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Press Releases

December 12, 2018

Global Consortium Supporting Low- and Middle-Income Countries to Make Evidence-Based Healthcare Investment Decisions Receives $14.5 Million Boost

“Policymakers’ decisions about what healthcare to make available and at what cost can be a life or death decision for people across the developing world.”

Contact: Holly Shulman, hshulman@cgdev.org Madeleine Stewart, madeleine.stewart@imperial.ac.uk

London – A global consortium working with low- and middle-income countries as they aim to make healthcare investment decisions that reflect the best value for money has received a $14.5 million grant from the Bill & Melinda Gates Foundation, announced the Center for Global Development today. The grant covers the next five years and specifically supports the International Decision Support Initiative (iDSI), made up of health policymakers, researchers, and development experts.

The most cost-effective health interventions produce as much as 15,000 times the benefit as the least cost-effective, and up to $2.8 trillion USD is reported to be wasted each year and could be redirected to save more lives. This means that allocating healthcare according to maximum health gain could save countless lives.

iDSI will harness the funding to extend its engagement with policymakers and healthcare payers in low- and middle-income countries, primarily in sub-Saharan Africa, working with them to understand and respond to the challenges they face when deciding on benefits—whether ensuring the financial sustainability of a health insurance fund or fair access to good quality care across public health facilities.

The network endeavors to generate long-term, locally owned solutions to healthcare challenges through building capacities for using evidence in policy and clinical decisions. Its impact to date includes influencing policy in eight countries—China, India, Indonesia, Philippines, Vietnam, South Africa, Tanzania, and Ghana—where there has been tangible progress toward national institutions being established to embed value-for-money into decision-making about what medicines, vaccines, or other health services should be offered to the population, and how these could be procured in the most cost-effective way. Already the coalition has supported Tanzania to prioritise its Essential Medicines List from 500 to 400 drugs, reducing spending on poor-value items and freeing up resources to improve access to the most cost-effective medicines; trained Kenya’s Health Benefits Package Committee on measuring the added value of a new health intervention compared to existing ones; piloted a local quality improvement initiative with hospital staff in Vietnam to reduce inappropriate antibiotic prescribing for pneumonia; and brought together more than 100 policymakers working across sub-Saharan Africa to share knowledge and best practices.

“With government and aid budgets under pressure, many developing countries have to make difficult choices,” said iDSI Director Kalipso Chalkidou, who also directs the Global Health Policy program at the Center for Global Development and is a professor of global health practice at Imperial College London. “Policymakers’ decisions about what healthcare to make available and at what cost can be a life or death decision for people across the developing world. We will inform these critical decisions with data and evidence that map out how best to spend limited funds to improve outcomes and save lives.”

The Chinese, Thai, and Norwegian governments have backed iDSI, which also receives funding from the Department for International Development, a United Kingdom government department responsible for administering overseas aid; and this renewed phase will see a stronger emphasis on sub-Saharan Africa. iDSI’s flagship countries include Kenya and Ghana, where global health funders will be departing and domestic health care spending is on the rise. Additionally, many sub-Saharan African countries are currently introducing national health insurance or coverage plans and making important decisions about what health services and technologies should be included in universal health coverage offerings, where value-for-money considerations could make a huge difference in health outcomes.

The Center for Global Development, a global think-and-do-tank that works to reduce global poverty and improve lives through innovative economic research that drives better policy and practice, will lead iDSI. The six other core partners in this global effort include the Global Health and Development Group at Imperial College London; the Asia HTA consortium, which includes the National Health Foundation of Thailand, the Saw Swee Hock School of Public Health at the National University of Singapore, and Health Intervention and Technology Assessment Program (HITAP); the China National Health Development Research Center; the Health Economics Research Unit (HERU) of the KEMRI  Wellcome Trust Programme; the Norwegian Institute of Public Health; and the Clinton Health Access Initiative, Inc. (CHAI).

iDSI was born out of the recommendations of the Center for Global Development’s Priority-Setting Institutions for Global Health Working Group in 2012.  

