STRATEGIES FOR FINANCING DEVELOPMENT

Debt Strategy

Research, Analysis and Advocacy

• 21 May – Jubilee Debt Campaign new report. The report, The State of Debt: Putting an end to 30 years of debt crisis, investigates the external debts of both governments and the private sector in low and lower middle income countries. The report’s author, Tim Jones said, “The rich world is currently gripped by a debt crisis caused primarily by reckless lending and borrowing between private banks. Worryingly, this kind of dangerous debt is now on the increase in impoverished countries, at a time when world leaders think the problem of Third World Debt has been solved". Perhaps the report’s most startling finding is that three of the countries that had some of their debt cancelled in response to the global Jubilee campaign – Mozambique, Ethiopia and Niger – are all soon expected to be spending as much on foreign debt payments as they were before receiving debt relief.
• 20 April – LIC Finance Ministers Demand Faster Progress on Debt Relief, Improvements in Debt Sustainability Framework and Debt Relief Architecture. Francophone LIC Finance Ministers met in Washington DC under the co-presidency of Cambodia and Cameroon. At a press conference, they demanded fair representation in the G-20 and the Financial Stability Board, further progress on innovative financing, debt relief, and aid quantity and quality. Combined with a substantial lobbying process by the Global Campaign Against Poverty, these discussions resulted in a rapid reconfirmation of Africa’s seats at the G-20 table. For a copy of the communiqué, click here.
• 14-16 November - UNCTAD Debt Management Conference. DFI spoke at the UNCTAD Debt Management Conference in Geneva on the links between debt management and public financial management, urging a reversal of the marginalisation of debt management in the absence of debt crisis, and a greater focus on funding decentralised regional and in-country capacity-building. For DFI's presentation click here. The conference also provided a forum for bilateral meetings with many of DFI's implementing partners and the countries we are assisting on debt management capacity-building. Overall, the conference focussed on debt restructuring and responsible borrowing/lending as well as debt management. Click here to see the programme and papers.
• 16 November - Vulture Fund’s Illegal DRC Debt Acquisition Revealed. A group of charities is appealing to Jersey to close the loophole in UK law which is allowing New York based vulture fund FG Hemisphere to sue the Democratic Republic of Congo for $100 million. A media investigation has exposed the hedge fund’s alleged illegal acquisition of DRC’s debt, forcing the second poorest country in the world to pay millions of dollars in interest repayments and fees on the original debt. Read more on the campaign here.
• 8 November - IMF and World Bank Report on HIPC Initiative. A recent joint WB and IMF report on HIPC Initiative aims to accomplish three objectives: 1) provide an update on the status of implementation, impact, and costs of the HIPC Initiative and MDRI; 2) discontinuation of the status of implementation reports and 3) further ring-fencing of countries eligible for debt relief.
• 4 November - IMF Agrees Debt Relief for Côte d’Ivoire. Under the IMF’s Extended Credit Facility’s three year arrangement, Côte d’Ivoire is to be relieved of its external public debt worth US$615.9 million. Another US$8 million for interim assistance has been approved under the HIPC Initiative. This decision should help Côte d’Ivoire implement its reforms plan while recovering from recent social and political unrest and economic decline, and reach the Completion Point of the enhanced HIPC initiative. Details and background are available in the IMF press release.

