WASHINGTON — Looking back just a few years, it might have been hard to imagine the expanded role the private sector would play in global development conversations.
In 2017, the profile of the private sector grew, in part because of leadership changes in places such as the United States, where the election of President Donald Trump and his proposed budget cuts forced people to think beyond donor dollars. Companies also were faced with decisions about what to do if regulations didn’t push them to adopt certain climate or sustainability policies, and many said they would do so anyway.
Blended finance, impact investing, and innovative financing tools such as development impact bonds have been discussed more than in years past, with more people pushing the idea that blended finance, or blended capital, could be the way of development in the future.
At Devex we covered the impacts of the shifting political tides, the emerging technologies, the key events, and the new ideas that have impacted how companies and private money impact and influence global development. Here are some of the key stories of the year:
One of Devex’s biggest stories this year was an exclusive on potential plans for a new U.S. development finance corporation. Devex learned that efforts are underway in Congress and in the Trump administration to create a new development finance institution with growth potential and greater capabilities. If announced, the bank would signal a remarkable turnaround for President Donald Trump’s administration, whose 2018 budget proposal had sought to gut the existing development finance agency, the Overseas Private Investment Corporation.
The shape of the new agency is still unclear, but it would likely see an expanded OPIC and could absorb other agencies or functions related to development finance, such as the U.S. Trade and Development Agency and the U.S. Agency for International Development’s Development Credit Authority, according to several people with knowledge of the discussions. Here's what you need to know.
2. New DIBs bring in big donors and provide new tests of the model — and results come for one of the first DIBs
Village Enterprise launched a new development impact bond to roughly double the number of households it reaches in Uganda and Kenya through its program that seeks to reduce poverty through entrepreneurship and innovation. We took a look inside the the Village Enterprise DIB — and why both U.S. Agency for International Development and the Department for International Development have signed on as outcome payers.
In November, USAID also announced a new DIB aimed at reducing maternal and newborn deaths in India, during the closing plenary of the 2017 Global Entrepreneurship Summit. As a growing number of organizations and funders consider launching DIBs, the second year results from the Educate Girls DIB demonstrated the potential gains and challenges for the innovative financing tool.
For a refresher on DIBs, watch: DevExplains: Development Impact Bonds
When Mars Inc. concluded a five-year effort to map and evaluate its supply chain, the company realized its business would be in jeopardy if a few things didn’t change. The company is now fundamentally rethinking the way it does business in order to better safeguard its supply chain, support smallholder farmers, and build a sustainable business in the long term. Here's a look inside the changes and how the company is looking to partner with development actors.
Finance for development is rapidly evolving, bringing a host of new instruments — and a new lexicon. As development is increasingly funded in partnership with the private sector, finance-based instruments are becoming part of the mix, bringing with them terms that are adapted to the new context. But the same or similar mechanisms can have different names based on the industry or region. Results-based financing, for example, is also called performance-based financing or pay-for-success. Devex pulled together a glossary of the key terms to know.
At the conclusion of the U.N.’s International Year of Sustainable Tourism for Development, delegates gathered in Jamaica last month to discuss what’s needed to ensure that tourism is an engine of good job creation, inclusive growth, and sustainable development. The Organisation for Economic Co-operation and Development’s Development Assistance Committee recently included the World Tourism Organization in its list of official development assistance-eligible international organizations — meaning financial contributions to the UNWTO can be now considered and reported by donors as ODA.
In a Devex feature, we looked at the tourism industry’s potential to vastly improve lives and livelihoods in the communities in which it operates — but the necessity for an industry-wide effort. We also looked at Airbnb’s new development roadmap, strategies for turning developing nations into tourism hotspots, and how to pursued governments that tourism can help achieve sustainable social progress.
In other news on the UNWTO, Devex reported from China on the controversy surrounding the appointment of the new UNWTO secretary-general, Zurab Pololikashvili. His appointment was tinged with questions of foul play, a potentially flawed election process, and a strong-arm effort to demand consensus over a ballot vote.
In July at a blockchain summit organized on Virgin Group founder Sir Richard Branson’s Necker Island, the World Identity Network was launched. The new initiative aims to leverage distributed ledger technology — better known as blockchain — to catalyze progress toward universal identification. And while the launch may have taken place at a luxury private island, the aim is to benefit the 2 billion people living without recognized identification documents.
At the end of a year of conferences and reports taking on the challenge of how to extend affordable internet access to the 60 percent of the world's population who remain unconnected, Devex rounds up some of the key ideas that emerged around internet for all — including new ways to turn action into results, new business models, and why there’s no “one size fits all” solution.
Earlier this year, we also looked at how the drive to close the digital divide is turning some of the world's biggest technology competitors into collaborators. Here’s what the global development community contribute to the effort.
8. The biggest 2017 events focused on business transforming dev
This year, Devex was on the ground at some of the biggest events focused on the intersection of the private sector and international development efforts. At the start of the year Devex was at the World Economic Forum in Davos, which saw a number of announcements including in the lead up when the Business and Sustainable Development Commission released a new report calling for a new model for business. In April, the Skoll Foundation convened social entrepreneurs and other leaders committed to entrepreneurial approaches to global challenges in Oxford, U.K, with the theme of “Fault Lines: Creating Common Ground.”
At Singularity University's Global Summit in San Francisco, Devex reported on how "exponential thinking" can support innovation in implementing the Sustainable Development Goals. At October’s Social Capital Markets conference, The Rise Fund — launched in 2016 — was all over the agenda as investors and entrepreneurs gathered to discuss issues at the intersection of money and meaning. Entrepreneurs from around the world also gathered at the Global Entrepreneurship Summit in Hyderabad, India, where the key focus was on women’s entrepreneurship.
Read more Devex coverage in business transforming development.