Devex Executive Review JUNE 2012
We think so. The post-Zoellick World Bank is in flux.
We examine what Dr. Kim inherits.
Russian foreign aid: Act II
Devex Timeline: Rio+20: Highlights from Real problems. our coverage Rio solutions. this year
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Truly transformative Raj Kumar, president of Devex This year in global development began in Busan’s shadow. Many of us there wondered: Were there real commitments? But history will show Busan to be the frontier between traditional development aid and a new era of development partnership. The ground is shifting, perhaps faster than donor agency officials (and even our analysts here at Devex) have come to expect. If there is a word for what’s happened in global development in the first half of 2012, it must be “transformation.” A decade ago, reform of the traditional aid model was the stuff of academic seminars and musings over a pint after work. Yet here we are, a global aid industry – at $200 billion, triple its size from ten years ago – facing a new world in which “developing country” no longer neatly applies to aid recipients from Brazil to Indonesia. It’s those countries – the big emerging economies – that are stealing the show these days. It’s been their success that has made arguments against country ownership fall
away. Devex reports that DfID now spends upwards of 63 percent of its aid through governments like Rwanda’s, and even USAID plans to follow that lead. At the same time, donors are closing shop in emerging markets. This year’s OECD review of Spain’s aid program had this once improbable advice: refocus on countries that need you most. In this flux, an orderly transition of power at the grande dame of development – a passing of the World Bank’s gold keys from one Wall Street denizen to the next – was even more improbable. Instead, we saw a credible campaign by a candidate from a big emerging economy, replete with speeches, promises and an appearance on Fareed Zakaria’s show, with an altogether unexpected coda: the appointment of an NGO executive who cut his teeth in the small but revolutionary Haitian clinic of Paul Farmer and had no more involvement in banking than balancing a checkbook. Not sure if this is a new era? Enter Dr. Jim Kim. In Europe, aid ministers like Germany’s Dirk Niebel have seen the fiscal writing on the wall: A more commercial model of aid that includes the private sector can get popular support in these times. Niebel may be gone soon,
Quotables “It’s not good enough to say you know about poverty. You have to live it.”
- Rajiv Shah, USAID administrator
- Ngozi Okonjo-Iweala, Nigerian finance minister
“Most ofalone our grants I “Money does are not online. buy dare to find them, but most betteryou health. Good policies of them are“Most online.” of our grants are online. I that promote equity have a dare you to find them, but most chance.” -better Rajiv Shah, USAID administrator of them are online.” - Margaret Chan,
“It’s good to say you "[S]onot often theenough big resources to know about poverty. You have to support a country only come live it.”it is plunged “It’s not good enough to say when into severe know about poverty. You ha a stitch in time might -crisis, Ngoziwhen Okonjo-Iweala, Nigerian finance minister live it.” have saved nine."
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WHO director-general - Rajiv Shah, USAID administrator
- Helen Clark,- Ngozi Okonjo-Iweala, Nigerian finance minister UNDP administrator
“Money alone does not buy "[S]o often the big resources to better health. Good policies support a country only come that promote “Money equityalone havedoes a not buy when it is plunged "[S]o often intothe severe big resources better chance.” better health. Good policies crisis, whensupport a stitchaincountry time might only com that promote equity have a have savedwhen nine."it is plunged into seve - Margaret Chan, WHOin director-general better chance.” crisis, when stitch NGO efforts. Nearby, on both sides of the Red a Sea, in in time m but, as our correspondent Berlin reported recently, he’s - Helen Clark, UNDP Yemen and Somalia, it’s notadministrator so much question of NGO working to surgically implant public-private partnerships haveasaved nine." - Margaret Chan, into the DNA at BMZ. (At Devex, we’re much the WHOdoing director-general same, as faithful readers may know: Devex and USAID will soon launch a new website focused on the way business is transforming development.)
licenses but survival. Some aid workers - Helen have Clark,died and many have been forced out. The governance challenge in UNDP administrator these failing states has gotten more tangled this year and, along with Burma, will figure in our headlines in the coming months.
