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Foreign direct investment, financial flows, private-sector development, humanitarian assistance, Africa
Vijaya Ramachandran is a senior fellow at the Center for Global Development. She works on the impact of the business environment on the productivity of firms in developing countries, and is the coauthor of an essay titled "Development as Diffusion: Manufacturing Productivity and Africa's Missing Middle,” published in the Oxford Handbook on Economics and Africa. Vijaya is also studying the unintended consequences of rich countries’ anti-money laundering policies on financial inclusion in poor countries. She has published her research in journals such as World Development, Development Policy Review, Governance, Prism, and AIDS and is the author of a CGD book, Africa’s Private Sector: What’s Wrong with the Business Environment and What to Do About It. Prior to joining CGD, Vijaya worked at the World Bank and in the Executive Office of the Secretary-General of the United Nations. She also served on the faculties of Georgetown University and Duke University. Her work has appeared in several media outlets including the Economist, Financial Times, Guardian, Washington Post, New York Times, National Public Radio, and Vox.
The Financial Stability Board's long-awaited report finds that the number of active CBRs has declined by 6 percent since 2011 and has continued through 2016, affecting all regions and major international currencies. The analysis suggests that small economies are among the most affected by CBR withdrawal. The bottom line: the decline of correspondent banking relationships, especially with smaller and poorer countries, remains an important policy issue.
The informal sector is a major source of economic activity and job opportunities in poor countries as well as emerging economies. In sub-Saharan Africa, the size of the informal sector is estimated to employ over 70 percent of the population. Why do businesses remain informal? What gains in productivity or profitability do they forego by as a result of that choice?
This work analyzes fresh data made available by updated, more comprehensive Enterprise Surveys of formal firms of various sizes and, importantly, of informal firms. It concentrates on five countries (the DRC, Ghana, Kenya, Myanmar, and Rwanda) to provide more fine-grained insights into differences in characteristics and productivity levels between formal and informal firms or different sizes in different developing countries.
The first Economic Inclusion Strategy for the EBRD, to be officially launched in May 2017, builds on four years of implementing inclusion concepts through the Bank’s operations. Economic inclusion, the opening up of access to labour markets, entrepreneurship and, more generally, economic opportunities to all is integral to achieving a transition to sustainable market economies. The strategy covers the period of 2017 – 2021 and reflects the experience and lessons learned from the EBRD’s distinctive private sector focused inclusion approach as well as evolving inclusion challenges and best international practices across sectors and geographic regions.
There are two good reasons to harness the market power of iconic brands. First, policymakers and researchers with evidence-based arguments on migration are struggling to combat the hateful rhetoric of the tabloids. Second, the private sector has an important role to play in ensuring global economic prosperity. Among other things, it should use its power to fight the misinformation, ignorance, and hate directed towards the world’s most vulnerable people.
Prime Minister Narendra Modi’s announced a bold measure on Wednesday to reduce the role of unaccounted for cash or “black money” in the country’s economy by “de-monetizing” higher-denomination currency notes. The new policy bans the use of 500 rupee and 1,000 rupee currency notes. While this measure may have the positive (though potentially temporary) effect of forcing illicit activity out of the regulated economy, the process could be disorderly, with the poorest members of society bearing the brunt of the disruption.
In September 2015, world leaders agreed on a new development agenda, Agenda 2030, that would leave no one behind and that would eliminate extreme poverty and hunger. What are the most effective ways of reach those objectives? Is agriculture still the most effective way to reduce poverty, in a rapidly changing world with a growing demand for food and rapid urbanization in many developing countries? More broadly, what is the role of rural economies – including but beyond agriculture, rural societies, and rural landscapes in turning the agenda into reality?
FOR IMMEDIATE RELEASE
New dataset identifies reports of 1,673 Chinese-backed projects in 50 countries in Africa over past decade
Washington, D.C. (April 29, 2013) - How much aid does China give Africa? Does it complement or undermine the aid from the United States and other Western donors? China releases little information and outside estimates vary widely. A novel approach to studying Chinese aid flows that relies on a database of media reports may offer fresh insights.
One initial result: Chinese official development finance to Africa seems to be roughly similar in size to the finance provided by the United States.
The new estimates come from a database compiled by AidData-- a partnership between the College of William and Mary, Brigham Young University, and Development Gateway – and a joint paper, China’s Development Finance to Africa: A Media-Based Approach to Data Collection, released this week by the Center for Global Development (CGD) in Washington, DC.
The database draws upon thousands of news reports on Chinese-backed projects in Africa from 2000 to 2011. It includes information on 1,673 official projects in 50 African countries, of which 1,422 have reached the commitment, implementation, or completion stage. All this amounts to a total of $75 billion in reported commitments of official finance during that period.
