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Cindy Huang is co-director of migration, displacement, and humanitarian policy and a senior policy fellow at the Center for Global Development. She works on issues related to refugees and displacement, fragile and conflict-affected states, gender equality, and development effectiveness. Previously, Huang was deputy vice president for sector operations at the Millennium Challenge Corporation where she led the strategic direction and technical oversight of a $2 billion portfolio of social sector investments. She also served in the Obama Administration as director of policy of the State Department’s Bureau of Conflict and Stabilization Operations, and as senior advisor to the State Department’s counselor and chief of staff. In her latter role, Huang managed the interagency leadership team of Feed the Future, a presidential initiative launched by a $3.5 billion, three-year commitment to agricultural development and food security. Huang has also worked for Doctors Without Borders and the Human Development Center in Pakistan. She has a PhD in cultural anthropology from the University of California, Berkeley, an MPA from the Woodrow Wilson School at Princeton University, and a BA in Ethics, Politics and Economics from Yale University.
For so long we’ve operated under the prevailing assumption that greater economic cooperation among countries would guarantee peace and stability. But now, the world finds itself in a dramatically different context—one that is fractured socially, politically, and economically. Today, more than 2,500 top decision-makers from around the world are gathering to kick off the 48th World Economic Forum Annual Meeting in Davos, Switzerland to address these new challenges.
This year’s theme, “Creating a Shared Future in a Fractured World,” sets the stage for important discussions that prioritize global engagement and innovative solutions to address today’s challenges. Below, CGD’s experts weigh in to shed some light on the ongoing debates, with innovative evidence-based solutions to the world’s most urgent challenges, and also discuss what’s not on the agenda but should be.
For the policymaker looking to improve the delivery of benefits, or for the financial institution trying to expand its customer base, the gap between technical solutions and the situation of the average technology user represents fertile ground for the many new opportunities that the digital economy provides.
This year, the global migration crisis finds itself buried in the agenda. However, it will remain one of the most urgent issues for generations to come if international leadership fail to tackle human mobility with pragmatic, fact-based policy tools. Now more than ever, innovation is imperative. To that end, Michael Clemens has a unique proposal.
Meeting the Sustainable Development Goals will require a major ratcheting up of private finance. So far, that hasn’t happened. Strengthening the role of the MDBs in mobilizing the private sector should be high on the agenda at Davos, says Nancy Lee.
There is no shortage of skepticism about whether global leaders at WEF are serious about addressing the needs of the poor and vulnerable, writes Cindy Huang. Visible progress through core business commitments would send an important signal that refugees are a crucial investment, not a cost—and that corporate leaders are committed to taking action towards, not just talking about, solutions that deliver social and economic impact.
As more than 1,900 corporate leaders convene in Davos this week to “create a shared future in a fractured world,” they should prioritize the well-being of the 22.5 million refugees around the world. In a joint report with the Tent Foundation, I highlight how global businesses can move beyond corporate social responsibility to engage refugees in their core business, especially by including refugees in hiring and supply chains. As market leaders, policy influencers, and innovators, these businesses have assets that are not found in traditional humanitarian response and that can shape the broader environment for refugees’ access to labor markets.
The nature of forced displacement, and the political disruptions it has contributed to, has made the imperative to act more pressing than ever. Refugees have been displaced for an average of 10 years; for those displaced more than five years, the average jumps to over 21 years. There is a severe gap in funding for humanitarian response, and more than 84 percent of the world’s refugees live in developing regions, where governments are already struggling to meet the needs of their own citizens. Creating greater opportunities for the displaced to provide for themselves and their families is essential to any sustainable solution.
One of the most promising entry points for global businesses is including refugees in hiring and supply chains. As employers and buyers at the helm of extensive supply chains that reach deep into local markets, global businesses can play an important role in creating demand for refugee labor, products, and services. Commitments to support refugees should take place in the context of broader policy and investment initiatives that also benefit local communities, which are often experiencing high unemployment, flat or falling incomes, and other vulnerabilities. A notable example is IKEA’s partnership with the Jordan River Foundation, employing Syrian refugees and Jordanians to make hand-woven rugs, textiles, and other products which will eventually be sold in IKEA stores everywhere. Also in Jordan, Airbnb has launched a livelihoods initiative where refugees can advertise services like tours and other local experiences.
The potential for such efforts is largely dependent on conducive business environments and rights for refugees to work and own businesses. Host governments value their partnerships with global businesses—not only for the trade, investment, and services they offer, but also for their expertise and insight. As CEOs meet with government leaders at Davos, they should use the opportunity to forge collaboration across public and private sectors, including advancing policies that facilitate trade and investment and the economic inclusion of refugees. Donors, too, need to remain engaged, recognizing the public good provided by refugee-hosting countries and the support refugees often need to succeed, such as language classes and job matching services.
Global businesses can also lead the way on championing evidence on the economic benefits of refugee inclusion. Contrary to widespread misconceptions, refugees quickly become economic contributors to their host countries. Even in the short-term, refugee influxes typically have little to no effect on average wages or labor rates, and in some cases has caused wages for some native workers to rise by encouraging occupational upgrading.
Giving refugees the right to own a business can also bring substantial benefits to host communities. A recent study found more than 10,000 Syrian-owned businesses in Turkey, each employing 9.4 people on average. And what’s more, Syrians have invested more than $330 million in the Turkish economy since 2011.
There is no shortage of skepticism about whether global leaders at the World Economic Forum (WEF) are serious about addressing the needs of the poor and vulnerable. Visible progress through core business commitments would send an important signal that refugees are a crucial investment, not a cost—and that corporate leaders are committed to taking action towards, not just talking about, solutions that deliver social and economic impact.
Happy New Year, and welcome to 2018 from all of us at CGD.
Here at CGD, we’re always working on new ideas to stay on top of the rapidly changing global development landscape. Whether it’s examining new technologies with the potential to alleviate poverty, presenting innovative ways to finance global health, assessing changing leadership at international institutions, or working to maximize results in resource-constrained environments, CGD’s experts are at the forefront of practical policy solutions to reduce global poverty and inequality.
