← This Week in Global Development
This Week in Global Development
Can domestic resources and private capital fund development?
00:42:29
In this episode, we look back at the conferences we reported from over the past few weeks, reflecting on how global development narratives are evolving across both the global north and the global south. With traditional donors stepping back, the...
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- [00:00]
A
Foreign. My name is Advaah Saldinger and you're listening to this week in Global Development, hosted by myself, Rumi Chikamba and David Ainsworth. I like to think of this episode as talking about sort of a conference O Rama episode. We have seen quite a number of summits in recent weeks, and so we're going to dive into them, hear about how the narratives around how global development and foreign assistance is changing from everywhere from Paris and London to Ainat, you've been recently to summits on the African continent and in Asia. And so joining me to have this discussion today about sort of how we're seeing the shifting narratives are my colleagues David Ainsworth and Ainat Mercy. Thank you, Ainat and Dave so much for being with me today and Dave for joining us as a guest, even though you often hear from him as a host. Inat I think I'll jump to you first because as people who are joining us on YouTube might be able to see, you're currently at the African Development bank annual meetings. And so I'm hoping you can give us sort of an inside take at sort of what you've seen. I know you've had quite a lot of logistical hurdles just to get into the conference venue. I think you were telling me it took you seven hours to get through registration earlier this week. So we're glad you're in and able to cover everything for us. So give us a peek at sort of both, sort of, you know, some of the logistical hurdles that have come from holding this summit in Brazzaville. But more so, you know, what are the themes that are emerging? What are sort of the key things that you're hearing from AfDB leaders? This is the new President Ty's first annual meetings. And so I know that's one of the things you've really been watching, sort of his leadership and how he wants to make his mark on the institution.
- [01:51]
B
Yes, absolutely. And you can see I'm still wearing my badge because I am protecting it with my life and do not want to go through the process of having to get another one. Yeah, the logistics, politics are no joke. I mean, first of all, we are in Congo, Brazzaville, Republic of Congo, which is a different country to the drc, but still its proximity to DRC has made some people actually cancel their visits here. So even though I'm actually Congo is so massive, I'm actually further away from the epicenter of the Ebola outbreak here on the western side of Congo than I am in Nairobi. So that just gives you a size of the sense of the scale of Congo. But still though we've had many reports of people canceling their trips, so that's one big change. And then in addition, we've also seen that I got in and there's people checking your temperature at the airport. When you get into the conference venue, people are checking your temperature, giving you hand sanitizer. So there's lots of precautions, even though there has not been any be spotted anywhere in this vicinity. But people are taking it seriously and being careful and putting in some necessary precautions. So a few logistical things on that. And of course, as you mentioned, just, you know, it's a city that isn't used to hosting conferences like this, to say the least. It's just across the river from Kinshasa, which is a huge behemoth, 20 million person city, whereas Brazzaville is this like tiny, quaint place across the river. And you know, the whole country is 6 million people, so it's much, much smaller. So to the point that, you know, when they ran out of ink to make people's badges, someone had to actually go to Kinshasa to buy more ink and got back, step back, which is why that took so many hours. But you know, in terms of the conference itself, rocky start for me at least. But it's really, it's been an interesting one because it is, as you mentioned, the new president, Sidi Ultaz first as the president and his whole push, I mean, even during his big campaign and election was really about Africa forging new partnerships. He came to the bank from the Arab bank for Economic Development in Africa. Badea was his former employer. He's the president of that. And so some of what he came with and like how some of his promises was about forging new partnerships, especially with Gulf states. And I think, you know, in the past few months, especially as he's taken the helm as president, you've seen even a greater push about mobilizing African capital domestically. So his baby, his signature project is something called the New African Financial Architecture for Development, nafad, I guess. Nafad. I'm not sure how people are saying it yet, but I'm writing a nafad, and you know, it is another acronym, but thankfully this not actually another institution. So it's not actually something new that's necessarily being created. It's more about creating a more integrated ecosystem for all of the existing institutions to live together more effectively. The argument is there's a ton of institutions, a lot of organizations, a lot of companies on the ground with a Lot of money in Africa. Are they working well together in support of African development? Not really. Right. There's a lot of money that could be invested in the continent that is instead being leaked or being invested abroad, whereas it could be invested pretty safely and with high returns actually on the continent. So what are the kinds of reforms, what