Philantropic Foundations and Multilateral Aid Institutions like the World Bank: Increased Opportunities for Collaboration in ACP Agriculture

Slide 1: Philanthropic Foundations and Multilateral Aid Institutions like the World Bank: Increased Opportunities for Collaboration in ACP Agriculture Olga Sulla World Bank

Slide 2: Outline 1. Global Development Finance: Private and Official capital flows 2. Philanthropic Foundations in international development 3. World Bank and Agriculture in Africa 4. Collaboration based on relative advantage – existing mechanisms and questions for discussion

Slide 3: Private Net Capital Flows $590 bln to Developing Countries are Concentrated in Middle Income, with only $40 bln to Africa 700 Private commercial investment in African $BLN AFR $38 bln 600 agriculture has been largely limited to crops and higher-potential zones. A number of international seed companies have invested in maize seed 500 multiplication 400 EAP ECA LAC LAC $134 bln 300 p MENA SA SSA ECA $172 200 bln EAP $152 100 bln 0 2000 2001 2002 2003 2004 2005 2006 2007

Slide 4: Official Aid Net Flows Official Grants to (aid+debt) are Most Africa are up to 1/3 of Important for Africa total ($104 bln) 60 Africa Official Grants by region $ BLN $30 bln 40 20 Africa 0 27% ECA $-32 bln Asia 2003 2004 2005 40% -20 -40 ECA LAC $-26 bln MENA 3% -60 25% LAC -80 5% EAP ECA LAC MENA SA SSA

Slide 5: Philanthropic Foundations  Foundations play increasingly important role in development assistance, their potential is significant. Financial capacity: total assets of the US t foundations account for $950 billion; ~700 billionaires in the world.  International development activities represent a small part of the foundations’ work. Of ~100,000 foundations only 1% is currently active; total amount estimated between 5-7 bln ). How does it compare with official ODA grants $104 billion and with the total private capital flows to developing countries (600 billion)?  The phenomenon of philanthropy for development is US dominated (experience since 1920s)  The poorest countries are not yet the main direct recipients of aid, due to mechanisms of foundations’

Slide 6: Foundations based in the United States: 90% of grants support Domestic activities 36,4 •3,8 billion international International Grants grants Total Grants 31,8 30,5 30,4 30,3 •68,000 grant-making foundations •Top 12 account for 50% •Types: independent (Gates, Ford, Moore), corporate (CitiGroup, Coca-Cola), community… 3,3 3,2 3,2 3,5 3,8 •The Gates disbursed $1 2001 2002 2003 2004 2005 bln in 2006 and plans to increase to $3 bln

Slide 7: Grants-Distribution Scheme, US Foundations US foundations annual total grant-giving (30bln) International giving Domestic giving (90%) (10%, $3 bln) Foreign recipients (1/3, $1 US-based recipients, (2/3, bln) $2 bln) Developed countries/organizations Developing countries (60- 70%, $600-800 mln)

Slide 8: Main Direct recipients of the Foundations' aid are a few emerging economies, not the poorest countries… Channels of Foundations’ 50 Aid Implementation: • Direct work in developing countries: Ford, Kellogg, MacArthur, and Soros Foundations 30 through offices (12 22 21 foundations have offices in 20 IDA countries 15 •Through existing organizations: Gates, Hewlett Packard Foundations and the South India Mexico Brazil IDA Russia Rockefeller Fund Africa countries •Hybrid models (eBay, Aol, (est.) Google)

Slide 9: European and Asian Foundations • European foundations developed slower: greater propensity to state over private action, a stronger welfare system. In 2003 the EFC launched Europe in the World Initiative, calling foundations to donate 5 percent outside Europe or for global projects. International grants at about $600 million annually. European Foundations Center lists about 200 foundations. Concentrated in Sweden, Denmark, Britain, Germany and Switzerland. Education, research and health care are the main sector • Asian Foundations play an increasingly important role in their Region. International giving by Asian foundations can be estimated at $400 million. Asian foundations are in Australia, Japan, China, Korea, but also found in Vietnam, Malaysia, Philippines, Thailand • Japan Foundations Center reports about 60 million of international grant making

