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Today, Devex speaks with the World Bank’s top economist about the latest economic forecast — and it doesn’t look good, but it could be worse.
Also in today’s edition: Get to know global health legend Dr. Anthony Fauci, and take a look at the U.S. policy that could transform foreign aid.
Weakening rapidly
The worst global recession in 50 years is feared by economists at the World Bank, who have issued a stark warning that such a severe economic downturn could further harm low-income countries already ravaged by the COVID-19 pandemic.
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My colleague Shabtai Gold speaks with the World Bank’s chief economist and director of the prospects group, Ayhan Kose, who tells him it’s not too late to avoid the worst economic damage — if policymakers and bankers get it right, and have a dose of “luck” to boot.
“We see the global economy weakening, and weakening very rapidly,” Kose says. On top of the pandemic, economies have experienced supply chain disruption and skyrocketing commodity prices after the Russian invasion of Ukraine.
Inflation, debt distress, and a strong U.S. dollar pressuring countries with weakening currencies are all key concerns for Kose.
World Bank: Global recession is possible but narrowly avoidable
Background reading: A deep dive into how the debt crisis got so bad and how to make it better. And for Devex Pro members, an in-depth analysis on how recession threatens "complete financial turmoil" in the aid sector.
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Prima Fauci
Dr. Anthony Fauci’s position at the forefront of the U.S. COVID-19 response made him the country’s most famous — or infamous, depending on your politics — health official. But his career isn’t limited to North America, and has seen him advance public health throughout the world, in particular on HIV/AIDs and neglected tropical diseases.
He has also served as a mentor to key global health figures in the country and abroad, another achievement that often falls under the radar.
My colleague Jenny Lei Ravelo spoke to the man himself about his career, achievements, worries, and the challenges ahead. She also interviewed those who have worked with him to create an in-depth profile of Fauci’s legacy in global health. Winnie Byanyima, UNAIDS’ executive director, tells Jenny that many people are alive today “because of Tony.”
“Every life and every person is sacred,” says Fauci. “So it shouldn't be that because you happen to live in an environment that doesn't have easy access, that you don't deserve that easy access. Everyone does.”
Beyond the US: Dr. Anthony Fauci's global health contributions
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Fragile states
Foreign aid can be effective and well-meaning, but also disjointed and reactive. A landmark U.S. law passed in 2019 aims to transform the government’s approach by heading off conflicts before they begin. And after three years of hiccups, the Global Fragility Act is about to be rolled out, my colleague Teresa Welsh writes.
Robert Jenkins, the U.S. Agency for International Development’s assistant to the administrator for the Bureau of Conflict Prevention and Stabilization and the official in charge of the Global Fragility Act, tells her the government will release a 10-year strategy by the end of 2022 that details the implementation of stabilization programs in Haiti, Libya, Mozambique, Papua New Guinea, and coastal West Africa.
The plan marks a paradigm shift in foreign aid programs, which focus on specific areas such as health and education, an often siloed approach that can be a Band-Aid after a conflict has already broken out.
The fact that the Global Fragility Act won bipartisan support in a polarized Congress is a sign of how important this shift in U.S. development is — and how timely it is, given the knock-on effects of Russia’s invasion of Ukraine.
Read more: USAID in ‘time crush’ to roll out landmark Global Fragility Act (Pro)
ICYMI: Global Fragility Act country strategies to come this year, says US official (Pro)
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A ‘window’ to revive multilateralism …
… that’s how Rockefeller Foundation President Rajiv Shah sees the next 18-24 months.
Speaking at a webinar on Thursday, Shah said that after next week’s Global Fund replenishment at the U.N. General Assembly, there will be a lull in similar events for major health and development instruments. The result? “Political space in the next 18 to 24 months … 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’s not the first to call out a problem. U.N. Secretary-General António Guterres said in March that the current (fragmented) multilateral system is failing, undermined by high-income members of the Group of 20 major economies that say one thing and do another through their influence on the boards of the World Bank and International Monetary Fund.
Shah was speaking this week at a joint Center for Global Development and Overseas Development Institute event on how to make multilateral development banks more development-friendly, building on the recent G-20 Independent Review of MDBs’ Capital Adequacy Frameworks report. Shabtai has been following why calls to try and make MDBs less risk averse are not a sure bet.
ICYMI: Fitch warns MDBs risk downgrade from G-20 report adoption
Inside UNGA 77: The global development issues we're watching (Pro)
In other news
The scale of extreme hunger more than doubled in 10 of the world’s worst climate hotspots, according to Oxfam. [The Guardian]
World Weather Attribution researchers say climate change may have intensified rainfall that led to the devastating floods in Pakistan. [BBC]
The U.S. will transfer $3.5 billion in Afghan central bank reserves to a Swiss trust fund, with safeguards to block funds misuse. [CBS News]
Vince Chadwick contributed to this edition of Newswire.
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About the author
William Worley@willrworley
Will Worley is the Climate Correspondent for Devex, covering the intersection of development and climate change. He previously worked as UK Correspondent, reporting on the FCDO and British aid policy during a time of seismic reforms. Will’s extensive reporting on the UK aid cuts saw him shortlisted for ‘Specialist Journalist of the Year’ in 2021 by the British Journalism Awards. He can be reached at william.worley@devex.com.
