Taking stock of global development: What's working and what's stuck

DAVOS, Switzerland — Picture the attendees at the World Economic Forum Annual Meeting in Davos, and Hindou Oumarou Ibrahim is probably not who comes to mind. The 36-year-old indigenous leader spends most of the year as a nomadic pastoralist in her native Chad, foraging and surviving off the grid as people have done for millennia. But each January, she makes the trek to Chad’s capital N’Djamena and then on to Paris, Zurich, and finally the frozen streets of Davos, Switzerland.

Ibrahim lives in the Lake Chad region, home to about 40 million people and some of the worst development statistics in the world, including rampant conflict. Not incidentally, she tells Devex, the once-massive lake is now almost entirely dried up; it’s been reduced by 90 percent since her parents were young.

The WEF meeting in Davos is full of grim statistics, but they are easy to ignore until you hear stories first hand from someone who has witnessed her own home turn from verdant forest to desert virtually overnight. Ibrahim is a charismatic harbinger of what is to come for the world if we don’t change the paradigm.

The kind of profound change that is needed requires a new development model, one that Sustainable Development Goal 17 describes as including country ownership, domestic resource mobilization, private sector partnerships, and innovative financing mechanisms. In conversations with business and global development leaders attending WEF’s annual meetings, it is clear there are areas of significant progress when it comes to the new era envisioned by the SDGs, and others where stories similar to Ibrahim’s are not yet breaking through.

What’s working

Among the most successful private sector engagements are the big, global health-focused alliances: Gavi, the Vaccine Alliance; the Global Fund to fight AIDS, Tuberculosis and Malaria, Global Financing Facility, and CEPI. Three of the four were launched at earlier WEF annual meetings and all have private-sector membership and market-based business models. From conversations with the leaders of all four institutions last week, it was clear they continue to make significant progress.

All are in fundraising mode, with replenishments coming up or in process. Peter Sands, the Global Fund’s executive director, faces the most significant challenge: raising a record $14 billion for the fund at a time of political dysfunction in nearly all the main donor countries. He’s making a three-pronged case for the money: that epidemics can get worse without it; that poor countries are kicking in their share; and that the fund tackles disease by strengthening health systems, making it one of the best aid buys in the world.

Gavi has several months before it must begin rattling the cup and its stellar record would make replenishment an easy sell in normal times. GFF is in the midst of a rolling replenishment and is seeking to double the $1 billion it has raised so far. The facility dangles cheap loans in front of middle-income countries, but requires the money be used for smart investments in health.

Mariam Claeson, GFF’s director, told the audience at a Devex and MSD for Mothers’ event on the sidelines of the conference that GFF is beginning to tap investment funds from capital markets using the World Bank’s strong credit rating. Though there’s no shortage of investment capital for the sustainable development bonds the World Bank Treasury is floating, the challenge is crafting bankable health plans in each country that will generate the required results.

CEPI celebrated its two-year anniversary in Davos this year and it has matured its model and is beginning to show progress. The initiative has 17 vaccines in its pipeline and has raised $740 million out of its $1 billion target. It is working closely with the biotechnology community to utilize novel vaccine platforms for diseases such as chikungunya and Rift Valley fever that would not normally be commercial priorities.

While these global health alliance models are working, it is less clear whether similar ones can be extended successfully to other sectors and if funding levels can be sustained for these four initiatives. The Bill & Melinda Gates Foundation is a key player in all four and Bill Gates used his platform in Davos to focus on the importance of funding these alliances.

What’s showing promise

The Gates Foundation’s ubiquity, however successful, points to the importance of finding ways to crowd in other philanthropists and to work in concert to solve global problems. So-called “collaborative philanthropy” is one answer, according to some Davos-goers, with Co-Impact and the END Fund both active during the week.

It is too early to say these models are working, but there is an expanding number of collaborative philanthropy initiatives and more money is being raised. In fact, Co-Impact announced its first round of grants earlier this month, totaling $80 million and impacting an estimated 9 million people.

Of course, the truly big money is not in philanthropy but in capital markets, and Bank of America’s Vice Chair Anne Finucane declared that the world has reached “a tipping point” in the billions-to-trillions transition so often talked about. She used the example of WaterEquity raising $50 million from Wall Street investors to fund water, sanitation, and hygiene infrastructure loans for some of the world’s poorest families. In fact, Water.org and WaterEquity’s co-founders Matt Damon and Gary White were in Davos making the case for more.

Those kinds of innovative financial instruments have gained real traction: There are now too many examples to easily count and banks such as Credit Suisse even have dedicated teams designing them. The scale of funding through these arrangements remains a tiny fraction of traditional official development assistance, but the trend is clear. A report issued at Davos by Devex and MSD for Mothers includes data from interviews with 500 global health practitioners and shows that trend exists in health too.

Perhaps the biggest opportunity for private sector change is not in raising funds for development-focused investments, but rather ensuring all business is oriented toward the SDGs and not just the bottom line. Nonfinancial metrics that take into account environmental, social, and governance impacts are, business leaders say, no longer niche. They are contributing to more long-term thinking and a key part of the paradigm shift away from a global economy that values quarterly profits above all else.