Watch our video to hear from our experts directly, and get an in-depth look below at their thoughts on the 2018 global development landscape:
The role of international cooperation
“We’re in a difficult time for development policy. People feel as if we’re in competition with the developing world, and I think we have to get back to recognizing that we have shared problems that we need to solve together. The premise of international development cooperation—now rightly enshrined in the Sustainable Development Goals—is that we are in this together: we all benefit from shared prosperity, openness, trade, security, values, rights, and justice. We are in danger of seeing the world as zero sum—in which improvements in some parts of the world are wrongly believed to be at the expense of success elsewhere. If we allow this idea to take root, it will undermine support for development cooperation, and take us in directions that erode global cooperation and the institutions that protect and sustain our shared security and prosperity.”
The effect of transitioning away from aid: asking the right questions
“I think 2018 is going to have to be about countries transitioning away from aid, and as a result it’s going to have to be about how we invest limited resources to get the best return for that investment. What happens to social spending commitments towards global health priority areas such as vaccinations and infectious diseases, as Ministries of Finance are increasingly asked to allocate their own domestic resources to replace diminishing donor funds? How do national health insurance funds procure pharmaceutical products and other health commodities as LMICs leave purchasing clubs such as Gavi and GFATM whilst having to deal with the growing burden of chronic diseases such as diabetes and cancer? How can technological and organisational innovation address the gap left by departing global purchasing arrangements?
What are the role and responsibilities of norm setting agencies such as the WHO in shaping resource allocation at national level as countries commit to and implement universal coverage for their populations? When are aspirational targets as the ones set through standard treatment guidelines, disease specific norms or the Essential Medicines List, justified and when do they distort local spending priorities and aggravate inequalities?”
New leadership, limited funding: an opportunity for global health aid
“In 2018, I’m looking forward to seeing economists more deeply embedded in all things global health. First, Peter Sands takes the helm as new executive director at the Global Fund to Fight AIDS, Tuberculosis and Malaria where the focus needs to be value for money—more impact, more rigorously measured, for the same or less money. It’s not just the right thing to do, it’s also a requirement for a portion of future DFID funding. To get this done, better economics should be deployed to inform resource allocation within programs, implement rigorous performance verification and evaluation approaches, and select most cost-effective diagnostics, drugs, and devices for purchase.
Second, at the World Health Organization (WHO), newly elected Dr. Tedros is finalizing his General Program of Work, a 2019-2023 plan that governs the rest of his tenure as Director-General. Faced with many demands and conflicting priorities from its member countries, WHO leadership could benefit from a chief economist (more on this here and here). The goal? To help prioritize demands amid scarce funding, to promote value for money in all policies, and to make the critical link with ministries of finance.
Third, with US tax reform passed, global health aid—like the rest of discretionary spending in the US budget—may face cuts, despite bipartisan support. In the UK, there’s also an uncertain outlook. It’s a clear case of ‘hope for the best, plan for the worst.’ And that’s where the dismal science can contribute: planning for these uncertainties and contingencies, and maybe finding some opportunities for efficiencies along the way. Look to recent work on aid transitions, priority-setting, domestic resource mobilization, innovative financing, value for money, fiscal policies for health, financing global public goods, and our forthcoming work on rationalizing future global health procurement should provide some fodder for policymakers to consider.”
“In 2018, I’m very much looking forward to continuing to explore China’s emergence as a leading development actor. Increasingly, this will mean defining a leading role on international policy commensurate with China's role as a leading development financier globally. In settings like Davos and institutions like the World Bank and the IMF, Chinese officials will inevitably be more prominent in 2018 and will just as inevitably come under increasing pressure to align Chinese policy on issues like sustainable lending with international norms. All of this will likely occur against a backdrop of US retrenchment in these multilateral fora.”
“I’m really excited about the relationship between technology and development, and to begin to examine how we can master the challenges that come with integrating a set of powerful new technologies and ensuring that they deliver the best options for poor people everywhere. Technological innovation has been a driving force of development and this continues to be the case. The current revolution in digital technology, big data, robotics, and artificial intelligence holds enormous promise to deliver development services more effectively and efficiently. However, these forces will need to be harnessed to ensure that the benefits flow to all segments of society in the developing world and the ‘losers’ from this transition are supported in ways that are economically, socially, and politically sustainable. This is a fertile and urgent area for conceptual and empirical research to underpin better policymaking by developing country leaders and the international community.”
“In 2018, I’m excited about expanding our research on the policies that will most effectively help refugees and migrants integrate into their host communities. At a challenging time for migrants and refugees, we are focused on analyzing and generating solutions that can simultaneously advance outcomes for refugees, migrants, and host communities. One of our main projects will highlight policies and programs that benefit sending and receiving communities, as well as emerging innovations such as the Global Skill Partnership. Building on our work on refugee compacts, we'll expand our work on how to achieve impact with new financing mechanisms that support developing countries, which host 86 percent of the world's refugees, to deliver services to refugees and citizens. A key part of this will be research on how to increase refugees' access to labor markets and more deeply engage the private sector, so refugees can become self-reliant by finding jobs and starting businesses—and spurring local markets in the process.
Latin America’s elections: choosing the right leadership to restore peace and prosperity
“In 2018, we will witness a huge cycle of presidential elections in Latin America. My big hope for the year is that the citizenship chooses the right leadership to be able to face the upcoming challenges. The recent elections in Chile (December) and Honduras (November) will be followed by six Presidential elections in 2018: Colombia, Mexico, Brazil, Costa Rica, Paraguay and, potentially, Venezuela. This highly charged electoral cycle comes at a time when populations’ discontent with the results of democracy is on the rise as reported by the reputable poll Latinobarometro. This change in attitude follows the significant deterioration in Latin America’s economic and institutional quality indicators in recent years, reflecting both the end of the period of super high prices of commodities exported by the region and the outburst of corruption and crime in many countries. In this environment, the risk of electing populist (notably in Mexico) or authoritarian leaders (notably in Brazil) is high. Populism and authoritarianism are not strange to Latin American history and their disastrous results on economic and social prosperity are extensively documented (with Venezuela’s recent experience being the latest example). The incoming elections will test whether Latin Americans can avoid repeating the painful mistakes of the past and will choose governments able and willing to put in place the needed reforms to restore economic growth and sustainably enforce the rule of law.”
