Author: Bo Carlson, Research Intern (Summer 2020), Center for Strategic and International Studies

2016 was a turning point in the two wars that have ravaged the Colombian countryside for over 60 years. The first was a civil war waged between the Colombian government and the Revolutionary Armed Forces of Colombia (FARC, for their Spanish initials), a leftist guerrilla group. After a decades-long insurgency, the FARC finally agreed to lay down their arms in exchange for lenient sentencing, reintegration for ex-combatants, and other reforms.[1] The second, which continues to this day in Colombia, is the War on Drugs. Although the government has reduced its use of controversial forced eradication programs in the last few years, its new voluntary crop substitution program appears to be equally ineffective, resulting in more cocaine exports, not less. Colombia should instead embrace an alternative approach that focuses on long-term development goals and a gradual decrease in cocaine production.

Three Approaches to the War on Drugs

Since the 1980s, Colombia has been a major exporter of cocaine.[2] Coca plants, from which drug traffickers derive the key ingredient for cocaine, grow in the periphery of the country.[3] Most coca plants are located on small plots and grown by smallholder farmers, or campesinos, who have few alternative economic opportunities.[4] Drug cartels, left-wing rebels like FARC, and right-wing paramilitary groups often employ these campesinos, with the implicit threat of violence if they fail to comply.

Violence and insecurity peaked in the 1990s, with the city of Medellín gaining the dubious distinction of “murder capital of the world” in 1995.[5] Since then, Medellín and other urban centers have made remarkable improvements and are now far safer than many U.S. cities thanks to private sector investment, public development projects, and high-profile arrests of drug traffickers.[6] However, the periphery of the country continues to suffer from economic underdevelopment, state neglect, and extortion from criminal groups.

To combat drug trafficking, the Colombian government has at least three strategies at its disposal.

1. Forced Eradication: Military and civilian personnel can destroy crops by plane, drone, or manual fumigation.
2. Voluntary Eradication: The government can incentivize campesinos to rapidly substitute their coca plants for legal crops as a prerequisite to receiving government benefits.
3. Alternative Livelihoods: In this approach, inspired by Thailand’s success in combatting illicit crops, the state could invest in human capital, job creation, and security provision in rural communities.[7] Only after at least five years would farmers be expected to eliminate crops.

After choosing one of these three broad approaches, the Colombian government can tailor the strategy to local conditions. Policymakers can also choose to complement any of these strategies with interdiction—arresting traffickers, destroying labs, and stopping shipments en route to transit and destination markets.

The rest of the blog evaluates whether forced eradication has worked in the past and interrogates the consequences of the current voluntary substitution program.  It then turns toward a program of alternative livelihoods, explaining why this is likely to be the most successful of the three strategies. The blog draws upon Vanda Felbab Brown’s January 2020 report, Detoxifying Colombia’s Drug Policy, for the bulk of the analysis, but it also integrates research from the Bogotá-based Fundación Ideas para la Paz and findings from economists Daniel Mejía, Mounu Prem, and Juan F. Vargas.

Has Forced Eradication Worked?

Prior to 2013, forced eradication was the main component of Colombia’s counternarcotics strategy. On the positive side, forced eradication produces visible, rapid reductions in the number of hectares with coca crops. Between 2007 and 2013, during a sustained aerial eradication campaign, both the U.S. government and the United Nations estimate that coca cultivation in Colombia fell by about 50 percent.[8]

However, forced eradication also comes with problems. In many cases criminal groups simply move from drugs into illegal logging, mining, wildlife trafficking, and extortion. Coca is relatively easy to grow, so they may also plant the crop in a new area.[9] Given criminal groups’ adaptability, most of the harm from forced eradication falls on the individual campesino. Aerial spraying of herbicides can also harm neighboring legal plots and radicalize poor farmers. In 2013, then-President Juan Manuel Santos began to decrease the use of aerial eradication, and in 2015, his government ended it completely after a World Health Organization body identified glyphosate as “probably carcinogenic.”[10] Manual eradication can prevent harm to bystanders, but it too carries major risks. Colombian police report that between 2001 and 2016, 153 manual eradicators have been killed and 500 injured, mostly by land mines and traps planted by criminal groups.[11]

            The Trump administration has pressured Colombian policymakers to resume aerial spraying using both carrots and sticks. In September 2017, President Trump told his Colombian counterparts that he reserved the right to decertify the country as a cooperating partner in the War on Drugs, unless they agreed to return to eradication.[12] After the Colombian government moved toward resuming fumigation, Trump nearly doubled his request for funding from Congress to go toward counternarcotics in Colombia.[13] Russell Crandall, a former NSC Director for Latin America, has warned of narcotization in the U.S.-Colombia relationship, in which U.S. policymakers allow the War on Drugs to outweigh all other concerns.[14] Under Trump, U.S. policy toward Colombia has taken several steps in that direction.

            In the few examples outside of Colombia where forced eradication has worked to sustainably eliminate illicit crop cultivation, governments have had to first reduce conflict in the area, then establish a strong state presence, and finally be willing to use violent repression against civilians. Vanda Felbab-Brown notes that China in the 1950s, Myanmar in the 1990s and early 2000s, and Vietnam and Laos in the 1980s and 1990s are the only potential success stories, but each has its own limitations. The human rights violations that accompanied these cases make them an undesirable model for Colombia today.[15]

Has Voluntary Substitution Worked?