are the kind of conversations we need to have in order to ensure that that ecosystem is working more effectively? That's kind of what the crux of NAFAD is. And so there's just a lot of conversations this week about the different elements of that. Like I went to one yesterday, for example, that was all about sovereign wealth funds. And that was an interesting conversation because there are quite a few on the continent that they're, they're a bit, some of them are a bit more nascent or some of them are in different stages than the other. And so I thought it was really interesting that they brought someone in from the Norwegian sovereign wealth fund, which is the largest in the world, you know, huge, huge fund. And he was really frank about, you know, we're not necessarily a blueprint for you guys because your, your development of your sovereign wealth fund might look really different. For example, you might need to have a different think about, you know, balancing long term generational savings and returns versus the shorter term returns that you might leave. So for us in Norway, we're letting very long term, the only investor beginner and even here you want to invest more domestically and so don't think of it as a blueprint. But you know, there are maybe things that you could take inspiration for. For example, the first several years of the sovereign wealth fund in Norway, we were actually just building capacity. We sent a bunch of Norwegians to investment banks in America, got, they all worked and then brought them back and said, what did you learn? How can we implement that here? So he said some of the lessons from the early stages might be relevant, like that it's all about capacity building. We have to do this in Norway. Everyone has to do it. But some of the lessons about what we actually invest in are quite different. So yeah, I think this is a lot of, just kind of a snapshot. Of course, the meetings are still ongoing. I'm here now, but kind of talking about the different pieces of the puzzle when we're talking about African finance, including pension funds, sovereign wealth funds, and how they can kind of pool their capital more effectively for development.
- [06:48]
A
Yeah. And some of that will obviously require, especially on sort of the pension front, changes in the rules that govern pension funds. Right. Because A lot of them are actually significantly restricted by the laws in the various countries that they operate in from doing more domestic investment in Africa. And we've seen a little bit of movement where even, even a small change can actually unlock capital in a number country. So I think that's something I've been sort of looking at too, especially is this conversation around domestic resource mobilization. Right. Which is another way to talk about this. I think often people talk about that in the form of taxes, which is part of it, but part of it is mobilizing domestic private resources as well. Dave, I know this issue of sort of dual issues of local ownership of private capital came up last week when you were at the Global Partnerships Summit in the uk. Maybe you could fill us in on sort of what you learned there and if there's anything, you know, any sort of crossover with what INAT was talking about as sort of the themes at the AFDB or sort of what takeaways you have. The week before you were in Paris for an OECD conference on the future of development. What sort of themes are you hearing from people?
- [08:02]
C
Yeah, actually remarkably similar. Very surprisingly similar. It's, it's interesting to hear the kind of how much same themes keep coming up. I would probably characterize the two themes I heard most as kind of the need to access private capital and the kind of African ownership of African development. Obviously we've seen a lot of people talking about, okay, there's been this sudden withdrawal of ODA that has created a window in which actually local leadership, country ownership can become a much more central part of the development picture. And we're hearing a lot of kind of optimism from African NGOs and from African governments. Like a lot of African past and present, Kenyan leaders in particular have been standing up saying, well, Africa needs to lead its own development. Never mind about the Americans, they took their money away, but it's their money, they can do what they want. We don't need them anyway. And the same from Ghana. We had a presentation from the leaders of the Accra Reset, which is this big campaign to kind of build up sovereign ownership of kind of issues within Africa. We're talking about essentially this kind of idea that there could be much more African leadership. There were also on the sidelines there a lot of people saying, yeah, it's fine for Ghana to say that Ghana's got plenty of money. It's a middle income country. The Kenyan economy has been growing fast recently. The Kenyans are feeling very powerful. They're feeling very proud of themselves. South Africa has got all this legacy money. Botswana is the diamonds. Like these people can talk about kind of the fact that Africans can do it for themselves. But what about Zambia? What about Mali? What about countries where there isn't this kind of sudden growth? What about the, in the entire kind of belt of kind of countries in sort of the Sahel where they're very unstable governments? What really are we doing with those? So those people are kind of muttering quietly to me. They don't want to say that out loud. They don't want to be the ones kind of poo pooing all this. But I'm chatting behind the scenes to people at the conferences and saying a lot of African confidence on the stage there. And they're like, yeah, yeah, yeah. But we're a little bit doubtful.
