, and the digital transition has generated an explosion of data, especially in cities. In this context, the ability of local governments to manage urban problems will be paramount for the recovery, and the pandemic has helped us better understand the missing elements we need to govern cities effectively. For instance, the World Bank’s World Development Report of 2021 underscored that a data infrastructure policy is one of the building blocks of a good data governance framework, both to foster the local data economy and promote digital inclusion.  

It is inconceivable not to consider cities as an integral part of the solution to challenges like tackling social exclusion, improving public services and reducing insecurity, among others. A key issue that has become increasingly prominent in city agendas is the good governance of data; that is how data is handled and for what purpose, its quality and integrity, as well as the privacy and security concerns related to its collection and use. In other words, city governments need to preserve people’s trust in the way they handle data to improve lives.

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Understanding migration as an asset: the Colombian case

Development Matters Latin America and the Caribbean, New social contract , ,

By Adriana Mejía Hernández, Vice Minister for Multilateral Affairs of the Republic of Colombia

The massive exodus of Venezuelan migrants is the world’s second largest migration wave and is unprecedented in the history of Latin America. Colombia, host to almost 30% of Venezuelan migrants, responded with comprehensive measures and most importantly, has approached the mass arrivals of migrants as an opportunity for development and growth. However, the lack of identity documents and irregular status of migrants are the source of many challenges to achieving an effective state response.

The Colombian case is particular. During the 1990s thousands of Colombian nationals migrated to Venezuela making Colombia the country of origin. Nonetheless, the worsening of the social and economic conditions in Venezuela caused a reversal of the migration dynamics between the two countries. As of 2015, Colombia began to receive flows of regular migration that later, in 2019, were surpassed by the number of irregular migrants crossing into national territory, through various pathways along the border, risking their lives and belongings along the way.

The dramatic circumstances that irregular migrants have to face make them more vulnerable to suffering from human rights violations, including sexual or gender-based violence, discrimination, xenophobia, labour exploitation, as well as migratory-related crimes like human trafficking or migrant smuggling. They are more likely to fall victims to criminal acts, or even, in some cases, of becoming involved themselves in criminality due to a lack of job opportunities or access to basic services.

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