Devex Executive Review Spring 2015 by Devex

Devex Executive Review Spring 2015

EMERGING DONORS What You Need to Know Also in this issue:

As Myanmar elections approach, donors gear up for next phase

General Electric: Human capital is the foundation for Myanmar's growth

Exclusive to Devex Executive Members

Quotables The Development Executive Review is exclusive to Devex Executive Members — global development leaders who are innovating and shaping the business of development and working hard toward a singular mission: to make the world a better place. To become an Executive Member, go to www.devex.com/executive-members.

“It is only through a combination of the young and the old, the traditional and the modern, that we can deliver the kind of future the next generation deserves.” - Ange Kagame, a budding philanthropist and daughter of Rwandan President Paul Kagame

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“We can't prevent everything; we can't be ready for everything but the way we respond really makes a difference.” - Judith Rodin, president of The Rockefeller Foundation

“I believe that the donor community can and must play an important role in supporting Myanmar's endeavor. We take this responsibility seriously.”

"To achieve good governance, we need transparency and accountability in our administrative mechanisms serving the public."

- Akihiko Tanaka, president of the Japan International Cooperation Agency

- Thein Sein, president of Myanmar

Embrace the Complexity Raj Kumar, president & editor-in-chief of Devex With just months until the Sustainable Development Goals (SDGs) are ratified, grumblings about their complexity are getting louder. It’s true: The vast number of goals, indicators and targets (17, 169 and 304, respectively) will make it all the harder to focus public attention in places like London, Berlin and Washington, D.C. But on-the-ground where development happens, the complexity has always been there. Take Myanmar, where Devex recently hosted an Executive Forum. No word better describes the situation there than ‘complex.’ After 50 years of isolation, Myanmar has begun a process of opening up to the outside world. The donor officials who joined our forum were broadly optimistic – much has been done in a short time to institute reforms. But just days before my arrival, small-scale student protests broke out and some were arrested. Upon leaving the country, the headlines were all about the Rohingya refugees – some stuck on ships off Malaysia, others found dead in mass graves on the Thai border. With national elections

looming this fall and opposition leader Aung San Suu Kyi still constitutionally barred from participating, and with simmering ethnic conflicts and land rights issues not yet resolved, Myanmar’s future is far from certain. It is how we respond to uncertainty like that in Myanmar that shows our true colors as development professionals. It’s not that we should be optimistic where there is no cause or that we should ignore the suffering and injustice that persists in places like Rakhine State. What makes a development professional different, what marks us as something other than a corporate professional or do-gooder, is our ability to look squarely at complexity and forge ahead through it. What the SDGs are telling us is true: The fate of humankind and our planet cannot be boiled down to a few bullet points, as much as that would make it easier to explain. Neither can the fate of Myanmar and its people. Myanmar will need to address the many intertwined issues holding back the country if it hopes to succeed. That’s the challenge that draws development professionals to places like this, and that is the reason we shouldn’t get hung up on simplifying the story. Yes, it’s complex. Embrace it.

Devex President and Editor-in-Chief moderators the opening plenary at the Devex Forum in Yangon, with speakers (from left to right) Toily Kurbanov, Country Director for UNDP; Gavin McGillivray, Head of the DFID Office in Myanmar; Chris Milligan, USAID mission director in Myanmar; and Nicole Barnes, VP of Business Strategy and Communications, RTI International.

Devex Timeline

Highlights from our development news coverage Germany approves largest-ever foreign aid budget increase

Aid workers count “small victories” five years since the deadly Haiti earthquake

12 U.S. President Barack Obama (above) seeks $50.3B for State Department and USAID

In Davos, U.N. launches $1B appeal for Ebola response (above: Special Envoy on Ebola David Nabarro)

Costa Rica's new international cooperation policy increases focus on south-south cooperation

The 2016 budget amounts to €7.4B in global development budget for 2016, up by €1.3B

18 In India, Prime Minister Narendra Modi’s (above) administration allocates $1.6B to foreign aid under its first full-year budget

21 IRD in hot water

Japan approves new aid charter

The reform allows the use of foreign assistance to finance overseas military troops but only for “nonmilitary” activities (above Prime Minister Shinzō Abe)

Busan hosts IDB annual meeting Governors of IDB and Inter-American Investment Corp. agree to consolidate the IDB Group’s private sector activities (above: IDB President Luis Alberto Moreno)

26-29

U.K. enshrines into law the pledge to spend 0.7 percent of GDP on foreign aid (above: Justine Greening)

Application for AIIB founding membership closes Australia, Germany and the U.K join the China-led multilateral bank, bringing founding members to 57.