On this side of the Atlantic, In a governance challenge closer to home, this year saw a Hillary Clinton is also shakeup at the Global Fund. The delicious quip is true: preparing for her exit. She NGO efforts. Nearby, on both sides of the Red Sea, in but, as our correspondent in Berlin reported recently, he’s The World Bank is to be run by a doctor and the Global has elevated global developYemen and Somalia, it’s not so much a question of NGO working to surgically implant public-private partnerships Fund by a banker. The banker seems to have stabilized the ment near the top of the licenses Some aid workers have diedofand into the DNA at BMZ. (At Devex, we’re doing much the ds of NGO efforts. Nearby, on both sides the Red Sea, in but, as our correspondent in Berlin reported recently, he’s but survival. health institution and, notwithstanding the loss of a U.S. foreign policy agenda – many have been forced out. The governance challenge in same, as faithful readers may know: Devex and USAID will anda’s, Yemen and Somalia, it’s not so much a question of N working to surgically implant public-private partnerships funding round, news from the Global Fund is that it’s out no small feat in the Tea Party has gotten more tangled this yearhave and,died an a new the way business me soon launch into licenses but survival. Some aid workers thewebsite DNA atfocused BMZ. (Aton Devex, we’re doing muchthese the failing states of the woods (thanks to a private foundation in Seattle). era. But she may be alongwill with Burma, will figure our headlines the is transforming development.) s. This many have beenin forced out. The in governance challen same, as faithful readers may know: Devex and USAID Indeed, much of the transformation so far this year can be remembered most for her coming months. s once these failing states has gotten more tangled this year soon launch a new website focused on the way business traced to the Gates Foundation: The saplings of partnericonic and the On thisvisit sidetoofBurma the Atlantic, d along with Burma, will figure in our headlines in the is transforming development.) ship and countrychallenge ownershipcloser and outcomes came from path she forgedis there – one In a governance to home, this year saw a Hillary Clinton also Historic meeting: Hillary coming months. seeds it has planted since its founding. that will make it a major shakeup at the Global Fund. The delicious quip is true: forOn her exit. Sheof the Atlantic, Clinton and Aung San Suu Kyi preparing this side development focus Clinton this year. to be run by a doctorcloser and the has elevated Hillary global developndelast December in Yangon. In a isgovernance challenge to Global home, this year is alsoThe World Bank One can’t help but feel there’s much more to come in this Fund Theatbanker seems to have stabilized ment near the top of nk’s (Photo by: U.S. State Department) shakeup the Global Fund. The delicious the quip is tru preparingthe for her exit. Sheby a banker. truly transformative year, so stay tuned to Devex. Even as we cheer for change health institution and, notwithstanding the of a and the Glo U.S. foreign policy agendaglobal – – The World Bank is to be run byloss a doctor has elevated developin Burma, last year’s great round, news from the Global Fundseems is that to it’shave out stabilize no small featment in thenear Tea the Party ible Fund by a banker. The banker top offunding the hope for democracy – of the woods (thanks to a private in Seattle). era. But she may be nomy, health institution and,foundation notwithstanding the loss of a U.S. foreign policy agenda – Egypt – continues to block Indeed, of the round, transformation so far yearFund can be rememberedno most forfeat her in the Tea e on funding news from thethis Global is that it’s small Partymuch traced to the Gates Foundation: The saplings of partnericonic visit to Burma and the ed of the woods (thanks to a private foundation in Seatt era. But she may be ship and country ownership cameso from path she forged there – one cut his Indeed, much ofand theoutcomes transformation far this year c remembered most for her Historic meeting: Hillary
Highlights from our daily breaking news coverage
