The landscape of international development, and the architecture of aid that has traditionally underpinned it, have shifted significantly over the last decade. In 2012, official development assistance (ODA) from members of the Development Assistance Committee (DAC) of the OECD comprised less than 10 percent of the international resource flows into developing countries. Development has become an enterprise dependent not on aid, but a conception of partnership involving a multitude of other actors – civil society, faith-based organizations, private philanthropy, the private sector, emerging economies, and the political leadership and commitment of developing countries themselves – that will be the focus of the forthcoming High-Level Meeting in Mexico City of the Global Partnership for Effective Development Cooperation in April, highlighting progress since commitments made in Busan. The “how” of development is no longer just about aid effectiveness – it encompasses all actors with a stake in its success.
USAID’s Policy Framework, launched in 2011, identified this new “aidscape” as a key global trend shaping the Agency’s future. Our commitment to achieve the President’s mandate from last year’s State of the Union address to end extreme poverty, reflected in our new mission statement, provides added impetus for us to evolve and adapt. The updated model of development we have been pursuing, which emphasizes local policy reforms and private sector engagement in combination with our investments and the reforms of USAID Forward, provides us an excellent template for continued progress.
International nongovernmental organizations (INGOs) have been both catalysts and subjects of this changing aidscape. A recent report by FSG, “Ahead of the Curve: Insights for the International NGO of the Future,” enjoins the evolution of the 50 largest U.S. INGOs in response to these disruptive forces, cataloguing the challenges they pose to the traditional INGO business model and highlighting paths of promise for both adapting and increasing their overall impact.
We have much to learn from each other. As the FSG report suggests, INGOs are well-placed to build upon their project experience and global reach to develop approaches that address large-scale challenges at the systemic level. Mercy Corps, World Vision, Save the Children and other INGOs helped pioneer approaches to building resilience in the face of crisis, integrating humanitarian response and long-term development strategies to help vulnerable communities respond to and recover from shocks and stresses. Their innovations in programming and designing systemic solutions were instructive in the development of USAID’s first-ever policy on resilience, and together we have been working with governments to lessen the effects of persistent drought in the Horn of Africa and the Sahel. USAID’s recent commitment to engage external stakeholders directly and post policies in development for public comment and feedback enables INGOs both to shape future market directions and identify opportunities for innovation.
To achieve transformative impact, USAID is increasingly focused on creating multi-stakeholder platforms for public-private partnerships built upon the political commitments of developing countries to a given cause. The New Alliance for Food Security and Nutrition has attracted $3.7 billion in private sector commitments in its drive to raise 50 million people out of poverty over the next ten years, and Power Africa, which seeks to make electricity available to 20 million people, launched last year with $9 billion in private sector commitments.
Investments are just part of the value of this engagement. Private companies bring strategic thinking, market savvy, distribution channels and value chains that, when leveraged, increase the development impact of our work. INGOs could be a key partner in developing and structuring more of these types of alliances to enable private sector commitments that result in public gain. INGOs are also an increasingly significant source of private resources in their own right, as evidenced by the $1 billion pledge made by InterAction‘s members to improve food security. Their growth as purveyors of private development assistance provides new opportunities to explore how we might leverage our combined resources through new and interesting partnerships.
And the financial support, both philanthropic and public, for international development that is emanating from emerging economies will only continue to grow. Mercy Corps has been active in supporting the growth of social entrepreneurship in China and recently deepened its collaboration with the China Foundation for Poverty Alleviation – even adding its president to the Mercy Corps board of directors – at the same time as USAID is embarking on the first-ever U.S.-China development dialogue with the Ministry of Commerce. As part of our new five-year strategy in Indonesia, USAID will work with the government to build and strengthen their own aid agency, and our new strategy in India also marks a significant shift away from the traditional donor/recipient relationship of the past to a strategic partnership. This evolution is not only spurring INGOs to tailor their operations in these countries to a new reality, but also opening them up to opportunities to diversify their resource base through local sources. Given our experience with INGOs and their capabilities, USAID can be an ally as INGOs seek to adapt and take advantage of potential new relationships.
From my perspective, the examples cited by FSG and our own experience suggest that leadership, strategic creativity and the willingness to risk new approaches despite resource constraints are key ingredients to charting a new path for the journey that has just begun – one that we will share.