Month: July 2016

Where We’re Going, We Don’t Need Roads: Drones in International Development

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By Aaron Milner

Introduction

Poor infrastructure and weak logistics limit development effectiveness.  Governments invested over $130 billion in official development assistance (ODA) into the world’s poorest countries in 2015, but billions of people still lack access to food, water, healthcare, internet, and electricity.  Traditional development often cannot deliver immediate results to communities, tax payers, and investors.  Developing countries plagued by financial and political instability wait in limbo for long-term development project completion to provide basic public goods.  New technology, however, expedites development delivery.  Private companies are experimenting with technological alternatives to traditional infrastructure—such as drones, also known as unmanned aerial vehicles (UAVs)—to reach more people for less money.  Beyond expense, drones are a flexible development tool.  The same network that patrols South Africa for poachers can track drought patterns.  Whereas an expensive road is permanent to one location, drones can cover vast geographies in a short time to achieve diverse goals.

This post explores how cost-effective and creative technology—specifically drones—could solve large-scale issues and jump start progress in developing countries.  A survey of the various companies using drones leads into an analysis that explores the question:  Do developing countries need to undertake expansive infrastructure projects to reach their initial goals?

Zipline

Photo courtesy of Zipline

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Women in Afghanistan: To Be Seen But Not Heard

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By Catarina Santos

Visitors to Afghanistan today might see a visible sign of the nation’s progress toward gender equality – women walking to university.  While women were not allowed to attend university under the Taliban, today around 26,000 women participate in higher education. However, despite significant improvements in the past decade, critical challenges still impact Afghan women’s ability to fully participate in society. Lack of female empowerment is still a barrier to sustainable development in Afghan society, economy, and governance.

An upcoming opportunity to discuss further developments will be the Brussels Conference on Afghanistan, which will be co-hosted by the Afghan government and the European Union in October. This conference will be a chance for the Afghan government to share their vision, establish plans for the future, and discuss how the international community can help. To achieve the goal of equal access for women, Afghan leadership will need to first understand the status quo of women in Afghanistan and consider two key hindrances to gender equality. First, female government officials are figureheads instead of agents of change. Second, there is an empowerment gap between those women sitting in governmental offices and the majority that is still constrained by traditional conservatism. After looking at these challenges, stakeholders must decide what opportunities lie ahead? What else can be done to advance women’s integration and recognition?

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Impact Investors Are Changing: Analysis from the GIIN Surveys

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By Waka Itagaki

This article is the second in a series from this author on the topic of impact investing. For Waka Itagaki’s earlier post on reducing transaction costs in development impact bonds, please click here.

 

Introduction and Background

The role that impact investors are playing in international development is increasingly growing. The amount of assets under management (AUM), the total market value of investments managed by financial institutions, in emerging countries was $36.4 billion in 2015. This is larger than the net Official Development Assistance (ODA) provided by the United States. International development actors should pay attention to this shift and become acquainted with the work of impact investors. One way to do this is through reading the annual impact investor surveys conducted by the Global Impact Investing Network (GIIN).

GIIN is a nonprofit organization that supports activities, education, and research that accelerate the development of a coherent impact investing industry. GIIN has conducted annual impact investor surveys since 2009 by leveraging its network of impact investors, and the surveys provide information on the current situation of impact investors. However, these surveys fail to acknowledge how impact investors are changing over time. Moreover, there is not much literature by other stakeholders that analyzes the data and discusses trends in impact investing in a consumable way. This article fills this gap by analyzing six GIIN surveys from 2009 to 2015 to illustrate how impact investors are changing.

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Reducing Transaction Costs in Development Impact Bonds

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By Waka Itagaki

Development Impact Bonds (DIBs) are a results-based financing mechanism that leverages private capital for international development. Since the first DIBs were created in 2014, one of the mechanism’s key challenges has been high transaction costs: Each DIB project is unique, and this customization increases legal fees and requires financial intermediary and technical services. This article highlights two ways to reduce these costs: sharing data and knowledge about DIBs among stakeholders, and limiting the focus of DIBs. The reduction of transaction costs will promote greater use of DIBs for international development.

Introduction and Background

DIBs catalyze private investment that generates social impact as well as financial return, so called “impact investment,” by engaging private investors, service providers, host-country governments, donors, and intermediaries. Once all stakeholders agree on a common goal and an evaluation method, private investors provide upfront funding for a development project and work with service providers. If and only if the pre-agreed development outcomes are achieved, host-country governments or donors repay the investors. An intermediary organization coordinates among the stakeholders and contributes to the creation of a deal that meets all stakeholders’ interests.

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