Devex Invested: Was Macron's finance summit worth the hype?

Was it worth it? That was the question after French President Emmanuel Macron’s Summit for a New Global Financing Pact wrapped last Friday. Here’s the answer(s). • For the official version, the chair’s summary, a “proposed roadmap to build on key milestones,” and a vision statement for multilateral development banks are online. Catching our eye in particular was the support from the World Bank and European Investment Bank, among others, for clauses allowing countries to pause debt repayments when hit by climate disasters — a key part of the Bridgetown Agenda of Barbados Prime Minister Mia Mottley. • For the advocates’ view, Friederike Röder from the nonprofit Global Citizen writes that, for all the focus last week on reforming multilateral development banks, “way more grant resources are needed to help the poorest countries in debt distress & address issues such as loss&damage or education.” There was lots of talk in Paris about stretching existing resources — U.S. Treasury Secretary Janet Yellen said that “balance sheet measures” could unlock $200 billion in new lending capacity from the MDBs — but few leaders came with their checkbooks. • For the momentum-as-progress perspective, check out this article from ODI visiting senior fellow Michael Jacobs. “The word on the grapevine is that Biden is open to the idea” of a capital increase for the World Bank, Jacobs writes, if new World Bank President Ajay Banga “can prove he can deliver reform.” • Our take? Macron took some flak for circumventing existing United Nations processes with a nonbinding, organization-heavy, deliverable-light gathering. And there was an element of theater in him taking out his pen and paper Friday morning to note leaders’ concerns from around the world — as if he didn’t know African leaders want Europe to do more to tackle illicit financial flows! But the summit also put heat on U.K. Prime Minister Rishi Sunak and many other leaders from the global north who failed to make the trip to Paris or engage with the issues of debt relief, climate change, and how to make the modern development system fit for purpose. By giving a platform to the leaders of Kenya and Zambia — who made eloquent appeals, for instance, to increase low-income countries’ say in international financial institutions and speed up debt relief — the French president showed the level of resentment simmering around the world toward the Bretton Woods bodies. That alone could give added impetus to efforts to bed down more significant changes in the months ahead. Read: Frustration and tentative progress at Macron finance summit Listen: An insider look at Macron’s global financing summit + Want to dig deeper into these issues? Devex Pro members can join us for an exclusive digital event on July 10 for an insider’s guide to the Bridgetown Agenda — and for a limited time only, we're offering new members $100 off an annual Pro subscription to be a part of it. Go slow, go together Back stateside, the U.S. International Development Finance Corporation has slowed down a planned restructure after staff pushback. “We know how busy everyone is and have heard the desire for more time to implement any changes,” the agency wrote in an email to employees seen by my colleague Adva Saldinger. The planned transition to organize teams around the key sectors of infrastructure and minerals, energy, health and agriculture, small business support, and funds will now likely begin late this year. Read: DFC extends reorganization timelines, responds to staff concerns Crowding in the private sector crowd A key theme of the Macron summit was how DFIs can get more private money going toward the Sustainable Development Goals. We know you’ve heard that one before, right? And it seems even the president of Kenya and head of the Global Fund to Fight AIDS, Tuberculosis and Malaria are ready to call time on that narrative. But Joan Larrea, CEO of blended finance network Convergence, and Kusi Hornberger, a partner at development consultancy Dalberg, are ready to make the case for how best to incentivize companies into high-impact investments. They suggest four ways: 1. Increase blended finance windows to catalyze investments. 2. Seek ecosystem additionality and not just financial leverage. 3. Interact and collaborate more with private catalytic investors. 4. Report better on blended finance use and impact. Opinion: How DFIs can mobilize more private sector capital The right wavelength Sergio Gusmão Suchodolski. Know the name? Maybe you should. Via Harvard Law School and Science Po Paris, the Brazilian development banker’s career has already included stints at the National Development Bank of Brazil, the New Development Bank, the BRICS bank in Shanghai, and the development banks of Minas Gérais and São Paulo. Today he is a senior fellow at the Brazilian Center for International Relations, together with his work at impact fund VR Investments, and on the board of the Amazon Sustainable Foundation. But when we met at the Finance in Common summit in Abidjan last year, the talk turned instead to Suchodolski’s other life as a surfer. Growing up in São Paulo, he began surfing at 5 years old, and since his teens, he’s traveled to remote parts of Europe, Africa, Asia, and Latin America in search of waves, including on the surf team of the University of São Paulo. “Traveling around to these remote areas was one of the relevant experiences that brought my attention to development finance,” he told me. With no hotels, Suchodolski said he often sleeps in a tent or rents a room at a local resident’s house, “interacting with the families, learning their languages and understanding their day-to-day lives and struggles.” Returning to those communities over the past 20 years, Suchodolski says he has seen what makes some thrive and others falter — from real estate speculation to pollution to poor urban development. And as for the sport itself, he says the experience of staying calm under the waves is “great training for your mind, for your body and for the connection with the oceans and the planet … The understanding that we are not isolated beings, that we are part of a larger ecosystem.” What we’re reading Canada getting no “tangible benefit” from membership in Asian infrastructure bank: former executive. [CBC] Belgium proposes €2.4 million “debt-for-climate swap” for Mozambique. [The European Morning Post] Has India’s multibillion dollar CSR law delivered for development? [Devex Pro]