Date: 2024-09-27 Page is: DBtxt003.php txt00025022
INTERNATIONAL DEVELOPMENT ASSISTANCE (IDA)
THE FINANCING OF IDA
The financing of international development assistance has been both rather
modest and also quite ineffective. More and better are both needed.
THE FINANCING OF IDA
The financing of international development assistance has been both rather
modest and also quite ineffective. More and better are both needed.
I archived this graphic around 2013 in the aftermath of the 2008 banking crisis. I had become increasingly concerned at what I referred to as the 'financialization' of the economy and the lack of 'development progress' around the world.
I worked 'on the ground' in various roles providing management assistance in a variety of development situations and humanitarian emergencies for a period of about 25 years starting in 1978. During this time, it became clear that many of the people involved in this sort of work were better educated than a generation before, but actually knew less about the real world problems that needed to be addressed. I was 'in between' because I came into this arena when I was 40 rather than 25 and already had 15 or more years of corporate management experience and specifically practical operations analysis and performance improvement experience. I went into shock when I got exposure to the management systems (or lack thereof) at the UN as well as at the World Bank and all sorts of Government organizations around the world.
Peter Burgess
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FOREIGN DIRECT INVESTMENT (FDI)
Gives access to investment funds ... but too often it is corporate colonialism | |
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Segmentation of FDI fund flows
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These are the various financing types that support the global economy
Has not grown much in the period since 1990 Other official flows (light blue) Has not grown much since 1990 FDI ... Foreign Direct Investment (orange) This has grown rapidly since 1990, but has not been 'development' investment but has been investment seeking maximum commercial return Remittances (dark blue) This has grown rapidly since 1990, but has been largely a result of low wage exploitation of migrant workers Portfolio equity (yellow) Small ... a subset of FDI Long term loans (leaf green) These grew rapidly in the period since 1990 in many cases to fund current expenditures Short term loans There was an unhealthy rapid growth in short term loans after the 2008 banking crisis Development Finance Institutions Small Non-DAC development cooperation Very small
The financing of international development assistance has been both rather modest and also quite ineffective. More and better are both needed.
| Remittances are one of the most important area of growth and likely one of the most efficient in terms of delivering poverty reduction at a low cost. It can also be noted that the banking sector and financial services industry charges very high prices for a service that is vital but low cost for the banks! TPB note: My experience with FDI over a period of more than 30 years has been that much needed foreign investment crowds out local investment and skims off the most lucrative projects. Worse many foreigners have been very comfortable paying bribes in a variety of forms to local officials at all levels, including very substantial amounts to those at the very top. Bribery and corruption are one of the lowest risk behaviors for international companies because they are most unlikely ever to be caught and it reduces conventioanl commercial risks considerably! |