            During peace negotiations in 2014, the government and FARC delegations publicly agreed to a crop substitution program that would provide material incentives to coca farmers who switched to legal crops.[16] The Comprehensive National Program for the Substitution of Crops for Illicit Use (PNIS, for its initials in Spanish) began operating in 2016, and since then, about 100,000 families have registered. 94 percent of enrollees have complied with their part of the agreement, but nearly 90 percent of them have yet to receive full payment from the government.[17]

            While the government’s crop substitution program was well-intentioned, the design and implementation have led to negative outcomes. After coca cultivation fell between 2007 and 2013, the number of hectares planted has steadily increased, reaching an all-time high in 2019.[18] In addition to the usual bureaucratic obstacles—poor funding, lack of coordination with other development agencies, and inadequate evaluation—the very idea of a crop substitution program created perverse incentives for campesinos.[19] When farmers realized in 2014 that they would be rewarded for eradicating a certain number of hectares, they naturally began to plant more coca crops. When three economists at Colombian universities measured the magnitude of this effect, they found that coca-suitable regions doubled their area devoted to coca plants after the announcement.[20] And even when coca farmers cooperate, they must give up all their income at once and then wait for an inefficient government apparatus to provide them with benefits.[21]

What Are the Prospects for an Alternative Livelihoods Approach in Colombia?

            Given the collateral damage of the forced eradication model and the perverse incentives of the voluntary substitution program, Colombia urgently needs another approach. Fortunately, they can learn from Thailand, which took nearly 30 years to combat illicit crops but now stands out as the most durable case of poppy eradication in the world.[22] In Thailand, government officials started by developing education and healthcare access in rural communities, as well as investing in infrastructure and offering land titles and microcredit.[23] After several years of involvement in these development efforts, farmers would be required to reduce their crops in stages.

            By switching from a substitution-first model to an alternative livelihoods approach, Colombia will not only see a long-term reduction in coca cultivation, but also a more general improvement in the security and wellbeing of rural communities.

Recommendations

            The main obstacle to reform may not be a shortage of technical knowledge, but rather the disconnect between politicians’ short-term interests and the long-term requirements of an alternative livelihoods approach. For that reason, I’ll end the blog with three recommendations to advocacy groups, Colombian politicians, and U.S. diplomats who recognize the need for reform.

1. Advocacy groups should consider embracing an alternative livelihoods model, rather than defending the current voluntary substitution program. Given the dramatic increase in coca cultivation under PNIS and the perverse incentives at the heart of the program, it is increasingly difficult to argue that the current system is the right one. Instead, advocates should press for more dramatic, long-term change and wait for Colombian leaders who are willing to endorse it.
2. Colombian reformers should expand the conversation around narcotics to include development and security. By drawing urban voters’ attention to the endemic issues in rural areas, they can increase sympathy for campesinos and forge a consensus in favor of development. They should also highlight the ways in which rural development can benefit urban centers through increased tourism and investor confidence.

Officials in the State Department Bureau of Western Hemisphere Affairs and the Embassy in Bogotá should resist pressure to narcotize the U.S.-Colombia relationship. When Colombia attracts attention from the White House, Congress, Drug Enforcement Agency, and State Department Bureau of International Narcotics and Law Enforcement, too often it is because of a sudden increase in cocaine exports. Diplomats who know the region best should push back on demands to immediately halt cocaine production, recognizing that a sustainable counternarcotics approach takes time and there are more issues involved in the U.S.-Colombia partnership than coca production.

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[1] Claire Felter and Danielle Renwick, “Backgrounder: Colombia’s Civil Conflict,” Council on Foreign Relations, Jan. 11, 2017, https://www.cfr.org/backgrounder/colombias-civil-conflict

[2] June S. Beitel and Liana W. Rosen, “Colombia’s Changing Approach to Drug Policy,” Congressional Research Service, Nov. 30, 2017, 1, https://fas.org/sgp/crs/row/R44779.pdf.

[3] Ibid.

[4] Nicholas Casey, “After Decades of War, Colombian Farmers Face a New Test: Peace,” New York Times, July 18, 2017, https://www.nytimes.com/2017/07/18/world/americas/colombia-cocaine-farc-peace-drugs.html.

[5] Stanley Stewart, “How Medellín Went from Murder Capital to Hipster Holiday Destination,” The Telegraph, Jan. 4, 2018, https://www.telegraph.co.uk/travel/destinations/south-america/colombia/articles/medellin-murder-capital-to-hipster-destination/.

[6] Ibid.

[7] Vanda Felbab-Brown, Detoxifying Colombia’s Drug Policy: Colombia’s Counternarcotics Options and Their Impact on Peace and State Building (Washington, DC: Brookings Institution, Jan. 2020), 2, https://www.brookings.edu/wp-content/uploads/2020/01/FP_20200106_colombia_drug_policy_felbabbrown.pdf.

[8] Beitel and Rosen, 2017, 11, https://fas.org/sgp/crs/row/R44779.pdf.

[9] Sophia Sadinsky and Ramón Campos Iriarte, “Broken Promises in Colombia’s Coca Fields,” Open Society Foundations, October 23, 2019, https://www.opensocietyfoundations.org/voices/broken-promises-in-colombias-coca-fields.

[10] Since the 2015 WHO report, there have been a number of conflicting studies. For more details, see Ibid., 7; and World Health Organization, IARC Monographs Volume 112: Evaluation of Five Organophosphate Insecticides and Herbicides, March 20, 2015, https://www.iarc.fr/wp-content/uploads/2018/07/MonographVolume112-1.pdf.

[11] Joshua Goodman, “Coca’s Comeback Forces Colombia to Rethink Drug War,” Associated Press, July 18, 2016, https://apnews.com/98dea2d6b485415bb2a5f37f1c0e2685/Coca’s-comeback-forces-Colombia-to-rethink-drug-war#:~:text=That’s%20an%20area%20twice%20the,largest%20supplier%20of%20the%20drug.

