This week, we’ve got a double-header on the U.S. International Development Finance Corporation, or DFC: One story on what it is doing internally, and another piece on what a former staffer says it should be allowed to do if it is to truly compete with Russia and China.
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“Hamstrung.” That’s how Andrew Herscowitz, a former chief development officer at DFC, says he and his colleagues sometimes felt due to the various restrictions on which projects they could take on.
In an opinion piece for Devex, Herscowitz, who is now executive director at ODI North America, lists the kind of projects that would typically be no-gos for DFC:
• Anything in a country that does not adequately protect workers’ rights, counting out the likes of Thailand, Bangladesh, and Sudan.
• Anything involving natural gas, apart from in Europe, where DFC can finance projects to counter Russia.
• A small business in Haiti that needs a $700,000 loan — too small for DFC and too hard for the company to meet DFC’s legal, environmental, social, and governance requirements.
• A U.S. company in Honduras that wants to expand to Mexico — thus creating jobs that might stop Mexicans leaving to the U.S., but potentially at the risk of U.S. jobs.
• Lithium processing in Chile — because Chile is a high-income country.
And there’s more.
“How is DFC to advance the climate agenda or help billions of people in the lowest-income countries of the world emerge from poverty if it’s so hamstrung?”
That’s Herscowitz’s question, and he says a move for fewer legal restrictions should be part of DFC’s upcoming reauthorization.
Opinion: How the US DFC is stuck in a carnival game
Meanwhile, my colleague Adva Saldinger has this look at where DFC is at in its internal review, which began in 2022. The shift to staff being arranged according to which sector they’re working on is done — despite some reticence from staff. So what’s next?
“DFC has been working to build out sector strategies, refine priorities, and define a value proposition,” Adva writes. “Those strategies are being completed and should be released in the coming months. Once finalized, the agency will figure out what additional staffing, training, or partnerships are needed for each team.”
Read: DFC staff switch jobs in reorganization (Pro)
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Boston-based consulting firm FSG has worked with the likes of Goldman Sachs, Microsoft, and the Ford Foundation as part of its practice with nonprofits, companies, and foundations on creating equitable systems change.
Now it has a new CEO in 38-year-old John Harper, and he tells my colleague Stephanie Beasley that he’s noticed a change as the sector goes through a precarious time following a lawsuit filed last year against an Atlanta-based venture capital firm and its foundation that provided grants to Black women entrepreneurs.
Some leaders are doubling down on their commitments to diversity, equity and inclusion — or DEI, Harper says. While others — especially within the corporate world and among smaller family foundations who often are in a more “challenging political context” — are moving away from calling a lot of attention to their work.
Where once the emphasis was on Black, Indigenous and people of color, now some organizations talk about supporting the underserved or underestimated.
Does it matter? And how is FSG thinking about converting the global racial reckoning of 2020 into concrete changes for its clients? Read below to find out.
Finally, if you want to learn even more about DEI — and how domestic U.S. dynamics play out in global development contexts — join our free event tomorrow at 12 p.m. ET (6 p.m. CET) featuring Black leaders in global development, including Mercy Corps’ Tjada D’Oyen McKenna, RTI’s Aaron Williams, and Loyce Pace from the U.S. Department of Health and Human Services. The event will be hosted by Stephanie along with Devex Executive Vice President Kate Warren.
Read: Advisory firm FSG’s new CEO helps philanthropists stay the course on DEI (Pro)
ICYMI: The legal case threatening to upend philanthropy’s DEI efforts
+ Want to continue the conversation in a more interactive setting? Join our WhatsApp and Telegram channels to receive updates on the latest global development news directly to your mobile device.
Onward to Nairobi, where my colleague Sara Jerving has the story behind the social enterprise Hewatele, which is trying to boost the amount of locally produced medical oxygen.
For now, Kenya is a net importer of oxygen and is bringing in nearly enough for routine care, such as for pneumonia patients. But Hewatele founder Dr. Bernard Olayo tells Sara that the country is vulnerable to external shocks and could find itself at the end of the queue should another pandemic break out, for instance.
Then there is the cost. The price of oxygen (bought in foreign currency) has roughly doubled in Kenya as the local currency depreciated nearly 20% compared to the U.S. dollar last year.
Hewatele now has around 6% of the medical oxygen market share in Kenya, but Olayo hopes that when a new plant on the outskirts of Nairobi is operational, that share could rise to 40%.
International funders are supporting Hewatele with a $20 million expansion through a combination of debt — a $10 million loan from DFC and a $1.1 million loan from Grand Challenges Canada. As well as equity — $4 million from the Soros Economic Development Fund; $3.5 million from Finnfund, a Finnish government development agency; and $1.6 million from UBS Optimus Foundation, a Swiss-based philanthropic foundation.
“It’s extremely difficult as an African startup to raise funds. It’s the nature of the business. There’s a very high-risk perception for African-led, African-founded organizations,” Olayo says. “We’re very grateful that despite all those challenges, they had faith in us.”
Read: A Kenyan doctor’s $20M mission to make sure every child has oxygen
The Devex U.S. Global Leadership series returns in 2024, presenting live discussions with U.S. lawmakers on global development policy. The next installment is on Wednesday, Feb. 28, at 1:30 p.m. ET (7:30 p.m. CET), and will feature U.S. Rep. French Hill of Arkansas, who serves as vice chair of the House Financial Services Committee and member of the House Foreign Affairs Committee, in conversation with Adva.
If you are interested in attending in person in Washington, D.C., request an invite. You can also register to watch the event live via Zoom.
And before you join, read up on Hill’s interview with us back in April 2023, in which he did not hold back, notably on what role he does and does not see for the International Monetary Fund.
“In my view, the IMF is facing an identity crisis, and I just believe it strayed from its longstanding mission, which is principally monetary cooperation through exchange and balance of payment stability,” Hill said last year. “I don't believe we should try to turn the IMF into a development organization or a development bank. The IMF is just not suited for that purpose.”
Background reading: Why this Republican lawmakers worries about the IMF and World Bank
Nature has value. Could we literally invest in it? [The New York Times]
The United Nations’ agriculture fund bets big on innovation to improve food security. [Devex]
The World Bank has approved a shift to channel IDA funds to Afghanistan humanitarian aid. [Reuters]