USAID Impact Photo Credit: USAID and Partners

Archives for Environment

A Record-Breaking Year for Mobilizing Private Capital for Development

Credit guarantees are a cost-effective way to get local, private financing into the hands of creditworthy borrowers. From low-income Haitians seeking to rebuild in Port-au-Prince, to women-owned small businesses in Kabul, to solar companies in Uganda, USAID is enabling private markets in the developing world to provide financing to the people who need it most.

USAID’s Development Credit Authority (DCA) worked with 45 financial institutions in 23 countries in 2012 to unlock up to $525 million in private capital for underserved entrepreneurs in developing countries. The financing, made available through 34 partial credit guarantees, is the most USAID has mobilized in a single year.

Putting Local Wealth to Work: Development Credit Authority 2012 Portfolio. Photo Credit: USAID.

An additional 39,000 small businesses will soon be able to access local financing because of the new USAID credit guarantees, reflecting the Agency’s drive to leverage private sector resources for international development. Thanks to increased employment and other benefits for the families of these small business owners and their workers, these loans will translate into more than a million people whose lives have been improved by increased access to finance.

Learn more about DCA on our website.

 

Interagency Panel on Economic Statecraft to Create Competitive Foreign Markets

Eric Postel is assistant administrator for the Bureau of Economic Growth, Education and Environment.

Last Monday, December 10, I had the opportunity to speak at an interagency panel on the topic of Economic Statecraft and Developing Partnerships with the Private Sector.

Spearheaded by Secretary of State Hillary Clinton, Economic Statecraft is a positioning of economics and market forces at the forefront of U.S. foreign policy. The Secretary has stressed that emerging nations are increasingly dealing in economic power rather than military might as their primary means of exercising influence, and the U.S. must be at the forefront, or risk being left behind.

Our USAID Administrator, Dr. Rajiv Shah, opened the event at the Woodrow Wilson Center, with remarks emphasizing the innovative work of USAID in this area – work which may not be as well-known as those in the areas of Global Health, Education and Food Security.

The panelists speak at the Economic Statecraft event. Photo Credit: Pat Adams, USAID.

USAID plays a central role in helping to create foreign markets that are competitive, transparent and integrated into the rules-based global trading system. The Agency has been successful in spearheading pro-business reforms in the last decade in six of the top 10 performers in the World Bank’s Doing Business Index. Technical assistance and support has been provided to numerous countries including Georgia, Columbia and Vietnam with reforming their laws and regulations. While a direct correlation is perhaps not possible to make, imports increased four-fold in Vietnam following the course of six years of U.S. assistance with business climate reforms.

In the last 10 years, USAID has formed more than 1,600 partnerships with over 3,000 private sector players, leveraging approximately $19 billion in public and private resources, expertise and technologies. In 2012, USAID’s Development Credit Authority was designed to use loan guarantees to unlock large sources of local capital, and approved 38 new partial credit guarantees to mobilize a record $700 million in commercial capital in 23 countries. In practice, this means that 140,000 small scale businesses will be able to access local finance – impacting more than a million people.

One of USAID’s goals is to create opportunities and economic expansion in developing countries. This approach is increasingly becoming a new model for the Obama Administration, and is one that engages far more broadly with the private sector, delivers more dividends after foreign aid is removed, and demands more transparency and good practices overall.

Our work in this area demonstrates the need to work closer than ever with our interagency partners, several of whom were also my co-panelists at the Economic Statecraft event: the Department of State, the Overseas Private Investment Corporation (OPIC), the United States Trade and Development Agency (USTDA) and the Millennium Challenge Corporation (MCC). As one example of our interagency coordination, this past Fall, USAID entered into a new global agreement with USTDA. The agreement will enable our missions around the world to perform feasibility studies of energy, transportation, and information and technology projects. Mission Columbia is the first buy-in under the agreement, supporting a feasibility study focusing on smart-grid technologies for large power systems. I anticipate many more partnerships between both the private sector and government, as well as within the government itself in moving forward in this undertaking.

More information can be found on the Wilson Center’s website.