One encouraging case in point comes from Gilbert Houngbo, the president of the United Nations’ International Fund for Agricultural Development, who told Devex he sees more private sector interest in investment in African agriculture than ever before, including in the productivity of smallholder farmers.

What’s not moving fast enough

For all the attention to billionaire philanthropy and all the billionaires in attendance at Davos, it’s striking how few are significant donors. There are more than 2,000 billionaires in U.S. dollars — yet less than 10 percent have signed the Giving Pledge and only a handful are giving a significant percentage of their wealth away each year.

As a result, many of the major global initiatives highlighted last week repeat the same list of donor backers, with Bill and Melinda Gates and Michael Bloomberg among the most prominent. There are a few others not represented because they are donating large sums in their own way, from George Soros in democracy building — he was at Davos again this year — to Priscilla Chan and Mark Zuckerberg in technology for global health and education.

Nonetheless, the vast majority of well-known billionaires are still not major donors to global development, even with all the proven, cost-effective ways they can save lives at scale. The Global Fund replenishment of $14 billion aims to reach just $1 billion from private sources, including the Gates Foundation, which will make up the vast majority of that amount. What would seem an obvious opportunity to make a positive impact at scale isn’t yet attracting billionaires waiting on the sidelines.

Similarly, domestic resource mobilization — an industry term for getting low-income governments to spend more tax revenue on health, education, and other social services — remains a point of discussion more than a reality. Apart from important examples, such as increased health spending in India and Nigeria, domestic resource mobilization remains an unfulfilled opportunity across most middle-income countries with high burdens of poverty.

The WEF Annual Meeting is key not only for launching prominent alliances, but also for reframing issues or hoisting them on the global agenda. This year, four issues seemed to attain a new level of prominence — in large part because not enough is being done about them.

The first two are closely related but don’t entirely overlap: food systems and oceans. Organizations, including the EAT Forum, Cargill, Gastromotiva, and The Rockefeller Foundation, have zeroed in on the opportunity to eliminate food waste, connect nutrition to broader themes such as climate and entrepreneurship, and recast food from a technical issue to a cultural movement.

The Salesforce Foundation and the Friends of Ocean Action coalition made a splash with their ocean-focused content and events, ensuring all conference-goers absorbed the prediction that oceans will have more plastic than fish in them by 2050 on our current trajectory. That, of course, is an environmental catastrophe but also a threat to human health: Half the planet, particularly many low-income communities living near coastal areas, rely on fish for food.

The other two issues that burst onto the scene at Davos this year are similarly related: mental health and disability inclusion. There was a noticeable push this year to remove stigma around mental health and begin mainstreaming solutions. Inside the Congress Hall, participants could try out a “friendship bench” from Zimbabwe with a therapist ready to have a chat with anyone who chose to sit down, and the Wellcome Trust and Johnson & Johnson were two participating organizations that made public commitments to focus on mental health.

Similarly, disability inclusion, a topic Devex has been focusing on extensively, was a key focus at Davos. Business leaders, including the chief executives of Accenture and Unilever, made the economic case for disability inclusion, pointing out that 1.3 billion people live with disabilities and they are 50 percent less likely to have a job.

What’s stuck

Davos is known as a place for dealmaking. But what about deals that relate to social impact?

One partnerships head for a major development agency complained that “we’re always trying to fit our agenda into their agenda,” suggesting that the business executives participating had higher priorities. And a participant in attendance claimed “half the audience” at a Bloomberg-sponsored side event left the room just as Matt Damon began speaking about water and sanitation. The implication was that development issues remain a side dish and big business deals the main course.

Kennedy Odede — CEO at Shining Hope for Communities, an NGO based in Kibera, Kenya, one of Africa’s largest slum — pointed out that when social impact deals are made at Davos and elsewhere, the communities that are impacted are too seldom at the table. “Private sector partnerships” is a refrain usually meant to refer to global corporations and not community groups or small- and medium-sized enterprises.

Another area where progress is hard to find is with fragile states. The private sector clearly has a major role to play, especially in the many fragile states with large extractive industries. While there was a new humanitarian finance initiative launched at the meetings this year, nearly all the development deals and private sector engagement remain focused on middle-income countries.

For companies from middle-income countries in Asia, especially China, there seems to be a tale of two Davos’. One development leader from the region shared her view that Chinese companies are some of the biggest in the world, but are totally divorced from the conversations on environmental, social, and governance issues and the SDGs. Similarly, another Asian leader worried aloud that there are enormous risks from the high debt burden that many low-income countries are taking on as part of China’s Belt and Road Initiative, a burden that could lead to less development borrowing capacity and reduced domestic resource mobilization.

The new era in global development — a time defined by both the SDGs and the rising nationalism that rejects their importance — will ultimately require another ingredient: urgency.

It’s something hard to spot among the global elite, but it’s palpable to anyone who hears Ibrahim’s story.

Update, Jan. 31, 2019: This article has been updated to clarify GFF’s sustainable development bonds.