What I Read

Header Right

Uncategorized

Core funding of the UN, the end of an era?

Posted on Leave a Comment

Browne and al’s “Sweden’s funding of UN funds and programmes: analyzing the past, looking to the future” reviews the funding patterns of  the UN development system (UNDS). The paper was commissioned by the Swedish Experts Group on Aid Studies, an independent policy evaluation/analysis function kick-starting topical conversations within the Swedish government.

The background for the study is the rise of earmarked funds to UN funds and programmes: from 58% of the total budget in 2007 to 80% now. Its findings and recommendations were discussed this week with Sweden’s State Secretary for International Development, a panel of respondents in which I participated, and about 100 civil servants from different ministries and SIDA. A key issue was the funding strategy Sweden should adopt moving forward. A key concern was whether, by being one of the last long-standing core-funding supporters, Sweden was being “taken for a ride” (the title of the event).

The report reviews the finances and effectiveness of funds and programmes. It uses CEB data cross-referenced with data from agencies. UNICEF is portrayed as an exemplary agency having grown in size thanks to non-core contributions, but having strategically redirected these resources towards pre-identified needs to service its mandate (pp 58-61). The recommendations, presented by the authors as “doable” and received by the State Secretary as “helpful”, go from an ask for harmonized definitions to a call for Sweden to “withdraw its non-core funding from UNDP with the aim of encouraging it to emphasis its original central funding and coordination role within the UNDS rather than its role as an operational competitor within the system.” Ouch.

Other recommendations ask Sweden to (i) redirect its core support towards the most effective organizations and humanitarian work, (ii) champion predictable funding for normative activities, and (iii) request agencies to improve their messaging around the importance of core funding. Part of the discussion this week picked up on these. The Secretary of State noted how powerful field results were to advocate for core funding. Several speakers underlined the critical role of core funding for normative and humanitarian work, two functions presented in this report (and many others) as the undisputed comparative advantage of the UN. I used UNICEF illustrations to show how core funding supports universality, the role of first responder in crises, long term investments, the bridging of humanitarian and development work, and the delivery of results for children on the ground.

A thought-provoking table in the report (see below) was used to remind the audience that the core/non-core funding trend was not affecting all multilaterals similarly. One speaker argued that the UN should consider adopting a replenishment system akin to International Financial Institutions (IFIs) and most global vertical funds. Several participants supported this idea while others wondered whether the decrease of UN core funding was more a matter of political will than of technical fixes.

 

 

Another recommendation of the report is for Sweden to sponsor an independent international commission on UN funding. Having worked for several such commissions including two financed by Sweden, I was asked to react to this suggestion. The proposed mandate of the commission being rather narrow (“to review definitions and rationalize the allocation of UN funding”) and the terms of reference rather prescriptive, I suggested a more strategic and forward looking framing. Indeed, the report did not, in my view, do justice to the second part of its title: “looking to the future”. What are the key drivers of change that will influence development finance, and UN funding, in the coming 10-20 years? What would the UN funding debate look like in a future where financial technology combined with digital peer-to-peer platforms could become the norm for international financial transactions? How will more frequent disasters influence the nature of UN funding in particular as these shocks also affect richer countries potentially reversing their aid-eligibility? Could traditional donors increasingly channel their resources via IFIs transforming UN agencies as mere implementing partners in a shrunk UNDS? Could new donors increasingly channel their resources via multilateral organizations and revitalize the UNDS? Etc

My main take away from this conversation and what I read on the topic in the context of UN reforms, is that we should develop “what if” funding scenarios, one of which focusing on a further decrease of core funding and direct support to UN operations.

