Podcast Summary: Getting Beyond Aid in Addis – Charles Kenny

Podcast: The CGD Podcast
Host: Rajesh Merchandani, Center for Global Development
Guest: Charles Kenny, Senior Fellow at CGD
Date: July 7, 2015
Main Theme:
A forward-looking discussion on the Addis Ababa Financing for Development Conference, focusing on how to realistically finance the ambitious Sustainable Development Goals (SDGs), the limitations of traditional aid, and the broader need for global cooperation and policy innovation.

Overview

This episode delves into the importance and expectations of the Addis Ababa Financing for Development Conference. Charles Kenny, senior fellow at CGD and leading voice on Addis and SDGs, examines how the world can move "beyond aid" in the pursuit of ending global poverty and delivering vital services worldwide. The conversation covers the emerging reality of development finance, the necessity for more comprehensive policies, and the gaps and potential within the current Addis Accord drafts.

Key Discussion Points & Insights

1. The Significance of Addis Ababa Conference

• The conference is a rare, critical opportunity for global finance ministers to coordinate on concrete steps for delivering development promises.
• Quote: "It's an opportunity that comes up once every 10, 15 years to really have the world's finance minister's sit down and talk about what are we going to do collectively to come together to deliver on the promise of global development." (Charles Kenny, 00:42)

2. Rethinking Development Finance: Beyond Aid

• The SDGs are vastly more ambitious than what aid alone can fund, encompassing goals like ending poverty, child mortality, malnutrition, and achieving universal access to infrastructure and services.
• Global aid flows are about $150 billion per year, far short of the trillion-dollar-per-year cost estimated for infrastructure alone.
  • Quote: "If you just look at some of the guesses on how much it would cost to meet just the infrastructure part of this, we're talking a trillion... plus dollars a year for the next 15 years. So it's a huge amount of money." (Charles Kenny, 01:20)
• Other major sources of development finance include:
  • Developing country government budgets
  • Foreign direct investment (FDI)
  • Remittances (which often far exceed foreign aid)
  • Private investment
• The real money is in these sources, underscoring the need for a broader and more integrated approach at Addis.

3. Building Prosperous Economies: The Role of Trade and Investment

• Sustainable growth and poverty reduction require enabling stable, prosperous domestic economies.
• China’s export-driven growth, heavily tied to trade and FDI, drastically reduced global poverty—a model the SDGs should learn from.
  • Quote: "So if you want to wipe out global poverty as the USDG suggests, this is a story. Yes, it's about aid, but it's also definitely about trade and investment. It's also about migration." (Charles Kenny, 03:55)

4. Assessing the Addis Accord Drafts

• Positive Elements:
  • Inclusion of a “global social floor” recognizing every individual’s right to certain basic services is a step forward.
    • Kenny calls for greater specificity and stronger commitments from rich countries.
    • Quote: "There's language in the accord about a global social flaw, about the idea that just everybody worldwide deserves access to certain basic services." (Charles Kenny, 04:56)
  • For Kenny, a comprehensive package should include:
    • Direct cash transfers in poorest countries
    • Basic health services (vaccinations, maternal care)
    • Quality education (with actual learning outcomes)
    • Clean water, sanitation, and related infrastructure
  • He notes the high cost and hefty policy reforms needed to deliver such a package.
• Room for Improvement:
  • The current drafts lack explicit outlines of what constitutes the “global social floor.”
  • Kenny wishes for firmer commitments to ensure delivery, not just rhetoric.

5. Realistic Prospects for Achieving the SDGs

• While achieving every SDG is daunting, recent decades prove enormous progress is possible with global commitment.
  • Quote: "I would be frankly amazed, delighted, but a bit amazed if we do actually reach all of the SDG 0 goals... But it's only possible... if we have a global commitment to deliver on that progress." (Charles Kenny, 07:13)

6. Migration as a Force for Development

• The latest Addis Accord draft positively frames migration, reflecting new thinking on its development impact.
  • Quote: "Migration is, you know, the trillion dollar bill lying on the sidewalk... If we opened up our borders a little bit more to flows of people." (Charles Kenny, 08:26)
• However, there’s a lack of actionable policy or commitments on migration flows. Kenny advocates for better-designed migration policies focused on maximizing development impact.
  • Suggestion: Facilitate targeted temporary worker programs between poorer countries and economies that need labor.

7. What’s Missing: Delivery and Binding Commitments

• Kenny is critical of the lack of specifics on actual delivery—especially in trade, development bank reform, and timelines for commitments.
  • Quote: "Although it... covers the breadth of development issues, I'd love to see again and again there's nice language followed up by nothing much in the way of commitment." (Charles Kenny, 10:22)

8. Vision for 2030: Global Self-Interest and Development

• Kenny’s ideal 2030 sees all countries acknowledging mutual benefit in global flows—aid, trade, investment, and especially migration.
  • Quote: "They really honestly are win wins. Right? So both parties gain from trade." (Charles Kenny, 11:21)
  • Using India’s IT sector as an example, he highlights how migration and global exchanges benefit both sending and receiving nations.
• Developed countries facing aging populations will need migration to sustain their economies, making global cooperation not just charitable, but self-interested.
  • Quote: "US Europe populations are getting older... Where's the young labor force going to come from?... Migration is the obvious answer." (Charles Kenny, 13:00)

Memorable Quotes (with Timestamps)

• "It's an opportunity that comes up once every 10, 15 years to really have the world's finance minister's sit down and talk about what are we going to do collectively to come together to deliver on the promise of global development."
  – Charles Kenny, (00:42)
• "If you just look at some of the guesses on how much it would cost to meet just the infrastructure part of this, we're talking a trillion... plus dollars a year for the next 15 years."
  – Charles Kenny, (01:20)
• "So if you want to wipe out global poverty as the USDG suggests, this is a story. Yes, it's about aid, but it's also definitely about trade and investment. It's also about migration."
  – Charles Kenny, (03:55)
• "There's language in the accord about a global social flaw, about the idea that just everybody worldwide deserves access to certain basic services."
  – Charles Kenny, (04:56)
• "Migration is, you know, the trillion dollar bill lying on the sidewalk... If we opened up our borders a little bit more to flows of people."
  – Charles Kenny, (08:26)
• "Although it... covers the breadth of development issues, I'd love to see again and again there's nice language followed up by nothing much in the way of commitment."
  – Charles Kenny, (10:22)
• "They really honestly are win wins. Right? So both parties gain from trade."
  – Charles Kenny, (11:21)
• "US Europe populations are getting older... Where's the young labor force going to come from?... Migration is the obvious answer."
  – Charles Kenny, (13:00)

Timestamps for Key Segments

• [00:42] — Why is Addis so important?
• [01:20] — Financing the SDGs: How much will it cost?
• [03:41] — The roles of the private sector, trade, and investment
• [04:56] — Global social floor: What does it mean?
• [07:13] — Are these ambitious goals achievable?
• [08:26] — Migration's development potential
• [10:22] — What's missing in the Addis Accord draft?
• [11:21] — Mutual benefit in development flows
• [13:00] — The future: Migration and demographic shifts

Conclusion

Charles Kenny argues that financing development in the era of the SDGs will require a paradigm shift—moving beyond aid to leverage the far larger sums in private investment, remittances, government revenues, trade, and migration. He calls for bolder specifics and actionable commitments in the Addis Accord and underscores the long-term self-interest all countries have in fostering development. For listeners seeking a concise snapshot: achieving a better world by 2030 hinges on global commitment, innovation in policy, and a realization that development benefits everyone—not just those on the receiving end.