One Mountain, Two Tigers

Author: Hannah Ryder, Deputy Country Director, UNDP China.

tigersI’ve recently celebrated my first anniversary of working in China, and I can wholeheartedly say it has been fantastic so far. In particular I have been lucky enough to be surrounded by supportive and enthusiastic colleagues. To be very honest, I had worried about a challenge summed up well by a Chinese saying that “two tigers cannot live on one mountain”. When I joined UNDP China I knew I would be working alongside deputy country director Patrick Haverman and there was potential for confusion about our roles. We needed to make sure we complemented and added value to each other.  Of course, it took a while to work out, but it seems to be going well so far.

This same saying about one mountain and two tigers has been on my mind recently when thinking about the new financial institutions that China and other emerging economies have recently created – the New Development Bank (NDB) and the Asian Infrastructure Investment Bank (AIIB). Let me explain.

In every official discussion or media report about the NDB and AIIB, they are always set out as intended to be complimentary to existing institutions such as the World Bank, IMF, and the Asian and African development banks and so on.

But like me, while it’s all well and good saying this, is it really happening in practice? The fact is, when I joined UNDP a year ago, I had a fairly defined portfolio, and through trial and error Patrick and I have worked out where working together on problems really makes sense and doesn’t. Is there such a strong foundation, a territory for the NDB and AIIB to roam slightly separately?

Here’s an example, brought to my attention when Donald Kaberuka, former president of the African Development Bank, visited the UNDP China office recently.

Dr Kaberuka said he thinks a special role for the AIIB and NDB should be financing large regional projects.  Indeed, such projects are badly needed. In Africa for example, the Grand INGA dam project – which would be larger than China’s huge Three Gorges Project, providing clean energy for hundreds of people – has been little more than a dream since the 1970s. But why? Regional projects like INGA suffer from many complex problems, but one major problem is getting the finance to work. When an organisation like the African Development Bank or World Bank is trying to finance a project, they don’t just have to look at the financial credibility of the project itself, they also have to look at the income classification of the country or countries the project will be in. But the latter kind of classification is uneven.

As an example, Ghana, Togo, Benin and Nigeria are next to each other, and could arguably benefit from a regional project. However, Togo and Benin are classified as Low Income Economies, while Nigeria and Ghana are lower Middle Income Countries. As is explained in this blog post this means that the two groups of countries are eligible for different types of finance at different interest rates from existing banks like World Bank.  This makes regional projects difficult – as it is more complex to blend all the different types of finance.

But why are these classifications used in the existing banks anyway? Well, existing banks get a lot of their money from developed countries, who have a historic target for giving 0.7% of their GNI to a particular list of the poorest (i.e. lowest income) countries in the world.  This list is based on these classifications and reviewed every three years. The existing banks use the list – and therefore the income classifications – to ensure the finance they get from the developed countries to spend meets this target.

The great news is that the NDB and AIIB are brand new, and the money they have to lend is from countries like China. Countries like China don’t have to meet the 0.7% GNI target, and therefore don’t have to use the “list”. This means they – and the new banks – can avoid the complications created by income classification all together. This may make it easier for the new banks to make regional projects a reality and an area of specialization. It could help them become complementary in practice and not just rhetoric.

This is just one idea that has come up for how – to go back to the Chinese phrase – several financial “tigers” could roam on one mountain to deliver development. But there are many other ideas that have been shared and will continue to arise over the coming months. The key will be for the new banks to continue consulting far and wide, and test out different approaches – just like Patrick and I did at the UNDP China office. Indeed, they can come to UNDP for such ideas, as we have a very wide network of country offices who are eager to help.

I’m hoping that in one more years’ time, as I approach my second anniversary at UNDP China, more and more tigers will continue to roam on the development mountain.

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Why we need to buy in to the World Humanitarian Summit NOW

Last weekend the Global Goals were announced. These follow on from the Millennium Development Goals and have been agreed following several years of consultation and negotiation. Celebrities have been bought in to persuade us that it is important for us, as individuals and citizens of nation states, to hold those in power to account for keeping them.