- [10:00]
A
I just wanted to jump in with two thoughts. One, one of the things that I've heard as a criticism is that, okay, it's all well and good to talk about local ownership. And I think African countries do want more local ownership. But is this sort of an excuse or they're sort of justifying like the UK government is justifying the fact that they've, you know, consistently cut aid in recent years in this agenda of local ownership? Right. If it's just sort of a convenient sort of cloaking of the narrative rather than taking responsibility for pulling back aid. It's like one of the things that I've heard and I'm curious if that if either of you have sort of also heard that argument. And then I think the other piece of it is really on this fragile states issue. Right. Because I think that especially in a world of constrained finance, in some of these places, private capital and private finance is like inherently the markets there are broken. It is harder to invest there. Private capital is not going to be able to play the same developmental role as it's going to be able to play in a Kenya, Ghana, South Africa. And so I'm wondering sort of what either of you are hearing about that conversation on fragile states or how aid needs to be allocated perhaps more so to those places, to the more low income countries, to the fragile states where some of these other solutions may be less viable.
- [11:20]
C
Yeah. If I can come back. So the people I was hearing this from most strongly were African leaders themselves, not from. I mean, I think it's a little bit unpalatable. Obviously we're hearing from the British and kind of German, like the Germans and the French. Most of the European aid ministers have kind of spoken at one of the things I've been at in the last couple of weeks. And they've kind of talked a lot about country ownership and local leadership, which is obviously this idea that we're going to help these countries run things themselves. We're going to try and let them lead the process and get out of the way. I don't know whether I believe it at all, but. But that's what they're saying anyway. But. But I'd be a lot more skeptical of that narrative if I wasn't hearing the same things from Ghanaian and Kenyan leaders saying exactly the same stuff and from civil society in these countries too. And what they are saying is you want investment in countries where investment is appropriate and you want grants going into countries where grants are appropriate. Like that does make sense, right? There's a lot of countries in Africa where it's much more useful to take a large market rate investment to build up local infrastructure, local capacity and local business. And then there are other countries where that's not appropriate. And what you actually need is a grant to run the health system and the education system. And in fragile states, really fragile states, what you actually need is humanitarian funding to just address the fact that things are completely broken down. And there's now, I mean, I heard a lot about kind of African growth, about the fact that Africa is growing at 5% a year and the fact that the African economies are getting richer fast. And it makes sense to start investing money in fast growing places because you make a lot of money if you invest money in those places. But then people were saying that. But that's a very uneven picture. An average 5% growth rate doesn't give you a picture of the whole continent. There's a lot of places that are really kind of behind. And there are more displaced individuals in the world today, or certainly there were a year or so ago than there have been at any point since the Second World War. And you need an adequate response to that. And that needs oda. You can't fix that with loans, you can't fix that with equity investments. There's no clever kind of capital construction that will help you in an environment where the market fundamentally isn't working and people don't have enough to eat.
- [13:34]
D
So today we're taking a short break for a Spotlight segment sponsored by Kirk Humanitarian. And I'm joined by Spencer Kirk, who is the founder of one of the largest private donors of maternal micronutrient supplements in the world. A quietly powerful intervention that could cut the risk of newborn death by nearly a third in anemic women. He's reached over 75 million so far. And we are here at the sidelines of the World Health assembly at our Devex Impact House to ask why this intervention still doesn't get the attention it deserves and what it would take for governments to really be able to take this over for good. So, Spencer, thank you so much for joining us.
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C
Thank you.
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D
So you spent decades building businesses in tech and self storage before pivoting entirely into material health. So was there a specific moment, a story, a number, a person that really kind of flipped that switch for you to make such a career pivot?