Canada establishes Development Finance Initiative

Obama later names Gayle Smith (above with Shah) as the next administrator

Devex covers the World Bank spring meetings The bank’s proposed safeguards and procurement reforms dominate discussions (above: President Jim Kim)

17-19 Saudi Arabia pledges $274M for Yemen emergency response, matching the appeal made by the United Nations a day earlier

In Sendai, Japan, a new global framework disaster risk reduction emerges (above: Margareta Wahlström, U.N. special representative for disaster risk reduction)

February

March

Global Climate Fund says signed contributions total $4B, less than half of the initial pledge made in Berlin (above: GCF Executive Director Hela Cheikhrouhou)

DfID gets a new ministerial team following the Conservatives’ big win in the general elections, DfID

21 A 7.8-magnitude earthquake struck Nepal U.N. and the government later launches a $415M aid appeal

Released: 2nd Quadrennial Diplomacy and Development Review

ADB governors meet in Baku for their annual meeting

Australia slashes foreign aid budget anew, by AU$1B in 2015-2016 (above: Australian Foreign Minister Julie Bishop)

The governors give the go-ahead to the merger of 2 major facilities which is expected to increase annual loans and grants to as much as $20B (above: ADB President Takehiko Nakao)

02-05

AfDB has a new chief

Akinwumi Adesina (above) wins the election to succeed Donald Kaberuka WHO declares Liberia Ebola-free (above: Liberian President Ellen Johnson Sirleaf)

09 April

Justine Greening remains as UK secretary of state for international development

ADB and AIIB commit to “work together for Asia”

14-18

26-27

The initial capital is expected to be C$300M over five years (above: Minister of International Development and for La Francophonie Christian Paradis)

The new QDDR prioritizes preventing conflict, building democratic societies, promoting inclusive growth and combating climate change

In Kuwait City, donors pledge $3.8B in aid for the Syrian humanitarian crisis

Rajiv Shah leaves USAID

January

Guinea-Bissau wins more than $1B in donor funding for the next five years

Funding totals €30.5B ($34.2B) through 2020

USAID bars one of its biggest contractors from receiving new government funds due to alleged funding mismanagement

Gavi pledging conference meets $7.5B goal (above: Gavi CEO Seth Berkeley)

11th European Development Fund comes into force

Bill and Melinda Gates (above) launch a campaign to mobilize “global citizens” who care about the post2015 development agenda

OECD: 2014 official development assistance hit $135.2B

May

As Myanmar elections approach, donors gear up for next phase By Pete Troilo, director of global advisory and analysis, Devex

Since 2011 when Myanmar embarked on its historic democratic transition, the international development community has engaged in a near unprecedented effort to show how official development assistance can actually work to deliver results. Myanmar offered exciting prospects for development institutions and professionals — an almost unique opportunity to transform arguably the least developed and definitely the most isolated country in the fast-growing Southeast Asian region. Riding the back of reinvigorated diplomatic relations and high-profile visits by government leaders, international donors pledged their long-term commitments and vowed to apply assistance in the most constructive, meaningful and coordinated ways. Cautious pragmatism prevailed from the beginning. No one expected miracles in Myanmar. The environment for development work was unfamiliar, unpredictable and difficult. Despite an international assistance windfall, most segments of the development community practiced restraint, heeding the warnings and advice circulated in a 2013 report by Nathan Associates, which questioned if the outpouring of foreign aid to Myanmar over three to five years would “be more of blessing than a curse.” Today, some governments consider Myanmar a foreign policy achievement. By many accounts, the government in Naypyitaw has pursued a responsible and measured transition that sets the stage for broader reforms. Donors concede missteps but highlight the incremental progress in a country marginalized under an authoritarian military regime for decades. According to a recent national survey by The Asia Foundation, 62 percent of respondents “believe things in Myanmar are going in the right direction.” But there is no denying the disturbing news — violent crackdowns on student protests or ethnic conflicts — that lead some observers to believe reforms have

stalled and the country’s “opening-up” is more smoke and mirrors than reality. Some plainly doubt the government’s dedication to basic freedoms and inclusivity. The Asia Foundation survey also revealed public perceptions of the major problems — conflict, poverty, unemployment, and infrastructure, among others — as well as a “lack of social trust and deep political divide that could threaten the development of a common vision for the country.” Donor nations will watch the November 2015 elections closely, and the outcomes are likely toinfluence development planning. Already, development organizations report project slowdowns as national and local politics take over. Assuming elections are conducted freely and fairly and results are accepted, most analysts agree that Aung San Suu Kyi’s opposition National League for Democracy party will gain seats in parliament but not necessarily a majority. Either way, because the renowned opposition leader is constitutionally barred from the presidency and

