WASHINGTON — As development professionals and aid workers return to their offices, project sites, and refugee camps to start a new year, the external environment remains daunting. Consider spiraling humanitarian crises in Libya, Venezuela, and Yemen; slipping economic growth and poverty reduction in major middle-income economies, including the iconic BRIICS — Brazil, Russia, India, Indonesia, China, and South Africa; growing climate-related droughts and floods whipsawing the fortunes of poor farmers; and Ebola still in the Democratic Republic of the Congo. But these and other worrying trends go back some time. What’s more recent is our increasingly challenging internal environment.
“2020 may well be a pivotal year if the world is to have a chance of achieving the SDGs at the end of the decade.”— Raj Kumar, president and editor-in-chief, Devex
Donor country politics — particularly the U.S. presidential election and the impact of Brexit on the U.K. and Europe — seem destined to dominate global development dynamics this year. But for those of us with our eyes on the 2030 Sustainable Development Goals, 2020 will also be a key milestone for our collective effort to achieve them.
Advocates are aiming to look past immediate political gyrations to develop a decadelong plan. They are working to make 2020 a defining year with an organizing narrative that can see the global development community through whatever internal challenges we may face this year. But 2020 may well test to what degree the global development community can mount and anchor that narrative in a year of serious headwinds.
For global development professionals, it’s what’s happening to our own institutions and funding sources that is likely to dominate conversation this year. They may not be on official conference agendas, but aid industry dysfunction and tumult will be the subtext of every panel and the topic of every heated discussion wherever aid workers gather. Here’s some of what to watch for.
2020 is a year that may well begin with the world’s third-largest bilateral aid agency — the U.K.’s Department for International Development — losing its status as an independent agency. If it happens, it could be a harbinger of things to come.
DFID’s implementing partners are already facing some of the toughest business conditions in recent memory. And nearly 30% of the U.K.’s foreign aid is to be spent through other government departments. If DFID does ultimately get absorbed by the U.K.’s foreign affairs ministry, it will be following in the footsteps of its Commonwealth partners Australia and Canada, which did the same several years ago with mixed results.
The idea that foreign aid should serve foreign policy objectives isn’t new.
But nationalist, insular politics has new force these days. “Take Back Control” (the Brexit campaign’s slogan) and “America First” (President Donald Trump’s infamous rallying cry) cast political attempts to steer foreign aid in a new light.
In the U.S., after two decades of solid bipartisan support for global development, the Trump administration has put forward three budget proposals that slash foreign aid by approximately a third. Each was shot down by the U.S. Congress, but the administration has now tried two years in a row to simply not spend all the money legislators appropriated (using clever techniques such as rescission and daily spending caps).
This makes the 2020 U.S. presidential election — important for so many reasons — highly consequential for global development. In a way we have not seen for two decades, much hinges on whether President Trump is reelected and to what degree the U.S. Congress remains able and willing to thwart his foreign aid proposals.
The fraught political environment matters for global development beyond the budget. Migration is becoming a defining voting issue in a way that is scrambling traditional left-right politics in the U.S., Europe, and beyond. As more people flee drought and conflict, the politics of migration will increasingly intersect with the politics of aid — as we saw with the Trump administration’s aid cutoff to Central America last year. Just before the Christmas holiday, this prompted Congress to include language in the latest budget bill that forces the president to spend appropriated aid money in Central America. How this continues to develop in 2020 is a key question.
Reproductive rights are on the line in 2020 too. The global movement to roll back these rights gained tremendous steam in 2019 across the world. President Trump’s unprecedentedly restrictive “global gag rule” — shown to undermine health services overall — is yet another key issue at stake in the November election that global health leaders will be closely watching.
Aid funding and aid politics are of course tightly linked. Nowhere will that be more important in 2020 than at the OECD’s Development Assistance Committee, a body that makes the rules for what counts as aid.
British Prime Minister Boris Johnson has agreed to abide by the commitment of his predecessors to spend 0.7% of gross national income on aid. But like President Trump, he’s been looking for ways around it. That makes the DAC rules more important than ever.
Look out for renewed attempts this year — particularly by the U.K. but perhaps with the support of other OECD members — to water down the rules for what counts as aid. Investments that generate financial returns and funds spent on refugees inside a donor country’s borders are among the areas where aid rules could be weakened to allow donor countries to continue reporting growing aid numbers while spending the money on other priorities.