Capacity Building Events

• DeMPA Missions to Burundi, Niger, Sudan and Mali. Joint missions by the World Bank and DRI visited Bamako (30 November-9 December 2011), Bujumbura (9-17April), Niamey (9-18 April) and (with UNCTAD) Khartoum (28 January – 7 February) to evaluate whether debt management is in line with international standards, based on the DeMPA methodology. The missions held meetings with all the institutions involved in debt management, and in Burundi provided training on operational risks, the calculation of the grant element and the interpretation of results of a DSA. Draft reports have been prepared and sent for peer review before being submitted to the country’s authorities.
• 23 April - 3 May & 13-30 March - Capacity Building Missions in Haïti. As part of the Debt Management Capacity Building Program managed by CEMLA and financed by CIDA, CEMLA/DRI visited Port-au-Prince for 2 joint capacity building missions. The first aimed at enhancing capacity in debt sustainability and debt strategy and to update the public debt database in order to prepare the various debt data projections and macroeconomic projections required for the debt sustainability analysis and Medium Term Debt Strategy (MTDS). The second mission was to familiarise staff of the various institutions with the methodology on new financing elaborated by DRI. The training welcomed nineteen participants from the Ministry of Economics and Finance, the Ministry of Planning and External Cooperation, and the Bank of the Republic of Haiti.
• 13-23 March and 23 January-2 February - Reform Plan Missions to DRC and Comoros. Following earlier DeMPA missions, the World Bank and DRI jointly conducted missions to help the governments design reform plans for debt management. After identifying needs, working sessions and bilateral meetings led to the formulation of reform plans hinging on four main areas: governance, organisational structure, debt strategy and operational risks. In Comoros, the mission also provided training in interpreting DSA results, report drafting, treasury management and operational risks.
• 27 February - 2 March – WAIFEM Attachment to DFI. DFI hosted an attachment for two WAIFEM staff. It provided hands-on training of the BWI's Debt Sustainability Framework (DSF), with particular reference to the debt situations in WAIFEM member states. In addition, the attachment discussed policy issues of relevance to WAIFEM countries.
• 15-28 January - Debt Management Mission in South Sudan. At the request of the Minister of Finance and Economic Planning, and financed by the Capacity-Building Trust Fund, a DRI mission visited Juba. The purpose of the mission was to provide independent advice to Government to help conduct a Debt Sustainability Analysis, and implement a technical capacity training program on issues such as risk and cost indicators, DSA methodology, and new financing issues. The mission also developed a medium term capacity building program for debt management.
• 5-15 December - Debt Relief Capacity Building Training in Sudan. At the request of the national authorities, a mission from DRI travelled to Sudan in order to assist the Government in its preparations for the HIPC Initiative. The mission had three main objectives: 1) provide practical training to officials on debt relief and Debt Relief Analysis (DRA); 2) assist officials in preparing for a National DRA Workshop in March of 2012 and 3) assist Government to finalise a proposal, budget and results matrix for a 3-year Debt Strategy and Analysis Capacity Building Programme. The mission was part of a program being financed by the Government of Switzerland to support debt management in Sudan.
• 17-29 October - Debt Sustainability Workshop in DRC. A Debt Sustainability Workshop was held in Kinshasa, Democratic Republic of Congo. The objective of the workshop was to enhance capacity in debt sustainability for staff from the Public Debt Department, the Ministry of Finance, the Ministry of Budget, and the Central Bank. About thirty staff were trained using the methodology developed by the World Bank and the IMF (Debt Sustainability Framework for Low Income Countries) in order to draft the country's debt sustainability report.

Foreign Private Capital

Research, Analysis and Advocacy

• 23 May – EU Endorses FTT. The European Parliament adopted by strong majority proposals for an EU-wide financial transaction tax. Following the recent French legislation for a unilateral FTT to be implemented in France from August 2012, Parliament approved the tax rates proposed by the Commission, 0.1 per cent for transactions of shares and bonds, and 0.01 per cent for derivatives. The adopted text also confirms that the additional revenue generated will also be used 'for specific policy purposes, such as development aid and fighting climate change', a step in the right direction for LICs' ministers who have been campaigning for an FTT and other innovative financing mechanisms.
• 15-16 April – New Rules for Global Finance Strategic Plan. Matthew Martin participated in a retreat of the New Rules board to draft a strategic plan for the next 4 years as New Rules fights to change the way global finance is governed and increase its contribution to just, inclusive and economically sustainable development. The plan will be finalised by June and used as the basis for fundraising for key analytical, advocacy and networking activities during 2012-15.

Capacity Building Events

• June 2012 – DFI contributes to Commonwealth Work on Innovative Financing. DFI is leading the production of a Handbook on Innovative Financing for Development for the Commonwealth Secretariat. The Handbook, due to be published in Q3 2012, uses a unique set of Principles to help developing countries to identify and assess a diverse range of new instruments in order to plug the huge development financing gaps necessary to meet their MDGs, address environmental challenges, and respond to exogenous shocks. It also raises awareness of innovative instruments presently under discussion. The Handbook is being targeted primarily at decision makers in developing countries.

