STRATEGIES FOR FINANCING DEVELOPMENT

Debt Strategy

Research, Analysis and Advocacy

• December 2012 - LIC Debt Sustainability Analysis Reports.

  DSA results are available on the IMF site from May to September 2012. The results for Zambia, Burkina Faso, Cote D’Ivoire, Samoa, CAR, Mauritania, Afghanistan, Tanzania, Cameroon, Sao Tomé and Príncipe, Malawi, Ethiopia, Sierra Leone, Zimbabwe and Guinea are similar to those of the previous DSA. Lao People’s Democratic Republic has improved and Samoa has worsened its status.

• 26 September and 27 June 2012 - Guinea and Côte d’Ivoire Reach HIPC/MDRI Completion Point.

  Having met the necessary requirements, Guinea is to receive $2.1 billion of debt cancelled by the IMF and the World Bank, therefore becoming the 34th country to reach completion point under the HIPC Initiative. However, debt payments will continue to average 5% of government revenue for the next ten years. Meanwhile in Côte d’Ivoire, the IMF and the World Bank have approved 4.4 billion USD in debt relief for Côte d’Ivoire under the HIPC Initiative. Although a definite step in the right direction, this will not however solve the issue of debt owed to private creditors and that of new borrowing, as described in Jubilee Debt Campaign's detailed analysis.

• 1-2 August 2012 - Debt Sustainability Framework and IMF Non-Concessional Borrowing Policy.

  Financed by OIF as part of its support to Francophone Finance Ministers in Kinshasa, DFI spoke at the African IMF-World Bank Caucus meeting of Finance Ministers on the issues of Debt Sustainability – Reviewing the LIC-DSF framework; and Changing the IMF’s Non-Concessional Borrowing Policy. The first presentation is available here and the second here.

• August 2012 – How it could work – The alternative to the traditional debt relief processes for Zimbabwe.

  Eurodad member Erlassjahr has released a new paper on how a Fair and Transparent Debt Workout mechanism could work in the case of Zimbabwe, with a concrete step-by-step simulation on how an impartial and fair process would work. The paper can be found here. The case study is based on a step-by-step guide developed by Erlassjahr, which can be found here.

• 25-26 June 2012, Accra - Why Debt Management Capacity Building Is Still Vital.

  DRI spoke on this topic at the World Bank Debt Management Facility Stakeholders Forum organised in Accra. The presentation focussed on lessons for best practice in building capacity, and especially emphasised the need for “downstream” (country-level) financing to be provided to other organisations to complement the “upstream” role of the World Bank in the DMF. To download a copy of the presentation click here. To see the wider programme and summary of proceedings of the forum click here.

Capacity Building Events

• January-February 2013 - Debt Policy Mission in South Sudan.

  DFI conducted the final debt policy support mission to support the Ministry of Finance and Economic Planning in South Sudan. The mission, funded by the joint donor Capacity Building Trust Fund, had three aims: to finalise the South Sudan Debt Policy for approval by the Government; to finalise plans for institutional strengthening and capacity-building support on debt management to be provided to Government institutions as well as Parliament; and to provide any updated short-term advice on current borrowing issues.

• 2012-16 Latin American Capacity Building Programme in Public Debt Management.

  Managed by CEMLA and funded by the Secretariat for Economic Cooperation of the Swiss Government, the Capacity Building Programme in Public Debt Management (PDP) was launched in 2012 to deliver tailor-made capacity-building support in public debt management to Latin American countries. The five-year programme will aim at assisting LIC and MIC LAC countries to maintain debt sustainability and improve debt and macroeconomic management through improved national debt and new financing strategies capable to effectively respond to the impacts of the financial crisis. Initial Demand Assessment Missions have already been conducted to several countries and will be completed in Q1/Q2 2013.

• 10-17 December 2012 - Financing Strategy Workshop in Haiti.

  As part of the Debt Management Capacity Building Program managed by CEMLA and financed by CIDA, a joint CEMLA/DRI mission went to Port-au-Prince, Haiti, to hold a first national Financing Strategy workshop. This event enabled participants from the Ministry of Finance, the Central Bank of Haiti and the Ministry of Planning and External Cooperation to draft their own debt strategy document structured around 4 main points: how to mobilize financing for development, how to maintain debt sustainability, conducting a cost/risk analysis and reducing long term dependence on external financing. The document is currently being finalised and will be submitted to the Haitian authorities for approval, in time for their 2013-2014 budget.

• 12-16 November 2012 - MTDS Francophone Regional Workshop.

  DRI coordinated for the World Bank Debt Management Facility (DMF) a regional MTDS training workshop in Dakar, Senegal, facilitated by World Bank and DRI consultants, which attracted 44 participants from 19 Francophone countries and institutions. The workshop introduced participants to the toolkit developed to assist governments to develop an MTDS. The training also familiarised them with the analytical tool through a series of exercises enabling them to quantify and measure the performance of alternative debt management strategies under different shock scenarios.

• 2012 Reform Plan Missions to Vietnam, Burundi, CAR and Tonga.

