Development financing should become more varied in future, moving beyond aid from governments to include private investment and creative new ways to finance developing economies, panellists told a Friends of Europe roundtable on 5 March.
The roundtable, “Financing for Development”, came ahead of the third International Conference on Financing for Development, which will be held in Addis Ababa, Ethiopia, in July. This aims to produce an intergovernmental agreement on the future of development and how to finance it.
The European Union should play its full part when it comes to ODA (Official Development Assistance) ” said Neven Mimica, European Commissioner for International Cooperation & Development.“At the same time, we want to be a leading voice in raising the global level of ambition – and encourage others to step up their contributions. Emerging economies and upper-middle income countries are increasingly supporting development through South-South cooperation.
“Quality of growth is fundamentally important,” added Kunio Okamura, Senior Special Adviser at the Japan International Cooperation Agency (JICA). “Growth can widen disparities in a country, and one of the biggest threats is environmental destruction at global level.” He said that development should foster social inclusiveness, environmental sustainability and resilience to events such as natural disasters, which can wipe out achievements in a few minutes.
Despite the new thinking on development financing, donors must not lose sight of basic priorities or of the continuing importance of ODA, said Samura Kamara, Sierra Leone’s Minister for Foreign Affairs and International Cooperation. “Goal number one is ending poverty,” he said. “Inequality, climate change, capacitydevelopment – all of these have to do with this goal number one.”
Official Development Assistance (ODA) is expected to remain critical in achieving the new Sustainable Development Goals (SDGs). Aid has been essential in helping low-income countries accelerate economic growth and lift people from extreme poverty over the last few decades. But financing a truly transformative post 2015 development agenda will require that ODA is used more effectively and strategically and backed up by a quest for additional financing from official and private sectors. Ahead of the first international summit on Financing for Development to be held in Addis Ababa, Ethiopia, in July 2015, several important questions need to be answered: is ODA still playing a valuable role in promoting growth and development? Or has it made some countries overly-dependent on “hand-outs”? What is being done to improve the effectiveness of aid? Does the public sector still have a catalytic role in attracting private sector financing, such as for scaling up infrastructure investments? Is public opinion in traditional Western donor countries still supportive of ODA?
Head of Division, Aid Agenda and International Partners, Agence Française de Développement (AfD)
Head of the Development Finance Division, Development Assistance Committee, Organisation for Economic Co-operation and Development (OECD)
Pedro Silva Pereira
Member of the European Parliament Committee on Development and Rapporteur on Financing for Development
Managing Director at New Horizons Project
The ability to adequately finance a post-2015 development framework will require a mix of policies and actions which spotlight public-private partnerships, the blending of grants with loans and equity, the role of foreign direct investments (FDI), the importance of domestic resource mobilization while also ensuring a more coherent use of remittances and philanthropy. Meanwhile, China, India, Brazil and Turkey have emerged as important development partners for many developing countries. Are governments in emerging nations doing enough on effective tax collection and hammering out well-designed and progressive fiscal policies? What can be done to improve efforts to eliminate illicit financial flows and tax havens? Is the fight against corruption gaining momentum? Are the new development actors working with traditional donors and forging a common view and stance in their policies and operations?
Minister for Foreign Affairs and International Cooperation, Sierra Leone
Head of the Portfolio Management and Policy Division (ACP Department), European Investment Bank (EIB)
Tove Maria Ryding
Policy and Advocacy Manager, EURODAD
Senior Research Fellow, Japan International Cooperation Agency (JICA) Research Institute
Head of Public Affairs, SAB Miller Europe
Chief Executive Officer of the Nelson Mandela Children’s Fund
Managing Director at New Horizons Project
Ambassador Katakami first entered the Ministry of Foreign Affairs in 1980 and was appointed Ambassador of Japan to the European Union in 2014. He was previously Director General of the Economic Affairs Bureau in the Japanese Ministry of Foreign Affairs.
Commissioner Mimica was first appointed to the European Commission in 2013 as the Commissioner for Consumer Policy. He has served as the Croatian Deputy Prime Minister for Internal, Foreign and European Policy and held a number of positions relating to foreign relations and trade, including Chief Negotiator for Croatia’s accession to the WTO.
Okamura is responsible for development partnerships with bilateral and multilateral institutions, and for loan assistance at JICA. He was previously Director General of the Operations Strategy Department and spent a number of years as Chief Representative of the Japan Bank for International Cooperation to France.
Prior to his current appointment in 2014, Guicquéro spent 6 years as Deputy Director of the Asia Department. He has also held numerous positions both within the AFD Group as well as in local agencies in French Guyana, Burkina Faso and Ghana.
Schütte started his career as a Project Manager in the International Labour Organization. He later held a number of positions at the KfW Development Bank, including Country Director for Kenya and Vice President and Division Chief for Financial and Private Sector Development, Asia.
Formerly a Member of the Portuguese Parliament, Silva Pereira was elected to the European Parliament in 2014. In addition to Vice-Chair of the European Parliament Constitutional Affairs Committee, he is a member of the Committee on Development and Rapporteur on Financing for Development.
An economist by training, Dr. Kamara was appointed Minister of Foreign Affairs and International Cooperation in 2012. Prior to this, he served as Minister of Finance and Economic Development and Governor of the Central Bank of Sierra Leone.
In her current role, Rüttgers deals with matters such as management of the ACP Investment Facility, the business plan among other policy and institutional matters. Prior to this, she spent 16 years in the Operational Department as a loan officer in the West Africa, North Africa and Indian Ocean regions.
In addition to her role at EURODAD, Ryding is a member of the coordination committee of the Global Alliance for Tax Justice. She follows the UN negotiations on financing for development, with a special focus on tax justice, debt and private finance. She was previously climate political coordinator at Greenpeace International.
As a Senior Research Fellow, Dr. Tomonori conducts research on environment and climate change, including climate change finance. He has previously worked for the African Development Bank and the OECD, and currently serves as Adviser to the Office for Global Issues and Development Partnership in the Operations Strategy Department, JICA.
McCrimmon has held a number of positions at SABMiller, including Policy Manager and Global Head of Licence to Trade. She was appointed Head of Public Affairs, Europe in 2012.
Mkhabela previously worked for the UNDP, helping to establish a presence in South Africa, and played a leading role in the establishment of the National Development Agency. In her current role, she also heads the Nelson Mandela Children’s Hospital Trust.
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