Public Sector Financing

Research, Analysis and Advocacy

• 29 May-1 June – Client Assessment Presented to AfDB Annual Meetings. DFI presented the main findings of the client assessment of the African Development Bank to its Governors’ Dialogue on the long-term strategy, and to a consultative conference of CSOs, at the Annual Meetings of the African Development Bank in Arusha, Tanzania. The report will be presented formally to the AfDB Board, and published in time for the African Development Fund replenishment dialogue in Q3.
• 14-15 May – Development Cooperation for Sustainable Development. DFI supplied a resource person for the UN Development Cooperation Forum symposium in Brisbane. Participants discussed the need for the post-2015 Development Agenda to be based on economically, socially and environmentally sustainable development, and what this would mean for delivery of aid, financing and partnership mechanisms, mutual accountability and the international architecture.
• 9-10 May – AfDB Client Assessment Management Meetings. Matthew Martin and Professor Ngaire Woods of Oxford University visited the African Development Bank in Tunis to hold discussions with Bank management on the findings of their Client Assessment report on the Bank. The meetings were extremely positive and led to agreement on many concrete steps to pursue the recommendations.
• 20 April – DFI supports Commonwealth-OIF Outreach with G20 on Food Security. DFI has contributed to a joint Commonwealth Secretariat – Organisation Internationale de la Francophonie paper on food security, which presents the perspectives of their smallest, poorest and most vulnerable member countries. The paper was presented at an outreach meeting with Mexico, which encouraged a continued focus on food security during Mexico’s G20 Presidency. Drawing on their own experiences, developing country participants ranked food insecurity among the most urgent priorities to reduce poverty and achieve sustainable growth. They called for a cohesive set of measures to increase food production and access, including securing longer-term commitments for investment, financial and technical assistance; adapting new research; and developing tools to help increase productivity for smallholders and promoting long-term sustainable use of natural resources.
• 20 April - LIC Finance Ministers Demand Fair Representation in G20. Francophone LIC Finance Ministers met in Washington DC under the co-presidency of Cambodia and Cameroon. At a press conference, they demanded fair representation in the G-20 and the Financial Stability Board, further progress on innovative financing, debt relief, and aid quantity and quality. Combined with a substantial lobbying process by the Global Campaign Against Poverty, these discussions resulted in a rapid reconfirmation of Africa’s seats at the G-20 table. For a copy of the communiqué, click here.
• 20 April - Delivering Growth and Poverty Reduction for Low-Income Countries. DFI was commissioned by Save the Children Norway, Norwegian Church Aid and the Norwegian Forum for Environment and Development to study whether the IMF Poverty Reduction and Growth Trust is delivering poverty reduction and growth to low-income countries. The study finds that it could do a great deal more, and makes strong recommendations for the IMF and its funders. It was presented at a seminar in the IMF Spring Meetings and is forming the basis for extensive CSO inputs into the IMF review of LIC instruments.
• 16 April – Strong Framework for Monitoring Aid Results. DFI was commissioned by a consortium of major NGOs (Actionaid, Concord, Oxfam, Save the Children and the UK Aid Network) to analyse whether a strong global monitoring framework is essential to make progress on increasing the results of aid. The study has been presented at meetings in Addis Ababa, Paris and Washington. Thanks to major lobbying and negotiation by developing countries and NGOs, it looks as though the post-Busan negotiations will produce a reasonably strong global framework to monitor progress on increasing aid results.
• 27 February - DCF Foundations Study Discussed. DFI was commissioned by the UN DCF to analyse the recent rapid growth of foundations and private philanthropy, and the potential advantages and disadvantages of this type of development financing. A half day meeting in New York discussed the findings and the potential for the UN to work with foundations to set best practice standards to improve the quality and results of philanthropy worldwide.
• 1 December - Busan Partnership for Effective Development Cooperation Agreed. DFI participated in the UN delegation to the Busan High-Level Forum on Aid Effectiveness, on 29 November-1 December, to assist in side events on mutual accountability and aid allocation, and a meeting between the UN DCF and its stakeholders on the future architecture for sustainable development cooperation. For a copy of the Busan Declaration, click here. For an independent analysis of the outcome by the Better Aid coalition, click here.
• 25 November - Water Aid Study Shows Aid, Spending Off Track for MDGs. Earlier this year DFI prepared a background study for WaterAid analysing central government allocations to the water, sanitation and hygiene sector (WASH). The final report, Off-track, Off-target, which draws of the findings of the background studies of DFI and others is available here.
• 18-19 October - DCF Luxembourg Symposium Discusses Mutual Accountability, Catalytic Role of Aid. DFI participated at the Development Cooperation Forum meeting in Luxembourg, speaking on the need for strong global mutual accountability mechanisms on development cooperation, without which developing countries cannot hold donors accountable. DFI's presentation is available here. For the conference programme and other papers (mainly on the role of aid in catalysing microfinance, investment and tax revenue) click here.

Capacity Building Events

• 10 May - Mutual Accountability in Afghanistan. DFI has been commissioned to support the Government of the Islamic Republic of Afghanistan in building a Mutual Accountability Framework to hold the government and its development partners responsible for delivery of aid results, after the international conference in Tokyo scheduled for July 2012.
• April - Guinea Aid & Auditing Project. In keeping with the national capacity building programme in aid management, and audit and control started in 2010, the national manual of procedures for the management and control of public investment projects is now being finalised and will be released for official use shortly.

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