“Definitions matter a lot when trying to measure China’s aid to Africa,” says CGD senior fellow Vijaya Ramachandran, an expert on private sector development in Africa and a co-author of the new paper. “There is a huge debate about what should be counted as aid and what should not.”
Further complicating matters, Chinese package financing often brings together agreements that mix aid, investment, export credits, and both concessional and non-concessional financing. Chinese state-owned enterprises also blur the line between official government finance and private flows.
Estimates of total Chinese financial assistance to the region range from less than a billion dollars to more than $67 billion (for Exim Bank credits). Deborah Brautigam, considered by many to be the leading authority on Chinese foreign assistance to Africa, recently estimated 2007 official development assistance (ODA) from China at $1.4 billion.
The new AidData - CGD study counts as “official finance” two types of assistance:
Official Development Assistance or ODA – concessional finance, mainly grants and loans, provided by official Chinese sources and aimed at the promotion of the economic development and welfare of developing countries. This aid largely meets the definition of ODA used by the Organization for Economic Cooperation and Development (OECD), and
Other Official Finance or OOF – other bilateral transactions from Chinese government entities (excluding investments and military aid).
Using these definitions, the study finds that China’s ODA + OOF combined was roughly equal to that of the United States from 2000 to 2011, varying from a low of about $2 billion per year at the start of the period to a peak of about $17 billion in 2006. (See chart for a comparison of China’s official finance with comparable flows from the United States and all members of the OECD’s Development Assistance Committee (DAC)).
By comparison, US ODA + OOF to the region has averaged about $9 - $11 billion a year in recent years. This rough comparison is useful, but just the start, say the authors.
"We are not claiming that the database is fully comprehensive,” says Bradley Parks, co-executive director of AidData and a co-author of the CGD paper. “We understand that some projects may not get picked up by the media. However, if we want to make sense of the competing claims made about Chinese 'aid' to Africa, we need higher-resolution data that are collected in a transparent, systematic, and replicable manner.”
Media contact for CGD:Catherine An(202) email@example.comMedia contact for AidData:Suzannah Dunbar(614)-firstname.lastname@example.org
Further analysis of the media reports of Chinese-backed projects may eventually yield insights into such controversial questions as to what extent Chinese assistance to the region is focused on natural resource extraction, and whether Chinese activities complement or compete with assistance from other donors.
The full dataset is being released online at china.aiddata.org with an explanation of AidData’s media-based data collection methodology, an interactive map to view reported projects by country and project type, and a tool for users to add information about specific projects.
“We hope to tap into a wisdom-of-crowds effect and enlist the support of scholars, journalists, and members of civil society to help make the data more comprehensive and precise," Parks adds.
The paper and new database will be launched at the Center for Global Development on Monday, April 29 at 4 pm.
AidData is a development research and innovation lab that seeks to make aid information more accessible and actionable. AidData tracks more than $5.5 trillion dollars from 90 donor agencies, undertakes cutting-edge research on aid distribution and impact, oversees efforts to geocode and crowdsource aid information, and develops web and mobile applications and custom data solutions for development finance institutions.
The Center for Global Development works to reduce global poverty and inequality through rigorous research and active engagement with the policy community to make the world a more prosperous, just, and safe place for us all. A nimble, independent, nonpartisan, and nonprofit think tank, CGD combines world-class research with policy analysis and innovative communications to turn ideas into action.
Development Finance Institutions (DFIs)—which provide financing to private investors in developing economies—have seen rapid expansion over the past few years. This paper describes and analyses a new dataset covering the five largest bilateral DFIs alongside the IFC which includes project amounts, standardized sectors, instruments, and countries. The aim is to establish the size and scope of DFIs and to compare and contrast them with the IFC.
This paper addresses the response to historically high rice prices in 2008 first by presenting a historical review of trends in the West African rice sector and, second, by assessing the effect of world rice prices on domestic prices, primarily at the consumer level.
Since the 2010 earthquake, there has been very little direct procurement of goods or services from local businesses, missing a huge opportunity to spur long-term growth. Local procurement not only purchases immediately needed goods or services but helps grow the private sector, create jobs, and encourage entrepreneurs. Spending more money locally can multiply the effect of US assistance.
The transparency and accountability of US spending in Haiti needs to be improved. Despite the large amount of public money disbursed for earthquake recovery in Haiti, it is nearly impossible to track how the money has been spent and what has been achieved.
Last month, the Indian Express reported that India might not accept aid from the United Kingdom after April 2011. India has been the largest single recipient of British aid, receiving more than €800m (about $1.25b) since 2008. This announcement is perhaps symbolic of the fine line that India is walking between being a “developed” and “developing” country. It is the eleventh largest economy in the world, growing 8-9% annually. But it is also home to one-third of the world’s poor—there are more poor people in India than in all of Sub-Saharan Africa.
Nonetheless, over the past decade, India has quietly transitioned to a donor country, emerging on the world stage as a significant provider of development assistance.