Devex Invested: The big moment to reform development finance

Among the most closely watched events of the 77th United Nations General Assembly this week in New York is the seventh replenishment of the Global Fund to Fight AIDS, Tuberculosis and Malaria — which seeks to raise some $18 billion for the next three years. But after that … a lull in major development events could provide a moment for reflection.

World leaders should use it wisely, says Rockefeller Foundation President Rajiv Shah. The coming 18- to 24-month “window” of “political space” is a chance “to make sure that the world's treasuries and finance ministries embrace a more robust role for the multilateral architecture in the coming decade,” he said last week.

He was speaking at a webinar building on the recent G-20 Independent Review of MDBs’ Capital Adequacy Frameworks that came out over the summer. Now the question is — who exactly should do what?

• “The multilateral system has been captured by the interests of advanced economies and failed to meet the needs of emerging and developing economies during recent crises,” says Annalisa Prizzon, senior research fellow in the Development & Public Finance program at ODI (formerly the Overseas Development Institute). She lists the tasks for multilateral development banks and international financial institutions: they should scale up their investments; improve their governance; and review their mandates to better align the interests of both borrowing and nonborrowing countries.

• The G-20’s MDB review is still resonating. “On a practical level, we need to act on the G20’s recent independent review, which could yield up to $1 trillion in development and climate financing — and move from the margins to seriously address the growing debt crisis,” says Gayle Smith, CEO of the ONE Campaign.

• So how does the world go about reforming the Bretton Woods institutions, MDBs, and IFIs so that they’re better able to respond to a never-ending cycle of crises? “This reform would ideally be done through a broad-based process that includes Global North and South voices, acknowledging that the G20 will have a leadership role. It would tackle the governance of the institutions, ensuring more balanced representation from across the globe, as well as mandates,” says Sonia Dunlop, program lead for public banks and MDBs at E3G.

• As for where to start: The sooner the better. “The big shareholders of the Bretton Woods organizations — including the largest shareholder, the U.S. — need to set clear direction and hold the management of these institutions accountable for delivery,” says Masood Ahmed, president of the Center for Global Development. “The upcoming [World Bank] Annual Meetings is the right place to start.” Prizzon predicts similar conversations at UNGA this week, too.

Background reading: How MDBs can spend hundreds of billions more

Your guide to #UNGA77

Feeling a little lost at UNGA?

Step 1: Go to Twitter to follow our reporters on the ground in New York: Michael Igoe, Colum Lynch, Omar Mohammed, Stephanie Beasley, Teresa Welsh, and Managing Editor Anna Gawel. 

Step 2: Check out our guide to events on everything from marine debris to corporate climate accountability.

Step 3: Listen to Devex Decoded, our new podcast from the UNGA sidelines.

Listen to "Raj Kumar on shaping the development narrative" on Spreaker.

UNGA Decoded episode 1: Devex Editor-in-Chief Raj Kumar on shaping development narratives

Step 4 … Your next job?

Devex has assembled this step-by-step online guide to pursuing a development career with the United Nations to help professionals decide whether to begin the journey, which paths to consider, and insider advice on navigating the recruitment process.

Become a Devex Career Account member with a 50% discount now to access the full report.

EBRD’s new digs

ICYMI, the London-based European Bank for Reconstruction and Development is in the process of moving to the Canary Wharf district. About half of its 2,500 staff in the city have already moved to Five Bank Street, with the rest to follow by the end of October. The bank has the top 13 floors of a building with eco-friendly credentials, access to the waterfront, sweeping views of the City of London, and even pingpong tables.

Et l’addition, s’il vous plaît? “We cannot disclose specific financial information,” a spokesperson told my colleague Jessica Abrahams when asked about the total cost of the move, “but can note that the building provides a world-class working environment for staff, and delivers excellent value for money.” Know more? Tell Jess!

Closed-door dialogue

The annual dialogue between civil society and the Organisation for Economic Co-operation Development’s Development Assistance Committee takes place next Tuesday in Paris. The media aren’t invited — sad! — but expect lots of interest in the sensitive topic of how to count private sector instruments, such as loans, guarantees and equity, as aid.

Provisional arrangements have been in place since 2018, but an excoriating opinion piece in the Financial Times over the summer from former U.N. Assistant Secretary-General Stephen Cutts charged that the 30 donor members of the DAC have “exaggerated their generosity at every turn” — so much so that they should be replaced by an independent body of professional statisticians.

In an interview in April, DAC chair Susanna Moorehead told us the secretariat is working to resolve the private sector instruments issue. Has there been any progress? We’ll be keeping our ears open for updates.

Pakistan recovers

MDBs and Pakistan's private sector are among those offering funding following the country's devastating floods, but so far less than 40% of the humanitarian appeal has been funded. Devex looks at which donors are stepping up.

After the flood: Who’s given aid to Pakistan?  (Pro)

+ For more funding insights, try out Devex Pro Funding today with a free five-day trial, and explore funding opportunities from over 850 sources in addition to our analysis and news content. 

What we’re reading

Human development regresses as global crises pile up, UNDP says. [Devex]

What does China’s cancellation of 23 interest-free loans to 17 African countries signal about its lending practices? [Boston University Global Development Policy Center]

In a first, the World Bank exceeds 35% funding target for climate finance. [Devex]

Five reasons Australia should establish a development finance institution. [Lowy Institute]