[12] June S. Beitel and Liana W. Rosen, “Colombia’s Changing Approach to Drug Policy,” Congressional Research Service, Nov. 30, 2017, Summary, https://fas.org/sgp/crs/row/R44779.pdf.

[13] “Trump pidió más dinero para Colombia si retoma fumigaciones,” El Especatador, March 12, 2019, https://www.elespectador.com/noticias/el-mundo/trump-pidio-mas-dinero-para-colombia-si-retoma-fumigaciones-con-glifosato/.

[14] Russell Crandall, “Explicit Narcotization: U.S. Policy Toward Colombia During the Samper Administration,” Latin American Politics and Society vol. 43, no. 3 (Autumn 2001), 95, https://www.jstor.org/stable/3177145.

[15] Felbab-Brown, 2020, 7, https://www.brookings.edu/wp-content/uploads/2020/01/FP_20200106_colombia_drug_policy_felbabbrown.pdf.

[16] Daniel Mejía, Mounu Prem, and Juan F. Vargas, “The Rise and Persistence of Illegal Crops: Evidence from a Naïve Policy Announcement,” Social Science Research Network, Oct. 7, 2019, https://dx.doi.org/10.2139/ssrn.3466363.

[17] Felipe Puerta and María Paula Chaparro, “A Death Foretold: Colombia’s Crop Substitution Program,” InSight Crime, April 1, 2019, https://www.insightcrime.org/news/analysis/a-death-foretold-colombias-crop-substitution-program/.

[18] Christine Armario, “US report: Colombia coca production still at record high,” Associated Press, March 5, 2020, https://apnews.com/0aa6474b944f4ff8eb9e7e9cffffce87.

[19] Juan Carlos Garzón, Juan David Gélvez, and José Luis Bernal, “En qué va la sustitución de cultivos ilícitos? Desafíos, dilemas actuales y la urgencia de un consenso: Informe 6” Fundación Ideas para la Paz, April 2019, 11-12, http://ideaspaz.org/media/website/FIP_sustitucion_VOL06.pdf.

[20] Mejía, Prem, and Vargas, 2019, 3, https://dx.doi.org/10.2139/ssrn.3466363.

[21] Felbab-Brown, 2020, 10, https://www.brookings.edu/wp-content/uploads/2020/01/FP_20200106_colombia_drug_policy_felbabbrown.pdf.

[22] Ibid., 11.

[23] Ibid., 12.

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By Daniel Runde

Lorne W. Craner passed away on July 2, 2020 after a lifelong career dedicated to public service. He was a man of integrity who adhered to the fundamental American principles of individual freedom and equal opportunity. For decades, Lorne toiled in the vineyards of democracy, human rights, and good governance, helping to design and implement meaningful policies that promoted democracy and prosperity on nearly every continent.

Lorne was first exposed to public service at an early age, and he understood better than anyone the value of liberty. His father, Col. Robert Roger Craner, who served in the Air Force, was held as a prisoner of war in the infamous Hanoi Hilton, the same Hỏa Lò prison where Senator John McCain was held for five years. Lorne’s father and Senator McCain forged an intimate bond—they were held in adjacent cells and communicated by tapping on the walls. Col. Craner passed away in 1980 but instilled in his son an unwavering commitment to defending and establishing democracy and freedom throughout the world.

Lorne attended Reed College and received a Masters’ degree in National Security Studies from Georgetown University. He began his public service career on Capitol Hill, where he worked for Congressman Jim Kolbe and Senator McCain. In 1989, he became a deputy assistant secretary of state for legislative affairs, and later served in the National Security Council as director of Asian Affairs for President George H.W. Bush. Between 1993 and 2000, he was vice president, and then president, of the International Republican Institute (IRI), created in 1983 as a response to a call by President Reagan to institutionalize democracy throughout the world.

Lorne, a conservative internationalist, believed in an interconnected world—one in which the United States should lead with its values. He believed that, by instilling respect for human rights and strong democratic institutions abroad, the United States could improve the lives of millions of people. Under his leadership, IRI emerged as a vital institution for establishing good governance, strengthening political parties, monitoring elections, promoting prosperity, and helping governments and civil society around the world “deliver on democracy”. In the 1990s, for example, IRI was instrumental in efforts to establish democracy in Romania. This work enabled the country to host free elections in 1996, ending decades of authoritarianism. During Lorne’s tenure, IRI also monitored the groundbreaking 2000 general elections in Mexico and provided vital support to Indonesian civil society organizations after the fall of the dictatorial Suharto government.

Between 2001 and 2004, Lorne left IRI to serve as Assistant Secretary for Democracy, Human Rights and Labor (DRL), during the peak of the Bush Administration’s Freedom Agenda. DRL made unprecedented advances under Lorne’s stewardship by working to defend, promote, and improve democracy in a vastly diverse set of contexts, ranging from Iraq to Colombia to Belarus to Kenya. Upon his departure from the State Department, he was awarded the Distinguished Service Award, the Department’s highest honor.

He returned to IRI and served as president until 2013, once again leading IRI to new levels of achievement and broadening the organization’s scope to include topics such as the inclusion of women in political processes and the role of digital technology in promoting democracy. In the wake of the Arab Spring, Lorne oversaw IRI’s efforts to foster a robust civil society and establish an accountable political process in Tunisia, paving the way for free elections in 2014. He also strengthened IRI’s efforts in China and Pakistan and cultivated relationships with key democracy-building organizations in the United States and abroad. After retiring from IRI, Lorne served as President of the American Councils for International Education and maintained his positions on the boards of IREX, Internews, the Institute for War and Peace Reporting. the National Committee on U.S.-China Relations, and the Millennium Challenge Corporation where he helped to develop the “good governance” criteria—aid is more effective in countries where there is good governance, personal and economic freedom, and investment in people.