  Joint missions by the World Bank and DRI visited Hanoi  (13-22 July), Bujumbura (30 July - 8 August), Bangui (19-30 November) and Nuku’Alofa (25 Nov - 12 Dec) to help the respective governments design reform plans for debt management, focusing on key issues such as, among others, operational risks management, legal and institutional framework and debt policy and strategy.

• 2012 MTDS Missions to Ethiopia, Côte d’Ivoire, Cameroon, Mauritania and Tajikistan.

  Joint missions by the World Bank and DRI visited Addis Ababa (9-19 October), Abidjan (19-20 September), Yaoundé (11-20 September),Nouakchott (3-10 June) and Dushanbe (30 May - 8 June). Their objective was to assist the countries to formulate their own medium term debt strategy by using the strategy formulation tool through exercises from the BWI methodology applied to their respective countries.

• 10-20 November 2012 - DeMPA Mission to Kosovo.

  A joint mission of the World Bank and DRI visited Pristina, Kosovo to evaluate the country's debt management, based on the DeMPA methodology elaborated by the BWIs. As part of the review, the mission held meetings with all the institutions involved in debt management. A draft report has been prepared which has been sent for peer review before being submitted to the country's authorities within the forthcoming weeks.

• 31 October - 2 November 2012 - MTDS Training Seminar in Washington.

  DRI participated at an MTDS training seminar for trainers in Washington DC. Various Implementing Partners, such as Crown Agents and Commonwealth Secretariat and various economists from different departments at The World Bank participated at the event. The training included presentations and practical exercises, as well as providing feedback to the Bank on further MTDS development.

Foreign Private Capital

Research, Analysis and Advocacy

• Q4 2012 - Francophone LIC Ministers Agree Enhanced Technical Support Work for Advocacy on Innovative and Private Financing.

  As part of their decisions in the Tokyo Annual meetings of the BWIs, Francophone LIC Ministers agreed that more technical work was needed to support their decision-making and advocacy. This will begin in Q1 2013 with the establishment of a network among LIC Ministries of Finance for rapid information sharing on experiences of innovative and private finance; and will continue in Q2 2013 with the holding of a meeting of senior officials to discuss key instruments and mechanisms for innovative and private financing.

• Q4 2012 - New Rules for Global Finance FSB-Watch Coalition and Global Financial Governance Report.

  New Rules for Global Finance has established a coalition with issue-specific campaigns on bank legislation, commodity/food speculation and hedge funds, tax havens and shadow banking, and sovereign debt, to monitor more closely the work of the FSB and G20 on regulating global private financial flows. To support the coalition, it has expanded and updated the www.fsbwatch.org website as well as the www.new-rules.org website, and appointed “translators” to provide concise user-friendly summaries of FSB and other documents for advocacy purposes. DFI will help New Rules to facilitate meetings in April in Washington to plan a Global Financial Governance report, assessing the governance, accountability, transparency and impact on inclusive and sustainable development of the G20, IMF, World Bank and FSB; as well as a meeting in Basel in June to plan more specific activities on the FSB and G20.

Capacity Building Events

• Q4 2012 - Briefing Papers on Private Financing Sources.

  DFI has produced a set of briefing/training papers for low-income policymakers on the pros and cons of international bonds, credit ratings and PPP/Private Financing Initiative deals, as well as on best practices in mobilising funding through these mechanisms. They are the first in a series of briefings on innovative financing mechanisms (including advocacy and implementation notes, and case studies of country experiences) which will be produced during 2013-14.

Public Sector Financing

Research, Analysis and Advocacy

• February 2013 - The Preferred Partner? AfDB Client Assessment Report To Be Published.

  The report of the client assessment organised by DFI for the African Development Bank is due to be published in February, following a final discussion by the Executive Board. The report finds that the AfDB is “a preferred partner” of its African clients compared to other funding organisations, and makes recommendations on strategy, resources, delivery, private sector support, becoming a “Policy Bank”, and reinforcing engagement with stakeholders, based on clients’ suggestions, to assist the Bank to become the preferred partner of its clients under its long-term strategy for 2013-22.

• January 2013 – Contextual Shifts In The Aid Landscape and Developing Countries.

  A working paper from the Overseas Development Institute (ODI) studies the evolution of development assistance in the changing global context of the last ten years, analysing the various types of funding available now to developing countries and providing specific examples in case studies.

• 22 January 2013 – Green Light for an EU FTT.

  The EU Council adopted a decision authorising eleven Member States - including the 4 biggest Eurozone economies Germany, France, Italy and Spain - to go ahead with enhanced cooperation on a common system of financial transaction tax. A subsequent Commission proposal for a Council Directive implementing the enhanced cooperation in the area of financial transaction tax should follow in due course. Check progress on the Robin Hood Tax website.

• 13-14 December 2012 - Vienna Policy Dialogue on Development Cooperation and Gender Equality.

