Presentation by John Hurley, Visiting Policy Fellow Centre for Global Development and former lead US negotiator for the Addis Ababa Action Agenda at SITE Development Day 2017

1. Private capital for
development and foreign aid
John Hurley
Center for Global Development
May 31, 2017

2. Private capital for development and foreign aid
Private Flows
Remittances
US Initiatives
The U.S. FY2018 Budget

3. Private Flows - “Take note with concern that a significant number
of developing countries have not experienced a rise in international
capital flows.”

4. But not consistent trend for all countries

5. Remittance Prices – “We will strengthen existing measures to
lower the transaction costs.”

6. Remittance Prices – Impact of Technology

7. Bilateral Initiatives
• “We will strengthen national, bilateral and multilateral efforts to
assist developing countries in overcoming the structural or other
constraints which currently limit their attractiveness as a destination
for private capital and foreign direct investment.” (para 23, AAAA)
• “The programmes, mechanisms and instruments at the disposal of
the multilateral development agencies and bilateral donors can be
used for encouraging business investments, including by mitigating
some of the risks faced by private investors in critical sectors…” (para
24, AAAA)

8. Power Africa
• Electrify Africa Act of 2015 - promote first-time access to power and power
services for at least 50,000,000 people in sub-Saharan Africa by 2020 in
both urban and rural areas. Signed by President Obama February 8, 2016.
• “In carrying out policies under this section, such institutions shall promote
the use of private financing and assistance and seek ways to remove
barriers to private financing for projects and programs under this Act,
including through charitable organizations.”
• Power Africa has more than $54 billion of commitments from its more than
140 public and private sector partners to achieve its goals. The 57 projects
that have reached financial close are worth more than $14 billion.

9. Food Security
• Global Food Security Act of 2016 authorizes a comprehensive, strategic
approach for United States foreign assistance to developing countries to
reduce global poverty and hunger. Signed by President Obama July 20,
2016.
• “leverage resources and expertise through partnerships with the private
sector, farm organizations, cooperatives, civil society, faith-based
organizations, and agricultural research and academic institutions…”
• In 2015, Feed the Future helped over 9 million small-scale farmers and
rural families adopt practices that improved agricultural productivity,
boosting their incomes by more than $800 million. In areas where Feed the
Future is active, these improvements have helped reduce poverty up to
26%.

10. Women Entrepreneurs Fund?
• Announced by Ivanka Trump in Saudi Arabia
• Promised a combined $100 million by Saudi Arabia and the United
Arab Emirates specifically to help women in the Middle East
• World Bank President Jim Yong Kim said he first heard about it when
it was pitched to him by Trump and German Chancellor Angela
Merkel
• Goal is to announce at the G-20 summit in July with additional
donations from the United States and other countries, a fund with a
total of $1 billion for women's economic empowerment

11. Trump FY 2018 Budget Proposal
• The full budget features a 32 percent cut to topline funding for the
Department of State and Foreign Operations.
• Plans to eliminate the Overseas Private Investment Corporation (OPIC), the
United States’ chief development finance institution, citing concern that it
displaces the private sector.
• Would zero out US food assistance under the United States’ largest
international food aid program, known as Food for Peace Title II (or P.L.
480). Suggests future food assistance will be provided through the
International Disaster Assistance account but rather than shoring up the
account to shoulder the additional cost, it cuts that account too.
• Plans to eliminate the Overseas Private Investment Corporation (OPIC), the
United States’ chief development finance institution, citing concern that it
displaces the private sector.