This weekend was an active one for voters around the world– citizens across Ukraine, Brazil, Tunisia, and Uruguay went to the polls on Sunday, and now have newly elected governments. These elections drew keen interest from international observers, and as we face down crisis and uncertainty around the world, are certain to have global implications. Here’s what you need to know from the weekend’s democratic exercises:
By Michael Jacobs
Last month’s signing of the long-delayed U.S.-Afghan Bilateral Security Agreement (BSA) allows American troops to remain in Afghanistan beyond 2014, providing a measure of security and stability for the country. The BSA is significant, but eventually American troops will head home. While U.S. military advisers and intelligence capabilities will likely remain in place for years, sometime soon Afghans will be substantively responsible for their own security and stability.
The BSA provides an opportunity for the U.S. to secure the progress we’ve established in Afghanistan over the past thirteen years. So far the cost has been high in both dollars and lives, and as we’ve seen in Iraq, those gains can be erased very quickly. At a minimum, Afghanistan’s long-term stability will hinge on a capable military and an inclusive government, but also on broad economic development: countries with an additional 2 percentage points of economic growth sustained over 10 years have been shown to have their risk of civil war reduced by 28% when compared to the risk of civil war in a typical low-income country.
This week in development…
- The World Bank released a report titled The Economic Impact of the 2014 Ebola Epidemic, estimating total economic loss associated with the outbreak could be as high as $32.6 billion by the end of 2015. The crisis has been escalating, and according to WHO officials is “much worse than it was 12 days ago.” Today, in a move to combat the outbreak, the U.S. Congress approved another $700 million in funding.
- This week over 10,000 development stakeholders were in Washington D.C. for the 2014 Annual World Bank and IMF Meetings. There are over 70 different panels and conferences on the official schedule, not to mention hundreds of meetings with periphery organizations. This weekend’s major highlights will include high-level meetings on the State of the Africa Region, Development Committee Press Conference, and The Future of Finance.
By Michael Jacobs
In order to provide some perspective on the shifting composition of development related financial flows over the last few decades, we assembled graphs using data from the UN Conference on Trade and Development to illustrate trends in Official Development Assistance (ODA), Foreign Direct Investment (FDI), and remittances. The numbers are compared for developing countries in three discrete regions: Asia, the Caribbean/Americas, and Africa. After a quick analysis of the results, a few common themes are apparent: FDI now exceeds ODA flows for developing countries in all three regions, and ODA flows, long flat relative to FDI in Asia and the Americas, are now leveling off in Africa as well.
This new reality reflects a paradigm shift in how we should view development in Africa, and globally– ODA will continue to play a critical development role, but as a force to mobilize, direct, and augment the substantial financial flows sourced from elsewhere. These snapshots illustrate clearly that the ODA “bull market” is a thing of the past, and development strategy must adjust accordingly.
- In Asia today, FDI far exceeds ODA flows, and while remittances are substantial, remittance flows are also dwarfed by FDI. We have to look all the way back to 1985 to see a point at which ODA flows were greater than FDI– while ODA remained flat and even declined slightly in the 1990’s, FDI exploded.