“Previous healthcare decision-making in developing countries has too often been driven by inertia and lobbying rather than science, economics, ethics, and the public interest,” said Amanda Glassman, Chief Operating Officer at the Center for Global Development. “We want to change that.”

Additional statements on the announcement from our partners follow:

Ira C. Magaziner, CEO of the Clinton Health Access Initiative Inc. (CHAI): “Low- and middle-income countries are set to make great strides toward universal health coverage in the coming years, ensuring that all people have access to affordable and quality care. CHAI works with governments that are implementing health financing and service delivery reforms to meet this goal. We are excited to deepen our collaboration with the iDSI network to help partner governments set health care priorities, drawing on iDSI’s expertise and years of experience across different country settings.”

Trygve Ottersen, executive director at the Norwegian Institute of Public Health: “Without proper support, it is hard for decision-makers to navigate within the broad and ambitious agenda of the Sustainable Development Goals and to make evidence-informed choices that are both fair and efficient. iDSI serves as a unique platform for supporting the most critical choices on the path to Universal Health Care, and the Institute delighted to be part of this partnership.”

Professor Teo Yik Ying, the dean of the Saw Swee Hock School of Public Health at the National University of Singapore: “The Saw Swee Hock School of Public Health at the National University of Singapore is delighted to be a contributing partner to the international Decision Support Initiative. The mission of iDSI to support evidence-based decision making in global public health is aligned to the mission of the School, with the aim of translating research discoveries to improve the health of global communities.”

Dr. Somsak Chunharas, National Health Foundation of Thailand: “Being an organization promoting evidence-based policy and system development in Thailand for the last 30 years, the national health foundation looks forward to this opportunity thru iDSI in sharing with and learning from various countries context in establishing mechanism and tools for evidence-informed policy. With the lessons and challenges in the Thai UHC over the last 2 decades, the focus of iDSI on UHC makes it even more challenging to ensure continuity in generating evidences in the pursuit of health equity across the world.”

You can follow the research, analysis, evidence, and impact of iDSI by visiting www.idsihealth.org, and the Center for Global Development at www.cgdev.org.

September 18, 2018

Sweden Claims Top Spot in Global Development Index

Commitment to Development Index Ranks World’s Richest Countries on How Well Their Domestic Policies Improve Lives in the Developing World

Contact: Holly Shulman Center for Global Development +1 (202) 416-4040 HShulman@cgdev.org

WASHINGTON – Today, the Center for Global Development announced that Sweden claimed the #1 spot in the Commitment to Development Index, which ranks 27 of the world’s richest countries by how well their policies help improve lives in the developing world.

The Commitment to Development Index (CDI) is released annually by the Center for Global Development. It is a quantitative, broad based analytical tool that measures contributions in seven policy areas: aid (both quantity as a share of national income, and quality), finance, technology, environment, trade, security, and migration. Within each component, countries are measured on how their domestic policies and actions support poor countries in their efforts to build prosperity, good governance, and security.

“Good development policy is about much more than foreign aid,” said Masood Ahmed, the president of the Center for Global Development. “While aid is important, policymakers in rich countries need to assess all the ways their choices, from refugee policies to intellectual property rights, help or hinder developing countries.”

In this year’s Index, Sweden edged out Denmark (which led the index last year). Sweden’s top performance was driven by excellent scores on foreign aid, environment, trade, and migration. It also led all 27 countries in the migration ranking, with a high share of refugees and strong policies to help integrate migrants.

You can view the full 2018 rankings at www.cgdev.org/cdi.

 “Domestic policies can have a major impact on other nations around the world – both intended and not,” said Ian Mitchell, a senior fellow and the report’s author. “Sweden sets a great example on its approach to environment and has migration policies that benefit migrants, Sweden, and developing nations alike, but Sweden’s work isn’t finished. As new global challenges emerge, we hope Sweden will continue to put in place domestic policies that improve outcomes in the developing world.”

Other findings from this year’s results include:

For the first time a G-7 country, Germany, clinched a place in the top three, overtaking France and just behind the Nordic powerhouses Sweden and Denmark.

The U.S. ranked 23rd in this year’s Index, while European countries dominate the top spots.