Egypt takes foreign NGO workers to court
Ban Ki-moon begins 2nd term at U.N.'s helm with reduced core operations budget
Egyptian leaders sue 43 after clamping down on NGOs allegedly receiving illegal funding from abroad. The trial is set for Feb. 26 but later rescheduled
05 DfID chief Andrew Mitchell hints at ending aid to India – but “now is not the time”
EU announces it will open an aid office in Myanmar; donors resume aid shortly thereafter
Robert Zoellick resigns, setting up a race for the World Bank presidency
15 Bowing to international pressure, Sudan grants select UN and humanitarian groups access to South Kordofan
MSF pulls out of a district in Somalia's capital Mogadishu following the assassination of two employees
19 World Bank resumes aid to Yemen Donors pledge to up assistance after the country’s new government appeals for urgent help, but security concerns remain
Global Fund chief announces resignation Michel Kazatchkine says he will step down as executive director, paving the way for incoming General Manager Gabriel Jaramillo (above) to restore donor confidence after controversial media reports about the agency’s funding oversight
MCC signs its firstever second compact, with Cape Verde
Obama defends foreign aid Facing down Tea Party skeptics, the White House requests $51.6 billion in foreign affairs spending for fiscal 2013. Even so, cuts are likely in this election year dominated by budget woes
On International Women’s Day, USAID and FAO unveil their new gender equality policies (above: Hillary Clinton)
Friends of Syria meet World leaders pledge more aid, sanctions and meetings as President Bashar Assad’s violent crackdown on protesters continues
Save the Children and Oxfam sound alarm on Sahel Canada, Ireland, the EU and others have pledged aid to help ease the food crisis. The development community expects more focus on the Sahel as terrorism and instability increasingly plague the region
January - May OECD reports slight drop in ODA levels in 2011
U.S. and Afghanistan sign landmark 10-year agreement to cooperate in the areas of security, democracy and development
Sweden and Germany are among the few countries that increased aid
ADB exceeds target for replenishing its concessional financing facility, with $12.4 billion
Canada announces plans to cut $380 million in aid over 3 years (above: Minister for International Cooperation Bev Oda)
DfID resumes budget support for Malawi Other donors unfreeze aid as well after the country’s new president promises governance reforms
Edging out Ngozi Okonjo-Iweala, Jim Yong Kim is named World Bank chief
FAO and UNESCO criticized in Australian multilateral assessment (above: UNESCO Director-General Irina Bokova)
South Sudan officially joins the World Bank
Australia back-pedals on aid hike commitment Prime Minister Julia Gillard’s administration pushes back meetings its ODA goal (0.5% of GDP) from 2015 to 2017
U.S. President Barack Obama announces new $3 billion public-private alliance on food security prior to G-8 summit
Global Health Council, turning 40, announces it will cease operations
Polio eradication funding shortfall an “emergency,” World Health Assembly declares
After Zoellick, World Bank faces uncertain future By Phil Thornton, Devex correspondent
Standing in a Tanzanian field, Christina Mwinjipe stares at a cassava plant that has been destroyed by brown streak disease. As 200 million African farmers depend on the crop, better known in the West as tapioca, this disease could exacerbate problems of hunger and malnutrition on the continent. Together with cassava mosaic, it causes more than $1 billion of damage a year. For Mwinjipe, this means eating into her savings to buy cassava to feed her three children. Fortunately, help is at hand in the unlikely form of Microsoft billionaire Bill Gates. The Bill & Melinda Gates Foundation is spending $1.2 million on research into tackling the viruses that attack cassava. “There is a scientific innovation that lets us change the cassava crop so it is not susceptible to this disease,” Gates said during a recent visit to London. “It will take another three years to get these out into the field, but it is clear it is going to make a huge difference.”
