Global development in 2014: 6 things to watch out for

You know the old saying that it’s dangerous to make predictions, especially about the future? Well, for the new year ahead and in a fast-changing global development landscape, I’m going to chance it. Here are six things to watch for in 2014. 1. Pressure eases on official aid budgets, but donor reform continues apace For some of the world’s biggest bilateral donors, the first years of this decade have been spent largely on the defensive when it comes to aid budgets. In the wake of the financial crisis and global recession, governments in the developed world were caught in bitter debates about austerity, with foreign aid imperiled. Fortunately, strong coalitions built over the prior decade largely protected investments in global health and development. In the United Kingdom, a tough austerity program led by a conservative government specifically ring-fenced the aid budget. In Canada and Australia, conservative governments have put aid budgets under real pressure, but made no major cuts. Even liberal governments, such as the Hollande administration in France, felt the pressure but managed to keep their aid budgets steady. The European Commission’s seven-year budget set in 2012 included, after some struggle, a small increase in development aid. In the United States, 2013 ended — at long last — with a two-year budget deal that preserved the Obama administration’s development commitments. As we enter 2014, the global economy is set to improve significantly. The U.S. and U.K. are likely to see substantial economic growth, and much of Europe is rebounding too. Japan is experiencing significant growth and economic optimism for practically the first time in two decades. This global rising tide will improve fiscal conditions across the developed world and provide some breathing room for advocates who have been fighting in the trenches just to preserve aid budgets. But the donor reform movement — much of which was propelled by the need to show “value for money” in times of austerity — isn’t going away. That’s because the underlying factors that have led to a wave of reform at nearly every major donor agency in the world aren’t tied just to the budget environment. They include the reality that many developing countries are now middle-income economies and powers in their own right; the emergence of business models for development that are challenging the traditional project-oriented approach; new technologies and innovations that both empower the poor to have more voice in their own development and question the often top-down approach of some development financing; and the growing role of the private sector (the subject of my next prediction). 2. Global corporations get a seat at the development policy table The line from aid ministers about how small aid flows are as a percentage of total investments in developing countries cues eye-rolling nowadays, as it should. Of course the situation is more complex than that, particularly when you look at the data on a country-by-country basis. But donors also look at engaging with global corporations in a similarly simplistic way. For the most part, big corporates are called in to help make the case for development aid to their governments. And they are increasingly brought into partnerships that connect development goals to their business goals. But when it comes to setting overall development policy, global corporations barely register. That’s likely to change. As companies increase the scale of their social investments and begin baking sustainability into their businesses, they have more at stake in the developing world and in development. Expect them to turn their political influence and lobbying power to push for a seat at the table when the World Bank, U.S. Agency for International Development, U.K. Department for International Development and others set their development agendas. 3. Individual philanthropy grows into a serious force Rising global economic growth has benefited the rich above all else. There are now some 1,400 billionaires in the world and 12 million millionaires. As these wealthy individuals have begun setting up foundations and trying to outdo each other in both the scale of their giving and the results they can show, the global development community is starting to see the impact. This is likely to be a breakout year for individual philanthropy. For one thing, the improving global economy will put rising income inequality into even starker relief; and in this environment, the wealthy may be more sensitized to increasing their giving. For another, now that Michael Bloomberg is no longer mayor of New York City, he is turning much of his attention and his $20 billion fortune to philanthropy. While the Gates Foundation has dominated the foundation space thus far, look to Bloomberg Philanthropies (a foundation already giving on the scale of the Ford and Rockefeller Foundations) to make its own mark and to drive a new agenda on the global stage. And it’s not just wealthy individuals for whom 2014 could be a breakout year; crowdfunding may well come into its own this year. Facebook’s launch of a “donate” button last month that lets users make credit card payments to nonprofits right from their fan pages is no small thing. And now that Kiva, DonorsChoose, Kickstarter and other crowdfunding platforms are reaching a point of maturity, people are becoming more and more accustomed to making small donations via their cell phones, apps and websites. Our estimate is that approximately $2 billion has already been crowdfunded for development and the rate of acceleration is significant. This may well be the year that nonprofit leadership, new technologies and the changing attitudes of small-dollar donors combine to make crowdfunding an industry shifting trend in 2014. It’s something we’ll be following closely at Devex. 