Australia surged up 4 spots in this year’s Index.

The Netherlands takes the top spot in the trade rankings, and Japan rises 10 slots.

Learn more about the rankings and how countries performed at www.cgdev.org/cdi.

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About the Methodology: The CDI is transparent about its method and data, with full details available at www.cgdev.org/cdi. All the data and calculations are published with full sources in a series of spreadsheets. The CDI uses an updated methodology each year, making improvements in the way we measure how policy impacts development. Year on year changes reported above can reflect new data, or an improved method, or both.

August 21, 2018

New Study: In Sub-Saharan African Countries with Unreliable Power, Outages Cost Companies As Much as 31% in Sales

More than 25% of businesses surveyed in some of Africa’s biggest economies cited losing double-digit sales due to power outages

Contact: Holly Shulman Center for Global Development +1 (202) 416-4040 HShulman@cgdev.org

Washington – In Sub-Saharan African countries with unreliable power, outages cost some companies as much as 31 percent in sales, according to a new study released today by the Center for Global Development.

Researchers from the Center for Global Development (CGD) examined data from more than 3,000 firms in 37 African countries in an effort to examine how businesses across Sub-Saharan Africa respond to frequent power outages, and what it means for their businesses’ bottom lines and growth prospects.

“While there’s a lot of effort put into providing solar panels and generators to African households to power their daily lives, to actually change the economic development equation in Africa we must focus our efforts on the energy infrastructure that can power businesses,” said Vijaya Ramachandran, the study’s lead author and a senior fellow at CGD. “We found that unreliable power can have a major impact on businesses, dampening their growth prospects and undermining job creation opportunities.”

The study found:

In some of the continent’s largest economies like Nigeria, Angola, and Ghana, more than 25% of businesses lose double-digit sales due to power outages—with some firms averaging losses of 31%.

The largest grouping of firms are just surviving. Thanks to a heavy reliance on generators their sales are mostly unaffected by power outages, but they average just 3% growth.

Across the continent, some firms have grown rapidly despite frequent power outages—even in very poor countries.

In middle-income countries, especially in Southern Africa, many firms suffer relatively limited power outages and don’t see significant effects on sales.

The hardest-hit firms average more than 200 hours without power each month, while even the least-affected firms average more than 10 hours per month.

Some individual firms report losing over 70% of their sales.

“Of course, there’s no single story of how African businesses cope with unreliable power, but it’s clear that across the continent, a huge number of firms suffer high costs and lost sales,” said Ramachandran. “Better power infrastructure could enable business growth, create jobs, and produce better economic outcomes for the region.”

You can read the full study at https://www.cgdev.org/publication/how-do-african-firms-respond-unreliable-power-exploring-firm-heterogeneity-using-k-means.

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August 6, 2018

New Study: Sustainable Coffee Certification Is a Mixed Bag for Farmers

Contact: Jeremy Gaines Center for Global Development +1 (202) 416-4058 jgaines@cgdev.org

For immediate release: August 7, 2018

Washington – How much does fair trade help poor coffee farmers? A new study suggests that the poorest farmers lack the resources to get certified without extensive, and ongoing, assistance.

Fair trade products have exploded in popularity over the last two decades, and in 2014 more than 40% of all coffee was produced under one of four initiatives: Fairtrade, Rainforest Alliance, UTZ Certified, and 4C. The study reviews the literature assessing these initiatives and found evidence of modest benefits overall, but not for the most vulnerable producers.

“Consumers pay higher prices for fair trade coffee, thinking it benefits farmers and the environment. But too often the poorest farmers are missing out on the benefits because they lack the capacity to participate,” said Kimberly Elliott, the author of the study and a visiting fellow at the Center for Global Development.

The study found:

Sustainability standards, particularly Fairtrade, raised the prices paid to coffee farmers, but there’s less evidence that farmer incomes rose after considering the cost of certification and compliance.

Larger coffee producers and some smallholder farmers benefit from sustainability standards, but not the poorest farmers. Poorer farmers often don’t have enough land, labor, or credit to make certification worthwhile without external financial support.