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E
Yes. So 25 years ago I asked the question what would have the biggest impact for a dollar invested in low and middle income countries? And we were told that maternal nutrition was one of the highest yielding products or services that could be impactful through generations. So my wife Kristen and I, parents of four thriving kids, realized that there was inequity. And the inequity is, hey, we live in a place where you can get access to prenatal vitamins and minerals, but if you live in a poorer country or a lower middle income country, you oftentimes get nothing. If you get something, it's iron and folic acid. Iron and folic acid is two micronutrients. But the real answer to the problem of full health for mom and for baby is to get 15 essential micronutrients. So we went to the World Health Organization and picked up the formula, which is broadly published, was created in 1999. It was created by WHO and UNICEF that said here are 15 essential micronutrients. It's called UniMAP and that stands for the United Nations International Multiple Micronutrient Antenatal Preparation. It's a long way to say prenatal vitamins and minerals for mom and baby. So we took that, had the product produced and over the course of the last 25 years we've been able to reach 75 million women in 111 countries. Was something that ensures mom's health is protected through the pregnancy, but just as importantly that the child is born to thrive, as I said earlier.
- [16:13]
D
So a lot of the conversations we've been having this week around the World Health assembly have focused on how you can get more bang for your buck in your investments when we're in a resource constrained environment. And you know, given the success of this seemingly simple intervention compared to the impact it can have, why do you think that it's not getting more attention? And I think you've described it kind of best kept secrets in the in the maternal nutrition world, you know what is missing there?
- [16:47]
E
Okay, so two things. We back up to 1999 when this product was created. For two decades, research had to be done. And thanks to the Gates foundation funding much of that research, There are now 19 clinical trials over two decades on 141,000 women that say not only is this product effective, it's safe. When I'm talking effective, infant mortality will drop 29% if a mom will take this UniMAP multiple micronutrient supplement, low birth weight, small for gestational age, preterm birth, all dropped by double digit gains. So until the science was there, the interest wasn't there. In a parallel path, Kirk Humanitarian was working on market shaping. With my background in business, we needed to produce this product at cost parity with iron and folic acid tablets, or roughly $2 per woman per pregnancy. We have achieved that. And with that cost parity, we now have much of the attention. We've got 30 countries that are now adopting MMS as the standard of care. And we have 63 countries that can now leverage the power of the Child Nutrition Fund, which provides a one to one match. So if a country will put in a dollar for MMS, they can get back $2 worth of that commodity. And now ministries of health around the world are saying, I cannot pass this up because I can double the impact.
- [18:18]
D
You know, you've been clear that donated supplements can't be the long term answer. Countries need to be able to take this over themselves. Again, this is a common theme of conversations here around health sovereignty and country led ownership. You know, when you're talking to these ministers of health as you have this week, what is a policy shift that you're asking them, recommending them to make to be able to put this on a costed roadmap. So you know, all, all women and mothers get access to this.
- [18:49]
E
So for us, the compelling argument is, come join with us. There is a $37 economic return to a country for every dollar invested in Unimap MMS. Then if the government is getting a match of 2 to 1, that is 74 to 1 on the economics and I don't know of any other intervention where you can get that kind of return on an investment. So we're excited about the momentum and countries saying we can make this part of our antenatal care policy and then it's durable.
- [19:25]
D
Well, it's very exciting to learn about this and the great work you're doing and how you're looking to find a sustainable path forward. So thank you, Spencer. Thank you to Kirk, Humanitarian for this conversation.
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E
Thank you, Kate.
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A
And I don't know if you want to jump in on any of that or how that sort of dovetails with anything that you've heard in, in recent weeks. I know you were also at sort of the Africa CEO forum where I imagine there was a really big focus on sort of the private finance coming in and sort of the opportunity on that front.
- [19:52]
B
Yeah, I mean, one thing that I thought was interesting is kind of the role of DFIs. And that was from the conversation that sort of some conversations I had at the Africa CEO forum. And so, you know, I spoke, you know, advai, you've covered BII and their new strategy. And I was speaking to them about, you know, how that translates to Africa. And one thing that I thought was interesting is that they're allocating 25% to fragile states, which makes a lot of sense. And I had this conversation with folks about, you know, the EBRD's push into Africa and quite a lot of the reaction was a little bit more lukewarm than I had expected. People saying, okay, but like, why, why are you expanding to a place like Kenya and Ivory coast countries that are doing just fine? Do they need EBR investment? Would that not be better used in countries that are maybe fragile or a bit more borderline or a bit harder to justify to kind of a traditional private sector investor? So I think there were these questions about are we allocating DFI money in the most logical way right now? Like should we be just investing in places that need it more as opposed to just investing in the places that the private sector is investing in a lot anyways. So that was one way that it came up, especially in the context of the Africa CEO forum.