Those who work in the field understand that democracy has been in decline for the past two decades. Freely elected leaders are increasingly encroaching upon the rights of political dissidents and breaking down institutional safeguards. In closed societies, authoritarian leaders are using digital technology to spread disinformation and intimidate political opponents. These trends should not be overlooked. Yet, it is wise to recall that over the last 50 years we have seen remarkable progress in democratic governance, political rights, and accountability. Indeed, the arc of history is bent towards human rights and democracy. This is due, in large part, to people like Lorne Craner, who understood that establishing and safeguarding vibrant democracies would require decades of meticulous work and an unflinching commitment to liberty for all. The world is a freer, safer, and more humane place because of Lorne’s efforts. Ronald Reagan said, “We’ve been blessed with the opportunity to stand for something – for liberty and freedom and fairness. And these are things worth fighting for, worth devoting our lives to.” Lorne Craner lived those words.

Author: Steven Weirich, Research Intern (Summer 2019), Center for Strategic and International Studies

Overview of Remittances and Wealth Investments

Global migration is an ongoing phenomenon for policy professionals to contemplate. By the middle of 2019 the total international migrant stock was nearing 272 million people, which was an increase of around 23 million people from the same time in 2015.[1] These migrants, who leave their home countries for a variety of reasons, are often strongly committed to investing in their countries of origin if they have the resources to do so. If there are actions by which development organizations could encourage these migrants to channel more capital to their home countries, then the development community should certainly pursue them.

These groups, who end up living and putting down roots in places often far away from their home countries, are known as diaspora communities. Historically, the main capital-moving mechanism for these migrants has been remittances to their families and close friends. With improved data collection, there is now a greater understanding amongst scholars and policymakers on the impact remittances can play in global financial flows. The World Bank estimated that for 2018, there was $396.1 billion paid in remittances around the world, and that this number has been rising steadily over time since the 1970s.[2]

Remittances can be used for a variety of purposes by the recipients. Many recipients use the remittances to smooth their budget constraints over time, protecting themselves from economic downturns and providing a potential lift out of poverty. On the macroeconomic side, the flows can be used to replenish critical foreign exchange reserves, which will be useful if there are larger economic downturns or if the recipient nation wants to improve their credit standing for external borrowing reasons.[3] The current COVID-19 pandemic, for instance, has brutalized the balance sheets of many low and middle-income countries. In order to pay off their public debts, the governments of these remittance recipient nations will be looking for any revenue sources possible.

There has been a significant amount of formal research done on the various impacts of remittance flows. Giuliano and Ruiz-Arranz found remittances could play a key role as an alternative to formal investments throughout the developing world when financial sectors were underdeveloped.[4] These remittance payments often led, in turn, to economic growth. The remittances could serve as substitutes to financial instruments in places where banks and other financial institutions did not have the operational capacity. When researchers looked at the African continent specifically, they found comparable results as well. Nyamongo et.al. investigated the effects of remittances on financial development within 36 African nations, and they found evidence remittances acted as a complement to the development of the financial sector.[5] Their other results showed remittances contributed overall to positive economic growth, but the volatility of those financial flows could have a negative impact at the same time.

Outside of remittances, another important source of diaspora financial support comes from their investments. While remittances are based off a migrant’s income, investments are more likely to come from a migrant’s accumulated wealth. Transnational loans and diaspora bonds are two of the more common investment instruments diaspora groups use to leverage their wealth. Transnational loans are used by migrants to invest in home improvement, mortgage lending, and business expansion in their origin countries while they live abroad.[6] Migrants are then able to retain control of the loan from abroad, while simultaneously supplying credit to their families. Various countries have experimented with transnational loans including Mexico and the Philippines, where citizens in both countries were given increased access to mortgage funds and home loans.[7]

Diaspora bonds are sovereign debt instruments that act to provide capital to origin countries for infrastructure investment or other spending goals. To attract the interest of diaspora communities, nations occasionally set lower interest rates for diaspora bonds. Investing in these bonds is often viewed as an act of patriotism by the diasporas, as they allow their origin countries to raise more capital without having to commit massive amounts of government revenue to development projects.[8] There have been large-scale diaspora bond initiatives in Israel, Ethiopia, Ghana, and India. Israel, which has been offering them annually since 1951, has found there is an increase in demand for the bonds when they are being attacked by their neighbors. This is evidence the purchasing of the diaspora bonds can indeed be driven by patriotic sentiment.

Rwanda Case Study

            Rwanda has an incredibly large diaspora community around the world. Driven primarily by the 1994 genocide against the Tutsi people, many Rwandans fled to other countries to seek refuge. Although it is estimated around 3.4 million Rwandans refugees have returned to their country of origin, there are still many who have chosen to live in foreign countries.[9] The total Rwandan diaspora still numbers in the thousands, and the top destinations for the emigrants are France, the United States, the United Kingdom, and Canada.[10]

While lots of developing countries have not been able to take advantage of their diaspora groups, the Rwandan government has taken many concrete steps in order to do so. The diaspora itself has also been committed to pushing for development strategies from their home country and have willingly participated in several of the largest programs targeted at them.