Only 25% of sustainably-produced coffee is sold as sustainably certified, because of a lack of demand. That means small producers might pay the costs of certification, but then aren’t able to sell the volume at a high enough price to recoup their investment.

More evidence is needed to be able to truly evaluate the benefits of coffee certification standards. Further research will benefit farmers and consumers alike.

“The bottom line is that for fair trade coffee certification schemes to work, they have to increase prices or productivity enough to cover farmer’s costs,” said Elliott. “And without greater consumer demand, the benefits of sustainability standards will remain limited and tentative.”

You can read the full study at https://www.cgdev.org/publication/what-are-we-getting-voluntary-sustainability-standards-coffee.

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July 13, 2018

Statement of Michael Clemens on the Finalization of the Global Compact for Migration

Contact: Holly Shulman Center for Global Development +1 (202) 416-4040 HShulman@cgdev.org,

Today, Michael Clemens, a senior fellow at the Center for Global Development, released the following statement responding to the announcement of the finalization of the Global Compact for Migration.

“This is the biggest step the world has taken to cooperatively face the defining policy challenge of our time: how to better regulate international migration in this century. The Compact offers a clear mandate and roadmap for countries to work together to get more of what they want from migration and less of what they do not want.

“Unfortunately, there is currently a political movement ascendant in the U.S., UK, Italy, and elsewhere promising to address the many problems of migration by restricting or eliminating it altogether. This new Compact is the defining alternative to that movement. It is a treasure chest of the best ideas on how to address the many challenges of migration with hard work and a pragmatic cooperative approach.

“While the Compact is now final, the real work is just beginning. As countries prepare to adopt the Global Compact for Migration in December, discussions will revolve around how to operationalize and implement the commitments agreed to in this document. One innovation endorsed by the Compact is the idea to create Global Skill Partnerships. Other innovations should also be piloted and tested out, as countries and their partners work to identify sustainable solutions to today’s migration challenges and opportunities.

“The road ahead will be difficult and many of the challenges and points of contention that arose during the Compact’s negotiations will not disappear with its adoption. Rather, countries will need to tackle these challenges head-on as they work toward pragmatic, evidence-based, and coordinated migration policies and practices that fulfill the objectives and commitments of the Compact. I welcome today’s achievement, and I look forward to supporting countries as they move forward with implementation.”

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June 18, 2018

New Study: In Developing Nations, As Many As 2.1 Million Working-Age Refugees Live in Urban Areas Where Employment Opportunities Could Be Close By

“There are many barriers to employing refugees but companies should know that geography isn’t one of them. Our advice to multinational companies? Hire refugees if they can.”

Contact: Holly Shulman Center for Global Development +1 (202) 416-4040 HShulman@cgdev.org,

Washington –  A new study finds that as many as 2.1 million working-age refugees live in urban areas in developing countries where employment opportunities could be nearby – shattering the frequently used but inaccurate depiction of refugees living mainly in desolate camps.

The study from the Center for Global Development and the Tent Partnership for Refugees is the first of its kind and estimates that there are between 915,087 and 2,186,829 working-age refugees in major urban areas in developing nations, and that 38 percent of all working-age refugees in developing countries live in major urban areas – constituting a potential hiring pipeline for many multinational, regional, and local businesses.

The researchers analyzed 31 of the 37 developing countries that host more than 25,000 refugees and mapped where refugees in those countries live. You can find the interactive map here.

“Despite the misconception that most refugees live in rural camps, 60 percent actually reside in urban areas and the overwhelming majority are in low- and middle-income countries,” said Gideon Maltz, executive director of the Tent Partnership for Refugees. “As Tent works to mobilize businesses to support refugees, these findings are critical for multinational companies and regional businesses that are looking to engage refugees where they live.

The study’s main findings include:

A large number of working-age refugees reside in major urban areas in developing countries. In fact, the report estimates that, among the 31 countries studied, between 915,087 and 2,186,829 working-age refugees live in major cities. 9 to 11 countries have more than 25,000 refugees in major cities, and 5 to 7 countries have more than 50,000 refugees in major cities.

