While we must continue to provide assistance to countries in crisis, fragile states and the world’s poorest, development assistance must be more than a tool to merely alleviate the effects of poverty. It must also be a tool to spur transformation. Since 2010, the United States has sharpened the focus of our global development investments to achieve sustainable development outcomes, leverage increased private capital flows, diversify the range of private sector and nongovernmental partners with whom we work, and invested in game-changing innovations.
Over the last four days, representatives from the White House, the Departments of Treasury and State, USAID, as well as from the Overseas Private Investment Corporation (OPIC) and the Millennium Challenge Corporation (MCC) have joined Treasury Secretary Jacob J. Lew to lead the U.S. delegation to the third international Financing for Development Conference (FfD) in Addis Abba, Ethiopia. FfD is focused on reinvigorating and strengthening financing for development across the international community, as well as to assess progress made and steps forward in our efforts to promote international development cooperation. The conference provides an opportunity to reaffirm our commitment to mobilizing the three streams of capital for sustainable development — private investment, domestic resources mobilized by developing countries, and foreign assistance. Maximizing their development impact is critical to achieving an ambitious, actionable post-2015 development agenda, one that reflects the U.S. Government’s commitment to ending extreme poverty within a generation and elevates social, economic, and environmental priorities in a new set of sustainable development goals.
While we recognize the considerable progress achieved since the first international conference on Financing for Development in Monterrey, notably in halving rates of extreme poverty, too many people have been left behind in what must be the global pursuit of prosperity and opportunity for all. A deliberate focus on inclusion and the needs of people in crisis and the poorest countries must therefore be a key tenet of our collective commitment to sustainable development. Official Development Assistance (ODA) continues to play an important role, particularly for those countries whose needs are greatest and whose capacity to mobilize domestic and international resources is weakest, in Least Developed Countries, and fragile and conflict affected states. The United States continues to lead the world in terms of volume of ODA committed, with nearly $33 billion in assistance committed in 2014 alone.
No country wants to fuel its economy on external aid alone, and the United States continues to be committed to using its assistance, where conditions allow, to support developing countries to better mobilize and effectively use their domestic resources and attract domestic and foreign private investment to finance their own development and reduce their dependence on foreign aid.
Today, private investment capital comprises a much larger share of total development finance than ODA, and the Obama Administration is effectively using all of our development finance tools as a catalyst to mobilize private capital for development:
- Since Monterrey, the Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, has committed over $33 billion in development finance. The new projects that OPIC has supported in this period are expected to yield close to $82 billion in private investment in developing and emerging economies. A further example of this commitment to mobilize private capital is reflected in President Obama’s 2016 Budget, which included an increase of more than 30 percent% to our funding for OPIC. Since Monterrey, we have – working with Congress – already expanded OPIC’s capacity by over 60%, and are now within reach of doubling OPIC’s capacity to mobilize private capital for sustainable development.
- Since its establishment in 2004, the Millennium Challenge Corporation’s (MCC) become a powerful example of successful investment in effective development strategies. MCC’s $10 billion portfolio has leveraged nearly $5 billion in private sector investment and more than $450 million in partner country contributions. Beyond direct leverage, MCC has worked with its partner countries to improve the infrastructure, policy and business environments that enable the private sector to thrive.
- Through Power Africa, an innovative initiative aimed at doubling electricity access in sub-Saharan Africa, the United States is bringing a range of partners together to generate dramatic investments to change people’s lives for the better. Power Africa is helping to accelerate private sector energy transactions combining the assistance, financing, commercial and diplomatic tools of the U.S. Government, as well as leveraging tools and expertise from our bilateral and multilateral partners and over 100 private sector partners. To date, Power Africa has leveraged nearly $32 billion in external commitments, including more than $20 billion in private sector commitments. For every U.S. taxpayer dollar committed, the United States has leveraged nearly three dollars in private sector commitments, and more than four dollars in total non-U.S. Government commitments.
- Following the 2009 G8 L’Aquila Summit and President Obama’s call for global leaders to do more to address food insecurity, the United States led a campaign that mobilized $22 billion in assistance for agriculture, and today food security and nutrition are at the top of the global agenda after decades of decline in investment. Through the New Alliance for Food Security and Nutrition, the United States and its partners have mobilized $10 billion in private sector commitments from more than 200 international and African companies, of which $1.8 billion has already been invested in Africa’s agricultural sector.
The Obama Administration is also building on a half century of leadership on development by the United States Government, and partnering with the American people who provide their own support, and American foundations, universities, and businesses, which continue to lead a new and exciting era of global philanthropy. In one year, this assistance totaled around $39 billion for development programs around the world.
