For the global development community, 7 predictions for 2021

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Devex President and Editor-in-Chief Raj Kumar details what may lie ahead in development for 2021. Photo by: Edgar Su / Reuters

This past year has been a lesson in the challenges of predicting. For the global development community, the best laid plans of the so-called “Decade of Action” had to be shelved as the coronavirus pandemic swamped every other issue.

Maybe this year will be no different. Nonetheless, it’s worth it to at least try to look ahead and see what may be coming in 2021 for global development leaders and practitioners alike. Here are seven things to look out for.

For poorer countries, a stark vaccine reality

The vaccine roll-out in high-income countries will quite literally be a shot in the arm. As advanced economies reach high levels of immunization — perhaps by mid-year — there will be collective euphoria. Restaurants, concert halls, and special events will be packed.

While it will feel much like the end of World War II in the rich world, in poorer countries the vaccine still won’t have reached most people by the end of 2021. There will be outbreaks and maybe even new variants of the virus.

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Worst of all, the inequalities we all recognize will be more viscerally felt as people the world over watch and wait for their vaccine shot. In some places, especially the middle-income countries of Latin America and South Asia hard-hit by the virus, this will become a deeply political issue. In Colombia and South Africa, it already is.

For those working in global health, the scramble to get vaccines to everyone — and the frustrating realities of fundraising and realpolitik — will be a lesson not soon forgotten. Much like the West African Ebola outbreak led to the creation of the Coalition for Epidemic Preparedness Innovations, expect at least one new global health organization to be conceived this year.

Vaccine diplomacy will become a major 2021 theme. Global health leaders — call them diplomats this year — will be phoning capitals looking for extra doses to be released to COVAX or directly to particular countries in need. While they’re at it, at least one of China’s four vaccines may have achieved regulatory approvals allowing for global roll-out.

The global development Cold War could well extend to vaccines this year. China may even reach more people in Africa with COVID-19 vaccines than Western countries this year, which could be good news for patients but also fodder for pulling global health further into a great power conflict.

The slip in the SDGs will turn into a slide

For the first time, 2020 was a year in which progress on the Sustainable Development Goals slipped. Unfortunately the economic repercussions of the pandemic have yet to be fully realized and SDG indicators will likely suffer even more this year.

One key data point helps to tell the story: In low- and middle-income countries, there are 200 million tourism jobs that could be lost as a result of the pandemic. As vaccines get distributed in wealthy countries, people may begin to travel, but mostly domestically or to other countries that have high rates of vaccination.

It doesn’t take much for fragile economies to falter, and governments in these countries don’t have the money or credit to provide massive stimulus as has happened in advanced economies. Beyond tourism, huge cash cows like oil and gas have been impaired — maybe permanently — by the pandemic and the push to find alternative fuels to save the planet from climate change. Many LMICs depend heavily on these extractive industries for government revenue, potentially imperiling their health care and education budgets at the worst possible moment.

The trifecta isn’t complete without mentioning remittances. The economic recovery in high-income countries is uneven, and service workers — especially undocumented workers in these places — have been hit particularly hard. Remittances are down and may not recover in time to avert economic disaster in many countries.

As the Executive Secretary of the Economic Commission for Africa, Vera Songwe, put it during Devex World, “2020 has been a year of resilience on the [African] continent. What we’re worried about is 2021.”

A window of opportunity for foreign aid (but closing fast)

After World War II, the Marshall Plan didn’t easily secure public support. It took a massive campaign to convince Americans that Europe’s economic recovery was worth their sacrifice.

This pandemic won’t automatically lead to public support in high-income countries for foreign aid. But it does present an opportunity to make the case that every country should have the health infrastructure to prevent and stop pandemics.

So far, that case has not been made. In fact, in most high-income countries, the pandemic has led to a more isolationist bent. The U.K. is pulling back on its foreign aid commitments, the Trump administration is taking one more shot at foreign aid on its way out, and the COVAX Facility hasn’t had an easy time raising money even for immunizations that directly benefit high-income countries’ health security.

And let’s not forget the de facto head of state champion for foreign aid, Emmanuel Macron, has an approval rating among French voters in the 30% to 40% range.

But there remains a chance — especially in the face of vaccine inequality, the SDG slide, and whatever humanitarian emergencies emerge this year — to reinvigorate the narrative around foreign aid and launch something consequential.

Without an effort of this kind, bilateral foreign aid will continue to be more about countering China, incentivizing private sector investment, and one-off emergency humanitarian response. Long-term development, including strengthening health systems, will suffer.