“In 2018, what I would like to see is the gender gap in financial services reduced. The gender gap in financial services is stuck at a 7 percent gap globally and a 9 percent gap in developing economies. According to the latest data, while the number of bank account holders has increased globally between 2011 and 2014, the gender gap has not shrunk. In 2018 we can do better. So far, a lot more attention has been paid to particular constraints women face in accessing financial services, than to what women actually want from financial products. Focusing on women potential clients as a distinct market segment is a first step. Second, in addition to “know your customer requirements,” the industry should have “know your bank standards” as well, and examine potential gender biases, explicit and implicit, in the delivery of financial services. Banks should examine and correct internal gender biases. Encouraging signs include the commitment of development agencies (including an 8-agency gender data partnership coordinated by Data2X and GBA) and some banks to invest in data, both supply and demand-side, and in testing innovative financial products and delivery systems to increase women’s access to financial services (including experimental evaluation work we at CGD and partners are completing this year). These and other partnerships should help shrink the gap in the short term, especially if large private sector banks globally also act.”
A consistent theme of President Trump’s campaign and White House tenure is the imperative of ending foreign aid to countries that fail to support America’s policies. These threats were made explicit in advance of the United Nations General Assembly vote on a nonbinding resolution that rebuked the recent US decision to recognize Jerusalem as Israel’s capital. In a cabinet meeting, President Trump said: “this isn’t like it used to be, where they could vote against you and then you pay them hundreds of millions of dollars and nobody knows what they’re doing.” Regardless of whether the administration makes good on this rhetoric, such posturing undermines US credibility and strains its partnerships with other countries.
Since the foreign aid budget and architecture was established to help stem the spread of communism during the Cold War, it has been an instrument of US foreign policy. Studies of US aid and UN voting have found significant connections between the two, although aid-based punishments or rewards are used sparingly and vary depending on regime type, level of development, and trade relationship between the US and recipient country.
Given that US foreign aid has always been linked to national security, how much of a departure is President Trump’s approach from that of previous administrations? And what should we expect to happen to the 128 countries that voted to express “deep regret” over recent decisions on the status of Jerusalem? (Nine countries voted against the resolution, 35 abstained, and 21 were not present for the vote.)
There are at least three ways in which President Trump’s threat is qualitatively different from previous approaches to tying US aid to the diplomatic actions of recipient countries:
The blunt and sweeping nature of the threat. The threat to cut aid to allies and partners was not tied to broader security and foreign policy objectives. While peace between Israelis and Palestinians is a critical US goal, the treatment of this single issue as a litmus test for apparently all forms of foreign assistance to all countries is uniquely broad. Previous aid negotiations have largely occurred around specific issues and targeted leverage; for example, a threat to withdraw aid in the event of a coup or other serious actions that undermine democracy. During the Cold War, the US sometimes traded one-off infrastructure projects for a UN vote or other policy decision (such as cutting ties with Cuba). And US aid to small countries (such as Nauru and Palau) does largely explain their consistent support in UN votes, including this one. Before the contentious vote to include Palestine as a member of UNESCO in 2011, the US exerted diplomatic energy and cut off contributions to UNESCO itself (as required by law), but there were no reports of threats to bilateral aid. The nature of President Trump’s threat also breaks with precedent in the framing of the vote as a personal sign of loyalty or disrespect: US Ambassador to the UN Nikki Haley wrote in a letter to UN Member States “that the President and US take this vote personally.”
The public airing of the threat. The carrot-and-stick negotiations around aid generally take place in private to preserve the broader bilateral relationship. President Trump has embraced an unorthodox approach to foreign policy that combines bold and unpredictable rhetoric with a systematic undercutting of the State Department’s capacity and role. Many USAID posts also continue to go unfilled, weakening the overall US foreign policy toolbox. By making such broad threats publicly while undermining his capacity to act on them, President Trump raises the stakes for his own credibility in future aid and diplomatic negotiations—even if his primary audience was a domestic one. Ironically, the high-profile nature of the threat may have created pressure for countries to abstain or vote for the resolution to avoid the appearance of being too eager to toe the US line.
The lack of a realistic implementation plan. Much foreign aid is congressionally mandated—and it is difficult to imagine movement to end programs combating HIV/AIDS and promoting female empowerment because of this UN General Assembly vote. When President Trump’s FY2018 budget proposed to cut development and humanitarian aid by more than 30 percent, members of Congress expressed strong disapproval. But even if aid levels remain the same, the uncertainty itself hampers planning and frays partnerships. There is also the difficulty of developing and implementing a strategy for the many countries that receive foreign aid among the 128 yes votes, including key strategic allies. Egypt, for example, was a sponsor of the original United Nations Security Council resolution that the US vetoed earlier in the week, paving the way for the UN General Assembly vote Thursday. But as of FY2015, Egypt was one of the top five recipients of US foreign aid at nearly $1.5 billion (with a slight reduction to $1.4 billion in the FY2018 request). Even if it were possible, slashing the aid budgets of critical partners in the Middle East like Egypt and Jordan is counter to President Trump’s stated security, development, and humanitarian interests in the region. Not surprisingly, just after the vote, the State Department’s spokeswoman seemed to walk back the threat, saying that “the president has said yesterday that the UN vote is really not the only factor that the administration would take into consideration in dealing with our foreign relations…”
If past experience is any guide, key security partners will continue to receive development and security aid, while poorer countries may be squeezed a little to show that there are consequences for siding against the United States in multilateral forums. More significantly, as other experts have noted, this rhetoric may be paving the way for major cuts to the US contribution to the UN. This risk is heightened by pressure to cut spending to make up for reduced government revenue as a result of the new tax bill. Whether or not there is follow through on President Trump’s threats to aid, the overall effect of this failed gambit is to erode US credibility and nudge countries to seek more reliable and productive partnerships elsewhere.
What will you remember about 2017? The growing crisis of displacement? The US pulling out of the Paris agreement and reinstating the global gag rule on family planning? Or that other countries reaffirmed their commitment to the Paris agreement, that Canada launched a feminist international assistance policy, that Saudi Arabia finally let women drive?
CGD experts have offered analysis and ideas all year, but now it's time to look forward.
What's going to happen in the world of development in 2018? Will we finally understand how to deal equitably with refugees and migrants? Or how technological progress can work for developing countries? Or what the impact of year two of the Trump Administration will be?