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A
And that's long standing sort of conversation and criticism of the DFIs, that they don't take enough risk, that they're actually quite risk averse institutions. And so they often all compete for deals in the places where, in a Kenya or in, you know, in, in the markets where it's a bit easier to operate. And so I do wonder if we'll see sort of growing pressure on them to work elsewhere. I think partly, you know, they are constrained by the ways that their institutions have been built. But sometimes they also, you know, I think one of the things we saw with ifc, the World Bank's private sector arm, when it last went to shareholders to get more capital, they promised to actually do more in the lowest income countries. And they've actually thus Far, if you look at the statistics, really fallen woefully short of those targets. And so I think that's something to watch and something that I've been keeping an eye on. But I think, I think there is a real question and I do wonder if there'll be more of a reckoning for these institutions to invest in the places because in theory they're using public dollars and are supposed to be building markets and sort of being a first mover. And I think in reality often that doesn't necessarily happen. So interesting that that's sort of something you're picking up especially in sort of the wake of the EBRD push, et cetera.
- [22:47]
B
Yeah. And someone also also said to me pose the question of, you know, is there any possibility that they will actually price out African institutions? Like, how will this shake out? Will they price out at afc? Which to me was a really interesting question because will it actually be productive when we're talking about this, this bigger goal of enabling those African institutions, what kind of role are you actually playing in that journey?
- [23:13]
A
Such a good point. And I think some there certainly, I've heard over the years plenty of anecdotal sort of cases where, where DFI money does crowd out sort of more private investment. So I think that is a concern. But that's also there if they're risk averse. There's a limited number of deals in a broad pipeline, so they're competing and they're maybe competing against private sector in some cases. Even though most of them at their core have a commitment to additionality, it doesn't always play out that way in practice. Dave, did you want to jump in?
- [23:44]
C
Yeah, I'm like, I kind of heard an opposite opinion on the sidelines of the Global Partnerships Conference, actually, which is, isn't it? We've still got relatively immature small capital markets in places like Kenya and Ghana. It's hardly as if these are well formed markets where there's an absolute ton of investment flowing in. They still need a lot of money. And it seems as if there's something of a tipping point here of people actually saying, well, actually these countries are now investible. We can crowd in private cash into these places. Like, I spoke to a guy who worked with Dutch pension funds and he'd invested like $1.7 billion alongside the World bank and DFIs. And he was talking about the fact that he could only do that because the World bank was doing it. He could only do that because DFIs were doing that. He was quite happy with his level of risk, but he didn't have the expertise to actually pick the deals. And he needed somebody like the World bank to be there in a middle income economy before he could start to plug cash into that economy. But talking about the very low income economies, is it really useful to start putting large amounts of capital into economies where there aren't a lot of deals to be done? I mean, I spoke quite a lot with Leslie Masdorf from BII and he very much said, yes, there is, there's plenty of opportunity for US to invest 25% in low income economies. There's no doubt about it, we can easily do this, we've got all the skills. But there were some question marks like people were saying, shouldn't we be investing? Like, isn't grant capital appropriate in the same way that you see the split at the World bank between RDA and the ifc, just.