4. Pendulum swings from BRICS to fragile states This decade began with much focus on the BRICS (Brazil, Russia, India, China and South Africa). Last year, there was buzz of a BRICS bank to rival the World Bank. There was a focus on the BRICS as bilateral donors and on the huge percentage of the world’s poor that live in BRICS countries and for whom a different development approach would be needed. The result of this focus was a sense that so-called “traditional development” was becoming less important. That’s likely to change in 2014 as the new focus becomes the rising tide of insecurity and fragile states — places where long-standing development organizations and the aid workers and development professionals who know how to work in the most difficult circumstances are irreplaceable. In 2013, DfID announced it would pull its funding from South Africa and India, two of the BRICS, as it seeks to focus its funds where they are needed most. Look for more of this from other donors, as Syria, Egypt, Somalia, South Sudan, Central African Republic, and even Myanmar and Ukraine take center stage. The tragedies and hopes in these states undergoing various degrees of instability will reinvigorate NGOs, development implementers and aid workers who have sometimes felt sidelined in the past few years as they were told countries like India and Brazil could handle their own development thank-you-very-much. And the sheer scale of instability this year is likely to ignite a fresh debate about how a development paradigm so shaped by Iraq and Afghanistan can adapt to new challenges in countries where development workers are on the front lines alone. 5. Localization trends accelerate Just a few months ago in Nairobi, Devex and our partner The Rockefeller Foundation convened a partnership forum and career fair. The purpose was to operationalize the growing policy trend toward a larger role for local organizations in the development of their own countries. The gathering — which included professionals and local organizations from Kenya, Uganda, Rwanda, Somalia, South Sudan and more — brought home the degree to which trends toward localization are just beginning. Major international NGOs and development consulting companies have begun to take corporate decisions to move significant decision making and capacity to their offices in key developing world hubs like Nairobi. While those decisions have been made, the process of shifting resources there is still in its infancy. Look for more local offices of international organizations to sprout up in the developing world this year, and for existing operations to grow in scale and importance. What started as a shift of funding by DfID, USAID, EuropeAID and others to local entities has led to the growing recognition that a strong local presence and capable local staff is now a comparative advantage for international NGOs and development implementers. And that has created a race for local talent and partnerships that will only accelerate this year. 6. On a more personal note: Devex continues to grow While Devex was originally founded at the Harvard Kennedy School in 2000, the media platform and online professional network as you know it now really came into being in 2009 with the launch of Devex.com. In four brief years, we have grown fast — sometimes faster than we could handle — as we sought to meet the demands of an expanding global development community eager for industry news and connections to each other. In 2013, we crossed an important threshold — more than 500,000 development professionals around the world are now Devex members. In addition, more than 1,000 leading donor agencies, foundations, corporations and NGOs are organizational members of Devex. Our team of reporters and analysts you’ve come to rely on has grown in numbers and abilities, as have our skilled professionals working in technology, social media, account management and more. Today, there are 120 Devexers around the world working to serve you and to help the global development community do more good for more people. In 2014, we anticipate another year of rapid growth. Look out for another Partnerships Forum and Career Fair in Nairobi this year, as well as one in Manila this spring. Modeled on our successful online partnership Land Matters of 2013, this year we will launch other online initiatives focused on key topics, including She Builds, which will focus on women’s empowerment. Our new, state-of-the-art funding database launching this week provides a unique window into funding trends, donor strategies and future project opportunities, as well as tools that make identifying the right procurement and grant notices easy. And, as always, we will continue to keep our finger on the pulse of the trends and big stories — including those I couldn’t predict! — that will make this year remarkable. From all of us at Devex, we wish you an impactful and productive new year. Thank you for all you do for the world and for being a Devex member. We greatly appreciate it. 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