Countries with significant numbers of working-age refugees have a large business presence. Most countries with significant overlap between urban areas and refugees are home to a substantial number of multinational corporations. In fact, the large majority of these countries have roughly 1,000 to 10,000 people employed by OECD multinational companies, suggesting viable opportunities for hiring refugees in these locations.

“There are many barriers to employing refugees but companies should know that geography isn’t one of them,” said Cindy Huang, the lead author of the study and co-director of migration, displacement, and humanitarian policy at the Center for Global Development. “Our advice to multinational companies? Hire refugees if they can.”

The study also outlines the main barriers to employment for refugees, including laws that bar refugees from employment and owning a business, as well as discrimination and restrictions on mobility within a country.

“If refugees face legal and practical barriers to accessing formal employment, businesses may not be able to work with refugees, regardless of proximity,” said Huang. “There’s a real economic opportunity here, but only if policymakers reduce these barriers to employment and support new opportunities for refugees and host communities.”

Read the full report and view the interactive map here.

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March 4, 2018

China’s Belt and Road Initiative Heightens Debt Risks in Eight Countries, Points to Need for Better Lending Practices

Researchers urge China to improve their debt practices and adopt standards

Contact: Holly Shulman Center for Global Development +1-202-416-4040HShulman@cgdev.org,

Washington – China’s Belt and Road Initiative – which plans to invest as much as $8 trillion in infrastructure projects across Europe, Africa, and Asia – raises serious concerns about sovereign debt sustainability in eight countries it funds, according to a new study from the Center for Global Development.

The study evaluated the current and future debt levels of the 68 countries hosting BRI-funded projects. It found that of the 23 countries that are at risk of debt distress today, in eight of those countries, future BRI-related financing will significantly add to the risk of debt distress. You can see the full list of countries, their external debt levels, and China’s portion of that debt in the new study here.

“Belt and Road provides something that countries desperately want – financing for infrastructure,” said John Hurley, a visiting fellow at the Center for Global Development and a coauthor of the study. “But when it comes to this type of lending, there can be too much of a good thing.”

According to the study, China’s track record managing debt distress has been problematic, and unlike the world’s other leading government creditors, China has not signed on to a binding set of rules of the road when it comes to avoiding unsustainable lending and addressing debt problems when they arise.

“Our research makes clear that China needs to adopt standards and improve its debt practices – and soon,” said Scott Morris, a senior fellow at the Center for Global Development and a coauthor of the paper.

The study recommends that China:

Multilateralize the Belt and Road Initiative: Currently, the multilateral development institutions like the World Bank are lending their reputations to the broader initiative while only seeking to obtain operational standards that will apply to a very narrow slice of BRI projects: those financed by the MDBs themselves. Before going further, the MDBs should work toward a more detailed agreement with the Chinese government when it comes to the lending standards that will apply to any BRI project, no matter the lender.

Consider additional mechanisms to agree to lending standards: Some methods might include a post-Paris Club approach to collective creditor action, implementing a China-led G-20 sustainable financing agenda, and using China’s aid dollars to mitigate risks of default.

In all eight highest risk countries, the proportion of external debt that is owed to China and its banks will rise, sometimes dramatically, under the Belt and Road Initiative:

Pakistan: Pakistan, by far the largest country at high risk, currently projects an estimated $62 billion in additional debt, with China reportedly financing roughly 80 percent of that. Big-ticket BRI projects and the relatively high interest rates being charged by China add to Pakistan’s risk of debt distress.

Djibouti: The most recent IMF assessment stresses the extremely risky nature of Djibouti’s borrowing program, noting that in just two years, public external debt has increased from 50 to 85 percent of GDP, the highest of any low-income country. Much of the debt consists of government-guaranteed public enterprise debt and is owed to China Exim Bank.

Maldives: China is heavily involved in the Maldives’ three most prominent investment projects: an upgrade of the international airport costing around US$830 million, the development of a new population center and bridge near the airport costing around US$400 million, and the relocation of the major port (no cost estimate). The country is considered by the World Bank and the IMF to be at a high risk of debt distress and is currently being buffeted by domestic political turmoil.