 

From Conflict to Coping

Tisda, Mercy Corps Program Officer, in Ethiopia. Photo Credit: Erin Gray, Mercy Corps

Last summer, amidst the Horn of Africa’s worst drought in generations, Mercy Corps received encouraging news from local officials in the Somali-Oromiya region of Ethiopia.  In this area – long known for conflict, scarce resources and harsh conditions – communities that had participated in USAID-supported Mercy Corps peacebuilding efforts were reportedly coping better than they had during less severe droughts in the past.

We were intrigued, so we sent out a research team—and the findings were striking: when local conflict had been addressed, people were far better equipped to survive the drought.

To understand why, put yourself in the position of an Ethiopian herder.  When a drought hits, you can cope in several ways.  First, you will sell the weakest animals in your herd, raising cash to meet your family’s short-term needs while reducing grazing pressure on a water-scare environment. You may migrate with the remaining herd to areas where the grazing potential is better.  Along the way, you will rely on sharing access to scarce remaining water resources wherever you go.

Yet conflict can make these coping mechanisms impossible – blocking market access, freedom of movement, and access to shared resources like water. In this part of Ethiopia, population pressure and climate change had strained resources, spurring violence that in 2008-09 resulted in massive loss of lives and assets. In response to that conflict, Mercy Corps initiated a peacebuilding process in 2009 with support from USAID.  We helped participating communities focus on establishing peaceful relations, economic linkages, and joint management of natural resources.

A “resilience” approach to aid focuses on understanding, and improving, how communities cope with drought and other shocks.  Instead of just providing assistance that meets immediate material needs, a resilience approach also focuses on factors that affect a community’s ability to cope.  As Mercy Corps found last summer in Ethiopia, this often means focusing on factors that fall well outside the traditional assistance toolkit.

The program had focused on reducing violence – but our researchers found that it also built resilience along the way. Communities that participated in Mercy Corps’ program reported greater freedom of movement and fewer barriers to accessing resources, markets and public services than did non-participating communities. They identified greater freedom of movement as the single most important factor contributing to their ability to cope and adapt to the severe drought conditions. As one herder from the Wachile community said, “It is very difficult to use or access dry reserves (grazing areas) located in contending communities in a situation where there is no peace…the peace dialogues in the area have improved community interaction and helped us to access these resources.”

Our research report – titled Conflict to Coping – confirmed the important link between conflict and resilience in this region, and demonstrated that effective peacebuilding interventions help build resilience to crises.  Participating communities showed less reliance on distressful coping strategies, especially depletion of productive assets, than other communities. Importantly, the increased peace and security has allowed participating communities to employ more effective livelihood coping strategies, enabling them to better cope with extreme droughts.

Thinking Across Borders in Southeast Asia

Earlier this month, I traveled to Cambodia to join Secretary Clinton at the Lower Mekong Initiative (LMI) Ministerial meetings where we launched “LMI 2020” – a deepening of the United States’ commitment to  Southeast Asia through a set of new activities aimed at strengthening regional coordination on development challenges facing the Lower Mekong region. 

“LMI 2020” seeks to advance knowledge and understanding of the environmental and health implications of economic and infrastructure development along the Mekong River, one of the most bio-diverse fresh-water ecosystems on the planet, as well as to strengthen the capacity and coordination of government, civil society and academic/research institutions in the region on these issues.  These new assistance programs support the LMI pillars of environment, education, health and connectivity which are co-chaired respectively by Viet Nam, Thailand, Cambodia and Laos.  But one of the most exciting outcomes was the formal welcome of Burma as a full participant in the Lower Mekong Initiative and the adoption of a fifth pillar on Agriculture and Food Security that Burma will co-chair.

The Lower Mekong Initiative was launched in 2009 as a framework for addressing the transnational challenges posed by infrastructure development along the Mekong River and a way to share information and analysis and to improve coordination amongst the countries in the region as well as donors.  Hence a parallel effort, bringing together the “Friends of the Lower Mekong” (FLM) around the table with the Mekong countries, has also become a critical way of aligning programs and policies.  I was struck by how far our partnerships under the LMI framework have progressed in the three years since it was launched. LMI partners now regularly discuss challenges with each other, at the highest political levels as well as in technical working group meetings, on issues such as the impact of proposed hydropower projects on the main stem of the Mekong River, or the need to coordinate to fight emerging pandemic threats.

