Transcript Millennium Village

DANIDA Development Days
Trends in International Development
June 2010
Brief introduction to Dalberg
Dalberg is a boutique consulting firm,
that promotes global development...
• by helping leaders of the world’s most
influential non-profit, for-profit and
multilateral institutions
• to develop the right strategies, to
innovate and enhance performance
Areas of Expertise:
• Agriculture and Food Security
Global Presence
• Strategy and Performance
• Founded in 2001
• Energy and Environment
• Opened at least 1 new office every year
• Global Health
• Worked in over 75 countries
• Access to Finance
People
• Corporate Engagement
• Staff from more than 30 countries
• Economic Policy
• Distinguished advisory board
• Conflict and Humanitarian Aid
• Support team, fellows and interns
Source: www.dalberg.com
1
Agenda
• The new emerging markets donors in Africa
• Expectations for the next 15 years
• Implications for traditional European donors
2
China is the main emerging donor in Africa with significant relative
weight to be able to define development assistance trends
• New emerging donors in Africa include principally China and India,
with a strong focus on commercial approaches and resource-rich
countries
• China is particularly responsive to Africa’s current demand for
infrastructure development
• The strong focus on commercial approaches, as well as local content
and ownership, is fostering the creation of new engagement
modalities in Africa such as impact investing and intermediaries
• Traditional donors (mainly Europe and North America) are showing
some timid initiatives towards new modalities (e.g. Millennium
Challenge Account in the United States), but the “traditional” ones are
still the norm (e.g. use of development contractors)
3
Agenda
• The new emerging markets donors in Africa
• Expectations for the next 15 years
• Implications for traditional European donors
4
China is by far the driver of new donor assistance overall. China and
India are the two more Africa-focused emerging donors, and provide
mostly bi-lateral assistance
Estimated development assistance (in USD millions)
7,000.0
6,000.0
5,830.0
5,000.0
4,000.0
3,000.0
2,000.0
1,000.0
-
1,691.0
752.0
601.0
483.0
386.0
205.0
200.0
181.0
135.0
4
Source: Various sources and based on data available for various years (2004 – 2007)
5
Traditional donors continue to be the most important players with
regards to net overseas development assistance
Annual estimates of development assistance to Africa in
billions of USD
China
Denmark
Germany
9.69
5.83
4.22
2.80
72%
Total assistance in USD billions
China
Denmark
Germany
4
30%
15%
Africa %*
0.83
1.48
USD billions to Africa
Based on reported technical and cooperation assistance (2002-2007) of US$ 25,551 million
Total overseas development assistance for 2008
Total overseas development assistance for 2008
Source: ACET, OECD, AidData, One The Data Report 2010
6
China’s development assistance is heavily focused on concessional
loans, with grants a minority
Reported Chinese economic and technical assistance to
Africa (2002-2007)
Concessional
loans
0%
7%
5%
Grants
Debt
cancellation
In-kind aid
4
Source: ACET
88%
Concessional loans
Grants
Debt cancellation
In-kind aid
USD millions
22,379.0
1,851.0
1,300.0
21.0
7
Modalities
Trade
Investment
Development
Assistance
Loans
Mostly driven by
projects and
humanitarian aid
Related to
development
assistance for:
- China
- India
Related to
development
assistance for:
- China
- India
Technical assistance
and scholarships
(India and Brazil)
Strong focus for
China
Leveraging of recent
development
experience of new
emerging donors
4
8
Agenda
• The new emerging market donors in Africa
• Expectations for the next 15 years
• Implications for traditional European donors
9
China, coupled with growing private engagement, will have a strong impact
on the profile of development assistance in the next few years
Development Assistance Today
Development Assistance Tomorrow
Sectors:
1
•Health, Education, Other social
sectors
Sectors:
•Agriculture, Infrastructure,
Environment
Focus:
•Regional
Focus:
•Country / Sector
Impact:
•“Feel good” (e.g. number of
trainees)
Impact:
•ROI (matrix)
Beneficiary:
•Passive by choice or by design
Beneficiary:
•Active in decision-making and
investments / partners
Implementation
mechanisms:
4
•Direct
Implementation mechanisms:
•Private sector, Intermediaries
10
A new development assistance profile will require new rules of
engagement
Development Assistance Tomorrow
Sectors:
•Agriculture, Infrastructure,
Environment
Focus:
•Country / Sector
Impact:
•ROI (matrix)
Beneficiary:
•Active in decision-making and
investments / partners
Implementation mechanisms:
•Private sector, Intermediaries
11
1
Amounts will increase
2
Players will change
• Mobilize quickly
• Flexibility in spending
3
Modalities will change
• Impact investing
• Social
entrepreneurship
• Intermediaries
A changing development assistance profile: the example of agribusiness
financing in Africa
Area of interest
Potential partners
Approach
Instrument
Donors and Foundations
Financial institutions
Normative agencies /
research institutions
Guarantee
schemes
Warehouse
receipting
Value chain
financing
Industry
knowledge
development
Source: Dalberg analysis
12
Agenda
• The new emerging market donors in Africa
• Expectations for the next 15 years
• Implications for traditional European donors
13
Traditional European and North American donors at a crossroads
• Back to the drawing board:
–Principles or pragmatism?
–Aid is part of a partnership with African countries, which includes trade,
country specific strategies and approaches, etc.
» Are the principles outdated?
» Redefine economic development?
• New rules of engagement:
–Support to the private sector (e.g. guarantee mechanisms)?
–Traditional donors as investors?
• New and strengthened skills:
4
–Investment analysis?
–The role of a shareholder?
–Public-Private Partnerships?
14
THANK YOU FOR YOUR ATTENTION!
Contact:
Madjiguene Sock
Dalberg Dakar
Email: [email protected]
Tel: +221 33 869 64 54
15
APPENDICES
16
No.
Donor country
1China
2Saudi Arabia
3Korea
4Turkey
5Taiwan
6Kuwait
7Poland
8India
9UAE
10Czech Republic
Hungary
Israel
Slovak Republic
Slovenia
Iceland
Mexico
South Africa
Malta
Lithuania
Latvia
Cyprus
Estonia
Estimated amounts (in
USD millions)
5,830.0
1,691.0
752.0
601.0
483.0
386.0
205.0
200.0
181.0
135.0
100.0
95.4
56.0
38.1
27.0
19.0
18.0
9.7
9.1
8.3
6.5
4.9
Bilateral
Mostly
N/A
96%
N/A
N/A
N/A
23%
Mostly
N/A
48%
63%
84%
55%
11%
74%
N/A
N/A
2%
9%
9%
77%
12%
Africa
High
Low-Medium
Low
Low
Medium
Low-Medium
Low
High
Low
Low
Low
Medium
Low
Low
Medium
Low
High
Low
Low
Low
Low
Low
17