WASHINGTON — From uncertainty in the U.K. aid environment to strong financial commitments to several multilateral institutions, the past year has been one of ups and downs.
As 2019 draws to a close, these are the year’s development winners and losers — and something in between:
The Global Fund to Fight AIDS, Tuberculosis, and Malaria
In its sixth replenishment, the Global Fund managed to raise about $14 billion — more than it had ever raised before.
The October pledging conference was held in Lyon, France, and French President Emmanuel Macron played an important role in convincing other countries to contribute or increase their contributions. France contributed about $1.4 billion to the replenishment, just shy of the $1.56 billion U.S. contribution.
Despite the Trump administration proposing to reduce the share that the U.S. would contribute, in the end the U.S. Congress chose to appropriate more money to the Global Fund, maintaining the roughly one-third U.S. contribution.
The Global Fund was able to successfully make its case in a difficult budget environment and now has the capital to accelerate its work during the next three years.
Replenishments and capital increases
Other replenishment efforts also proved successful this year, with the World Bank’s International Development Association and the Green Climate Fund surpassing replenishment targets and the African Development Bank securing a capital increase.
The African Development Bank’s shareholders approved the largest-ever capital increase for the institution — a 125% boost that brings the AfDB’s capital resources to $208 billion. The announcement at the fifth extraordinary meeting of the bank’s board of governors in Abidjan also represented a strong vote of confidence in President Akinwumi Adesina, who is currently running for a second term. Adesina said the board’s decision amounted to “a joyful day for Africa,” which will give the bank “greater stability for the future.”
IDA, the World Bank’s fund for low-income countries, secured $82 billion in commitments in December despite a lower pledge from the U.S. That total is a record for IDA and is about $7 billion more than its 2016 replenishment.
Dialogue around development finance took center stage throughout the year, particularly as conversations about the role of private capital in development and the role of development finance institutions continued to evolve.
While the U.N. and many other development leaders sounded the alarm that there is too little financing to meet the needs of the SDGs, several high-level meetings also shone a spotlight on issues from engaging financial markets to improving domestic resource mobilization and international accountability on taxation and debt.
In the U.S., much of the year was spent building the foundations of the new U.S. International Development Finance Corporation, though its launch was delayed by congressional budget drama. With a budget deal pushed through right at the end of the year, the new institution, whose CEO, Adam Boehler, was confirmed this fall, should officially open for business in the new year.
And in the European Union, a debate unfolded about who would lead the bloc’s development finance efforts — both the European Investment Bank and the European Bank for Reconstruction and Development are vying to lead a possible new European Climate and Sustainable Development Bank. In December, finance ministers supported a feasibility study to evaluate proposals from a report released in October about how to improve European development finance.
This year, the Nobel Memorial Prize in Economic Sciences went to a trio of development economists: Abhijit Banerjee, Esther Duflo, and Michael Kremer.
The three were recognized “for their experimental approach to alleviating global poverty” as a result of their research in pioneering randomized controlled trials. The win has certainly brought more attention to development economics and RCTs, even if there’s still some debate about when and if to use RCTs to test program effectiveness. The results-based financing movement that has been helped by the trio’s work continues to gain momentum through development-impact bonds and performance-based contracts.
The U.K. Department for International Development and its contractors
It’s been a bit of a turbulent year for the U.K. aid agency, which has seen three different leaders and now waits to learn about its fate.
With aid-skeptic Boris Johnson’s Conservative Party winning a decisive majority in the parliamentary elections earlier this month, there is an increased possibility that the department will be merged into the Foreign and Commonwealth Office. DFID and FCO were asked by the Cabinet Office to draw up plans for a potential merger, though what Johnson will decide to do with DFID remains up in the air.
It was also a challenging year for British aid contractors — some collapsed, while others downsized. The contractors blamed contracting reforms introduced in 2017, cash-flow issues due to procurement delays, uncertainty over future projects, and internal issues at some of the companies for the struggles.
Central American aid
Organizations working in the region are also nervous that, as funding comes back online, U.S. assistance will only fund programs aimed at deterring migration, which could damage other sectors and overall development progress.
Global health security
The Ebola outbreak in the Democratic Republic of the Congo continues, spurred on by continued conflict in the region, but other global health threats, including of vaccine-preventable diseases such as measles, made this a tough year for health security efforts.
There were outbreaks this year of dengue, yellow fever, polio, and measles, which aid agencies rushed to contain. Despite years of progress toward polio eradication, there was an increase in cases in 2019, including a vaccine-derived polio outbreak that continues in the Philippines. And with vaccine hesitancy on the rise, measles outbreaks continued to be a concern, with more than 400,000 confirmed cases in 2019.
United Nations financing
The U.N. has come up short on cash for the last several years, but this year's funding gap seemed worse, and U.N. chief António Guterres announced new “extraordinary measures” in October, including travel restrictions and escalator shutdowns at the U.N. Secretariat.
The U.S., long established as the U.N.'s most significant donor, has yet to hand over its mandated contributions, which totaled more than $10 billion in 2017. In December, the U.S. reportedly paid $300 million of its dues for 2019, but the U.N. is still facing a liquidity crisis and is $768 million short of its $2.85 billion general budget for 2019. Even if the funding materializes, the U.N. still has no sustainable funding model in place and could face funding shortfalls next year — and the year after that — experts told Devex.
As China continued to assert its leadership on the world stage, it also took leadership in global organizations while facing increased scrutiny over its development efforts.
In June, Qu Dongyu, China’s vice minister of agriculture and rural affairs at the time, was elected director-general of the U.N. Food and Agriculture Organization. His election, in which he defeated two other candidates backed by the European Union and the United States, was seen as a major win for China and evidence of its growing power at the United Nations.
As China’s influence has expanded, there are mounting questions about its development efforts. China faced a lot of questions this year about its Belt and Road Initiative and, with increasing debt levels, has come under scrutiny for opaque lending practices and uncertainty about the guidelines under which it lends. At the second Belt and Road Forum this past spring, China made several announcements related to concerns over BRI, including a new debt-sustainability framework.
Efforts to tackle climate change seemed to operate in two different worlds in 2019. On the one hand, climate action gained unprecedented popular support, with strikes and rallies regularly drawing hundreds of thousands of people into the streets to demand a more ambitious global response. On the other hand, formal negotiations to finalize the rules that will guide implementation of the Paris Agreement ran into walls of national interest, power politics, and government backsliding — ultimately leading to a disappointing outcome at COP25 in Madrid.
For the development community, a critical issue remains whether high-income countries will follow through on their collective commitment to provide financial and technical support to climate-vulnerable countries facing the daunting challenge of mitigating their own emissions while adapting to climate-change impacts. And as those impacts already materialize in the form of drought, extreme weather, and rising sea levels, governments are beginning to confront the reality that they will experience “loss and damage” due to climate change.
High-emitting countries have so far shown little willingness to create new financing mechanisms that might address those costs, which threaten to put additional pressure on already burdened aid and humanitarian budgets.
Michael Igoe, Amy Lieberman, and Teresa Welsh contributed to this article.