Slide 10: Sectors of Foundations’ International Grants and of the Official Development Grants Foundations: Official Development Grants Health ~50% of the total Emergency assistance (Gates accounts for 1.2 of 11% 1.4 billion) Social Infrastructur e International development 34% (11-13%) Debt related action Environment (6%) 30% Education (5%) Human rights, art, religion Economic Infrastructur Multisector Production e 7% Sector 12% 6%

Slide 11: Foundations’ work in Agriculture still small but increasing  Aga Khan Foundation Programs typically link elements such as rural savings and credit, natural resource management, productive infrastructure development, increased agricultural productivity and human skills development with a central concern for community-level participation and decision-making.  Gates Foundation invests across the complete agricultural value chain. It focuses on small farm households, mostly headed by women. A particular focus since 2006 is the foundation’s support, in a partnership with the Rockefeller Foundation, of the Alliance for a Green Revolution in Africa, which brings a wide range of African partners together to spearhead new agricultural programs for small farmers.  The William and Flora Hewlett Foundation The Global Development Program make grants that attempt to reform multilateral trade rules that limit market access for agricultural products from developing countries.

Slide 12: Foundations work in Agriculture still small but increasing (cont.)  Novartis Foundation for Sustainable Development The Millennium Villages Project (MVP) was founded with the goal of helping impoverished communities in rural Africa achieve the Millennium Development Goals. The project operates in seventy- eight villages, reaching around 390,000 people.  Syngenta Foundation for Sustainable Agriculture improves rural livelihoods in semiarid parts of the world in sustainable ways. It promotes innovative methods and technologies to help farmers increase their food production and make a profit.  In 2006, SFSA established the Syngenta Foundation India to develop its projects across India: agricultural extension services, trial/demonstration crops, seed production, development of horticulture and building low-cost greenhouses.

Slide 13: World Bank Agriculture in Africa Bilateral and multilateral donor aid for development of Africa agriculture declined from $1.921 mln in 1981 to $997 mln in 2001, rebounding slightly after. OECD data show that although bilateral donors together gave 52% (Japan and the US top), the World Bank was the single largest donor to African agriculture between 1990 to 2006 (20% IDA) with $2.8 billion in investment lending in agriculture, 8% of total Bank investment lending to the Region.

Slide 14: World Bank Agriculture in Africa cont. IEG report “World Bank Assistance to Agriculture in Sub Saharan Africa” 2007: “Agriculture has been neglected by both governments and the donor community. The Bank’s strategy for agriculture subsumed within a broader rural focus and technical skills declined. The lending support from the Bank “sprinkled” across various activities: (research, extension, credit, seeds, transport and policy reforms in rural space), but without synergies. In partnership with others, the Bank could take the lead in fostering a multifaceted approach, based on its comparative advantage as multisector lending institution. “

Slide 15: World Bank Agriculture in Africa cont. WBG new focus on Agriculture: 1. Total lending for agriculture will go up from USD 4 to 6 billion in the coming year 2. President Zoellicks’ 10 points plan for food crisis (including stimulation of agricultural supply response by immediate provision of seeds and fertilizers); 3. 2007 saw increase in lending for agriculture in Africa to 2.7 bln; 4. Reorganization of departments working on rural and agriculture; 5. Regional projects expansion 6. Diversification Stimulate private sector led investment across the value chain

Slide 16: Foundations and the World Bank working together 1. Trust Funds: The World Bank as a multilateral attracts some of the foundations through its Donor Funds mechanism (more than $400,000 like AK, Gates, Aridius, Ford). WBG is the top Trust Funds holder among all the multilaterals (7 bln vs. 3.8 bln UNDP, 1.7 UNICEF, 1.1bln IADB). 2. Co-financing arrangements: arrangement under which funds form the Bank are associated with funds provided by other sources outside recipient country for a specific lending project: parallel and joint co-financing is available. 3. The Development Grant Facility (DGF): its goal is to encourage innovation through seed money for new development approaches on a global or regional level, to catalyze partnerships. Available for new activities about 10-15 million per year.