One can quibble with the figures, but few argue with the premise that this makes for a radically different environment for the bank to operate in: Emerging countries that were once recipients have built up capital and skills that are enabling them to invest in countries typically seen as the World Bank’s clientele. During the last decade, the state-owned Export-Import Bank of China alone made more loans to sub-Saharan Africa ($67.2 billion) than the World Bank ($54.7 billion), according to Fitch Ratings Inc. Combined with an estimated $43.6 billion of investment in the five years leading to 2010, according to the Heritage Foundation, that makes China a major player. Granted, these are only estimates. But they raise major questions. “We see China, Brazil and other emerging countries offering finance to developing countries to build infrastructure,” said professor Ngaire Woods of Oxford University. “There are lots of examples of China swooping in — in Kenya, in Ghana and in Angola.” The bank is keenly aware of this. Read the full story at devex.com/news/zoellick
Meanwhile, in neighboring Uganda, the World Bank too is spending money on cassava, investing $30 million in improving production. A few decades ago, the World Bank — perhaps with other multilateral institutions — occupied this territory alone. Now, it looks very crowded. The bank’s emerging rivals The bank, which celebrates its 68th birthday this year, faces challenges its founding fathers could not have foreseen. In 1944, even amid postwar devastation, developed economies’ share of global gross domestic product was about 80 percent, with the United States alone accounting for more than 40 percent. By 2050, according to Goldman Sachs, the four emerging economies known as BRIC — Brazil, Russia, India and China — will account for more 40 percent of the world economy.
Dr. Jim Yong Kim (right) found out he was elected the next World Bank president while in Peru on April 16, where he met with Peruvian President Ollanta Humala (left) as part of a global listening tour. He will be the first person with no banking or corporate experience and the first career development professional to take the job. Read more at devex.com/news/kim
World Bank lending per sector, FY 2011 (in $ millions) Agriculture, fishing and forestry 2,128
Water, sanitation and flood protection 4,617
Transportation 8,638 Energy and mining 5,807
Public administration, law and justice 9,673
Health and other social services 6,707 Industry and trade 2,167
Information and communication 640 Source: World Bank
World Bank presidents then and now: Eugene Meyer 06/1946 - 12/1946
Barber Conable 07/1986 - 08/1991
John Jay McCloy 03/1947 - 06/1949
Lewis Preston 09/1991 - 05/1995
Eugene Robert Black 07/1949 - 12/1962
James D. Wolfensohn 06/1995 - 05/2005
George David Woods 01/1963 - 03/1968
Paul Wolfowitz 06/2005 -06/2007
Robert S. McNamara 04/1968 - 06/1981
Robert Zoellick 07/2007 - 07/2012
Alden Winship Clausen 07/1981 - 06/1986
Jim Yong Kim 07/2012 -
Robert Zoellick will leave his post as World Bank president June 30 after modernizing the multilateral lender and opening up its treasure troves of data to the public. (Photo by: Sebastian Derungs / World Economic Forum / CC BY-SA)
Executive Member Insight For Russian foreign aid, a second act By Pete Troilo, Devex director of global advisory & analysis Russian Official Development Assistance
When Russia hosted the G-8 summit in 2006, members of the media pointed out that the country was the sole G-8 member without a development aid agency. A year later, the Kremlin issued a concept paper that lays the ground for establishing the Russian Agency for International Development.
Total ODA (in million $) GDP Growth Rate Source: Russian Government and World Bank
RUSAID was supposed to be up and running by the start of 2012. What happened? In “For Russian foreign aid, a second act,” Devex outlines Russia’s development assistance priorities and challenges as it moves to regain status as a donor.
A few takeaways: The Commonwealth of Independent States, a region with cultural and historical ties with Russia, receives the largest portion of Russian aid. But the former Soviet republic is also engaging more with Africa and the South Pacific. Food security and global health have emerged as Russian aid priority sectors over the last decade. The country is one of the world’s leading providers of humanitarian assistance. Read the full story at devex.com/news/russia
Vladimir Putin, seen here at the 2009 World Economic Forum’s annual meeting, officially returned to the Russian presidency on May 7. (Photo by: World Economic Forum)
The World Bank isn’t the only multilateral bank whose leadership will change hands in July. Shareholders of EBRD voted in May for Suma Chakrabarti to be the bank’s next president.