3 November 2017

Posted on Leave a Comment

It is always good to have a quick read through the OECD DAC high level meeting communique. Two specific points caught my attention this year. One, the club of 30 richest countries agreed on the accounting rules for in-donor refugee spending. Certain costs can now be reported as official development assistance (ODA) during the first year of refugees in host countries with no cap on expenditure levels (Annex II). Provision of food, shelter, healthcare and education, rescue at sea, and voluntary resettlement costs are eligible. Spending associated with detention, border control, return and resettlement following asylum rejection is not eligible. Two, DAC members decided to explore the possible “reverse graduation” of rich countries affected by natural disasters or humanitarian crises (paragraph 41). This decision was triggered by the U.K. seeking ODA eligibility when supporting their Overseas Territories in the Caribbean following hurricane Irma. This is important as there has been, up to now, no rule for high income countries experiencing crises-induced GDP drops to be re-instated as aid recipients. As these two developments have implications for the redirection of ODA away from the poorest countries, these conversations are worth monitoring and, I would argue, engaging with. For the second-time in 40 years of its existence, the DAC high level meeting allowed civil society participation and NGOs issued common statements – a possible entry point.

In “It is time to end the opacity and secrecy of social media” Ghonim and Rashbass suggest to develop standardized public interest APIs (application programming interfaces) to improve the transparency of social media. The idea is to create “public good” algorithms to scan and surface problematic content and sponsors on digital platforms.  I found this interesting because it does not only look at the symptoms of the on-going social media crisis. As we have argued before, the root causes of the problem have to do with the ethics of digital platforms design and what drives their expansion (money, not societal progress). But, of course, there are also limits in using tech to fight tech.

My graph this week is from Heidrick and Struggles in “To understand whether your company is inclusive, map how your employees interact”. It shows the results of a network analysis done with employees of a large professional services firm to understand whom they trust and turn to to ask for help with decisions. In that particular example, we see that women (red dots) have less connections than men (blue dots); that there are more same-gender ties than cross-gender ones; and that women are less central than men in the innovation network. This type of evidence is key to understanding diversity and inclusion at a deeper level than counting the number of staff from different groupings.

 

 

My quote of the week is from Pekka Kuusi’s “Social policy for the 60s: A plan for Finland” (H/T Ronald Wiman) referring to the universal child grant system introduced when Finland had a GDP per capita equivalent to that of 2015 Namibia: “A heavenly gift to a country where there was scarcity of everything – except of number of children”.

20 October 2017

Posted on Leave a Comment

The Economist’s “China’s leader Xi Jinping  declares the start of a ‘new era’” neatly captures the ambition of the 19th Chinese Communist Party Congress held this week: “revise the party’s constitution, reshuffle the leadership and set the tone for policymaking in the next five years”. The ‘new era’ is one where China becomes a “great modern socialist country” by mid-century. I found Bill Bishop’s “19th Party Congress Work Report” [shared by Guy Taylor and which just added a paywall] very useful in pulling together articles from diverse sources and structuring some of the key take-aways. They include the positioning of Xi Jinping in the legacy of Chinese leaders, the characteristics of the “new era”, the strategic opportunity for  China to “take center stage in the world”, the clearly articulated leadership on climate change, and the strengthened role of state enterprises. All of which very relevant to our work either directly or indirectly (through South-South and regional/international organizations).

I recently suggested to a young female professional who introduced herself as “just an intern” to consider introducing herself as a “reverse mentor” instead. That was based on the fact that pretty much every millennial who has been in my team has opened my horizons. And as Kevin Roose reports in his “Executive mentors needed. Only millennials need apply”, reverse mentoring schemes are trending in many industries. As an organization servicing the young, shouldn’t we formally develop such as system?

My graph this week if from IFPRI’s “2017 Global hunger index”.  While broad numbers are positive, the index report presents important inequalities between and within countries, illustrated below for child stunting rates. It also argues that 52 out of 119 countries for which data are available, are in serious risk of hunger or alarming states of hunger. Together with FAO’s “2017 State of food security and nutrition in the world” showing that the absolute number of hungry people rose in 2016, it rings the alarm bell on a possible reversal of long term (taken for granted) trends.

 

My quote this week is from Muhammad Ali’s 1971 Parkinson interview: “When one man of popularity can let the world know the problem, he might lose a few dollars telling the truth, he might lose his life but he is helping millions. But if I keep my mouth shut just because I can make millions this isn’t doing nothing.”