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A
And maybe the answer is both, right. I think in a lot of these immature markets you have to have the grant capital and you have to have the sort of the work to help build, build the regulatory environments etc to make them more attractive to private capital. Right? Like that, that has to happen with public dollars at some level, right. So I think, yes, those markets should, I think people, at least from what I'm hearing, increasingly it's about differentiation. So your approach to a Kenya should be very different than your approach to investing in a South Sudan. Right? And a South Sudan probably needs way more grant capital in its mix, whereas Kenya maybe, maybe they do need some capital to de risk investments. But as you're looking at, you know, private capital mobilization, that amount that maybe the DFIs or MDBs put in should probably be lower in relation to the bigger deal, right? So if you're mobilizing $1 billion, maybe you only need like a guarantee to come in to be able to unlock that capital or different tools, Right. And so I think to me, one of the things I'm hearing about is like how do you differentiate your approach in different markets, use different tools, but also different levels of subsidy based on sort of the underlying market conditions. Right. And so I think that that's part of how the conversation has to evolve. And I do think BII does look at that. Right? Their approach in sort of low income and fragile states is different. They have more sort of concessional capital that they can use in those places and they recognize that they're taking a lot more risk in those environments. Now maybe some of those deals pay off in a really big way, but they also know that some of them might completely fail. Right. And so I think it is about sort of risk appetite and differentiation and how do you. What types of tools you use in some of these different markets, at what level levels. So not to say these institutions don't have a role in those markets also because they need to have sort of a balanced balance sheet. So like if an AFDB is only investing in the lowest income countries, they actually need those like higher earners and deliverers to help make the economics work of their balance sheets. So I think it is sort of a balancing act between, between the various aspects.
- [27:45]
C
And anyway, I don't want to make it sound as if private finance was the only thing that we talked about at these two conferences for like three whole days was a very significant part of the offering. It was clear that the British. Well, the current administration at FCDO seems quite taken with the idea of supporting private finance. That I'm not sure how much that matters because the United Kingdom is quite likely to get a new Prime Minister in the next six months and they're quite likely to appoint a completely different set of people to FCDO and they might very well have a completely different take. For what it's worth, we did get the chance to chat with a couple of former ministers and they said no, we think that they're on more or less the right track here with this. But there was a lot more kind of, we like the idea of supporting private capital than there was. We've got really coherent ideas about how we're actually going to generate more private capital movement because fundamentally it comes from the markets. It's hard to make the money markets do something that they don't want to do. Stuff that they can do is they can help a little bit with domestic resource mobilization by tackling illicit financial flows and they can help a little bit more with debt by doing some work on the common framework. And these were things that were heavily kind of emphasized by the last three G20 presidents. India, Brazil and South Africa. They've all talked a lot about those things that like and also reform of the global decision making architecture, moving stuff away from the G20 and the G7 and the OECD to the United nations so that there's actually a kind of level playing field for making these decisions that the poorer countries are in the room where it happened. I don't know how serious the British government actually is about that. It's easy to utter warm words, but they did utter those warm words like they did say beyond the.
- [29:34]
A
So you were saying that it's not all been about private capital. You were also at the OECD where it was much more about sort of the future of development cooperation and what that might look like. And so I'm wondering what other sort of themes or issues are emerging.
- [29:48]
C
Well, I had a lot of people ask to bold ideas. And I had a lot of people basically talk about the changes that everyone has wanted to have happen for quite some time. I mean, we're talking about technological reform, we're talking about genuine local leadership, we're talking about country ownership, African leadership, tax reform, debt reform. Honestly, no. Did I hear anything completely revolutionary that was going to change anything? No, I don't think we did. I think what we did see was European governments really grappling with how they want to participate in this new development era. And obviously this is also the development department to these governments, their answer to their own prime ministers and presidents who may not have the same opinions at all. They're thinking like, okay, we don't have as much money to just give away. We can't just write large checks anymore. People are less enthused about getting those checks in the first place. What do we want our role to look like? How do we best engage with this? But that was them asking themselves that question. They didn't have the answers. They hadn't come up with a kind of coherent strategy. They were talking a lot about we need to be much more kind of supporters of private capital rather than grant givers up until now. But then the humanitarian. The level of humanitarian need in the world is larger than it has been for pretty much any point in history. So how appropriate is it really to be having those conversations? So we heard a whole bunch of stuff. There was the. I mean, I don't want to suggest that there were no new initiatives and no new ideas at all. We heard a lot about DAC reform, about reform of how we're actually measuring ODA and what's appropriate. I think that's really good because there are a lot of questions about how we measure and quantify ODA and what ODA should be and that sort of thing. But also I question a little bit whether they really have the support of member countries to make the radical changes that they would like that people, I think, in the Global south would like to see. The problem with local leadership is always that everybody talks about it, but then there's a lot of fear about actually making the changes. And I kind of feel that the change in this environment will be driven by changes in incentives and relationships that the simple Fact is that Africa is getting richer faster than Europe and the United States, maybe slower than India and China. But Africa really has kind of turned a corner a little bit. And you could see the signs of that emerging confidence and that kind of changing relationship. And I talked a little bit earlier this week about how, like the remorseless logic of money, you go where the profit is billions to trillions, has firmly remained at billions because the trillions wanted to stay where it was safe and warm and invested in domestic markets. And. Or if they were African billions, they wanted to be in the European and American stock markets because they saw those as safe havens. And I think a lot of people are kind of asking themselves questions about America. Is this such a safe haven? Can I really trust that my foreign capital is safe in the United States, that they won't do anything crazy with it? Probably, but there's a little bit of a kind of hesitancy about that. Wouldn't I actually be better having this money invested domestically in my own market where I'm not taking any currency risk and I can walk down the road and go get it if anything goes wrong? So I felt as if the change was more likely to emerge from a shift in strength between the parties than it was from any kind of shift in will and enthusiasm.
