Tag: Investment

India Kolkata street. social exchange investment. Development matters
Building resilience

What is India’s Social Stock Exchange and how can it benefit the country?

By Dr R Balasubramaniam, Chairman, SEBI Social Stock Exchange Advisory Committee, India

UNDP estimates that India needs USD 1 trillion per year to meet the UN Sustainable Development Goals by 2030, and has a funding gap of USD 560 billion per year. As the Government alone may not be able to mobilise resources on this scale, it may look to enlist the support of the private sector and High Net Worth Individuals (HNI).  

Social enterprises, development sector organizations, not-for-profits, NGOs and civil society organisations (CSOs) aim to bring about a positive change in society. However, their efforts to convert intent into impact are often constrained by a lack of capital, as well as by lack of sustained access to this capital. Could a social stock exchange (SSE) be the answer?

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Development Matters
Quality infrastructure for development concept
Building resilience

Why do we need to invest in quality infrastructure?

By Koki Hirota, Professor, Graduate School of Humanities and Social Sciences, Saitama University and Visiting Fellow, JICA Ogata Sadako Research Institute for Peace and Development

According to the principles adopted by the G20, quality infrastructure investment consists of six key components: maximising sustainable growth, economic efficiency throughout the life cycle, environmental considerations, resilience, social considerations and governance.

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Development Matters
Asia, Green transition

Leveraging Asia’s investment potential for a green recovery

By Jong Woo Kang, Principal Economist, Economic Research and Co-operation Department, Asian Development Bank (ADB) and Rolando Avendano, Economist, Economic Research and Co-operation Department, Asian Development Bank (ADB)

Developing Asia is estimated to have fended off the scarring impact of investment decline relatively well during the pandemic compared to other developing regions such as Latin America and Africa. For example, the People’s Republic of China and India still posted a positive growth rate in FDI in 2020. Meanwhile global FDI flows collapsed in 2020, falling by 35%, their lowest level since 2005, according to the UN. The impact was felt the most in developed countries where FDI declined by 58%, while developing countries weathered the storm better, with an 8% decline. Latest estimates for the first quarter of 2021 suggest an overall 10% decline for global FDI flows and 12% for Asian FDI inflows, according to firm level data. Adding to this is the fact that the pandemic has prompted economies, in the region and globally, to implement stricter screening and regulatory measures to oversee FDI. While the arguments for these restrictive measures are compelling from the perspective of national security or public health, economic impact and implications should be taken into account. Policy makers in the region could also seize the moment as an opportunity to introduce higher social and environmental standards for investment. 

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Development Matters
New social contract

The morning after

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.

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Development Matters
Covid-19, Development finance

Mobilising investment to sustain economic recovery: what can impact investors do?

By Alberto Bernardini, Sustainable Finance Director, GreenWave

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

Private investment in sustainable development has been on the rise in recent years. Impact investments differ from traditional investments as they aim to generate positive, measurable impacts on society and on the environment, in addition to being financially profitable. According to the Global Impact Investing Network’s (GIIN) annual impact investor survey, close to 300 impact investors worldwide collectively managed USD 404 billion of impact investment assets in 2019. This is almost double the USD 228 billion worth of assets under management by 200 impact investors in 2017. Moreover, the rapidly growing impact investment market could provide the capital needed to address the world’s most pressing challenges in areas like sustainable agriculture, renewable energy, conservation, microfinance, and affordable and accessible basic services such as housing, healthcare, and education. 

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Development Matters
Covid-19

Why we need Global Public Investment after COVID-19

By Simon Reid-Henry, Reader in Geography and Director, Institute for Humanities and Social Sciences, Queen Mary University of London

This blog* is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

business-sustainabilityThe COVID-19 response has highlighted the international need for an ongoing pool of public money and explains how Global Public Investment (GPI) would work.

It has been heartening this June to watch the latest Gavi (the Vaccine Alliance) pledging round raise US$8.8 billion, partly in response to COVID-19. It would be more heartening if we didn’t have to live on tenterhooks always, unsure if the goodwill to meet this or that international need will eventually be found. Or whether, as with the US’ denial of contributions to the World Health Organization, it might even be withdrawn.