As a result, look for high-income country governments to increasingly rely on multilateral development banks such as the World Bank (and nowadays even the International Monetary Fund) to fill the gaps. It would be a missed opportunity, but that may well be where most of the action is this year.

Billionaires’ big philanthropic announcements — with little accountability

The situation this year is ripe for massive philanthropic commitments by the world’s billionaires. For one thing, many have gotten much, much richer during the pandemic. For another, deficits even in high-income countries mean the tax writing is on the wall.

Plus, inequality and racial justice will remain high-profile themes this year, pushing billionaires to finally do something. It’s worth noting that some 90% of the world’s 2,000 billionaires still haven’t signed the Giving Pledge, and most signers still haven’t given much away.

In 2020 we saw fascinating developments in billionaire giving, from Jack Dorsey’s billion-dollar pledge announced on Twitter with a link to track it on Google sheets, to Mackenzie Bezos decision to give away almost as much as the Bill & Melinda Gates Foundation but only to small U.S. domestic organizations, to Larry Ellison effectively cancelling his massive philanthropic plans. Then there’s the Gates Foundation’s announcement during Devex World that its total giving is up $1.75 billion due to the pandemic.

Expect more of the same in 2021 but at a much more rapid pace and at greater scale. Look out in particular at the world’s two wealthiest people — Jeff Bezos and Elon Musk — to see what, if anything, they do this year. And while there may be a flurry of announcements, we’ll still lack basic accountability mechanisms to assess the quality (and reality) of all this giving in 2021.

ESG and impact investing will become a major global development theme

If COVID-19 changes finance, will that help development funding?

Sustainable investing and impact investing appear to be on the rise in the wake of COVID-19. But will markets truly change and create the potential for more development funding, or is much of the new trend mere window dressing?

There’s money in environmental, social, and corporate governance now. Once a bit player in massive public markets, ESG factors are now a major investment theme — to the tune of $45 trillion. An entire generation of millennial investors is prioritizing companies which can show solid ESG results (although how to measure those results is still an open question).

But the ESG and impact investing space has, until this year, been quite separate from global development. For one thing, ESG is relevant in every market, not just the lowest-income countries, so it is naturally skewed to the most advanced economies.

For another, ESG has been heavily weighted to environmental factors and less focused on the social issues more relevant to global development. As for impact investing, the private investing side of ESG, it remains comparatively small in low-income countries and has only marginally connected to broader global development efforts.

The gush of funding for ESG investments and the relevance of global supply chains — including agriculture, extractives, and tourism — will this year make ESG and impact investing newly relevant to the global development industry. Look for many more connection points this year, from NGO partnerships to new metrics and standards to new funds.

Localization comes of age

The idea of getting funds directly in the hands of local organizations closest to the communities they serve is not new. But the so-called “localization” agenda has had mixed results, even with prominent efforts by subsequent U.S. Agency for International Development administrations (see “USAID Forward” and, more recently, the “Journey to Self-Reliance”).

Things are changing. For one, 2020 was the year that “decolonizing development” became a household term among development practitioners. For another, it’s becoming easier than ever to identify credible local organizations and fund them directly.

As private philanthropy takes off, the kind of giving practiced by Mackenzie Bezos in the U.S. may become more possible across the world, leading to significant flows to organizations based in lower-income countries.

This year, look out for existing online platforms — as well as new initiatives — to seek to capitalize on these trends, including the pandemic response, to advance the localization agenda.

Internet connectivity takes center stage

If there’s one thing pandemic lockdowns emphasized, it’s the importance of an internet connection. With it, schools, medical care, business, and employment can go on. Without it, a lockdown is effectively a shutdown.

This new found realization, along with the reality that internet connectivity is a problem that can be solved with private sector investment and government regulation (and with minimal government funding), will put wind in the sails of connectivity efforts this year.

If there’s to be a massive initiative this year that goes beyond health, internet connectivity could be it. Expect internet connectivity to feature even more prominently at this year’s — still largely virtual — global convenings, from the World Economic Forum to the U.N. General Assembly.

About the author

  • Raj Kumar

    Raj Kumar is the Founding President and Editor-in-Chief at Devex, the media platform for the global development community. He is a media leader and former humanitarian council chair for the World Economic Forum and a member of the Council on Foreign Relations. His work has led him to more than 50 countries, where he has had the honor to meet many of the aid workers and development professionals who make up the Devex community. He is the author of the book "The Business of Changing the World," a go-to primer on the ideas, people, and technology disrupting the aid industry.