Lao, P.D.R. (Laos): Laos, one of the poorest countries in Southeast Asia, has several BRI-linked projects. The largest, a $6.7 billion China-Laos railway, represents almost half the country’s GDP, which led the IMF to warn that the project might threaten the country’s ability to service its debts.

Mongolia: Mongolia’s future economic prosperity depends on major infrastructure investments. Recognizing Mongolia’s difficult situation, China Exim Bank agreed in early 2017 to provide financing under its US$1 billion line of credit at concessional rates for a hydropower project and a highway project. If reports of an additional $30 billion in credit for BRI-related projects over the next five to ten years are true, then the prospect of a Mongolia default is extremely high, regardless of the concessional nature of the financing.

Montenegro: The World Bank estimates that public debt as a share of GDP will climb to a whopping 83 percent in 2018. The source of the problem is one very large infrastructure project, a motorway linking the port of Bar with Serbia that would integrate the Montenegrin transport network with other Balkan countries. The Montenegro authorities concluded an agreement with China Exim Bank in 2014 to finance 85 percent of the estimated US$1 billion cost for the first phase of the project, with the second and third phases likely to lead to default if financing is not provided on highly concessional terms.

Tajikistan: One of the poorest countries in Asia, Tajikistan is already assessed by the IMF and World Bank to be at “high risk” of debt distress. Despite this, it is planning to increase its external debt to pay for infrastructure investments in the power and transportation sectors. Debt to China, Tajikistan’s single largest creditor, accounts for almost 80 percent of the total increase in Tajikistan’s external debt over the 2007-2016 period.

Kyrgyzstan: Kyrgyzstan is a relatively poor country with significant new BRI-related infrastructure projects, much of it financed by external debt. China Exim Bank is the largest single creditor, with reported loans by the end of 2016 totaling US$1.5 billion, or roughly 40 percent of the country's total external debt. While currently considered to be at a “moderate” risk of debt distress, Kyrgyzstan remains vulnerable.

The full study, “Examining the Debt Implications of the Belt and Road Initiative from a Policy Perspective” can be found at: https://www.cgdev.org/publication/examining-debt-implications-belt-and-road-initiative-policy-perspective.

February 20, 2018

New Study: Grid Electricity and Off-Grid Solutions Alone Are Not Meeting Many Africans’ Energy Demands

On-Grid Customers Still Rely Heavily on Off-Grid Energy Technologies, and Off-Grid Customers Want On-Grid Electricity

Contact: Holly Shulman Center for Global Development HShulman@cgdev.org, (202) 416-4040

Washington – A new study released today by the Center for Global Development found that either grid electricity or off-grid solutions alone are currently inadequate to meet many African consumers’ modern energy demands. The survey of consumers in twelve African countries found that on-grid customers still rely heavily on off-grid solutions like generators for their daily lives, and that off-grid customers want access to on-grid electricity.

The researchers analyzed data from mobile phone-based surveys to assess energy service quality and demand in in twelve African countries: Benin, the Democratic Republic of the Congo (DR Congo), Ethiopia, Ghana, Kenya, Mozambique, Nigeria, Rwanda, Senegal, Tanzania, Uganda, and Zambia. The surveys were conducted between July 2015 and December 2016, and received responses from 39,000 consumers in 28 languages.

“Making electricity more accessible, reliable, and responsive to African demand across the continent should be a priority,” said Todd Moss, a co-author of the report and a senior fellow at the Center for Global Development. “While many policymakers debate whether grid or off-grid solutions are most appropriate, African consumers don’t view these options as an either-or question. Customers who are on the grid want to be able to use off-grid electricity too. And customers who have off-grid power want access to grid electricity to meet growing demand.”

“Off-grid customers may appreciate the lights and basic appliances like phone chargers that off-grid systems can power, but want to move up the energy ladder toward higher power appliances like refrigerators enabled by a grid connection. At the same time, on-grid customers face a host of reliability issues and thus see off-grid options as an important backup.”

