AIIB annual meetings, the BUILD Act marches on, and Australia's foreign influence laws: This week in development

Jin Liqun, president at the Asian Infrastructure Investment Bank. Photo by: Sikarin Thanachaiary / World Economic Forum / CC BY-NC-SA

Education leaders search for the intersection of research and policy, the Asian Infrastructure Investment Bank discusses corporate culture and third-party investments, and Australia’s NGOs breathe a sigh of relief. This week in development:

A new, U.S. development finance institution is one step closer to becoming reality, after the Senate Committee on Foreign Relations on Tuesday briefly discussed — and then quickly passed — the Better Utilization of Investment Leading to Development Act, which would create a new U.S. DFI. In the weeks and months leading up to the committee’s consideration of this bill, a number of questions about the proposed institution’s structure, its development mandate, and its safeguards policies have come to the fore. U.S. Agency for International Development Administrator Mark Green told Devex that his agency’s focus during the process has been “to do everything we can to ensure that whatever the final product is, that development and finance are closely linked.” The most recent version of the bill requires a “chief development officer” and a “development advisory council,” and would direct the new agency to evaluate the proposed and ex-post development impact of its investments. The latest bill also includes a transparent, independent accountability mechanism to “annually evaluate and report to the board and Congress regarding compliance with environmental, social, labor, human rights, and transparency standards, consistent with corporation statutory mandates.” One of the bill’s sponsors told Devex he hopes it will be voted on before the congressional August recess.

The world’s leading thinkers on global education debated the role of research in informing concrete policies that can help improve learning outcomes around the world at the RISE annual conference in Oxford last week. The conference saw a distinction drawn between the “nitty-gritty,” context-specific findings revealed by randomized controlled trials — or RCTs — and the practical, big picture policy recommendations that can help guide investments. “My plea to you as researchers is to do the messy details, but then also bring out the links [about] what that’s telling you about the big systems,” said DFID Chief Economist Rachel Glennerster. Devex has learned that RISE — a £35 million ($46.32 million) education research program across six countries — could soon enjoy additional financial support from the Bill & Melinda Gates Foundation, aimed at boosting the program’s non-research activities to have a larger policy impact.

Australia’s NGOs expressed relief that they will be exempt from new laws aimed at curbing foreign influence in the country’s political system. Two recommendations put forth by a parliamentary inquiry and agreed to by Australia’s attorney general aim to amend the pending legislation so that Australian charities will continue to be able to accept overseas support to carry out their work. They had previously feared that “onerous levels of monitoring, managing, and reporting on donations received from foreign entities” would impose prohibitive costs and force some organizations to shut down, Lisa Cornish reported for Devex from Canberra. The recommendations include a provision to exempt organizations from registering as working on behalf of “foreign principles” when those organizations are “making routine representations in accordance with their respective purposes, and where the relationship with the foreign principal is well known or a matter of public record.” One NGO representative called the recommendations, which came after months of lobbying, “a victory for common sense.”

Civil society groups are warning that the Asian Infrastructure Investment Bank’s $100 million investment in an Indian infrastructure fund could result in the China-based multilateral development bank supporting activities with high social and environmental risks. On Monday, at the AIIB’s third annual meeting in Mumbai, the institution announced its first investment in India’s National Investment and Infrastructure Fund, a collaborative investment platform for commercially viable infrastructure projects. Just as they have with other development finance institutions, civil society groups have raised concerns that the AIIB’s decision to direct funding through “financial intermediaries” — commercial banks or funding platforms such as the NIIF — opens that money up to being used for activities that violate environmental and social standards, and means the AIIB is likely to have limited visibility. AIIB officials told Devex the institution’s involvement in these investments actually ensures they will be used more responsibly than they otherwise might have been. At the same meetings, AIIB President Jin Liqun shared his vision for the bank’s emerging corporate culture, which he said he hopes will be “a workplace environment free of corruption and harassment, with a culture of openness and candor underpinned by mutual respect for others.”

About the author

  • Michael Igoe

    Michael Igoe is a Senior Reporter with Devex, based in Washington, D.C. He covers U.S. foreign aid, global health, climate change, and development finance. Prior to joining Devex, Michael researched water management and climate change adaptation in post-Soviet Central Asia, where he also wrote for EurasiaNet. Michael earned his bachelor's degree from Bowdoin College, where he majored in Russian, and his master’s degree from the University of Montana, where he studied international conservation and development.