Today’s podcast, our final episode of 2017, raises these questions and many more as a multitude of CGD scholars share their insights and hopes for the year ahead. You can preview their responses in the video below.
Thanks for listening. Join us again next year for more episodes of the CGD Podcast.
On a recent research trip to Jordan, I (Kate) met a young Syrian woman—we’ll call her Hala. Since fleeing the civil war, Hala has been living as a refugee in one of Jordan’s northern municipalities. With her university plans cut short, she opened a mobile beauty clinic traveling to customers—Syrians and Jordanians—around town for appointments. Jordan does not automatically give refugees the right to work. Under the Jordan Compact, launched at the Supporting Syria and the Region conference in London in February 2016, donors committed $1.8 billion in grants and concessional loans, including to support significant efforts to increase jobs and improve livelihoods for refugees and Jordanians. As one of several parts of the Compact agreement, the Jordanian government began distributing work permits to refugees working in certain sectors.
Hala is not one of the Syrians to have received a permit, and her beauty clinic did not fall into one of those sectors in which refugees are permitted to work.
Her business was cut short when she started receiving blackmail calls, threatening to turn her into Jordanian authorities for working without a permit if she didn’t agree to anonymous demands. Shuttering her first business, Hala next opened a dress shop in town with her brother—housed in what might compare to a one-room bodega on a New York City corner. On a busy street surrounded by other shops, with men working and resting along the sidewalks, Hala’s dress shop was bustling (our interview relocated a few times within the shop to avoid interrupting customers). Yet Hala no longer stays at her shop if her brother is not there. Men in the area have learned her brother’s schedule; once he leaves Hala to run the shop alone, patterns of intimidating harassment begin.
Being a young refugee woman in Jordan and opening her own business—twice—reflects clear resilience and entrepreneurship that belies the rhetoric of refugees as passive aid recipients. But the lack of personal security hinders Hala’s pursuit of a sustainable livelihood. Verbal harassment and intimidation itself is enough to dictate when and whether Hala, as a business owner, can keep her doors open and turn a profit.
Hala’s situation is not unusual—not for Syrian refugees nor their Jordanian hosts. The personal security challenges extend beyond street harassment. The rise in domestic violence among Syrian refugees is well-documented. There was a spike in early marriage among Syrian refugees in Jordan between 2013 and the first quarter of 2014 (when nearly 32 percent of registered marriages were considered early marriages), and the majority of early marriages as of 2014 involved Jordanian girls. Early marriage puts women and girls at greater risk for domestic abuse and undermines their education and earning potential.
Refugees are entering an economy already under pressure. Even before refugee populations are considered, Jordan’s job market faces serious challenges: a 34 percent youth unemployment rate, a total unemployment rate of 13.2 percent (and per Jordanian officials, reaching more than 18 percent in the first quarter of 2017), and a female labor force participation rate of just 14 percent.
The majority of Syrian refugees are unemployed in Jordan, and while many work informally, those who have received formal work permits since 2016 number less than 70,000 (against the 200,000 goal under the Jordan Compact). The barriers to secure, formal employment for refugees are significant. They face discrimination, harassment, and difficulty accessing safe, affordable transportation, among other challenges.
The other side is that many refugees may not want to formalize. The reasons vary depending on who you talk to. Perceptions that refugees refuse formalization out of fear of losing cash assistance or resettlement opportunities are common. Others (refugees and aid workers especially) indicate it may be the hesitancy of Jordanian employers to formalize. Business owners may be unwilling to register either their refugee employees or their business as a whole—which requires they meet the standards and employee care obligations set by the Ministry of Labor.
Jordan is taking steps in the right direction, but policies and programs remain insufficient given the scale of challenges
Creating sustainable livelihoods, providing the right to work and to own a business, and creatively bringing refugees and native businesses into the formal economy can be steps in the right direction.
Jordan hosts more than 650,000 registered Syrian refugees (and unofficial estimates are closer to 1-1.3 million). The number grows when considering the more than 64,000 Iraqi refugees, and nearly 15,000 refugees from Yemen, Sudan, Somalia, and other countries. Jordan is also home to 2.1 million registered Palestinian refugees. Jordan has a per capita refugee population of 89 refugees to every 1,000 Jordanians, a rate second only to Lebanon.
Jordan has time and again adapted to absorb and integrate refugees into the country. But in the face of the ongoing Syria crisis, international support and domestic measures have fallen short of meeting needs. Refugees must be better included into the Jordanian economy, alongside development of the native labor force and greater economic inclusion of Jordanian citizens.
Helping refugees build skills, secure employment, and formalize their businesses can improve productivity and stability for refugees and their host countries
Ensuring refugees have access to livelihoods opportunities is one of the key factors to broader stability. Poverty can exacerbate personal and community-level security risks. When refugees are seen as aid-dependent, it can stoke host perceptions that refugees are stressing local infrastructure and taking jobs from often already impoverished host communities. But when refugees are allowed to contribute meaningfully to the economy, they gain self-reliance and economic security. This lessens the aid burden on the host country, and alleviates pressure on community-wide social tensions. However, this is no easy task in an environment where unemployment may be as high as 18 percent.
But research shows that refugees can provide complementary skills that increase productivity—one empirical research study shows no direct relationship between the arrival of Syrian refugees and the Jordanian labor market. While there may be potential displacement when adding new numbers to a workforce already facing high unemployment, good policies around right to work, including without sector-specific limitations, and right to own a business can mitigate adverse impact and even create new opportunities benefiting Jordanians and Syrians alike.
Beyond job creation, training, and matching initiatives, it is important to support the development of small Jordanian and Syrian owned businesses. In Jordan, micro and small enterprises (MSEs) supply about 40 percent of GDP, and in 2014 made up 98 percent of registered businesses. Policies and programs that help entrepreneurs create, formalize, and grow more of these businesses could be a prime opportunity to develop the local economy. For comparison, Syrian business owners in Turkey have invested almost $334 million into the Turkish economy, with more than 10,000 estimated Syrian-owned businesses in Turkey. This also benefits the host communities: Syrian businesses create jobs, with Syrian business owners employing 9.4 people on average.