Key findings from the survey include:

Daily outages are a norm almost everywhere. Among those with access to grid electricity, at least half cited electricity outages at least once a day across almost all surveyed countries. Respondents in Mozambique, Ghana, and Zambia reported the highest prevalence of daily outages. The country with the lowest prevalence of frequent outages was Rwanda, where only 18 percent of respondents experienced multiple outages per day. In all countries, the vast majority reported at least one outage per week.

On-grid customers still rely heavily on generators, especially in Nigeria. Almost half of on-grid respondents in Nigeria relied on a generator during power outages – the highest of any other country.

Off-grid customers still desire grid electricity. In most countries, off-grid respondents are not completely satisfied by off-grid electricity solutions and retain a high demand for grid electricity.

Off-grid, non-generator electricity is inadequate for most respondents’ energy needs. A significant proportion of respondents across the surveyed countries reported that their off-grid electricity solution did not fulfill any of their power needs. This includes almost two thirds (65 percent) of Rwandans with off-grid, non-generator electricity.

In all countries, the majority desire a grid connection. Demand for the grid was highest in Zambia and Ghana, where over 50 percent said that they wanted an electrical connection very much. In all other countries except Senegal and Benin, demand appears to be high but less passionate; over two-thirds of respondents without an electric connection indicated that they wanted an electrical connection to the national grid either a little or very much.

Satisfaction with service from the grid varies widely. Reported satisfaction with grid electricity ran from Mozambique (74 percent satisfied) and Rwanda (71) at the high end to Ghana (19) and Zambia (27).

Connection costs and distance from the grid are the most common obstacles to grid electricity. When asked about the greatest obstacle to gaining access to the national grid, most respondents cited either the cost of electricity, the cost of connection, or the lack of proximity to the grid.

Demand is high for energy-intensive appliances, especially TVs. Off-grid households indicate a high demand for energy-intensive appliances, particularly televisions and refrigerators. The survey also asked respondents what appliance they would like to purchase if they gained a grid connection (refrigerator, television, hot plate, radio, or iron). Televisions are the most common aspirational purchase across most surveyed countries.

You can read the full study at https://www.cgdev.org/publication/what-can-we-learn-about-energy-access-and-demand-mobile-phone-surveys.

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February 19, 2018

New Study: To Address De-risking and Comply with AML/CFT Regulations, Banks Are Turning to Artificial Intelligence and Other New Technologies

“Regtech May be the Solution to Some De-risking Woes,” Says Center for Global Development’s Vijaya Ramachandran

Contact: Holly Shulman Center for Global Development (202) 416-4040HShulman@cgdev.org,

Washington – Today, the Center for Global Development released a new study that finds that financial institutions have turned to new technologies, including artificial intelligence, to address de-risking and increase the effectiveness and efficiency of their AML/CFT compliance. These new technologies may enhance transparency and information-sharing capabilities, facilitate automation and interoperability between institutions, and improve banks’ ability to accurately identify illicit activity.

This study is the first comprehensive effort to assess six key new technologies and their potential to solve the de-risking problem: know-your-customer (KYC) utilities, big data, machine learning, distributed ledger technology (DLT), legal entity identifiers (LEIs), and biometrics.

“Some policies that have been put in place to counter financial crimes have unfortunately had a chilling effect on banks’ willingness to do business in markets perceived to be risky in part due to the high price of compliance. This has had costly consequences for people in developing countries, and have hurt migrant workers, small businesses that need to access capital, and recipients of lifesaving aid in conflict, post-conflict, or post-disaster situations the most,” said Vijaya Ramachandran, one of the study’s authors. “But what we’re seeing is that even as these policies are having an impact, financial institutions are coming up with solutions in the form of new cutting edge technologies to help them comply better and faster with anti-money laundering regulations.”

The study suggests that new regulatory technologies (“Regtech”) may offer a partial solution to de-risking by lowering compliance costs and improving risk management capabilities. The technologies include:

Machine learning is a type of artificial intelligence that allows computers to improve their performance at a task through repeated iterations. Machine learning may be used to augment or transform a number of compliance functions, including those for developing more sophisticated customer typologies and for more accurately monitoring transactions. These uses could simultaneously cut down on false alerts and identify undetected illicit finance techniques.