- The United States is the world’s leading donor in global health. Our global health investments are improving health outcomes through strengthened and more sustainable health systems, increased investments in maternal and child health, family planning, nutrition and combatting infectious diseases including HIV/AIDS, tuberculosis, malaria and neglected tropical diseases. From U.S. Fiscal Year (FY) 2009 to FY 2014, the U.S. Government dedicated more than $50 billion to achieving global health goals, including as a primary donor to the Global Fund for AIDS, TB and Malaria and as a leading donor to Gavi, the Vaccine Alliance. The United States is also a world leader in supporting research and development, and has over the last 5 years substantially increased investments in game-changing innovation in the health sector.
- Through Feed the Future we invest in the food security plans of our partner countries to develop their agriculture sectors, spur economic growth and trade, increase the incomes – particularly of small farmers – and reduce hunger, poverty and under-nutrition. Under this initiative we achieve impact through country-led approaches and by establishing partnerships with all stakeholders—governments, businesses, local farmers, research communities and civil society organizations. Feed the Future programs are also supporting the deployment of climate-smart technologies that make farmers more resilient to climate change. U.S. leadership on food security helped inspire a series of related development efforts centered around inclusive, collective global action, including the establishment in 2010 of the Global Agriculture and Food Security Program (GAFSP), an innovative multi-donor trust fund that has to date allocated approximately $1.4 billion to 25 low-income countries to help boost agricultural productivity.
- The United States supports efforts to channel funding to low-carbon and climate-resilient development. To this end, President Obama’s Executive Order 13677 on Climate-Resilient International Development, commits the U.S. government to taking climate resilience into account across all of our international development assistance. In June 2015, the G-7 leaders pledged to incorporate climate mitigation and resilience considerations into development assistance decisions. The United States is using every available lever to mobilize climate finance globally, having committed $12.8 billion in public climate finance between FY2010-2014, which leveraged billions more in private finance.
- As a founding member of the Open Government Partnership (OGP), which the United States launched in 2011 with Brazil, Indonesia, Mexico, Norway, the Philippines, South Africa and the United Kingdom, the United States partners with governments and civil society leaders around the world to promote the more transparent, effective and accountable governance and institutions that are necessary for development gains to be sustained. Currently co-chaired by Mexico and South Africa, OGP has grown to include 65 participating countries that together have made over 2,000 commitments to make government more open, accountable and responsive to citizens.
- Though Let Girls Learn, the United States will launch new programs and elevate existing efforts, including in areas of conflict and crisis, and leverage public and private sector partners to help adolescent girls worldwide attend and complete school. It will build more partnerships and challenge other organizations and governments to commit resources to lift up adolescent girls. President Obama’s FY 2016 Budget included $250 million in new and reallocated funds for Let Girls Learn, and the United States has partnered on the initiative with the United Kingdom and Japan, two countries that together have newly committed $400 million to adolescent girls’ education. A key part of Let Girls Learn will be to encourage and support community-led solutions to reduce barriers that prevent adolescent girls from completing their education. Through the efforts of First Lady Michelle Obama working with the Peace Corps, this new initiative will support community-generated and community-led girls’ education and empowerment projects worldwide.
- In times of crisis, communities and countries need urgent assistance, and the United States is the world’s leading provider of humanitarian aid, and works in partnership with other donor governments, UN agencies, non-governmental organizations, local relief groups and others to respond to an average of 70 disasters in more than 50 countries annually. The U.S. Government provided over $6 billion in FY14 alone, providing critical food aid, relief supplies, and shelter as well as access to clean water, sanitation services and healthcare to those in need, and is the lead bilateral donor to emergency responses to the conflicts in South Sudan, Yemen, Iraq and Syria and its neighbors. In addition to providing technical expertise on infections disease, health, nutrition, water, sanitation, logistics, incident management, and early warning systems to aid in effective delivery of relief, the U.S. government’s humanitarian professionals have over many years assisted over 130 countries to build their own capacity to manage and respond to disasters.
- The United States continues to play a leading role in the international response to the unprecedented Ebola epidemic in West Africa, and is now providing new assistance through our Global Health Security Initiative with the aim of ensuring, with our partners, that all countries have the capacity to prevent, detect and respond to global health threats.
New Partnerships Announced at the Financing for Development Conference
Building on our longstanding leadership and commitment to development, the United States announced new partnerships at the Financing for Development Conference to mobilize domestic resources, expand Power Africa, combat illicit finance and enhance our collective ability to generate and utilize open data as a tool for development.
- Mobilizing Domestic Resources and the Addis Tax Initiative (ATI). The United States, along with many other partner countries and international organizations, has announced the Addis Tax Initiative, a new partnership to help developing countries better mobilize and effectively use their own domestic resources to achieve the sustainable development goals by building developing countries’ capacity to finance their own development. The United States, and other developed and developing country partners, have committed to significantly increasing their resources for countries, especially LDCs, to be able to access official development assistance (ODA) and technical assistance for tax and fiscal management capacity. At its core, the ATI is a partnership, where each country takes ownership of mobilizing its domestic revenue, and is supported by others in identifying the best ways to align their efforts with the post-2015 Development Agenda. All partners of the ATI also committed to a set of principles that outline the best practices of taxation and to promote policy coherence by sharing information on their respective policies, activities, and Domestic Resource Mobilization (DRM)-related activities. The Governments of the United States, Ethiopia, the Netherlands, Germany, the United Kingdom, and the International Tax Compact (ITC) will co-host a side event on DRM, which will officially launch the ATI.