- [33:22]
A
Interesting. I know one of the things you wrote about in your coverage is sort of this shift towards more transactionalism. And obviously, I sit in Washington, D.C. we've seen this be sort of the way that U.S. foreign policy is operating these days. But there's increased transactionalism elsewhere. We're seeing it in Europe, certainly sort of more of a focus through Global Gateway and other initiatives on sort of strategic interests. And I think one of the things that you wrote that sort of stood out to me was sort of asking the question of whose interest is it really? So when you talk about having shifting power dynamics, I think sometimes there is a question about how much have these dynamics really shifted?
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B
Right.
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A
So you can say it's about mutual interest. Yeah, we might be transactional, but we're meeting them as partners. But the reality is, are we still seeing power imbalances? Are African nations getting the short end of the stick, or are they actually winning in some of these conversations? And I think that's something that stood out to me because something I'm sort of.
- [34:28]
C
I think it's really interesting. Right. Part of that question was about, okay, whose interest is it in? We're negotiating with governments in the Global south, but governments in the Global south are not monolithic. Entities that exist solely for the good of the ordinary people of the country. There are many different special interest groups in those countries, and you really need to be careful about exactly which of those special interest groups you're working with when you're doing that. And the same in the Global north as well. Why are we giving the money away? Part of the problem, I think, in the Global north is we haven't been very sure about why we're actually giving money or lending money to different countries. Are we doing it to foster good relations? Are we doing it because it's the right thing to do? Are we doing it because it's strategically correct? Are we doing it to prevent trouble kind of being imported into the Global North? This was one message that I did hear a lot, actually, was kind of, there's only one planet and we've all got to live on it. And if we don't make it a safe and livable place for everybody on that planet, then sooner or later people are going to come and make trouble for you if you don't help them and where they live isn't safe. They're going to get up and they're going to come to a safe place, and that's your. That's where you live. And if you don't want that to happen, then you need to do something about it for your own strategic reasons. And one guy stood up at the OECD conference and he said, if unless everybody is safe, nobody is safe. And that's why we are funding development to make everybody safe. And I thought that was a really smart, kind of insightful kind of commentary on how we're doing it.
- [36:06]
A
One of the things I would just caveat is I think that argument doesn't work as well in Washington, D.C. as it once did.
- [36:12]
C
Yes, well, I think that's certainly true, but I think what we're beginning to see is the limitations of the transactional approach to power.
- [36:20]
B
Certainly.
- [36:21]
C
Interestingly, one other thing that came through quite strongly, which I haven't talked about very much, but partly because I'm saving it for a future newsletter. Wow. I'm worried I might run out of ideas. But one thing I haven't talked about as much, but is really interesting is this concept of narrative. The story that we tell about aid. What story do we tell about aid to people in the Global South? And what story do we tell about aid to people in the Global North? And a lot of people at the conference in Paris, the OECD conference, talk to me about this kind of failure of narrative that we haven't explained clearly while I was just talking about to people why it's sensible to, to provide funding for development or to work not, not even to provide ODA necessarily, but to have a sensible development conversation with other countries about how we can support them to grow.