U.M. Secretary-General Ban Ki-moon (right) meets with Aung San Suu Kyi (left), chairperson of Myanmar’s National League for Democracy.

there is no obvious alternative, there will be a period of uncertainty and apprehension between the end of parliamentary elections and the presidential election in early 2016. The new administration will then have to build the team, alliances and credibility to govern effectively. In all likelihood, these issues will extend well into 2016 and, once the dust settles, the development community could be dealing with an entirely new set of officials, priorities and systems. So there remains a precarious balance of foreign aid in Myanmar characterized by the complexity and opportunity that accompanies massive political transition as well

as increases in development dollars and actors. Still, the donor community operating there appears more committed than ever to Myanmar’s development. Development leaders during the Devex Executive Forum in Yangon described a country riddled with challenges and nuance but also emphasized Myanmar’s distinctive potential and their efforts to coordinate and scale development programs. And recognizing the importance of the upcoming elections, they agree that next couple of years represent a new phase that could make or break the longer-term development trajectory of the country. Read more about foreign aid engagement in Myanmar.

GE: Human capital is the foundation for Myanmar's growth By Pete Troilo, director of global advisory and analysis, Devex

The Myanmar economy continues to heat up as investors look to take advantage of the country’s more open market policies. A new foreign investment law and corresponding rules have provided a formal framework to govern and stimulate foreign investment, established business incentives, and increased investor confidence across a variety of sectors. To better understand the risk and reward tradeoffs of investing in today’s Myanmar, Devex talked to Andrew M. Lee, GE’s chief country representative in Myanmar. An emerging markets veteran, Lee is passionate about the positive role a company like GE can play in Myanmar’s development. How would you describe the current private sector investment climate in Myanmar? Myanmar is more attractive to foreign investors than it used to be a few years ago. Rules and regulations have been amended to accommodate investors to enforce more secured contracts, and reduce concerns when it comes to property rights and settling disputes.

Andrew M. Lee, GE’s chief country representative in Myanmar

The banking system has also been improved allowing businesses and the general public to regain their trust in the system. Nine foreign banks have been granted licenses to operate in the country, which would allow better flow of investments from outside Myanmar as well as improve banking practices within the country. What are some of the risks that jeopardize the country’s socio-economic growth?

One top constraint is bank borrowing where, according to the World Bank, only 1 percent of fixed asset investment costs are financed by bank borrowing, while 92 percent rely on their own funds. Almost nonexistent bank borrowing can curtail the growth of small and medium enterprises, and thwart entrepreneurs’ ability to flourish. Another risk to growth is Myanmar’s current low electrification rates, one of the lowest in the world. Access to reliable, stable and efficient power is still a major problem. Electricity is a prerequisite for economic growth. GE is committed to playing a role in improving the current situation by joining Myanma Electric Power Enterprises in repowering and upgrading two existing gas turbines in Yangon. The initiative will result in approximately 25 megawatts of additional power using the same amount of gas. Can you describe the current state of Myanmar’s health systems and infrastructure? Strengthening health care systems is critical for Myanmar’s economic growth. According to the World Bank, health care spending used to be one of the lowest in the world. The rapid political changes have contributed to a more liberalized health care system. The government has pledged to quadruple health care spending, which has opened up new opportunities for more FDIs in the health care sector. The GE Foundation announced in June 2013 that it would expand its Developing Health Globally program to include Myanmar. The initial work focused on decreasing the rate of maternal and newborn infection at government-operated, district-level hospitals and clinics, as well as strengthening other aspects of maternal care. GE partnered with the Ministry of Health in Myanmar and Jhpiego, an affiliate of Johns Hopkins University, to fulfill this commitment. GE delivered and completed the installation of medical equipment at major hospitals in Yangon. This is part of GE Foundation’s $7 million commitment to Myanmar to strengthen its health care system, improve its energy architecture and promote the development of Myanmar’s human capacity. Read more at devex.com/andrewlee