- Partnership on Illicit Finance (PIF). The Partnership on Illicit Finance, announced by President Obama at the 2014 U.S.-Africa Leaders Summit in Washington, D.C. and joined by Burkina Faso, Kenya, Mauritius, Liberia, Niger, and Senegal, is an initiative that brings African partners and the United States together to jointly address the generation and movement of proceeds from corruption and other financial crimes. It includes two main objectives: (1) examine illicit financial flows from Africa, and (2) develop national action plans through which the United States and African governments can improve transparency and accountability in public and private sectors. The United States and several African nations met in late June to discuss challenges in stemming corruption-related illicit finance in Africa, explore opportunities for collaboration, and initiate work on these action plans. This approach is consistent with one of the key priorities for the Financing for Development conference and with the principles outlined in the post-2015 Development Agenda, which focus on the need to build developing countries’ capacity to mobilize domestic resources and attract private sector financing flows and assistance.
- Harnessing the Data Revolution for Sustainable Development. There ıs growing recognıtıon of the critical importance of data as a tool to inform evidence-based decision making, as well as a tool for social impact, transparency and mutual accountability. The U.S. government has been a global leader and innovator in the collection, analysis, use, and sharing of data. The Obama Administration has made path-breaking investments in data science, advanced analytics, and data interoperability, and has championed the idea that of data and knowledge as a public good. It has also demonstrated international leadership in open government, open data, and big data, in particular for health and climate. Building off this leadership, the U.S. government, alongside the governments of Mexico, Kenya, and Senegal, other foundations, private sector companies and multilateral partners will announce a new Global Partnership for Sustainable Development Data at a high-level side event co-hosted with the ONE Campaign, Mexico, UN Sustainable Development Solutions Network (SDSN), UN Economic Commission for Africa (UNECA). Signatories to the Global Partnership will agree to take action to fill critical gaps in sustainable development data through existing and new data sources, and to invest in the capacity to use and analyze data, including open data, big data, and citizen-generated data. The U.S. will also expand data commitments in several priority sectors, including expanding our commitment to the Global Open Data for Agriculture and Nutrition (GODAN); releasing new data sets on health, gender, climate resilience and governance; and making investments in building capacity through “country data collaboratives” to analyze and use HIV/AIDS, health, education, and sex-and-age disaggregated data to accelerate local impact.
- Power Africa-European Union (EU) Partnership to expand electricity access in sub-Saharan Africa. On June 14, the United States and the EU signed a Memorandum of Understanding (MOU) that establishes a framework for joint Power Africa- EU activities that will highlight our joint commitment to expand small-scale and off-grid efforts to increase access to electricity across sub-Saharan Africa. The European Union’s development program action plan is backed by a financial commitment of €2.5 billion (approximately $2.8 billion) in financing for sustainable energy activities over the next 5 years, targeted towards assisting their partner countries in sub-Saharan Africa to advance their ambitious goals of establishing modern and sustainable energy sectors and to fight energy poverty. Power Africa is committed to adding 30,000 megawatts of power and increasing electricity access by more than 60 million new household and business connections and is building partnerships to build this goal. Two years after launching Power Africa, we have already leveraged commitments by public and private Power Africa partners to invest nearly $32 billion for power generation across sub-Saharan Africa. Treasury Secretary Jack Lew and EU Commissioner Neven Mimica signed the EU-Power Africa MOU at the Financing for Development Business Forum on Tuesday, July 14. This joint action promises to boost and enhance efforts across the continent, thereby speeding up greatly the progress so badly needed. Power Africa’s partnerships with the EU, Government of Sweden, the World Bank Group, the African Development Bank, and private sector stakeholders will be highlighted during a joint side event on Wednesday, July 16, focused on mobilizing finance for small-scale and off-grid efforts.
- The Global Financing Facility (GFF) in Support of Everyone Woman Every Child. Since originally convening with Canada, Norway, the World Bank, and others in September 2014 to announce the Global Financing Facility (GFF), the United States has brought together a broad set of partners to accelerate efforts to end preventable maternal, newborn, child and adolescent deaths in 63 high-burden countries by 2030, in support of the UN Secretary General’s renewed Global Strategy for Women’s and Children’s Health and the new Sustainable Development Goals. The GFF will focus on narrowing the financing gap for maternal and child health by incentivizing countries to allocate a higher share of funding from the World Bank’s International Development Assistance (IDA) concessional loans. Countries will be assisted to develop strategies for longer-term financing and domestic resource mobilization to further accelerate investments in increasing the provision of quality health services to those most in need. The United States will announce a $50 million commitment to the Global Financing Facility (GFF) for Every Woman Every Child.