The Agaciro Development Fund (AGDF) is a Rwandan sovereign wealth fund which was proposed at a meeting of the National Dialogue Council in 2011. It was officially implemented a year later. The fund was created as a way to both engage the diaspora group and to protect local Rwandans from external economic shocks, such as the global financial crisis of 2007-2008.[11] It receives its inflows from members of the Rwandan diaspora, as well as citizens within the country and anyone else who wishes to invest in the fund. The AGDF holds most of its investments in the form of equity, fixed income government securities, and term deposits.[12] The fund aims to promote sustainable development in Rwanda by maximizing returns on its investment holdings, while minimizing its risk and exposure to outside economic fluctuations.

Initiatives to spur outside investment have also come from members of the diaspora group themselves. The Rwanda Diaspora Global Network (RDGN) has been managing an investment fund since it was first implemented in late 2014.[13] The fund was designed as a way to build off of the success of remittance payments to Rwanda. Remittances from the diaspora have long been an important resource for poverty alleviation and foreign currency reserves in the country, but the hopes were that larger amounts of capital could be channeled from the diaspora for various development projects.[14] The RDGN was also responsible for creating the One Dollar campaign, which helped to build an orphanage in the capital city of Kigali in 2014.[15]

One of the leading concerns about workers who leave their home countries to work abroad is that they contribute to the “brain drain” problem. It is often argued that even if diasporas are sending remittances or finding other ways to help their home countries, the greatest contribution they may have been able to make was to never leave and become an active contributor to the economic and political health of their nation. In an effort to find a solution to this issue, the United Nations Development Programme (UNDP) started a program with the Rwandan government to help expatriates serve as official UN volunteers. The initiative was called the Transfer of Knowledge Through Expatriate Networks (TOKTEN). They recruited Rwandan nationals with technical backgrounds in areas such as technology, health, and agriculture to work with groups on training and skills transfer.[16] The evaluations conducted after the program was completed demonstrated they met the majority of the objectives. 47 volunteers returned to Rwanda to participate in the program, and nine of them ended up returning permanently when the work was finished.[17]

While it can be a struggle for developing countries to engage effectively with their diaspora groups, Rwanda provides several examples of how this process can be done. There is no one option for accomplishing this goal, but by pursuing a variety of efforts, it is possible for both a national government and the diaspora group at large to make tangible contributions to the development of their origin country.

Recommendations

Development organizations should be using the example of Rwanda as a guide on how to engage with large diaspora groups. Specifically, they should attempt to create channels for investment back into these developing countries using capital from the diaspora. An organization such as the International Finance Corporation (IFC) has tools at their disposal which could work to accomplish this goal. They have a platform called the Managed Co-Lending Portfolio Program (MCCP) which serves to encourage investment by creating portfolios of private sector loans. These loans are then used by groups looking to begin making investments in emerging markets. The portfolios for the investors are the same as the ones maintained by the IFC during the investment process. The partners agree at the start on how exposure and risk will be allocated between the two.[18]Since the first investment partner came on board in 2013, around seven more organizations have entered into partnerships with the IFC through the MCCP. They include Allianz Global Investors, Liberty Specialty Markets, and the Hong Kong Monetary Authority. The capital raised through these partnerships is much more than the IFC could raise on its own for development and market creation projects. According to its data from 2018, the MCCP was able to amass $7 billion in capital.[19]

Although most of the partners in the MCCP have been state banks or large private companies, it is possible an expansive and committed diaspora group could serve as a partner. As the RDGN demonstrated, a highly motivated group is capable of coming together to structure large-scale wealth investments. There are other ways development organizations could channel these capital resources. The United States Agency for International Development (USAID) has also been supporting more innovative forms of impact investing. They have recently pursued ventures like the Utkrisht Impact Bond, which they claim is the first development bond tailored specifically for newborn and maternal health.[20] Much of the up-front private capital backing in this bond originates from USAID’s partner organization the UBS Optimus Foundation. The bond is meant to help improve medical facilities and healthcare services in Rajasthan, India. USAID and another partner, Merck for Mothers, are on the hook to pay back the initial investment only if the implementing organizations meet predetermined targets on improving the health facilities catering to mothers and newborns.[21]

A program similar to the Utkrisht Impact Bond could be an option for a large diaspora group looking to invest in areas more related to human development. The key step, however, is for a development organization such as the ones mentioned above to approach these groups and help facilitate the investment process. If there are substantial amounts of diaspora members out in the world wanting to use their capital more productively, then development agencies should be active in courting their support. Considering all of the positive effects remittances can have on developing countries, the international development community should seek to make greater strides toward facilitating a wave of diaspora wealth investments.

[1] United Nations, “Total International Migrant Stock,” United Nations Department of Economic and Social Affairs, https://www.un.org/en/development/desa/population/migration/data/estimates2/estimates19.asp.

[2] World Bank, “Personal Remittances, paid (current US$),” The World Bank Group, https://data.worldbank.org/indicator/BM.TRF.PWKR.CD.DT.

[3] Gloria Moreno-Fontes Chammartin, “The Effective Use of Remittances in Promoting International Development,” International Labour Organization, https://www.un.org/en/development/desa/policy/publications/general_assembly/eitconference/2aprpm_moreno.pdf.

[4] Paola Giuliano & Marta Ruiz-Arranz, “Remittances, financial development, and growth,” Journal of Development Economics 90, no.1 (September 2009): 144-152, https://www.sciencedirect.com/science/article/pii/S0304387808001077.

[5] Esman Nyamongo, Roseline Misati, Leonard Kipyegon & Lydia Ndirangu, “Remittances, financial development and economic growth in Africa,” Journal of Economic and Business 64, no. 3 (May/June 2012): 240-260, https://www.sciencedirect.com/science/article/pii/S0148619512000021.