CGD research on refugee compacts, conducted in partnership with the International Rescue Committee, shows how donors can play an important role by providing resources and support to both refugees and host communities, helping shift from a zero-sum mentality to one of mutual benefit. The Jordan Compact has been an important turning point in responding to the needs of Syrian refugees and their hosts. Critical avenues for dialogue around policy, programming, and investments have been unlocked.
But there are still areas that require substantial improvement, particularly around policy changes with respect to refugees’ right to work across sectors, right to own a business, and a better business environment to bring (and keep) greater investment to Jordan.
Getting this right will build social cohesion—ultimately critical to regional stability
The livelihoods element is just one of several pillars of the international and host government response. These solutions will require innovative approaches that not only address the livelihoods challenges of refugees, but that also tackle challenges endemic to the Jordanian economy and labor market. Building sustainable self-reliance and economic viability in and of itself can be a security guarantee.
There is much-needed attention on the significant security implications of the conflict. The international community should harness similarly robust focus and resources when looking several layers deeper, addressing other security challenges at the individual level. For the many cases like Hala’s, pursuing a small business is a step forward, but greater protection and sustainable livelihoods opportunities are necessary. Increased international support and partnership is critical to making this a reality.
We are pleased to join 12 colleagues in signing the Redesign Consensus: A Plan for US Assistance that launched today. The four main recommendations are to empower USAID as the lead independent aid agency, to create a full-fledged development finance institution, to establish a global development and humanitarian strategy, and to upgrade systems to better manage personnel, procurement, information, and evidence. This proposal concretely advances the dialogue between Congress, the administration, and civil society on reforming the US development architecture. It captures the main conclusions of a series of robust discussions among a diverse group of leaders, experts, and practitioners—and it represents a bold and comprehensive vision for a more coherent and modern development architecture.
Importantly, the recommendations of the Redesign Consensus represent a holistic package. Policymakers should—indeed must—pursue such reforms in order maintain the impact and relevance of US development engagement. But the bulk of the major structural reforms should roll out in a comprehensive, rather than piecemeal, manner. Taking an a la carte approach to these recommendations would in some instances undermine their effectiveness. For example, the recommendation to move PEPFAR and other aid programs from State to USAID is most viable if joined with the recommendation that the USAID Administrator be simultaneously empowered with more expansive budget and planning authority.
Given that implementing a comprehensive reform package would require legislation and/or lengthy administrative and consultative processes, we also believe it is important to act now to build momentum. Action on a set of immediate, actionable reforms—low-hanging fruit options —could “grease the skids” for a more comprehensive reform effort. In July, we proposed just such a set of 14 practical recommendations (many of which are also included in the Consensus) that could advance progress, separately or together, while laying the groundwork for a full redesign.
Finally, we underscore the sentiment in the Redesign Consensus that moving around deck chairs alone will not yield greater impact. Any changes should be accompanied by renewed focus, changes, and requirements around increased effectiveness, accountability, and transparency. This should include a standard approach to assess program effectiveness, as well as emphasis on cost-benefit analysis and impact evaluations. It is the combination of changes in structure, incentives, and accountability for results that will drive a broader cultural and bureaucratic transformation. Such a transformation would not only help make the best use of precious taxpayer dollars, but also most expeditiously advance our national security objectives.
How can we do better for the 60 million displaced people around the world? That was the focus of a major CGD event ahead of the World Humanitarian Summit featuring President Jim Kim of the World Bank and David Miliband, President and CEO of the International Rescue Committee. The lively conversation on refugees, displacement, and development covered many topics, including major changes in the humanitarian landscape, such as longer periods of displacement and fewer refugees living in settled camps, and what new tools and approaches are needed in response.
Here are my three key takeaways from the event:
Build an evidence base for emergency interventions
Both speakers highlighted the importance of building and following the evidence base. Miliband spoke about IRC’s commitment to make all of its programs evidence-based or evidence-generating, including emergency interventions. This is no small task given the lack of a common outcomes framework for humanitarian activities and lack of rigorous evaluations.
According to Miliband, there have been more than 2,000 impact evaluations or equivalent studies of development projects since 2006, but fewer than 100 have been conducted in humanitarian settings. Significant investments are needed to close this evaluation gap and strengthen the evidence base so the global community can identify what works and what is most cost-effective. When there is strong evidence that interventions deliver impact, as in the case of cash transfers, donors and implementers have to move beyond their biases. Kim recounted questioning his staff about the huge number of studies of cash transfers – and discovering that the reason was persistent misperceptions about giving cash to people living in poverty. According to Kim, even as development organizations have scaled up cash transfers, the percentage of humanitarian funds delivered as cash remains far too small.
Focus on people and tools, not sectors
With half of all refugees displaced for 10 years or more, there is a need to shift the balance between social and economic interventions. As Miliband remarked, there can’t be a sustainable social policy program for that length of time unless it has an economic component. Rather than view the world through a humanitarian or development lens, we should see people in humanitarian situations. Individuals and families need multiple tools and services to survive and find a path to self-reliance. Both Miliband and Kim called for greater collaboration between humanitarian and development actors to bring more comprehensive and coordinated analysis, tools, expertise, and financing to the table. Kim noted that the World Bank is engaging “with great humility” because of its lack of experience working with refugees. At the same time, he highlighted that the Bank is deploying familiar tools in familiar sectors to reach these new populations; for example, by creating job opportunities with the support of concessional financing and private sector partners.
Design win-win deals
Finally, Kim and Miliband described how to create win-win deals that offer hope and dignity to both refugee and host populations. In the case of Jordan, the World Bank and its partners brought more financing to the table to create special economic zones that will build infrastructure, attract private capital, and increase the country’s capacity to employ more Jordanians and refugees. It was in the context of this deal that the government agreed to make it easier for Syrian refugees to get work permits. But sustainable solutions are difficult to achieve.
Miliband reflected on a recent trip to the Dadaab refugee camp in Kenya, noting that the poverty rates outside the camp are higher than within. In such contexts, “the political challenge is to align short-term help for refugees with the medium-term help for the local or national economy and community.” Creating this new equation will require significant political will and partnership with low and middle-income host governments that host more than 80 percent of the world’s refugees.