13 October 2017

Posted on Leave a Comment

The IMF’s Fiscal Monitor 2017 is launched during the Annual Meetings of the IMF and the World Bank where the broader economic mood is positive with messages welcoming a global economic recovery. It is labelled “Tackling inequalities”. It shows that since the late 1980ies global inequality has declined while inequalities within countries have increased for half countries in the world.  It unpacks 3 policy debates — progressive taxation, universal basic income (UBI) and public spending in health and education — without making explicit recommendations to policy makers. As UBI remains a hotly debated topic (that Horizons has summarized for you) and as the conversation around our house is growing on universal child grant, the report is worth browsing through.

In “The Red Cross presses Silicon Valley to fight cyberwarfare”, FastCompany interviews ICRC President Peter Maurer who met big techs to discuss responsibility and possible game changing role in humanitarian contexts. Arguing that governments with cyberwarfare capacities are not interested in regulation, he points to areas of convergence between the private sector and humanitarian organizations and suggests that collaborating with big techs could be a way to shape necessary norms and standards. Watch that space.

My graph this week is from Alvaredo and al “Measuring Inequality in the Middle East, 1990-2016: The World’s Most Unequal Region?” It combines household surveys, income tax data, wealth rankings and national accounts to estimate income concentration for 1990-2016 in Middle East countries. It then compares results with other parts of the world to show that the top income share in the Middle East is higher than in Western Europe, USA, Brazil and South Africa.

 

 

One week after unveiling the “Human capital project” aiming to create a human capital index for each country with the help of the Institute for Health Metrics and Evaluation (yes, same crowd who worked on the Gates Foundation SDG report), World Bank Group Jim Kim announces: “Soon, we’ll publish The Changing Wealth of Nations, and for the first time, we’re looking at human capital as part of the overall wealth of nations. It turns out that more than 65 percent of the wealth of all nations in the world is in human capital.”

6 October

Posted on Leave a Comment

Antonio Garcia Martinez’ “Chaos monkeys” is a deep dive into the Silicon Valley ecosystem illustrated with the up and downs of Martinez’ career from the Goldman Sachs credit derivatives desk to the Facebook ads team. His writing style is casual and witty but also show-offy and sexist. If one manages to rise above that, the second half of the book gives an illuminating unpacking of the digital advertising mechanics, and is worth reading. Rarely can one find straightforward and comprehensive information about this exploding sector which increasingly shapes economies and societies. And Martinez does that with brio. Here is a digest of a couple of chapters I’ll share with my kids (while they remind me again that “Facebook is for old people”): Facebook makes money through (people clicking on) ads; Facebook does not sell users data to ad companies, it triages and packages users data for better ad targeting; Targeting was initially done by classifying users’ “likes” and allowing ad companies to plug targeted ad in their feeds; The big revolution in targeting was about bridging online with offline users data (what you do on Facebook with what you buy online and offline with the same credit card); The bridging is done by connecting real world IDs (eg home address) with digital (mobile, tablet, desktop) IDs; “What is generating tens of billions of dollars in investments and endless scheming inside the bowels of Facebook, Google, Amazon, and Apple is the puzzle of how to tie these different sets of [IDs] together, and who controls the links.”; This allows these companies to have full pictures of behaviors; “The match rate (ie the percentage of offline personas that can be found online) for Facebook’s Customs Audience product is as high as 90%”. Martinez says that this information (and more) is shared publicly by Facebook but agrees that it is not easily understandable. And he adds that too many people don’t care, even though they should. Oh, and I should also probably add this other quote: “Facebook has run out of humans on the internet. The company can solve this by either making more humans (hard even for Facebook), or connecting what humans there are left on the planet. This is why Internet.org exists, a vaguely public-spirited, and somewhat controversial, campaign by Facebook to wire [the developing world] with free Internet.” I’ll stop here.