[6] Aaron Terrazas, “Diaspora Investments in Developing and Emerging Country Capital Markets: Patterns and Prospects,” Migration Policy Institute, August 2010, https://www.migrationpolicy.org/research/diaspora-investment-developing-and-emerging-country-capital-markets-patterns-and-prospects.

[7] Ibid., 15

[8] Ibid., 16

[9] IOM, “Rwanda,” International Organization for Migration, https://www.iom.int/countries/rwanda.

[10] OECD, “Connecting with Emigrants: A Global Profile of Diasporas,” Organisation for Economic Co-Operation and Development, July 26, 2012, https://read.oecd-ilibrary.org/social-issues-migration-health/connecting-with-emigrants/key-statistics-on-diaspora-from-rwanda_9789264177949-graph171-en#page2.

[11] IFSWF, “Agaciro Development Fund,” International Forum of Sovereign Wealth Funds, https://www.ifswf.org/members/rwanda.

[12] Ibid.

[13] James Karuhanga, “Diaspora group starts investment fund to help fast-track national development,” The New Times, January 6, 2015, https://www.newtimes.co.rw/section/read/184688.

[14] Rwanda Global Diaspora Network, “Remittances,” Rwanda Global Diaspora Network, http://www.rwandaglobaldiaspora.org/diaspora/.

[15] Diane Mushimijimana, “Rwanda: One Dollar Campaign Complex Inaugurated,” allAfrica, October 29, 2014, https://allafrica.com/stories/201411032568.html.

[16] IOM: UN Migration, “Rwandan Diaspora,” International Organization of Migration, September 2018, https://www.iom.int/sites/default/files/country/EEA/info_sheet_diaspora.pdf.

[17] Ibid., 3.

[18] IFC, “Managed Co-Lending Portfolio Program,” International Finance Corporation, https://www.ifc.org/wps/wcm/connect/corp_ext_content/ifc_external_corporate_site/solutions/products+and+services/syndications/mcpp.

[19] Ibid.

[20] USAID, “The Maternal and Newborn Health Development Impact Bond,” United States Agency for International Development, November 30, 2018, https://www.usaid.gov/cii/indiadib.

[21] Ibid.

Author: Sharmishta Sivaramakrishnan

In 2020, our greatest predicted global risks were forecasted to be environmental degradation, health vulnerabilities like chronic diseases, breaches in cybersecurity, and increased political and economic polarization. From the Australian bushfires to the COVID-19 pandemic and the onset of a global recession, the threats we face in emerging and developed markets are more pronounced than ever.

Adding fuel to the fire, in December 2019, Australians reached a historic low in their trust in government. Meanwhile, Edelman’s Trust Barometer in the same year reported that in Singapore and China, while trust in government had increased, 76 percent of respondents felt change was more reliable coming from the private, not public, sector.

Dealing with a decade of new and exacerbated challenges will require re-instilling trust in our younger citizens.  It will implore us to welcome the birth of new leadership styles, inspired by more youthful generations’ preferences while learning from the legacy of incumbent governance processes.

So, how do we do this?

There is a lot of rhetoric out there about inspiring young people to run for public office, to invest in their countries through civic engagement, and to show up and vote during their elections. Despite these encouraging and important messages, we need to recognize the inherent innovation potential of the public sector and, mainly, how governments must evolve how they engage and involve young people. Considering young people an asset to more robust policymaking, governments can tailor and benefit from the ability of young citizens to be effective, public communicators.  The jargon of the public sector, coupled with often intricate, internal processes can make it difficult for the everyday citizen to decipher its true motivations. Investing in digital platforms that encourage more frequent communication between public servants and young people can result in a more open, timely, and constructive conversation.

In 2019, Singapore launched its SG Youth Action Plan. Moreover, Singapore’s Ministry of Community, Culture, and Youth (MCCY) recognized the willingness of young people to participate in online channels. It announced the launch of a new digital platform to conduct polls and cultivate interactive government-citizen discussions more often. In the words of Senior Minister Sim Ann, ‘the rise of digital technology and social media have accelerated changes in how youth produce and consume goods, services, and information, as well as how they relate to one another and derive meaning and identity.’ Forging online fora where young people can comment on, and challenge government decisions will provide a new way for youth to contribute direct insights on what they and fellow citizens would like to see. Replicating such digital platforms in other countries will encourage more open communication channels and infuse more transparency and trust in decisions affecting a country.

National governments in countries like ASEAN must also continue hiring younger civil servants to maintain high levels of trust between the citizenry and government. To make a government career more exciting and appealing for a young person, there needs to be a real push to incentivize them to join their civil service following their studies or academic training. At the same time, one must not forget the importance of pulling into experienced professionals in their late twenties or early thirties to think about transitioning into the government. To do so, governments need to think about how they promote meaningful success stories of interesting, creative, and open government initiatives. Coupling stronger storytelling with opportunities for immersion in government agencies will provide young people with a more realistic and insightful picture of what a civil service career entails. Minimizing the weight of government jargon and removing perceptions around vertical career progression as a mandate is crucial. Placing young people as secondees from the private sector or fostering the idea that a government job does not need to be something they are ‘sentenced to’ until the end of their careers will normalize the conversation around transitioning into public service as they seek to grow their skills and career experiences. In Norway, a new pension policy was rolled out last year to ensure that young people did not feel a transition from the private to the public sector or vice-versa would result in a loss in their pensions. In Indonesia, as a way to build solidarity among young Indonesian public servants, the Aparatur Muda platform was established. Led by young government officials in Indonesia, the platform provides a way for officials from different ministries to interact, share experiences, and develop skills. Moreover, it ensures that young people who choose to enter public service will be joined by a peer network that offers support, passion, and empathy.