I was delighted that CGD could host this important conversation with two development and humanitarian leaders, who shared their visions and practical ideas on how to bridge the humanitarian-development divide. The session inspired me to dig deeper into this issue and look for ways to help policymakers “move away from ideology and toward evidence,” as Kim called for, so that we as a global community can better deliver for people in such great need. Stay tuned!
Many organizations working on development champion women’s empowerment and equality as a core goal. But behind the scenes, how are these organizations living these values and what can they do better? On March 6, the Center for Global Development and Devex will host an event highlighting practical ways organizations can live up to their promises for a gender-equal workplace.
The plight, peril, and potential of refugees and displaced people has been near the top of the political agenda around the world for many months, culminating in two large summits of world leaders during the UN General Assembly in New York. Discussions there will inform policy work and debate designed to lead up to agreements in 2018.
The main questions: can the world agree on a coordinated plan to deal with the more than 21 million people who have fled their homes, many due to the Syrian conflict? And what ideas, elements, and policy innovations must be included in that plan in order to do better for those who have left their homes without overwhelming the countries they flock to?
CGD researchers are at the leading edge of this debate, working on different but connected aspects of this problem. For this podcast I am joined by Michael Clemens and Cindy Huang. Click below to hear what they hope comes out of the New York summits.
Senior fellow Clemens, CGD's expert on the economics of migration and labor mobility, recently published a major report called Shared Border, Shared Future (produced with an eminent Working Group led by former Mexican President Ernesto Zedillo and former US Commerce Secretary Carlos Gutierrez) that lays out a win-win set of policy ideas for legal, temporary, regulated migration between Mexico and the US that protects workers in both countries.
Huang, who joined CGD as a policy fellow this year after six years in the Obama administration, leads a new study group with the International Rescue Committee on how to address the growing divide between humanitarian response and long-term development for people who are forcibly displaced, taking as its starting point the new reality that, when it comes to humanitarian emergencies today, more people are in need and for longer.
At a recent G20 dialogue in Berlin, Angela Merkel unveiled plans for a new fund—spearheaded by Ivanka Trump—to promote women’s entrepreneurship. The fund will be managed by the World Bank and include contributions from governments and businesses. As some of us at CGD proposed last October, the United States and donor partners can do much more to improve economic opportunities for women and girls. Among the different components of women’s economic empowerment, from closing gaps in education and labor force participation to reforming laws, this new fund focuses on one important pillar: increasing women’s access to capital while breaking down other barriers to growing their businesses. Greater support for women entrepreneurs is a potentially welcome move.
But given that President Trump’s draft FY2018 budget proposes major cuts across development accounts, including on spending and activities central to women’s empowerment, there are significant questions to ask about what appears to be a major new development initiative championed by his Administration. Here are four core considerations in determining whether the fund delivers on the promise of empowering women and raising their incomes:
1. Will the fund be combined with, or crowd out, other critical investments that advance gender equality?
As Amanda Glassman and Rachel Silverman recently blogged, the new fund might represent two steps forward, but it could easily mean three steps back for women if donor support for other programs, such as family planning, are cut in the meantime. A well-designed approach to empower women must recognize and incorporate the rich evidence base that supports the connections between economic outcomes for women and investments to improve their health and education, decrease gender-based violence and unpaid care work responsibilities, and promote women’s voice and agency in advocating for their own rights. With Trump’s proposed 30-plus percent cut to USAID and elimination of the budget for the State Department’s Office of Global Women’s Issues, it’s difficult to understand how this new fund is part of a coherent strategy to advance women’s empowerment. This is not just an issue for the US: Reportedly, Canada, Germany and a few Middle Eastern countries are planning to contribute. The Trump administration and its fund partners should explain how this fund fits into and complements their broader efforts to empower women.
2. Will the fund’s design and programming rest on the best evidence on what works and what is most cost-effective?
While initial reports suggest the fund will emphasize giving “women in developing countries easier access to loans,” presumably in partnership with the International Finance Corporation (IFC, the World Bank Group’s entity that focuses on crowding in private finance), those designing the fund should take into account evidence on the effectiveness of a range of interventions. Lucky for the fund’s designers, CGD’s Mayra Buvinic and Megan O’Donnell conducted a rigorous review of the evidence on what works to promote women’s economic empowerment. The evidence suggests that access to loans alone is not enough. Women need a range of support including savings, seed and venture capital, training, cash transfers, health and child care, land and property rights, and rural electrification. The fund should operate in partnership with other parts of the World Bank and with US and other development agencies to combine services in a way that ensures real impact on the income of women and their families. The fund should also consider ways to address barriers to women entrepreneurs entering non-traditional sectors like manufacturing and high-value services, and creative solutions to support them, such as giving them advantages in government procurement. The fund should also make significant investments in data and evaluation, including through partnerships with existing efforts like Data2X, to build the evidence base and business case for supporting women entrepreneurs. Indeed, most evaluations of women’s entrepreneurship programs have focused on microentrepreneurs rather than women-owned small and medium enterprises (SMEs), the anticipated beneficiaries of the new fund.
3. Will the fund reach poor women?
Women who own SMEs are not among the poorest segments of the population. Typically, SMEs are defined as companies that have between 10 and 500 employees. There are compelling reasons to support women SME owners: they can contribute more to broader growth and job creation, are more likely to hire other women, and can serve as role models and mentors for poorer and less-empowered women and girls. However, given the stark needs among very poor women, limited budgets, and evidence that supporting them with bundled services (e.g., capital, training, cash grant, access to savings, and health information) can be sustainable and cost-effective—it’s important to ensure that some of the resources of the fund benefit microentrepreneurs who represent the vast majority of women business owners. With the right design, the fund could create positive feedback loops between its SME investments and women microentrepreneurs, for example, by investing in inclusive women’s entrepreneurship networks, helping women make the transition from micro to small businesses, and supporting women-owned SMEs to source from women microentrepreneurs. And policies and platforms that help SME owners access financial services, such as mobile platforms and e-invoicing, should be designed and extended to reach microentrepreneurs.