Final_WHS_LogoOver the past two years, a separate global consultation – reaching over 22,000 people – has been looking at how to improve the humanitarian sector (the Exec Sum of the synthesis has just been published). The UN Secretary General’s World Humanitarian Summit (WHS) will take place in Istanbul, Turkey, in May 2016. The objective of the Summit is to agree recommendations and garner commitments to improve the humanitarian sector. 

The humanitarian sector has been criticised both internally and externally for being increasingly ‘unfit for purpose’. The current system is based on principles which were developed in Europe over half a century ago. It’s main mode of operating is to fly costly international experts in to a country when a disaster strikes, normally funded by Western governments. However, both the donor landscape and the variety of groups providing aid are changing. Some perceive this change as a danger to the purity of humanitarianism, others see their vested interests being threatened, whilst others are frustrated by the slow pace of the change.

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Though the Global Goals and WHS are inherently linked, the two processes have been managed separately. Many criticised the post 2015/post MDGs/SDGs process, claiming that it was being run by politicians and raising concern that ambitious goals would be meaningless without real buy in from global leaders. What can/should we learn from this experience when preparing for Istanbul in May 2016?

First, all such global processes include a painful change curve. By this I mean that there will always be an initial burst of energy, followed by growing criticism until there is an explicit denouncing of the process and/or its potential to achieve results. Finally the troops are rallied, and a compromise is met.

At this end stage, there will be people still saying that it was all done wrong. There will be people shouting about how great the result is. And there will be those, the majority, who are simply relieved that an end has been reached.

In September 2013 in New York at the WHS kick off meeting many round the table expressed doubt that the Summit would enable any significant change. The same was heard when the first debate about the SDGs was held – how could a paper agreement really end poverty? The WHS global consultation received mixed reactions in the different regions, and consultations have been criticized for not reaching remote or vulnerable people.

Most recently at a conference hosted by Manchester University, Alex Betts – Professor of Refugee Studies at Oxford University, made a public statement against the planned process for the next 3 months. Betts believed Dr Jemilah Mahmoud’s recent resignation, from her post as Chief of the WHS Secretariat, was because of internal politics at UNOCHA. He named 3 white middle aged man who were now in control of the process and would be drafting the UN Secretary General’s report. This meant, he stated, that the voices of those heard during the consultation could be easily lost. In response some of the conference’s participants proposed a separate summit be held at the same time next year: one where the voices of affected populations would be heard and acted upon.

Secondly, despite all the grumblings, disappointments, concerns about watering down to the lowest common denominator or about being too ambitious and unrealistic, the process will reach a conclusion. Many doubted that the debates about the SDGs and the new MDGs would reach one set of goals. Yet 17 global goals have now been agreed and announced.

As part of the humanitarian sector, I believe that despite the imperfect process, we must grasp this opportunity to instigate change. We must focus energies on discussions about substance and content over process and politics. We have 8 months to buy in and direct the final result towards a useable solution.

Thirdly, the process has just begun. The Summit itself and the recommendations agreed at it, are just the first step. A clear roadmap, with commitment, ownership and funding arrangements will be essential before any change is witnessed. The MDGs have already demonstrated this for us.

Currently, there is no roadmap for after the Summit. Key member states from around the world – from both the Security Council and the G77 – need to see a process for implementation. And there needs to be mechanisms to hold everyone to account.

In conclusion, we need to get over the imperfections of the process and focus on getting the most out of this rare global opportunity. Much time, effort and resources have already been committed to the Summit. It would be a real shame to see the Summit become a talking shop full of junior officials without the authority to take decisions.

Civil society (read you, I or we) can play a key role in the following ways:

  • putting pressure on their Governments to properly engage with the Summit, helping to shape the agenda and ultimately committing to undertake its recommendations
  • engaging during the formation of the recommendations to ensure that they are relevant, implementable and ambitious
  • supporting and calling for the development of a roadmap with clear responsibilities for implementing the recommendations, specifying how they will be financed and what monitoring/accountability system will be put in place

It’s rare that the humanitarian sector has this opportunity to garner change for the better, let’s ensure we make the most of it.