For those who may not intend for a career in public service but are keen to participate in public life, youth parliaments and advisory councils offer a different means of engagement. In countries like Singapore, Cambodia, Malaysia, national youth councils serve as meaningful spaces for local youth alliances and networks. They concretize the means through which young leaders’ ideas are not only heard but also integrated into tangible programming and policies on a national level.

We must trace back to how our existing public service structures are evolving to fit a world where issues erupt with increasing frequency and fervor. In ASEAN, challenges to regional stability, economic prosperity, and, most importantly, citizen trust will only be met if we can bring in fresh perspectives to complement and evolve decades’ worth of tried-and-tested processes. This can only be accomplished by igniting our young leaders, encouraging them to speak up and sharing their future visions.

Disclaimer: Views expressed above are the author’s own.

Sharmishta Sivaramakrishnan works for the World Economic Forum and has served as a Youth Ambassador for World Summit Award since 2016. Sharmishta holds an undergraduate degree from The George Washington University’s Elliott School of International Affairs and a Master’s degree from the Graduate Institute of International and Development Studies. Sharmishta is a Singaporean citizen raised across the Middle East, Europe, South and Southeast Asia. Passionate about global governance, she is committed to strengthening the evolution of public leadership through cross-sectoral cooperation, activating youth engagement and innovating how intergovernmental agendas such as the Sustainable Development Goals can succeed.

Author: Aleem Walji, Former Chief Executive Officer at Aga Khan Foundation U.S.A. Aleem has also held senior leadership roles at the World Bank and Google.org.

While it’s too early to develop definitive policy prescriptions in the face of an unfolding global pandemic, there are things we can learn in real time from COVID-19 and our response to date.

Here are 11 that come to mind for policy makers, the private sector and civil society:

1. The world is so interdependent that disease anywhere can create dis-ease everywhere. Go-it alone approaches don’t work and are dangerous in the face of a global scourge that transcends geographic boundaries, social and economic divides. Germs level the playing field and remind us that ensuring the health and wellbeing of every person is both morally right and in our collective self interest. His Highness the Aga Khan in 2010 remarked, “Almost everything now seems to ‘flow’ globally – people and images, money and credit, goods and services, microbes and viruses, pollution and armaments, crime and terror”. He alerted us then that none of us live on an island.
   
   An effective response to COVID-19 anywhere has to involve multiple stakeholders including Government, the private sector, civil society, faith-based groups, and multilateral organizations for starters. A coalition has to be multi-country, multi-sector and multi-year. While governance of such an alliance will not be easy, this is the moment to strengthen coordination and demonstrate how collaboration builds more resilient systems.
   
   National and International institutions like the Center for Disease Control (CDC), the World Health Organization (WHO) and the United Nations High Commission for Refugees (UNHCR) have an outsized role to play at times of crisis precisely because their role is to share information and provide support as widely and quickly as possible in the interest of communities everywhere.

2. Pre-emptive planning and disaster preparedness is the best medicine. Investing in strong health systems is a precondition to saving lives in the face of a health crisis. This means investing in epidemiology, early warning systems, data collection, analytics, and securing access to emergency supplies before they are needed. It means training doctors, nurses, and community health workers to respond to crises and building surge capacity when demand exceeds supply. Strong public health systems in Nigeria are just as important as Louisiana in a globalized world. We need to invest in both. While we shore-up expertise and strengthen local supply chains, we must also resource transnational institutions so they can respond quickly wherever they are needed. While we cannot prevent low-probability, high-impact events from happening, we can plan for them and minimize damage when they occur.

3. Consistent messaging from leaders is critical to behavior change. At times of crisis, people understand the need for directive leadership and expect their leaders to level with them and make decisions based on the best information they have. It’s equally important to be clear on what we don’t know and not pretend to know all the answers and repeatedly change course. Crises are times to draw upon the best expertise we have wherever it lies and put aside divisive politics and grandstanding. This is when we put people above party and parochial interests. Behavior change is hard but citizens respond to clear and consistent messaging when so much is at stake. Our new normal will require new models to increase connectivity, retain human connection and protect our health.

   The potential for misinformation to spread as fast if not faster than the virus is real. Civil society, government, news and social media platforms need to work together to counter false narratives and ensure all people have access to timely and trustworthy information to inform their attitudes and behavior.

4. Civil society institutions step up at times of crises. Necessity unlocks human innovation, creativity and the ability to develop local solutions to local problems. The most powerful lever a government can pull is enabling people-led institutions to problem-solve alongside public and private actors. Examples range from setting-up neighborhood food pantries to retrofitting scuba gear as ventilators to 3D printing masks, face shields, and emergency medical equipment. When people know what is needed, they step-up, innovate and bootstrap with the resources they have. Sometimes the best thing governments and funders can do is to frame problems clearly, set targets and invite solutions from anyone anywhere to be tested, adapted and scaled if they work.

5. Government, business and civil society must work together to achieve what is best for society rather than narrow self-interests. Profit drives business behavior in capitalist societies but businesses led by enlightened self-interest realize that when citizens and societies falter, businesses lose customers, markets crash and long-term profits decline. Today, factories across the world are being repurposed to manufacture personal protective equipment, pharmaceuticals are collaborating to fast-track a vaccine, and philanthropies are working with the private sector to launch a therapeutic accelerator. In these moments, we pull together around total societal impact rather than parochial interests. Each group has a role to play in building a more resilient and inclusive society. The challenge is how to remember that lesson when we move to a new normal.