Emerging donors: What you need to know Lorenzo Piccio, senior analyst, development finance & policy, Devex Claire Peracchio, digital business senior associate, Devex

The rise of emerging donors continues to be among the biggest stories in global development, with the share of funding these nontraditional players contribute to the industry increasing each year. That’s why Devex released its latest research report, “Devex Reports: Emerging Donors,” an in-depth look at the practices and priorities of development’s donors on the rise. Building on our leading coverage of development finance, Devex researchers looked at donor documents and conducted interviews with leading officials to evaluate and compare the total spending, key funding trends and regional and sectoral priorities of aid efforts in China, the United Arab Emirates, Turkey, South Korea, India, Brazil, Russia and South Africa. Be sure to download the full report to read all of our research, and in the meantime, here are some key findings on emerging donors that every development professional should know. Spending by emerging donors has seen sustained growth. Determined to reshape the global development finance landscape, emerging donors have been markedly increasing their foreign aid spending and should continue to do so. Despite slowing growth in these emerging economies, global development consulting firm Dalberg estimates that emerging donors will account for 20 percent of all foreign aid by 2020, nearly doubling the 7-10 percent share these donors contributed in 2012. China remains a foreign aid juggernaut. China is the biggest player in the emerging donor space, with aid spending that rivals Western donors, and it spends billions more than the next biggest-spending emerging donor Devex profiled, the United Arab Emirates. China provided aid to 121 countries between 2010 and 2012, with more than half of that funding going to Africa, according to its latest report on its aid program. Chinese aid is also closely linked to the country’s strategic priorities — with its “win-win” approach to foreign aid, China ties aid to the purchase of Chinese goods and services. The United Arab Emirates is a standout. While it may not get as much press as China for its aid efforts, in the past few years the UAE has quietly scaled up its financial contribution to global development. At $5.4 billion, the UAE’s official development assistance budget in 2013 more than quadrupled over the previous year. Channeling most of its aid to majority-Muslim nations in the Middle East and North Africa, the UAE further formalized its development efforts by establishing its Ministry of International Cooperation and Development, its new development policymaking agency. Most spending by emerging donors is disbursed regionally. Emerging donors may talk about the global scope of their giving, but for those Devex profiled, foreign aid programs largely invest in projects in neighboring regions. India’s foreign aid program, for example, largely focuses on South Asia, with that region projected to account for 84 percent of total spending in 2015-16. It should be noted that China is an outlier here, since it’s taken a keen interest in African development, and particularly infrastructure projects. Based on the most recent figures, more than half of Chinese aid goes to Africa. Emerging donors’ sectoral priorities run the gamut. As development observers might expect, Devex found that emerging donors’ sectors of interest are driven by diverse geopolitical and economic concerns. That means these donors seek to take advantage of particular resources and knowledge of areas like health, education and infrastructure. Russia, for instance, has built programs that leverage the country’s understanding of the medical and education infrastructure of its partner countries in the former Soviet Union. Download the Emerging Donors report.

Recruiting Insight

Executive Appointments

What will the face of aid (workers) look like?

At the end April, U.S. President Barack Obama nominated Gayle Smith, senior director of the National Security Council, as Rajiv Shah’s successor at the U.S. Agency for International Development.

By Kate Warren, senior director and editor for careers and recruiting, Devex

New sources of funding, new actors and new technologies are quickly changing the way we do development. This led us to wonder, what will the next generation of development professionals look like and what will they need to be successful? In partnership with USAID and PSI, Devex recently conducted a survey of development professionals to see what tools, skills and approaches they think the next-generation of development professionals will need to thrive. One finding was clear: 83 percent of respondents believe that in 10 years, the technology, skills and approaches used by development professionals will be significantly different than they are today. The results paint the picture of a well-rounded, flexible professional who takes a holistic view of development work. Just as likely to be a venture capitalist or high-tech whiz as your traditional aid worker, the future development professional will need to be agile, nimble and constantly learning new skills. Here are three key findings from the survey and what it means for your organization’s talent needs:

1. Cultivating a highly diverse well of talent The majority of respondents (57 percent) believe localization will drive down the need for long-term expatriate development experts but increase the need for short-term expat development experts. Respondents predict people working in global development are more likely to be someone from a high-tech firm, social enterprise, corporation, large-scale fund or venture capital firm than they are today. To stay competitive, your organization may need to attract expertise from these nontraditional actors either through partnerships or short-term engagements.