After several days of productive meetings in Phnom Penh surrounding the U.S.-ASEAN Ministerial meetings, I then traveled to Siem Reap  to participate in  the Lower Mekong Gender Equality and Women’s Empowerment Policy Dialogue, which USAID co-hosted along with the State Department and the Royal Government of Cambodia’s Ministry of Women’s Affairs to highlight the role of women in the fostering sustainable development in the Mekong region. Secretary Clinton gave an inspiring speech on women’s rights as workers and the need to ensure opportunities for all girls and women. USAID has committed to support women leaders in the region to build a network to address critical transnational issues, such as environmental resources management.  Listening to the dynamic and vibrant women participants at the conference, it was clear to me that the potential in the region to achieve inclusive and sustainable growth could not be achieved without the full and active participation of women.

For more information, see the fact sheets on LMIthe Asia Pacific Strategic Engagement Initiative (APSEI) and more at http://www.state.gov/r/pa/prs/ps/2012/index.htm

Mexican Diaspora Leader Gives Back Green

The Impact Blog interviewed Luis Aguirre-Torres, CEO of GreenMomentum and recipient of the White House’s Champion of Change award. He partners with USAID in his homeland of Mexico to help foster green companies. 

You have been extremely successful in helping companies become green, why is it important for you to give back to your native country of Mexico?

After several years of living abroad, I found myself in a position to give back to the country that gave me an education and inspired me to continue moving forward. I have a personal believe that the future is something we work towards and not something that simply one day magically appears. Before I always imagined a better future than what the present turned out to be; today, I understand that the future will only be different if we take an active role in making it happen. What better place to reinvent the future than my country of origin.

What is the Cleantech Challenge and how did it come about?

The Cleantech Challenge was originally conceived as a green business plan competition. However, today it has become an open forum for investors, entrepreneurs, government and development agencies to share ideas on how to develop clean technology, how to finance it and how to accelerate its implementation. It was first conceptualized after a conversation with the Director of the UNEP a few years ago, when he challenged me and my team to do something different that could impact the Mexican economy. A few weeks later, the Cleantech Challenge was born.

What would a surge in green companies in Latin America mean for the region?

We are currently seeing a surge in green companies in Mexico. This has been echoed by other countries like Colombia, Chile and Argentina, among others. For all these countries, it represents an opportunity to become part of the world’s new green economy. As it has happened in other countries, it could also lead to a surge in investment opportunities and the development of new government policies. This could accelerate economic growth through the creation of new business and job opportunities, having therefore a direct impact on the competitiveness of the region as a whole.

Do you think Latin America faces unique challenges regarding greenhouse gas emissions compared to the rest of the world?

Latin America faces a series of challenges regarding climate change. It has to develop new and more reliable mechanisms for financing the implementation of adaptation and mitigation programs. Specifically, it has to find a way of fighting climate change without negatively impacting economic growth and increasing the region’s competitiveness.

The White House just honored you with a Champion of Change award, what does this mean for you?

This has been a great experience. I feel humbled and forever grateful to those who from the beginning believed in this project. The recognition from the White House means the world to us, not only because it validates our efforts during the past four years, but also because it has allowed us to share it with the American people and the rest of the world. It has inspired me to continue working and to work towards newer and bigger things.

To read more, visit the White House’s Champions of Change webpage.

Picture of the Week

Closeup photo of a cow's nose.  Photo credit: Jyldyz Niyazalieva, Kyrgyz Agro-Input Enterprise Development Project

Through the USAID-funded Kyrgyz Agro-Input Enterprise Development Project, production of biofertilizer out of organic waste was organized on a dairy farm in northern Kyrgyzstan. Natural biofertilizer, rich in biologically active substances and microelements, is derived in the process of anaerobic fermentation. This initiative helps to implement environmentally-friendly techniques and promotes organic farming in Kyrgyzstan.

