Devex Newswire: Is the World Bank going trust fund-crazy?

The World Bank seems to have a love affair with trust funds. All 364 of them. Also in today’s edition: U.S. senators slam USAID for relying on temporary contractors. Upcoming event: The latest edition of the Devex Pro Leader Roundtable series will hear from chiefs of staff of development organizations on Sept. 15. Sign up now. Can’t attend live? Register anyway and we’ll send you a recording. Trust us Trust funds come in all shapes and sizes, but some fit better than others. At least that appears to be the case at the World Bank, home to roughly 360 such funds ranging from big and well-known ones like the Global Fund to Fight Aids, Tuberculosis and Malaria, to a panoply of smaller, single-donor trust funds. These funds — which in 2022 accounted for about $14 billion — allow donor governments to bypass traditional multilateral aid channels and earmark money for specific activities or countries. But while the bank’s biggest trust funds are often sitting on cash, many others are sitting idle, wasting time and resources, Devex contributing reporter Sophie Edwards writes. Critics deride smaller trust funds as donor pet projects that, among other things, are an administrative pain, cost too much money (or take it away from existing programs), and sidestep the wants and needs of recipient countries in favor of what donors think are the best solutions. They can also be seen as a “quick fix.” “When facing a new challenge, a first step is often to create a new trust fund, but it’s not necessarily the best response,” says Annalisa Prizzon of the Overseas Development Institute. Despite the bank’s recent efforts to streamline its portfolio, the number of funds, especially on climate, remains bloated. But while trust funds have their detractors, they also have their supporters, who say they offer a flexible vehicle to help countries or causes neglected by traditional aid donors. What’s more, traditional trust funds are usually small and used to pilot new ideas and initiatives that can be mainstreamed if successful, explains Maitreyi Bordai Das, who heads the bank’s trust fund portfolio. “In the grand scheme of things, trust funds are a drop in the ocean but a very important one,” Das says. Read: Does the World Bank have too many trust funds? (Pro) + Access all our exclusive reporting and analysis by starting your 15-day free trial of Devex Pro today. ‘Nail into the coffin of poverty’ As Sophie writes, the World Bank is trying to curtail and consolidate the plethora of trust funds it houses, but that’s just one of many reforms it’s embarking on. Under its new president, Ajay Banga, the anti-poverty lender recently launched a Private Sector Investment Lab, which brings together 15 chief executives, including financiers and asset managers, to identify ways the bank can entice private investors to channel more money to low- and middle-income countries. The lab, which reports directly to Banga, includes leaders from BlackRock, HSBC, Standard Chartered, and Tata Sons, among other private titans. An initial focus will be helping to wean countries off fossil fuels by scaling renewable energy finance. “Results won’t come overnight,” Banga said in a statement, “But if successful this group has the potential to unlock significant investment that will deliver jobs and better quality of life for people living throughout the Global South – the surest way to drive a nail into the coffin of poverty.” Read: World Bank's private sector lab to focus on energy transition financing Temporary fix A letter that three powerful U.S. senators sent to USAID Administrator Samantha Power about the agency’s hiring practices was couched in polite diplo-speak such as “concerns” and “challenges” — but make no mistake: The senators are clearly frustrated with America’s premier aid agency. The eight-page missive takes aim at USAID’s reliance on temporary contractors over career civil and foreign service officers, my colleague Michael Igoe reports. To express their displeasure, the senators quoted the American Foreign Service Association, which they write “succinctly summarized these problems when it recently opined that ‘[d]ecades of hiring workarounds and the agency’s patchwork, fragmented, and seemingly ad hoc approach to strategic workforce planning have diluted USAID’s career employee workforce, complicating operations, management, and agency-union relations.’” They didn’t mince words (or at least someone else’s words). USAID leaders, including Power, have repeatedly acknowledged that the overstretched bureaucracy faces a “staffing crisis.” Even so, the senators suggested the approach taken by USAID is at odds with President Joe Biden’s vision for rebuilding a career federal workforce. “With USAID’s recent appointment as a permanent member of the U.S. National Security Council and an FY23 budget of $49.44 billion — both of which are unprecedented in the Agency’s history — ensuring that USAID is rebuilt with a strong, permanent, union-represented workforce centered on and led by its Foreign Service matters now more than ever,” their letter states. Read: Lawmakers question USAID’s reliance on temporary contractors + Get a recap of our recent reporting on USAID’s workforce challenges. Don’t forget 3.1 The U.N. Sustainable Development Goals are in a sad state, with progress stalled or in reverse. So the Bill & Melinda Gates Foundation’s seventh annual Goalkeepers report contained no big revelations. It reinforced that the world is lagging on nearly all of the SDGs, from eliminating poverty to adapting to climate change by 2030. But it’s still a clarion call ahead of next week’s U.N. General Assembly to keep the SDGs alive, particularly SDG 3.1 — reducing infant and maternal mortality rates, which the foundation argues should be central to efforts to achieve the goals yet seems to increasingly be an afterthought for many world leaders. My colleague Stephanie Beasley points out that the foundation included a stark message in the report’s introduction: “Once every two minutes, a mother dies from complications due to childbirth. By the time you finish reading this introduction, it will happen again.” Mark Suzman, CEO of the Gates Foundation, says there’s been an overall dip in international aid, with war in Ukraine and economic crises in many high-income countries cutting into funding for “high impact interventions like health.” “That’s one of the reasons why we’d like to use the report to remind people that saving a child’s life and saving a mother’s life is not remotely political,” he says. “It’s a shared goal that every country in the world did sign up to join as part of the Sustainable Development Goals.” Read: Gates Foundation pushes for refocus on maternal and newborn health + Look forward to two special editions of the Newswire that will give readers a comprehensive, insider view of the 78th U.N. General Assembly, with a preview on Sept. 18 and a wrap-up on Sept. 25. In other news Despite long-standing diplomatic tensions, Algeria is now opening its airspace for humanitarian and medical flights heading for Morocco in response to the aftermath of the Sept. 8 earthquake. [Foreign Policy] Mediterranean storm Daniel led to unprecedented flooding in Libya, where the current estimated death toll reached 700 people and 10,000 reported missing. [AP News] Several people were arrested after entering U.S. House Speaker Kevin McCarthy's office during a protest urging him to reauthorize critical provisions of the U.S. President's Emergency Plan for AIDS Relief, which is set to expire this month unless an agreement is reached. [The Guardian] Sign up to Newswire for an inside look at the biggest stories in global development.