“Development isn’t charity; it’s one of the smartest investments we can make in our shared future, our security, our prosperity.” – President Obama said to a room full of ‘do-gooders’ at the Summit on Global Development at the White House on July 20th Wednesday this month.
This was no simple gathering of the international development community, it was an event led by the U.S. Agency for International Development (USAID) at the White House where there were diplomats, civil society members, public and private sector financing partners, entrepreneurs and development leaders. All vouching their commitment to fight the daunting challenges and discuss ways to keep the momentum going.
Marked by some insightful discussion on range of subjects with development practitioners and representatives from USAID, Power Africa Transaction and Reform Program, International Food Policy Research Institute, Ford Foundation, President's Council on Global Development etc– the message was clear - the development agenda adopted by Obama government, led by USAID had reached far flung corners of the world.
Partnering to Finance the Sustainable Development Goals
Living in a world which is strongly interconnected, a very significant panel discussion was on “Partnering to Finance the Sustainable Development Goals”, a topic which was very widely discussed and deliberated upon in the Addis Ababa Action Agenda just exactly a year ago and endorsed by the global development community. Two overarching questions were taken up in the discussion – which were, given the Official Development Assistance (ODA) accounts to only 9 per cent of US financial flows to developing countries, is the US government’s development aid still relevant in a space which is increasing now being dominated by private sector participants? And secondly in context of diversifying the sources of funding, what is the role of innovation, of entrepreneurship which could help us meet the Sustainable Development Goals (SDGs)?
Significant examples were quoted by the panellist where the 9 per cent ODA was highlighted as “hugely catalytic”, which bridged the new innovations and entrepreneuring ideas with initial start- up money which is required. One of the panellist cited a very concrete example of how innovation can result into development - the electronic digital currency platform in Kenya – "M-pesa".
M-pesa started because it was the result of a small grant which was innovatively joined with a large telecom’s own money to build an innovative platform - phone-based money transfer, financing and microfinancing service – it soon became viral and reshaped Kenya’s banking and telecom sectors, further expanding and growing in Afghanistan, South Africa and India too. The platform led to creation of many new small businesses in Kenya where earlier the biggest challenge was-limited access to any financial services. This led to more employment opportunities and further spins off businesses using the same data.
The panel discussed that the needs of people in developing countries or of poor people in middle income countries were changing. There is an urgent need to find new ways of solving problems to drive for social returns. This is especially true when the amount required to achieve the SDGs, far exceeds the available development assistance as well as the private sector funding. How will we fill in the financing gap?
The leaders agreed that adequate support and coordination is required in all the three proposed themes - domestic resource mobilization, private investment and official development assistance to see through the changes that world requires in achieving the sustainable development goals.