What is Global Public Investment?

This is the idea behind Global Public Investment (GPI): a system of fixed and multi-directional international fiscal allocations. Think of it as a way of funding global public goods, like a COVID-19 vaccine, or of meeting already agreed international commitments like the Sustainable Development Goals. Either way, GPI would fill a modest but important niche by providing a common pool of public money internationally. Continue reading “Why we need Global Public Investment after COVID-19”

Development Matters
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

bakery-ecuador
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
Policy

Investing in Resource Efficiency – The Economics and Politics of Financing the Resource Transition

By Florian Flachenecker, Junior Economist, OECD, and Jun Rentschler, Economist, The World Bank1

florian

Various factors are putting increasing pressure on policy makers, researchers, firms and investors to explore pathways towards sustainable and efficient resource management. These factors include: high and volatile resource prices, uncertain supply prospects, rising demand, and environmental pressures. Moreover, rapid technological transitions that are changing lives for the better are also adding to the challenge. The significant increase in renewable energy technologies, such as solar power, electric vehicles and smart-phone use, are improving people’s lives. While these developments are in line with the Sustainable Development Goals (SDGs), they are also driving up demand for critical natural resources.

Resource efficiency investments could help solve these challenges, yielding substantial benefits both economically and environmentally. And yet, global resource efficiency has increased by a mere 1% per year over the past three decades. This is insufficient to counterbalance ever-increasing resource demand. Continue reading “Investing in Resource Efficiency – The Economics and Politics of Financing the Resource Transition”

Development Matters
Policy, Reviving multilateralism

From aid to Global Public Investment: an evolution in international co-operation

DEV-IN-TRANS-BANNER

By Jonathan Glennie, independent writer and researcher, and Gail Hurley, Policy Specialist on Development Finance at UNDP

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

arrows-changeIt is time to bring aid to an end.

Gradually, maybe, as a few “pockets of poverty” still persist. But this symbol of global collective action that has lasted seven decades will now, inevitably and as planned, be ended.

That is the common view of almost everyone. Whether you are a member of the general public in a “donor” country, still feeling the effects of an economic downturn, or a citizen of a “recipient” country whose economy feels like it is taking off for the first time in living memory. Whether you believe the aid era has been an unqualified failure and should be ended as soon as possible, or that aid has actually been quite successful in promoting development but has now largely “done its job” and can be rolled back as countries reach “middle income” status. Whether you think the hole left behind by aid can be filled by fairer tax collection or by better-targeted private sector finance, both of which are experiencing growth of historic proportions. Even (perhaps especially) if you are part of the aid industry and are well-practised at repeating the mantra that “our job is to do ourselves out of a job”.

Whatever side of the political spectrum you sit on, you are unlikely to disagree with the notion that aid should be decreased as recipient countries’ incomes rise, bringing to an end an experiment intended to kick-start growth in sluggish contexts, but not to last in perpetuity. With only 34 so-called low-income countries left, the only question left to be discussed is how to manage a good “exit strategy”.

Aid is temporary. Success is when aid is no longer necessary.

That’s what we thought, too. That’s what we were taught. But it’s wrong.

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Development finance, Green transition, Policy

Maximising the public-private investment multiplier

By Alain de Janvry and Elisabeth Sadoulet, Professors at the University of California at Berkeley and Senior Fellows at the FERDI
 

Development-finance

At the FERDI-IDDRI conference on “Development, Climate and Security” held in Paris on January 15, 2018, Barbara Buchner from the Climate Policy Initiative reported on the state of global climate finance flows for mitigation and adaptation. She made two points. First, finance is under-invested to combat climate change if the COP21 target in temperature increase is to be met. Second, private investment’s role in complementing public investment in climate finance is large, with an estimated 2/3 private for 1/3 public in current total contributions. This stresses the fundamental part private investment can play in meeting the COP21 objectives, particularly at a time when governments face multiple demands on public expenditures.

With public investment targeted to induce private investment, this raises the issue of public investment’s effect as a private investment multiplier. A useful way of thinking about the under-investment issue is consequently how to target public investment to maximise the public-private investment multiplier.

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