2. Jack of all funders, master of none In 10 years’ time, professionals with a basic understanding of working with a wide range of funders will be more successful than those specializing in one, said 90 percent of respondents. This would be an obvious shift from the reality today where development organizations and their staff tend to specialize in a single donor. To help groom a more diverse talent force, organizations should consider bringing in expertise with more well-rounded funding experience and providing learning opportunities for their staff to work on projects and proposals from multiple funding sources.

3. Constant skill development critical to a professional’s success The number one piece of advice respondents gave to the next generation of development professionals is to invest in skills development and continuously upskill. The skills professionals wanted the most training and education in were mutlidisciplinary or cross-cutting approaches, new methods of financing, public-private partnerships, impact evaluation and data-driven and evidence-based programming. Organizations that invest in the development of their staff will not only better serve their mission but also be more competitive for the next generation of talent. Read more analysis of the Next-Generation Development Professional survey at www.devex.com/futureaidworker

Michelle Nunn, a former U.S. Senate candidate, will take over as president and CEO of CARE USA by July 1. She succeeds Helen Gayle, who will be the inaugural CEO of McKinsey Social Initiative. Other leadership changes: AECOM: Carla Christofferson, executive vice president and general counsel; Carlos Pone, chief executive for Africa AfDB: Akinwumi Adesina, president AfricaRice: Harold Roy-Macauley, director-general American International Health Alliance: David Greeley, president and cEO Clinton Foundation: Donna E. Shalala, president and CEO Consultative Group to Assist the Poor: Greta Bull, CEO DfID: Justine Greening, secretary of state for international development (reappointed); Desmond Swayne, minister of state for international development (reappointed); Grant Shapps, minister of state for international development; Sandip Verma, parliamentary undersecretary of state for international development Gates Foundation: Emilio Emini, director of HIV; Steven Rice, chief human resources officer Global Fund to Fight AIDS, Tuberculosis and Malaria: Jennifer Goosen, head of donor relations Global Impact Investing Network: Amit Bouri, CEO Grant Thornton Australia: Greg Keith, CEO Grant Thornton LLP: Billy Moore, CFO International Institute for Communication and Development: Suzanne van der Velden, managing director New Development Bank: K.V Kamath, president Pact: Christian Loucq, chief strategy and global engagement officer; Dorothy Scheffel, chief global programs officer Publish What You Fund: Rupert Simons, CEO STOPAIDS: Mike Podmore, director Tony Elumelu Foundation: Reid E. Whitlock, chief executive UNEP: Elliott Harris, assistant secretary-general and head of the New York office UNHCR: George Okoth-Obbo, assistant high commissioner for operations; Volker Türk, assistant high commissioner for protection United Nations: Eric Goosby, special envoy on tuberculosis; Stephen O’Brien, undersecretary-general for humanitarian affairs and emergency relief coordinator U.S. Global Leadership Coalition: William Davis, executive director VSO International: Philip Goodwin, CEO World Vision Canada: Michael Messenger, president and CEO World Vision U.K.: Tim Pilkington, chief executive

FPO Share this publication, keep it as a reference or recycle it knowing that Devex supports sustainable forestry. Photo credits: Raj Kumar, Pete Troilo, Kate Warren, Lorenzo Piccio, Claire Peracchio: Devex; Ange Kagame: personal collection; Judith Rodin: Remy Steinegger / World Economic Forum; Akihiko Tanaka: Rick Bajornas / UN; Thein Sein: Chatham House; David Nabarro, Christian Paradis, Hela Cheikhrouhou: Mark Garten / U.N.; Bill and Melinda Gates: Jolanda Flubacher / World Economic Forum; Seth Berkeley: Eskinder Debebe / U.N.; Shinzō Abe: Hudson Institute; Rajiv Shah and Gayle Smith: Pete Souza / The White House; Narendra Modi: Office of the Sri Lankan President; Justine Greening: Melissa Bunni Elian / Transparency International; Margareta Wahlström: Devra Berkowitz / U.N.; Luis Alberto Moreno: Presidencia Perú; Jim Kim : Center for Strategic and International Studies; Takehiko Nakao: Asian Development Bank; Ellen Johnson Sirleaf: Petty Officer 2nd Class Sean Hurt / U.S. Defense Department; Julie Bishop: Kim Haughton / U.N.; Aung San Suu Kyi: Rick Bajornas / U.N.

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