Recruiting and retaining a high-quality staff can be challenging. Devex explores common challenges aid groups and their recruiters face in a series of articles we call Recruiting Insights — on everything from hiring innovators to hiring for hardship posts.
Also in May, WHO Director-General Margaret Chan was formally confirmed for a second term. Meanwhile, Pascal Canfin became junior development minister under new French President François Hollande. In April, Akihiko Tanaka took over JICA from Sadako Ogata, who is now chairwoman of the World Economic Forum Japan. The new WEF vice-chair is Josette Sheeran, who was succeeded by Ertharin Cousin at the helm of the World Food Program. Jose Graziano da Silva assumed his post as FAO director-general in early January, shortly before Juan Lopez Doriga took his oath as director of AECID, the Spanish aid agency. Other high-level personnel movements include: AfDB: Cecilia Akintomide, Rémy Rioux, Zondo Sakala and Sue Wardell, vice presidents; Emmanuel Mbi, chief operating officer; Tarek Rouchdy, auditor general. Alliance Green Revolution in Africa: Jane Karuku, president. EBRD: Hildegard Gacek, managing director for the southern and eastern Mediterranean region. European Commission: François Bourguignon, Ha-Joon Chang, Paul Collier, Simon Maxwell, Dirk Messner, Elizabeth Sidiropoulos, Jonathan White, and Lennart Wohlgemuth, members of the Scientific Advisory Board. Gates Foundation: Christopher J. Elias, president of the global development program; Kurt Fischer, chief HR officer; Haddis Tadesse, official representative to Ethiopia; Daniel Greenstein, director of postsecondary success strategy; Girindre Beeharry, director of India office.
Our latest story focuses on the challenges of — and best practices for — hiring locals. Five key takeaways: 1. Each organization does it differently – both in terms of the percentage of its workforce that is hired locally, and its recruitment methods. 2. Inconsistencies emerge when hiring is decentralized – the trick is to have headquarters coordinate, not make the decisions. 3. Diversity means more than having locals work with internationals – it's in how you mix people of different gender, ethnicities and backgrounds. 4. Career development and performance management is crucial to building local capacity. 5. A lack of cohesion between local and international staff can jeopardize project success. Read the full story at devex.com/news/locals
Global Fund to Fight AIDS, Tuberculosis and Malaria: Gabriel Jaramillo, general manager.
International Labor Organization: Guy Ryder, director-general.
Vice-President, Operations Sector II in Tunisia – African Development Bank (apply by June 25)
JICA: Hideaki Domichi, senior vice president. United Nations: Ján Kubiš, U.N. special representative for Afghanistan and head of UNAMA; Miloš Koterec, ECOSOC president; Yukio Takasu, undersecretary-general for management; Ameerah Haq, undersecretarygeneral for the Department of Field Support; David Muchoki Kanja, assistant secretary-general for the Office of Internal Oversight Services; J.V.R. Prasada Rao, secretary-general’s special envoy for AIDS in Asia-Pacific. World Bank: Pamela Cox, vice president for East Asia and the Pacific; Makhtar Diop, vice president for Africa; Deborah Wetzel, country director for Brazil. World Resources Institute: Andrew Steer, president.
CEO of FINCA Haiti – FINCA International (apply by June 30) Vice President, Finance & Operations in the United States – Institute for Sustainable Communities (apply by July 1) Executive Director in France – OECD (apply by July 2) Director of Operations in the United States – Architecture for Humanity (apply by July 4) CEO in Canada – Dignitas International (apply by July 20) Find out more at devex.com/jobs
UN Foundation and Devex launch sustainable development campaign By Rolf Rosenkranz, Devex news & careers editor
How do we provide energy, health care and other services to people around the world as the population grows and resources dwindle? It’s a challenge that was front and center this June at Rio+20, the United Nations Conference on Sustainable Development. In Rio, world leaders gathered to negotiate a blueprint for collaborative action that will guide the development community for years to come. For foreign aid leaders, now is the time to speak up to shape the social, economic and environmental agenda and with it, a post-MDG agenda characterized by inclusive, sustainable development. “The world stands at a crossroads,” as U.N. SecretaryGeneral Ban Ki-moon said March 22 in a message delivered by U.N. Development Program Associate Administrator Rebeca Grynspan to the Global Human Development Forum in Istanbul. “We need everyone — government ministers and policymakers, business and civil society leaders, and young people — to work together to transform our economies, to place our societies on a more just and equitable footing, and to protect the resources and ecosystems on which our shared future depends.”