  Organized by UNDESA, in partnership with UN Women and the Government of Austria, this brought together senior experts from national and local governments, civil society organizations, parliaments, women’s organizations and the private sector with representatives of international organizations to develop concrete policy recommendations to advance gender equality and the empowerment of women in response to the profound shifts in international development cooperation. The meeting emphasised that gender equality must be at the heart of future development cooperation efforts and discussed proposals for indicators to measure that this is happening.

• December 2012 - Is EU and European Aid Improving?

  The UK Independent Commission on Aid Impact (ICAI) released a report analysing the coordination and management of the EU’s development spending and focuses on the impact of EU aid in low-income countries through case studies. While the report assesses that many improvements are being made, it highlights concerns over delivery and weaknesses in terms of performance. A Eurodad AidWatch Special Report concludes that much remains to be done to implement aid effectiveness commitments by EU donors, one year on from Busan.

• 14-15 November 2012 – ODI CAPE Conference: Development Cooperation in Tomorrow’s World.

  DFI chaired a session of this conference focussing on the role of South-South cooperation. Featuring panellists from Brazil, China, Mexico and South Africa, the session discussed the comparative advantages of South-South cooperation and what more can be done to enhance evaluation of results. The conference also had sessions on climate finance, philanthropy and social impact investment, recipient country perspectives on different actors, and how these fit with the current focus on maximising results from development cooperation.

• 11 October 2012 - Francophone Finance Ministers Mobilise for Financing Development.

  Finance Ministers of Francophone countries met on 11 October 2012 in Tokyo, Japan, during the Annual Meetings of the World Bank and the IMF. At the invitation of the Democratic Republic of Congo, Ministers discussed development financing with a focus on how to fill the gap between development financing needs and currently available resources, as well as on finding solutions to reduce the deficit and effective ways to use new possible resources. Read the communiqué here.

• 11 October - Leading Group Appeal for Implementation of Innovative Financing Measures.

  An appeal was adopted by CSO representatives and the French and Finnish governments at a side event on innovative financing for development organized in Tokyo during the IMF/WB Annual Meetings. The next plenary session was held on February 6th 2013 in Helsinki. A special session discussed a paper on innovative mechanisms for financing agriculture, food security and nutrition.

• 1 August 2012 - French FTT Goes Live.

  France becomes the first country in the European Union to bring in a tax on financial transactions. Launched on 1st August, the 0.2% levy on France’s biggest businesses with a market value in excess of 1 billion Euros is expected to generate 150 million Euros (10%) for development and climate change - a much lower figure than needed to cover current and future development needs. Civil society organisations, however, welcome the step in the right direction but will keep on pushing for an expansion of this tax to derivative products which could generate more substantial amounts to respond to global challenges.

• 5-6 July 2012 - UN Development Cooperation Forum.

  The latest ministerial meeting of the DCF in New York focussed on ways to improve the effectiveness of development cooperation in catalysing domestic resource mobilisation (budget revenue, microfinance), promote sustainable development, improve allocation among countries and sectors, increase quality and results, accelerate progress on accountability and transparency, and maximize the benefits of South-South cooperation. DFI provided key support to the preparation of the Secretary-General’s report on Development Cooperation. DFI’s Director also chaired a video panel discussion on mutual accountability. For other information on the outcome of the DCF click here.

• 18 June 2012 - Save the Children’s Report On The Importance of Social Protection.

  DFI was commissioned by Save the Children UK to provide research into current and projected trends in social protection expenditure which contributed to the newly launched report A Chance to Grow. With the current global economic crisis hitting the poorest countries hardest, this report finds that promoting and strengthening social protection programmes can reduce child hunger and malnutrition, save lives and promote economic opportunities, and proposes a series of evidence-based recommendations to achieve this goal.

Capacity Building Events

• January-December 2013 – Strengthening National Mutual Accountability Mechanisms.

  DFI will be supporting the UN Department of Economic and Social Affairs and UNDP to implement programmes to strengthen national mutual accountability mechanisms for development cooperation and its results in 4 pilot African countries during 2013. The work builds on the earlier global analysis of MA progress and DFI’s experience in providing MA support to more than 30 low- and middle-income countries.

• January 2013 – DfID Seminar on Strengthening Mutual Accountability.

  DFI presented lessons from experience at a seminar organised by DfID, together with presenters from DfID Afghanistan and Sierra Leone. The seminar discussed key lessons about the need to tailor MA processes to different countries (eg MICs, LICs and fragile states), closer collaboration between MA and New Deal processes, generating political commitment by donor and recipient governments, enhancing inclusion of parliaments and civil society, and capacity-building needs. The DFI presentation is available here.

• June-September 2012 – Mutual Accountability Support to Afghanistan.

  DFI provided support to the Government of Afghanistan and UK DfID in preparing the content and implementation mechanisms for the Tokyo Mutual Accountability Framework, through which Afghanistan and its donors will hold one another responsible for the delivery of promises made at the Tokyo donor conference in July 2012. The main focus of the work was on reducing conditionality levels for Afghanistan, increasing accountability targets for donors, and suggesting strong implementation mechanisms and closer coordination with New Deal initiatives.

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