Ideas to Action:
Independent research for global prosperity
Many developing countries are pursuing domestic revenue mobilization (DRM) initiatives, which is critical for them to finance the spending necessary to enable sustainable development. The need for DRM has now taken on greater urgency given the fiscal implications of the COVID-19 crisis.
The latest G20 finance ministers meeting concluded with no major progress on debt relief for the world’s poorest countries, and a few setbacks. To date, no country eligible for the G20’s Debt Service Suspension Initiative has requested a moratorium on their private sector debt. We are at an impasse.
After a four day marathon run of negotiations, the 27 Heads of State of the EU reached an agreement on both the Recovery Fund—a large fund to support the post-COVID recovery across the EU—and its new long-term budget and priorities, the Multiannual Financial Framework (MFF) 2021-2027. While leaders across the EU are now hailing the deal as a “win” for their own voters and priorities, inevitably the negotiations were fundamentally driven by domestic interests and priorities, and predictably, international development has suffered as a result of the cuts.
We need to move forward—or backward—in what we expect development finance institutions (DFIs) to do in terms of financing private sector development in the world’s poorest countries.
While there is debate in the management literature about the primacy of measurement in effecting change, there is no doubt that it is a necessary component of bringing about lasting change.
Some changes in leadership are more risky than others. The selection of the successor to Philippe Le Houérou, who leaves the IFC in October, is a prime example of a high-stakes decision.
The COVID-19 pandemic has become a threat to global prosperity and stability, but what is the cost of doing nothing in response?
Philippe Le Houerou, the Chief Executive of the IFC has announced his intention to step down in September. His legacy will include a significant effort to focus the work of the corporation on development impact and the world’s poorest countries. Le Houerou has had some success. But a look at IFC’s portfolio suggests how far the institution still has to go to have the biggest impact.
Imagine the young George Washington said, “I cannot tell a lie. I did not cut down the cherry tree,” then added sotto voce, “’twas the hatchet that did it.” Multilateral development banks (MDBs) and development finance institutions are dissembling in the other direction when it comes to their impact—not unreasonably shifting blame but implausibly taking credit.
The World Bank has just released country-by-country data on the debt owed to individual creditors by the 73 countries eligible to participate in the G20-sponsored debt service suspension initiative.
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