4. Will there be a robust consultative process and governance structure that balances stakeholder voices?
The design of the fund is in its early phases and would benefit from transparent and robust consultation with a range of policymakers, experts, representatives from the private sector and civil society, and women entrepreneurs themselves. There isn’t much time between now and the G20 Summit in early July, when we expect to hear more about the fund, but it would benefit from critical information and improved credibility by setting a schedule for public input and consultation. These consultations should begin as soon as possible and extend past the high-level ceremonies through the detailed program design process. One issue that will likely be determined sooner rather than later is the governance of the fund. Building on the model of the Global Agriculture and Food Security Program, another fund managed by the World Bank, Steering Committee membership would benefit from diverse representation, including from recipient (not only donor) countries and civil society organizations (CSOs), such as those that work closely with and/or represent women entrepreneurs. Given the focus of the fund and evidence on the benefits of diversity in leadership, the World Bank can break new ground by considering gender balance in representation at Steering Committee meetings and also evaluating the possibility of CSOs serving as voting members, rather than non-voting ones as in the past. The fund should also be designed to coordinate with and complement existing offices and programs, such as the Women’s Entrepreneurship Opportunity Facility, launched as a $600 million partnership between the IFC and Goldman Sachs.
As Ivanka Trump and Jim Kim recently wrote, women are “an untapped source of growth” and “supporting women’s economic participation has enormous dividends for families, communities, and whole economies.” This new fund can advance this vision, but only if it seriously considers and affirmatively answers these four questions. Hopefully, the fund is an important step forward that world leaders follow by dedicating new resources and energy not only to women’s entrepreneurship, but the full range of investments needed to empower women as equal partners in accelerating growth and reducing poverty.
Today’s refugee crisis poses serious challenges to the international order. Conflict and crisis have pushed some 21 million people to seek refuge outside their home countries, including 5 million who have fled Syria since the civil war began in 2011. We offer three key principles and 10 recommendations for policymakers to build effective compacts for refugee-hosting nations.
Policy guidance issued recently by Office of Management and Budget (OMB) Director Mick Mulvaney on “Reforming the Federal Government,” along with Secretary of State Tillerson’s plans to streamline and reorganize the Department of State and US Agency for International Development (USAID), have set off rampant speculation across the development and foreign aid community. Many aid watchers fear this process will be used as cover for a pre-cooked outcome: perhaps providing an opportunity to subsume USAID into the State Department, retroactively justify plans to slash the foreign aid budget (already proposed in the Trump administration’s FY2018 budget blueprint), or wipe out a range of development tools and agencies.
These fears are probably premature. The announcement of President Trump’s intent to nominate Mark Green to be USAID administrator is a hopeful sign that the administration does not intend to do away with the agency (Green was reputedly seeking assurances to this effect before taking the job). And at the recent confirmation hearing for President Trump’s pick to fill the role of deputy secretary of state, the nominee, John Sullivan, spoke thoughtfully about the distinct missions and cultures of USAID and State. Looking past the OMB reform memo’s aggressive tone, the practical guidance it provides is actually quite sensible: agencies are to review their functions to identify any that are duplicative, non-essential to their mandate, inefficient, or provide a poor cost-benefit ratio. Additionally, they are to seek ways to maximize employee performance. These are reasonable requests, and not that different from prior reform efforts under past administrations.
As former senior officials at USAID and the Millennium Challenge Corporation (MCC), we—like most supporters of US foreign assistance—agree that there is room for improvement in the system (some of our colleagues at CGD have proposed specific reforms). But the devil is in the details. There is extensive evidence that development aid has saved lives and improved standards of living (nicely summarized by Steve Radelet here). And when deployed effectively, US assistance can be an important tool for addressing a range of global challenges: state stability, pandemics, urbanization, violent extremism, climate change, the youth bulge, and record levels of displacement and humanitarian suffering. Any review of the US foreign assistance structure should focus on how to enable that assistance to be deployed as effectively as possible.
So, how to judge whether this process is truly focused on improving effectiveness, rather than just justifying cuts or rationalizing a predetermined re-org? We have our eyes on six key elements to watch:
Does it address the changing global context? The world has changed dramatically since the passage of the Foreign Assistance Act of 1961, and the US foreign aid apparatus needs to keep pace in order to remain relevant. In the coming decade, extreme poverty will be increasingly concentrated in fragile states, while the poor-but-stable states will become decreasingly reliant on aid. US assistance will be most needed in the difficult and risky environments that have traditionally been consigned to humanitarian relief flows. In these countries a more “expeditionary” development approach will be required: one that is more rapid, nimble, and risk-tolerant than traditional USAID programming. The rising economies, meanwhile, will need less US money but will still need our partnership, technical support, and private sector facilitation. In an era of rising private flows to developing countries and constrained donor budgets, there is need for greater coherence across the USG’s array of financial tools—grants, risk-sharing tools, lending, and equity—to better mobilize private finance. A serious review should focus on adapting US development capabilities to this new landscape—and equipping government experts and institutions to operate effectively within it.
Does it roll back aid fragmentation? The biggest structural question on US foreign aid is not whether USAID and State should fully merge (short answer: no. Development and diplomacy are distinct disciplines, requiring differing timelines, expertise, training, and experience). Rather, it is how to streamline a badly fragmented US development architecture. There has been an awful lot of uncoordinated tweaking of the core aid architecture since 1961. While diplomacy is relatively unified under the State Department, development functions have evolved across 20-plus USG entities. The result is a messy spaghetti bowl of objectives and organizations, with a whole that is less than the sum of its parts. There is scant efficiency to be gained from folding USAID into State (and, the record shows, a lot of potential waste when assistance is focused on political deliverables rather than development results). But much could be gained by tackling the dilution and duplication of development policy authorities and resources across an alphabet soup of federal entities and initiatives. A serious review should take a hard look at these issues. There is no inherently correct number of agencies, but the test should be whether agencies and offices have clear and distinct roles, tied to clear capacities and comparative advantages, with an efficient system for coordinating efforts among them.