From June 19-June 22, 2012, USAID joins delegations from around the world at the UN Conference on Sustainable Development (Rio+20) in Rio de Janeiro, to mark the 20th anniversary of the historic Earth Summit.

Photo credit: Jyldyz Niyazalieva, Kyrgyz Agro-Input Enterprise Development Project

Video of the Week

You’re invited to join Powering Agriculture: An Energy Grand Challenge for Development, which is a multi-year initiative focused on promoting affordable, clean energy solutions for farmers and agribusinesses throughout the developing world. Powering Agriculture: An Energy Grand Challenge for Development supports market-driven approaches that link modern energy service providers with farmers, processors, input suppliers, and traders. These approaches aim to further integrate clean energy technologies in the agricultural sector to increase production, employ new value-added processing techniques, and reduce post-harvest loss. This Energy Grand Challenge for Development was launched last week at the Frontiers in Development conference and includes an online ideation community that you’re encouraged to join through www.PoweringAg.org– find it by clicking on “Join the Community.”

Powering Agriculture: A Grand Challenge for Development is implemented under the Grand Challenge for Development program that invites innovators everywhere to apply science, technology, and creative business models to address obstacles in the path of human development. USAID and its partners – the Swedish International Development Cooperation Agency (Sida), Duke Energy, the US Department of Agriculture (USDA), the African Development Bank (AfDB) and the Overseas Private Investment Corporation (OPIC) – seek to catalyze a movement of solvers to identify clean energy solutions to intensify the agriculture sector, enhance food security, and decouple food production from the use of fossil fuels. For more information on how to join the community now, share ideas, review the pre-solicitation notice, and apply for a grant starting July 12th, please visit: www.PoweringAg.org.

Pressures on the Plundered Planet

Director, Centre for the Study of African Economies, Oxford University

Director, Centre for the Study of African Economies, Oxford University

Paul Collier, Professor of Economics at Oxford University, spoke earlier today at USAID’s Frontiers in Development Forum, and will speak again tomorrow morning. Below is an excerpt from his contribution to the Frontiers in Development essays.

As the world economy grows, it increasingly faces natural constraints. These provide both new opportunities and new risks for the poorest countries; managing them well will be central to their exit from poverty. These were the themes of The Plundered Planet. Here I bring out some of the key current issues. Industry needs natural resources, for energy and material inputs, but many of the natural resources we use for these purposes have a fixed endowment, which we are depleting. A growing global population needs food, and food needs land, but land suitable for agriculture is finite.

Both industry and agriculture emit carbon dioxide into the atmosphere, but the stock that can be safely absorbed by the atmosphere is finite, and as it builds up it gradually changes the climate. How concerned should we be about these constraints, and what do they imply for development?

I think that the concerns about industrialization grinding to a halt because of shortages of vital natural-resource inputs are misplaced. As any particular resource becomes depleted, its price rises. In turn, this induces fresh investment in prospecting and so furthers discoveries, and ultimately research into innovation. This has happened so many times across such a wide range of activities that we can be fully confident of it. The past decade of rising prices for natural resources has already triggered these waves of investment. Currently, by far the highest-valued natural resource is carbon-based energy, from oil, coal, and gas. The high prices of the past decade have triggered an astonishing wave of new technologies that enable us to tap into endowments that were previously inaccessible: The United States has already discovered enough additional resources through these new technologies to be self-sufficient for several decades. Beyond technology-based discoveries are technology-based
substitutes: For example, in the 19th century, nitrates were considered vital and finite; then we discovered modern fertilizers.

Similarly, the global population will not face hunger because of land shortages. There are still huge areas of grossly underutilized fertile land; beyond that are drip-feed and greenhouse technologies that open up lands that are currently too dry or cold. Nor will we face a stark choice between energy shortage and overheating. Although global supplies of carbon-based energy are finite, there are many non-carbon sources of energy waiting to be developed. Indeed, modern physics tells us that the endowment of other forms of energy is infinite: The challenge of permanently sustained energy supply is entirely technological, and we can be confident that innovations will be forthcoming. But although we are not facing a natureimposed Armageddon, natural resources, climate, and food are interconnected in ways that pose new opportunities and new risks for the poorest developing countries.