- [37:15]
A
Ina, I know that we're, we're short on time, but I wanted you to be able to sort of give us a rundown of what you learned at the Asia Philanthropy Summit and any sort of final takeaways. And I know that you'll have much more coverage from AFDB and on some of these issues, as will I in devex Invested in coming weeks. It's a platform in which we write sort of a lot about the role of private capital. Your Thursday newsletters focus specifically on sort of, you know, private capital and the players behind it on the African continent. But Aina, what, what more should we know about sort of philanthropy? How Asian philanthropy is changing and how that feeds into some of these other conversations?
- [37:58]
B
Yeah, absolutely. So the thing that probably struck me the most about the Asian Philanthropy Summit was the role that China played this year. Of course, you know, we as outsiders are, you know, thinking about philanthropy in Asia. It sounds like China would be a big part of it, but actually this has been a separate conversation. A lot of philanthropy throughout Asia, one thing that distinguishes it is that it tends to be domestic. You know, countries have billionaire philanthropists often or corporations, and they tend to do philanthropic activities within their own borders. And so one thing that this alliance is trying to do is trying to change that and facilitate cooperation, cross border projects and the like. So now that China is in the fold within this Philanthropy Asia Summit, we saw a lot more Chinese philanthropists there. And the thing about Chinese philanthropy is that actually a lot of it is corporate. So it's a lot of these massive companies. Like there was a representative from Tencent there, for example, and these guys are really looking to elevate their position in the global philanthropy stage. And so this is something that I'm really excited to watch because this is, we're talking about a lot of money, these massive, massive corporations and their, and their philanthropy arms. And to see the way that they choose to on the flexi philanthropic muscles internationally will be really interesting to watch, I think. Another thing that, you know, I think people are probably a bit more familiar with is of course, Gulf philanthropy. So there are also much more, many more attendees from Gulf states, specifically the uae, that were in attendance at this year's summit. So the extent to which they're investing elsewhere will be really interesting. But of course, you know, again with Asian philanthropy, a lot of it is corporate philanthropy. And when I was talking to Naina Batra of one thing she, she really highlighted was that, you know, because a lot of this is corporate philanthropy, some of it can be cut quite easily during tough times. And we are ultimately in tough times right now. So she actually it's that she's already seen a downturn in Asian philanthropy. So since the outbreak of the war. And so that is something to watch. There is a lot of excitement about these new partners and philanthropists emerging. But the moment is also quite a tough one.
- [40:14]
C
That makes me think about a couple of themes which I did hear about. One is obviously this growing power of philanthropy in the world of aid. We know that there's a lot more philanthropy than we thought there was. OECD has revised how it measures. It still says that it's not got anywhere close to the actual size of philanthropy and the world of aid. We knew that philanthropy was sort of about 5% of ODA. It's now clearly more than 10%. We think it's probably much higher than that. So I think we're gonna. And we're gonna see that grow as individual wealth increases because as we know, individual wealth is increasing much faster than anything else at the moment. Corporate or country wealth. And the other thing is a huge growth in south south cooperation, or what they call triangular cooperation, where there's some money from the global north. But the main action is to support partnerships between countries in the south to share knowledge and expertise. And that is a hugely growing theme I think that we're going to see far more of. And it was probably remiss of me not to have mentioned when you asked me just a couple of minutes ago advar like what big themes we're seeing because that is a new and big theme that people are talking about a lot more than I've previously heard. And I think philanthropy, cross border philanthropy in the Global south is going to also be a really big part of that.
- [41:31]
A
Yeah, I think that's definitely something that will be interesting to watch. Again, it's one of these things that's not, you know, south south cooperation, not necessarily a new idea, but I do think in this era an idea on the rise and a place where there is a lot of learnings that can be exchanged across borders, perhaps in context that are also more relevant in some ways. So definitely an issue I think we'll continue to watch at devex and the role of philanthropy. So, Dave Inant, I know that we could probably continue this conversation for much longer, but perhaps we'll have to have it again in a couple of months and see how things are changing. So thank you both so much for joining me today. This has been this Week in Global development, Sam.