These and other kinds of funding technicalities (including currency fluctuations) will particularly matter for vaccines, nutrition, and family planning this year. Gavi must have its funds replenished this year, and the U.K. is hosting the fundraising summit in the spring. In the nutrition arena, previous donor commitments run out in 2020 and must be renewed at the Nutrition for Growth convening. And the big push for getting women access to modern contraceptives — known as FP2020 — ended last month with disappointing results. Look for serious introspection among its backers this year and perhaps a new approach to take shape.
The humanitarian system
“Overstretched” and “underfunded” have described the humanitarian system for several years now, as the number and severity of crises has multiplied. Traditional development U.N. agencies such as UNICEF and UNDP, as well as international NGOs and aid implementers, increasingly find themselves focused on crisis environments. Those trends look set to continue in 2020.
At USAID, 2020 will see the rollout of a new humanitarian bureau that combines two previously separate functions: Food for Peace (which provides emergency food assistance) and the Office of U.S. Foreign Disaster Assistance, or OFDA (which provides technical assistance and all nonfood emergency support). That humanitarian department will report to a newly created high-level role — an “associate administrator” — who will oversee humanitarian aid, conflict prevention and stabilization, and resilience and food security. President Trump’s nominee is Jenny McGee, a U.S. Air Force intelligence officer with a 31-year military career, who will need to be approved by the Senate this year.
The recent move toward cash assistance will be in the spotlight again this year, particularly in light of Brexit. The three biggest humanitarian donors — USAID, DFID, and ECHO — have been fairly united in their desire to move away from goods and toward electronic transfers, payment cards, and even cash. How Brexit might impact that coordination and to what degree progress continues to be made in this area will be a key issue to watch in 2020.
Cold War with China
There is a growing consensus in Europe, the U.K., and the U.S. on the need to confront China’s global development activities. That has raised the potential of a kind of Cold War that has already begun to pull in the aid community.
In particular, this year will see the launch of the massive new U.S. International Development Finance Corporation, a development finance institution akin to the U.K.’s CDC Group or the Netherlands’ FMO. The DFC (as it’s known) owes its very existence to the argument that the U.S. government needs new tools to compete with China’s Belt and Road Initiative. That includes offering a financing alternative to China for private sector projects such as infrastructure.
This confrontational view will continue to cause heartburn at the World Bank and Asian Development Bank in 2020. Both institutions provide loans to China, a practical reality that is now nonetheless politically fraught. The Inter-American Development Bank has found itself caught between China’s desire to play a bigger role in the institution and the U.S. government’s opposition. China’s role is likely to be a key factor in this year’s presidential election at the IDB.
For the European Bank for Reconstruction and Development, China’s growing role has evolved into an existential question. Because of this, Europe seeks to showcase its own development offering, particularly in Africa. That is raising questions about where EBRD should fit into Europe’s development architecture. The bank is London-based in the era of Brexit. And with the U.K. headed out of Europe this year, the EU will own just 55% of the only development bank that bears its name. This is background to a major 2020 debate in Brussels that includes the idea of merging the European Investment Bank’s development function with EBRD.
Billionaire philanthropy has been growing fast for several years, but in 2019 it began attracting more controversy. In 2020, this seems likely to intensify as the U.S. presidential election increases the focus on inequality and more billionaires announce commitments and find themselves in the spotlight. Among those to watch this year are the London-based Larry Ellison Foundation (it’s in the early phases of a ramp-up in activity), Bloomberg Philanthropies (given its founder’s presidential campaign), and the CEO leadership change at the Gates Foundation.
Collaborative philanthropy had a breakout year in 2019. NGO leaders this year will be carefully assessing the momentum of nascent initiatives such as Co-Impact, The Audacious Project, and Maverick Collective, as well as precursors such as the Giving Pledge and even follow-on grants like those the Lego Foundation made to winners of the MacArthur Foundation’s 100&Change competition. If collaborative philanthropy continues to grow — signing up new donors and rolling out major new grants this year — it could become a major disruptive force for NGOs, social enterprises, and global alliances.
A pivotal year
2020 may well be a pivotal year if the world is to have a chance of achieving the SDGs at the end of the decade. This year, will global powers head toward further confrontation or find common ground around a positive agenda? Will a global recession stymie poverty reduction in middle-income countries? Will climate-linked disasters propel more people to flee their homes and generate larger humanitarian crises? Global development professionals will be watching these issues no doubt. But with so much at stake for development institutions and funding, it’s the internal questions that are most likely to dominate our conversation. This is a year with a lot on the line.