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Views from the Center

CGD experts offer ideas and analysis to improve international development policy. Also check out our Global Health blog and US Development Policy blog.

 

New Leadership at the IFC Aims to Get Us from Billions to Trillions

This week, CGD hosted a discussion with Philippe Le Houérou, the CEO of IFC, the private sector arm of the World Bank. He was enthusiastic about his institution’s role in leveraging private capital and getting from billions to trillions of dollars for development, but he also presented a nuanced and critical judgment about the limitations of the IFC model to date, pointing to a number of ways it needs to change.

Corporate Commitments: Necessary but Not Sufficient to End Tropical Deforestation

Over the last few years, an increasing number of companies that produce, trade, or buy “forest risk” commodities have pledged to get deforestation out of their supply chains. But voluntary efforts by progressive companies will not on their own be sufficient to end tropical deforestation. A “jurisdictional approach” that marries public and private efforts at the scale of political units offers a promising way forward.

Beyond Aid—and Microcredit: Three Recommendations to Promote Women’s Economic Empowerment

Recently CGD hosted the Second Annual Birdsall House Conference on Women, which focused on beyond-aid approaches for women’s economic empowerment, with particular emphasis on private sector engagement. CGD experts have written about how international organizations and national agencies should examine and correct gender biases in the design and delivery of their strategies for financial inclusion. But while public sector interventions are crucial for promoting women’s economic empowerment, the panelists pointed out that the private sector is in many ways better equipped to provide opportunities for women to grow their businesses, investments, and incomes. Here’s our takeaway.

What the Fed Rate Increase Means for Emerging Economies

The first thing we should be asking is why now in particular, since conditions have not really changed much in the past few months. For example, back in September, there were large uncertainties in the global economy. China’s economic slowdown was causing alarm. Volatility in international capital markets was high. The appreciation of the US dollar was hurting US exports, which could (yet) mean slower US economic growth. That was not the time for the US Federal Reserve to up interest rates. But now it is – and here’s why.

Can the Private Sector Deliver on the Infrastructure SDGs?

In two weeks, a teaming mass of world leaders are going to descend on New York to sign up to the Sustainable Development Goals. Among the targets to be met by 2030 are global universal access to water, sanitation, reliable modern energy, and communications technologies. Back-of-the-envelope calculations suggest that meeting these infrastructure targets would involve a trillion or more dollars in additional infrastructure investment in developing countries every year. That begs the question: where is the money going to come from?

How Should Donors Work with the Private Sector? Responding to John Simon

In his post, John Simon, a former CGD visiting fellow, politely disagreed with our suggestion that donors are mainly using the wrong instrument to support private-sector investment. John made some excellent points (which we urge you to read in full). And, as we stressed in our first post, we all agree that private investment is crucial for delivering social returns in developing countries.

How Much Scope for Private and Market Rate Infrastructure Finance at Addis?

Meeting the SDG targets for infrastructure in developing countries is going to cost around USD 1 trillion a year. With official development assistance at around $150 billion, other official flows at $27 billion, and investment in infrastructure with private involvement at about $181 billion, it is clear that the majority of infrastructure finance will have to come from domestic resource mobilization in developing countries (which comes to about $9.2 trillion per year).

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