Traditional foreign assistance can no longer pretend to dominate the scene, writes Council on Foreign Relations Senior Fellow Isobel Coleman in an exclusive guest opinion. Read her full op-ed, and check out this excerpt:
Earlier this year, I visited a women’s savings group in Darshour, Egypt, a rural community a few hours outside of Cairo. Every month, the women – almost all of whom are illiterate – come together to put their hard-saved coins and bills into a lock-box and carefully enter the amount on a worn ledger. One woman proudly told me how through this savings group, she had accumulated enough money to purchase a washing machine for her family. Her husband was stunned, her children were delighted, and she has freed up hours of her day to start a business.
This savings group, and millions of others like it, is a small part of an essential trend in development of leveraging new resources for poverty alleviation. As delegates meeting in Busan to discuss aid effectiveness noted, handouts from rich countries to poor countries are a shrinking part of the development picture. Indeed, according to the OECD, private capital flows from Development Assistance Committee members to developing countries between 2000 and 2009 were more than double bilateral official development assistance (57 percent versus 27 percent). Private philanthropy, double-bottom line investing, and the mobilization of local resources are also playing a bigger role.
Deploying these multiple financing streams effectively, however, is a formidable challenge.
Read Isobel Coleman’s full op-ed, brought to you by Devex in partnership with the United Nations Foundation.