Read the full article in USAID’s Frontiers in Development publication.

Ask the Expert: Eric Postel, on Economic Growth, Education, and Environment

For Earth Day, the Impact Blog interviewed Eric Postel, Assistant Administrator of the Bureau for Economic Growth, Education, and Environment (E3).

You are head of the E3 bureau, which works in the environment, energy, water and climate change sectors, among others.  In the context of Earth Day, why is this work so important?

When I was a freshman in High School, I was one of the organizers of the first Earth Day.  I’ve been committed to environmental issues ever since.

These issues – such as forests, water, and climate change – touch upon all areas of sustainable development, including agricultural productivity, economic growth, gender issues, and health. The economies of many developing countries are heavily dependent on industries that could be severely impacted by climate change such as agriculture, fisheries, forestry, and tourism.  Poor communities are more limited in their ability to adapt to climate change.  As a result, climate change can compound pre-existing social stresses including poverty, hunger, conflict, migration, and the spread of disease.

Eric Postel, Assistant Administrator of the Bureau for Economic Growth, Education, and Environment (E3) Photo Credit: USAID

2012 is the U.N. Year of Sustainable Energy for All. What is USAID doing to promote clean energy?

Globally, 1.6 billion people lack access to modern energy services, such as electricity, and more than two  billion rely on traditional fuels, such as wood and dung, for cooking, often paying significant portions of their income for low quality fuels. USAID is working around the world to address energy poverty by helping to provide clean, renewable energy for their citizens to power their homes, schools, health clinics, and businesses.  This work literally helps power development across all sectors.  It is also a critical component of dealing with the world’s expanding population and the pressures that this growth will place on the environment. Over the next 20 years, worldwide energy demand is projected to increase by 40 percent. Continued dependence on fossil fuels to meet this increasing demand contributes to increasing greenhouse gas emissions and economic disruption from increasing world competition for fossil fuels. Emissions of carbon dioxide, the most significant greenhouse gas, are projected to grow by approximately 40 percent between 2007 and 2030, exacerbating global climate change. This challenge cannot be ignored.

Tell us about USAID’s Climate Change and Development Strategy.

USAID’s Climate Change and Development Strategy, which we released this January, describes our Agency’s vision and strategy to address the challenges that climate change poses to development and livelihoods around the world.  It outlines the Agency’s goals, strategic objectives, and guiding principles for climate change programming, and lays out a roadmap for implementation.

This strategy specifies three strategic objectives that will guide our future work. USAID will: 1. accelerate the transition to low emission development through investments in clean energy and sustainable landscapes for climate change mitigation; 2. increase the resilience of people, places, and livelihoods through investments in climate change adaptation; and 3. strengthen development outcomes by integrating climate change in USAID programming, learning, policy dialogues, and operations.

Read the rest of this entry »

Tell USAID’s Story with Photos – Last Call

To celebrate Earth Day this year, USAID is hosting a photo contest to showcase the ways we are working to conserve the environment and mitigate climate change.

The contest is open to all, including USAID employees and interns; employees of NGOs and contractors; and representatives from universities, foundations and other organizations that partner with the Agency.

The deadline for photos is midnight, April 16, 2012.

Winning photos must:

  • Illustrate why and how USAID is engaged in the specific environmental project. Photos of people, animals, plants and landscapes that are relevant to programs are all eligible.
  • Include the date and location for the photograph as well as a brief description of what is happening in the image.
  • Be at least 300 dpi or larger (low resolution photos will not be considered).
  • Be in color (black and white photos will not be considered).
  • Submitted digitally, with jpg files preferred.

Each photographer can submit up to five images. Contest photos should not have been previously submitted to USAID for another purpose. Also, note that submitting a photo through this contest grants USAID full reproduction rights to the images, including use in official USAID print and online publications and inclusion in the USAID photo gallery.

Photos will be selected and announced in time for Earth Day.  See last year’s winning photos here.


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