The International Financial Corporation’s “Tackling childcare: The business case for employer-supported childcare” investigates the business impacts of employer-provided childcare. It complements a literature review with an in-depth analysis (~100 interviews and 40 focused group discussions) of 10 companies in different countries. It shows benefits for recruitment, retention and productivity. On-site child care helped the Village Nut Company (Kenya) attract young talent and prevent urban migration; cut staff turnover at Nalt Entreprise (Vietnam) by a third; and led to a 9% drop in sick leave absence in MAS Kreeda Al Safi-Madaba (Jordan). The evidence is here. The impact for companies is clear. This could move the needle for women who remain outside of the workforce in much larger numbers than men (27 percentage point difference). A no-brainer for action!

My graph this week is from the 2018 World Development Report “Learning to realize education’s promise” and shows big learning gaps between poor and rich children in African countries. A good graph pointing to sad realities.

 

 

My quote this week is from the late Tom Petty: “I’d have to give technology a D-plus. I think it is unhealthy for rock. I can hear digital anything. It sounds different. It’s very cold.”

The (missing) human dimension of the circular economy

Posted on Leave a Comment

Last Sunday, I attended a “working dinner” on the circular economy. It was held at the Residence of the Holy See Representative to the UN, Chaired by the Vatican Minister of Foreign Affairs, and sponsored by ING.  The residence of the Vatican in NYC is extra-ordinary. It was built and donated by the first 20thcentury mayor of the city: Hugh J Grant. It is the only NYC townhouse with a built-in chapel and a bullet proofed bedroom where 3 popes have slept.

I was intrigued by the interest of the Vatican in the circular economy. That’s because I had missed the reference in Pope Francis’ Laudato Si: “We have not yet managed to adopt a circular model of production capable of preserving resources for present and future generations, while limiting as much as possible the use of non-renewable resources, moderating their consumption, maximizing their efficient use, reusing and recycling them. A serious consideration of this issue would be one way of counteracting the throwaway culture which affects the entire planet, but it must be said that only limited progress has been made in this regard.” [Emphasis added]

The circular economy proposes a growth model decoupled from natural resources. This means a shift from a linear model that “takes, makes and disposes” to a circular model that “reduces, reuses, and recycles”. The concept was born in environmental economists circles. It is connected to other, more familiar, concepts such as the sharing economy, the green economy and sustainable development. It is presented as a response to co-existing trends that contribute to environmental degradation: the increasing resources scarcity and commodity price volatility; and the growth of population and middle-class consumers.

 

 

Accenture estimates that the circular economy could generate 4.5 trillion by 2030. The first World Circular Economy Forum was held this year. And more and more businesses, mostly European so far, are embracing the concept. This means big changes to their strategies: Unilever commits to 100% recyclable packaging by 2025, Philipps moves from selling light bulbs to selling lighting as a service, Michelin leasesand retreads tires, etc.

A key question at the Vatican-hosted dinner was about the impact of the circular economy on the poor. This matters because so far the conversation has mostly happened in rich countries and focused on the environmental dimension of the circular economy. Not much has been written on its human dimension. My main message during the dinner was that circular economy advocates should not consider human wellbeing as an ex-post issue only. Rather human wellbeing should be a core element of the model where human capital wastes are considered alongside natural resource wastes. Under this broader message, here are some ideas I put on the table:

The circular economy

  • Should seek to optimize all resources, including human resources. That would require pricing negative human externalities (eg inequalities) so that goods and services bear the full cost of their production and consumption;
  • Could make certain goods and services more accessible to the poor (sharing is cheaper than owning);
  • Could offer jobs opportunities to young “green” entrepreneurs provided they have the skills, finances, and technology.
  • Would require life-long learning systems.
  • Could help formalize informal economic activities, in particular when digital platforms are used to share goods and services.

In short, the circular economy concept is transforming big industries into service providers, being promoted by influential political and financial actors, but missing a fully-fledged human dimension that I, for one, would like to help shape.

Find me on Linked In