That’s why the United Nations Foundation and Devex have partnered on Rio+Solutions, a campaign to raise awareness of key challenges — and solutions — around the high-level gathering in Brazil. Over the past few months, Devex has featured guest opinions from some of the world’s greatest thinkers and doers on issues such as sustainability and the green economy, providing solutions to challenges that featured prominently at Rio+20, including jobs, cities, food, water, oceans, disasters, health, science and technology, and women’s issues. Rio+Solutions is Devex at its finest: a space for leaders in global development to congregate, share ideas and discuss solutions to the pressing challenges of our time. Join our community and find out how Devex can help you navigate today’s ever-changing development landscape.
Rio+Solutions contributors include:
Kandeh Yumkella Director-general, UNIDO
Rajendra Kumar Pachauri Chairman, Intergovernmental Panel on Climate Change
Barbara Frost Chief executive, WaterAid
Bill Drayton CEO and founder, Ashoka
Rajiv Shah Administrator, USAID
Here’s what’s coming up... Devex will continue to bring you in-depth reportage and analysis from all corners of the world – from Tokyo to Jo’burg, Washington to Rio, and way beyond. In the coming weeks, we plan to cover the future of aid to Burma and Afghanistan. We’ll discuss the role of Big Pharma and mHealth in development cooperation, as well as the ongoing debate about vertical vs. horizontal aid. We’ll talk shop with Inter-American Development Bank President Luis Alberto Moreno and Akihito Tanaka, the new president of JICA. And of course we’ll bring you the latest on Rio+20 and the process to craft a post-MDG
framework for global development – and how it may affect your work. On our website and in our online publications, you’ll find the latest business news and best practices – on how to recruit for hardship posts and how to do business with the EU and other donors, for instance. Stay up-to-date with our exclusive analysis of procurement trends, and watch out for our predictions on the future of international NGOs in development cooperation. Our team of seasoned researchers, writers and editors are working around the clock – and around the world – to bring you the information you need to do good, and do it well, every day. Not yet a Devex Executive Member? Learn more about membership at devex.com/executive or call us at +18.104.22.16822 (ext. 100).
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Photo credits: José Graziano da Silva: UN Photo/WFP/Rein Skullerud; Robert Zoellick, Bill Gates: World Economic Forum/Sebastian Derungs; Andrew Mitchell: DfID/ Russell Watkins; Caroline Anstey, Janez Potočnik: European Union; Vladimir Putin: World Economic Forum/ Monika Flueckiger; Ollanta Humala and Jim Yong Kim: Peru Presidency; Kandeh Yumkella: UNIDO; Bill Drayton: Yusuke Abe; Barack Obama: White House; Ban Ki-moon: UN Photo; Rajiv Shah: USAID; Barbara Frost: WaterAid; Raj Kumar, Rolf Rosenkranz: Cade Martin; Pete Troilo: Pam Sta.Cruz; Phil Thornton: personal collection; Rajendra Kumar Pachauri: PopTech/Kris Krüg; Julia Gillard: MystifyMe Concert Photography; Ngozi Okonjo-Iweala: World Economic Forum; Helen Clark: National Assembly for Wales; Margaret Chan: WHO; Bev Oda: Megan Mallen; Gabriel Jaramillo: The Global Fund; Irina Bokova: Brazil Ministry of Culture; Hillary Clinton: U.S. Department of State
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