6. Technology and Data are Enablers Not Solutions. Epidemiologists, immunologists,  and data scientists are modeling the spread of the virus in real time: what’s happening, where it’s happening, and what we must do to save lives by ‘flattening the curve’. Tech companies are deploying geospatial data and machine learning to ‘contact trace’ the virus and determine where it’s speeding-up and where it’s slowing down. But algorithms are only as good as the data they ingest. Data gaps and inaccurate assumptions limit our predictive capacity: think of the number of people not tested for COVID-19 globally, the challenge of testing in low-resource settings and what happens if recovery does not mean permanent immunity. Privacy concerns around sharing location-based information and developing disease registries are serious. Ethical considerations abound because technologies are embedded within broader systems of power. Our ability to channel them for good depends on the incentives and motivations of those who control them. Global and local civil society institutions must have a voice in determining what data is permissible to share in emergency situations and what constitutes overreach and intrusion now and in the future.

7. Savings lives and saving livelihoods both matter. Choosing between lives and the economy is a false choice. We need both to survive and thrive. The first order of business has to be the preservation of life. It is both a moral imperative and essential for long-term economic and social well being. But livelihoods matter and people without jobs and income, without health insurance, benefits, and social safety nets cannot contribute to economic health. The Prime Minister of Pakistan recently warned, ‘we might save our people from Corona today but they will die of hunger tomorrow’. Public, private and social institutions need to strengthen safety nets while reigniting local enterprises and resuscitating businesses on life support. Small businesses create millions of jobs and urgently need financial assistance to weather the storm and strengthen their economic foundations. Further investment in health, education, livelihoods and civic institutions will be needed in the medium to long term as they are the surest pathway to prosperity over the long haul.

8. Low paid workers are not low-skilled workers. The quiet heroes of this crisis are front line health workers but also grocery store, warehouse, and pharmacy staff, food delivery people, trash collectors, cleaners, mailmen and women, law enforcement officers, elderly caregivers, the list goes on. They are a fundamental rubric of our society. How do we ensure their health and wellness after the crisis passes? More than ever we appreciate teachers and how they shape the future of our children and our societies. As we all juggle work, childcare, and our children’s education directly, we can appreciate how the most vulnerable in our society do this everyday and have the fewest resources to do so. Building safety nets is essential to counter glaring inequality, vulnerability and exclusion in a post COVID world.

9. Our challenges are interrelated and require systems approaches to solve them. Disease, climate, health and the economy are not discrete phenomena: they are interrelated. Biodiversity saves species but also enhances human health and quality of life. As more of our world is susceptible to drought, loss of land due to sea level rise and snowmelt, the spread of disease is accelerated and impacts our economic health. To fight pandemics, we need to understand the social, economic, and political consequences of the decisions we make, directly and indirectly, and the price we pay for short-term wins over long-term gains. Complex systems create interdependencies that are under-appreciated until crises strike. This is why we need integrated approaches and systems thinking to address our most complex problems.

10. Fast-moving crises should remind us of the importance of countering long-term and slower-burning crises. Crises create new vulnerabilities but they also highlight and exacerbate existing vulnerabilities. Millions of New Yorkers will get food from more than 800 pantries in the months to come but 1.4m people depended on food assistance before the virus. Crises bring into high relief inequities in our society and provide fresh perspective on broken systems. We are already seeing the disproportionate impact on Black and Hispanic communities in the US. We live in a world where a $400 unexpected expense in the richest country on earth can plunge 100m people into poverty. More than 500m people may fall into poverty across the globe this year. Few governments can inject millions let alone trillion dollars of economic relief into their economies. What happens to our safety and security if COVID-19 overwhelms parts of Africa, Asia and Latin America preying upon weak health systems, poor governance, high population density and high rates of poverty? Unless we support these countries, the threat of viral rebound remains. Rapid, low cost and early testing comes to mind, self-triage, access to water and hand washing stations and thinking through what physical distancing and isolation looks like in slums and refugee camps. The fate of more than 70m refugees and internally displaced people will be impacted by how we prepare now. This is not a time for fiscal distancing as the virus will boomerang if we’re not vigilant.

11. Crises give us permission to rethink and reshape our societies. The eruption we call COVID-19 presents an opportunity to reshape institutions and redirect resources with broader societal interests in mind. We can make different choices about the kind of world we want to live in. What are public goods and what happens when we define them too narrowly (eg who gets health insurance, paid leave or access to job retraining)? When it comes to public health, how much should we invest in preventative care and what resources should flow to the federal, state and local levels? What personal data should governments and the private sector control and under what conditions? Google recently made aggregate data related to human mobility publicly available for more than 100 countries. Should this continue post COVID and who decides?

    Are we prepared to confront the indirect costs of climate change given its health and economic consequences? When do global supply chains serve us and what are the strategic goods and services that we must be available quickly and locally (think PPEs, medical equipment, medicine and food)? Exponential technologies like 3D printing and blockchain can help secure local supply chains but how do we mitigate the risk of ‘un-infectable’ robots and AI displacing workers not equipped for a digital economy? These are fundamental questions to debate today and in the months ahead. Time and tragedy create rare opportunities to make different choices with the benefit of real life experience. Are governments, corporates and the social sector up to the challenge?

Our shared goal must be to build a more resilient global system composed of resilient nations and communities. That will require investing in emergency preparedness and response, building stronger civic-minded institutions to accelerate recovery, and recognizing the interrelated nature of the environment, health systems, social systems, and economic well being.

We are only as strong as the most vulnerable amongst us. We have to work across divides to build local and global systems that are more inclusive, flexible, and fair.