Does it engage the full State/USAID team? Any meaningful government review process depends on the interplay between seasoned career staff who know their institutions, and political appointees who can provide leadership, framing, and overall policy guidance. Get this wrong and it’s likely that this effort will be among the 70 percent of change management projects that fail. The fact that there are no senior political appointees in place at either agency apart from Secretary Tillerson himself does not augur well on this front (nor do media reports of tense relations between Tillerson and State’s career leadership). Online surveys, word clouds, and outside consultancies won’t do the trick here—meaningful reform can only flow from a sincere and substantive partnership between career staff and appointees. Deep involvement of the career teams at State and USAID is critical on two fronts. First, these are the people who know their institutions inside and out. They can see around corners, and draw on institutional memories, that the appointees simply can’t. (We say this as former appointees!) If they are engaged in a sincere and substantive way, they can provide a wealth of knowledge on potential improvements. A brand new (and still very thin) team of political appointees will struggle to generate serious reform ideas—or to have any realistic gauge of feasibility—without this input. Second, the career staff will ultimately be the frontline implementers of any changes. Without their buy-in, the reforms are less likely to have staying power.
Does it set clear targets and emphasize cost-effectiveness? As the saying goes, form should follow function: look out for clear targets vis-a-vis agency goals and units. It sounds basic, but a shockingly low number of government re-orgs (8 percent) have set detailed unit-by-unit targets. These are essential in the public sector, where benefits like pandemics halted and youth employed cannot be easily captured in dollar terms. Over the past 10-plus years, foreign assistance agencies—especially the President’s Emergency Plan for AIDS Relief (PEPFAR), MCC, and USAID—have increasingly focused on setting measurable targets, tracking progress and impact, and incorporating cost-benefit analysis into decision-making. Notably, this progress contrasts with much of the aid delivered by State and the Defense Department, where objectives may be more difficult to quantify and monitoring and evaluation policies and implementation have lagged. While there is still significant room for improvement at USAID and elsewhere, any proposal should recognize recent advances in measurement and accountability—and emphasize evidence of results and cost-effectiveness over simple cost-cutting.
Does it have buy-in beyond the administration? Recent history shows major structural changes to US foreign assistance need buy-in from key external constituencies and from Capitol Hill in order to endure. President George W. Bush’s tenure illustrated both scenarios. In launching both PEPFAR and the MCC, his administration did the hard work of cultivating strong stakeholder buy-in from NGO and faith leaders, who could continue advocating for the programs long after he left office. He also worked with Congress to build ownership on the Hill, leading to legislation that enshrined the programs into law. As a result, the initiatives are still going strong two presidencies later. On the other hand, the Bush administration’s “F process” reforms, which consolidated USAID budgeting in a new State bureau, were initiated with little outside consultation and scant support from the Hill. Thus, the reforms were vulnerable to reversal, and when President Obama jettisoned most of them after taking office, no one in Congress was inclined to defend them. There is strong bipartisan support for increased aid effectiveness and accountability, so the critical question is whether the administration will engage champions and build broad support for whatever reforms it decides to pursue.
Does it seek reasonable efficiencies or debilitating cuts? The FY2018 “skinny budget” released by the Trump administration in March envisions dramatic cuts in US foreign aid and diplomatic spending. These cuts were proposed well before any strategic review was underway, much less completed. This is cart-before-the-horse budgeting—letting an arbitrary budget level set strategy rather than matching resources to strategic aims. At less than 1 percent of federal outlays, the foreign aid budget has a comparatively negligible impact on overall US spending, and rolling it back by a third is a rounding error in the broader budget context. There are certainly efficiencies that can be gained, and there may be plausible arguments for cutting budget and staffing levels (though our own view is that both remain too low). But a re-org plan that proposes major changes to budget or staffing should have a correspondingly robust strategic rationale explaining how those cuts would affect US foreign policy objectives.
In the next few weeks, we’ll propose some ideas that respond to these principles and have strong potential to increase efficiency and effectiveness . . . stay tuned!
As President Obama joked earlier this week, the White House Summit on Global Development assembled “a lot of do-gooders in one room.” It was a daylong celebration of the Administration’s achievements across food security, global health, energy access, open government and more. There was much to applaud, including President Obama’s announcement that he had just signed into law the Global Food Security Act. Here are my three takeaways:
A lot of new initiatives have been successfully launched and implemented, but the bigger win is the elevation of development as a key pillar of foreign policy. The speakers highlighted a litany of U.S. policy and program achievements in the past seven-and-a-half years: 18 million children with better nutrition, progress toward bringing 30,000 megawatts of power to Africans, and 70-plus countries participating in the Open Government Partnership. These are important in and of themselves, but do not add up to policy influence when it matters most. When the national security team is debating issues – like where to put emphasis and resources in fighting violent extremism, preventing and responding to conflict, and combating climate change – development needs a seat at the table. It may not always be the prevailing voice, but it matters that the USAID Administrator “sits alongside generals in the Situation Room.” (It should be noted that despite vigorous advocacy, the USAID Administrator is not a permanent member of the National Security Council.) This Administration has advanced the view of development as a smart investment – indeed, as much more than just doing good. Development policymakers need to continue strengthening their case, bringing rigorous evidence and data to inform decisions that require tough trade-offs.
Development investments require strategic patience, and people are worried that is in short supply. Several panelists talked about the need to exercise strategic patience so our investments have a real chance of achieving systemic change and impact. Alix Zwane, CEO of the Global Innovation Fund, talked about the hard work of translating lab innovations into program results and then into fundamental changes in government service delivery systems. Too many countries, organizations and people give up somewhere in between. The President acknowledged this challenge of an age of instant gratification, quoting a plaque on his desk, “Hard things are hard.” The next Administration will need to decide the extent to which it builds on existing initiatives versus launching new ones. While it’s impossible to eliminate initiative fatigue altogether, there should be careful consideration of how to strike a balance that fosters new ideas and sustainable results.
Principles matter, a lot. As my colleague Scott Morris observed before the Summit, much of the President’s legacy relates more to the “how” than “what” of development. The Summit discussions reflected the principles set forth in his policy directive on development, including focusing on results, innovation, and partnership. On the latter, an impressive range of speakers – from a South African urban planner to a Ukrainian member of parliament to the CEO of an energy company – emphasized the critical role of the US in convening partners to take on major global challenges. There is still progress to be made to ensure partnerships are strategic and effective, but it is clear that building them is now part of the development DNA. It takes relentless focus on a handful of key principles to change culture, and the next Administration will hopefully continue and deepen this approach.
This was a well-earned victory lap for the Obama Administration. I hope there is another lower-key summit later this year to discuss mistakes made and lessons learned. That would be an appropriate complement to this week’s celebration that also reflects the Administration’s focus on results, evaluation, and learning.