Biometrics use distinctive physiological or behavioral characteristics to authenticate a person’s identity and control his or her access to a system, and are more robust than other authentication factors, such as passwords and tokens, as they are generally more secure and easier to use. Biometrics are being used to address the “identification gap” that exists in many developing countries. This use, in turn, could make it easier for banks to conduct customer identification, verification, and due diligence, which may bolster the confidence of their correspondent banks. However, most biometric identification systems are being developed at the national level, meaning that work is required to develop an internationally recognized and interoperable identification system.

Know Your Customer (KYC) utilities are central repositories for customer due diligence (CDD) information. By centralizing information collection and verification, KYC utilities can reduce the amount of information that has to be exchanged bilaterally between correspondent banks and their respondents, thereby reducing the time banks spend conducting CDD investigations.

Big data refers to datasets that are high in volume, high in velocity, and high in variety, and therefore require systems and analytical techniques that differ from those used for traditional datasets. Compared with relational databases, big data applications offer more scalable storage capacity and processing. They also allow many different types of data to be stored in one place, so compliance staff spend less time gathering information from disparate sources. Most important, they can greatly expand the range and scope of information available for KYC and suspicious transaction investigations.

Distributed Ledger Technology (DLT) is a way of securely organizing data on a peer-to-peer network of computers. In a blockchain, which is a type of DLT, data modifications, such as transactions, are recorded in time-stamped blocks. Each block is connected to previous blocks, forming a chain. Modifications are confirmed and stored by all users on the network, which makes the ledger difficult to tamper with. Although blockchain technology is most commonly associated with virtual currencies, such as Bitcoin, the basic technology has a number of other potential use cases, including uses in regulatory compliance. In particular, DLT may be used for securely storing and sharing KYC information, as well as for cheaper and more secure international payments.

Legal Entity Identifiers (LEI) are unique alphanumeric identifiers, like barcodes, that connect to reference datasets held in a public database. Any legal entity that makes financial transactions or enters into contracts may request an LEI. In many countries, especially developed ones, LEIs are increasingly mandated by regulation. To date, more than 1 million LEIs have been issued worldwide. By serving as common identifiers, LEIs can enable different platforms, organizational units, and institutions to refer to entities clearly and without any ambiguity. This interoperability can, in turn, facilitate greater automation and information sharing. A further extension of the LEI would be to include it in payment messages to identify originators and beneficiaries, which would further enhance the transparency of international payments.

This important study comes ahead of the Financial Action Task Force meeting in Paris – set for next week.

“In the face of de-risking, both the public and private sector have tried to find ways to lower the compliance burden without lowering standards,” said Ramachandran. “Our study finds that Regtech may be the solution to some de-risking woes. But for this to work, policymakers need to invest time in understanding how these technologies work, and what their benefits and limitations may be.”

You can read the full report at https://www.cgdev.org/reader/fixing-aml-can-new-technology-help-address-de-risking-dilemma.

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February 12, 2018

Statement on the Trump Administration’s Proposal to Establish a New Development Finance Institution

Contact: Holly Shulman Center for Global DevelopmentHShulman@cgdev.org, (202) 416-4040

Washington – Today, the Trump administration included in its budget funding for a new Development Finance Institution (see page 129 here).

Below is a statement from Todd Moss, a senior fellow at the Center for Global Development, who has been a leading advocate for modernizing U.S. development finance over the past several years:

“Because of the changing global landscape, development finance – rather than aid – is the future. Many previously poor countries are richer today and are looking for partnerships with the United States to deliver jobs, roads, and electricity instead of just aid.

“That’s why it’s so important that the administration included a proposal in its budget to create a new development finance institution. Expanding our commitment to development finance promotes deep capital markets, our culture of entrepreneurship, and our belief in free markets while at the same time spurring economic growth in the developing world.

“The White House today has shown its willingness to build markets for American goods in fast-growing emerging markets, support private sector led growth in our strategic allies, and ensure that U.S. companies are competing in these markets with Chinese and European firms—all at less than zero cost to taxpayers. Now, it’s up to Congress to finish the job.”

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