Slide 17: Foundations and the World Bank working together cont. 4. CGIAR 5. New study “Evolving Aid landscape in Africa and the role of Private Philanthropy” WB in partnership with Norway and Kellogg Foundation: mapping the aid landscape, private actors – how and where; dynamics at the country level. 6. New Gates – World Bank Group partnership on agriculture (meeting in April 2008): WBG: intellectual and policy advocacy leadership; in country-relationships, processes, understanding of public investment priorities, due diligence, financial rigor.. BMGF: long term commitment, ability to take risks/experiment, work through partnership 7. WBG is deepening relationship with Aga Khan which is active in SME development and promotion of aro processing. Currently partner in Uganda, Mali, Cote

Slide 18: Strengths of Multilaterals that Foundations find valuable for cooperation  Presence on the ground  Influence/leverage with governments  Ability to convene multiple government actors across and within countries  Ability to scale up innovations to the level of systemic change

Slide 19: Topics for Discussion Philanthropic foundations and Official Developm. Aid 2. Sectors (production/ social sectors, research/projects) 3. Forms of aid (grants/loans) 4. Beneficiaries (public institutions/communities) 5. Accountability and Governance (public/private) 6. Aid implementation (country-based/global funds) 7. Scale: regional vs. local 8. Approach: Pilot vs. Mainstreaming 9. Partnerships (official agencies, foundations, private sector) 10. Aid effectiveness and results measurement systems 11. Monitoring and Evaluation

Slide 20: The World Bank’s contribution to an integrated global response to Food crisis  The response is articulated around 4 main pillars: policy advice, expedited financial support, financial market insurance products, and research to address critical knowledge gaps. 1. The Bank is engaging in policy dialogue with over 40 countries to help them address the food crisis, as well as assessing food security and trade implications of the crisis at the regional level. Instruments used include: rapid country diagnostics, high-level dialogue and public communications, as well as in-depth analytical work.

Slide 21: The World Bank’s contribution to an integrated global response to Food crisis cont. 2. In expediting financial support, the Bank has launched a Global Food Crisis Response Program (GFRP), an umbrella facility that will provide up to $1.2 billion of accelerated financial support and technical advice to countries affected by the food crisis. As part of this facility $200 million dollars in additional grant funding was made available for the most vulnerable and fragile states. Grants for Djibouti ($5 million), Haiti ($10 million), and Liberia ($10 million) were approved in May, while Tajikistan ($9 million) and Yemen ($10 million) were approved in May and June. In July, the World Bank expects to approve grant support to Togo, Sierra Leone, Niger, Guinea Bissau, Central African Republic, and Afghanistan. Furthermore, a pipeline of low-income affected countries has already been identified for further grant support in July and August. Proposals for fast-track IDA funding under GFRP have been approved in Kyrgyz Republic and are moving forward for Nepal, Afghanistan, and Burkina Faso, and are being developed under

Slide 22: The World Bank’s contribution to an integrated global response to Food crisis cont.  In terms of creating financial market insurance products, IBRD and IDA will offer index-based weather derivatives to help transfer the financial risk of severe weather events to financial markets. Malawi will be the first client – should the country suffer a drought it would receive a payout to offset the price of imported maize.  The Bank is also collaborating with other agencies and institutions on research addressing critical knowledge gaps. in the following areas: global food markets; poverty, distributional and nutritional impacts, fiscal and macroeconomic implications and responses, trade responses and impacts at country and global level; facilitating an agricultural supply response, role of safety nets.