The Global Development Council’s Farewell Tour Treading

The dozen-member White House Global Development Council issued a final progress report on recommendations to date and urged the next administration to sustain the advisory body and broad activity and policy direction. It praised the Obama “doing business differently” approach with data and non-traditional partner reliance, including a directive to apply behavioral science to programs. Consolidation of the government’s financing arms at OPIC, USAID, Treasury and other agencies into a single unit has “solid bipartisan support,” but not proceeded. Plans for OPIC’s multi-year appropriations and new staff and equity allocation capacity are also stuck. Social impact investing headway is limited, with a pilot bond under consideration at the grant-making Millennium Challenge Corporation, and “blended capital” models from public and private sources can be found in Latin American and African clean energy projects. Climate and food security are priorities with a focus on forest protection and sustainable agriculture, and technology and innovation have been promoted through dedicated labs and funds. In finance e-payments and inclusion are prominent with a push into women-owned and micro-enterprise. Measures to combat illicit flows and tax evasion have advanced through bilateral and multilateral channels, and the US has tried to lead on remittance cost and fossil fuel subsidy reduction. Humanitarian crisis response has been modernized with initiatives like the President’s private sector refugee call to action, but frameworks could be further overhauled as the UN’s updated Migrant Compact is set by end-decade.

Sub-Sahara Africa should be a future concentration, despite setbacks with country favorites and the “rising” narrative at risk with GDP growth dipping to 3 percent this year, according to the IMF. Ethiopia’s expansion has been double the pace, but a security forces crackdown against restive central regions has provoked international condemnation and travel warnings denting tourism which has increased 10 percent annually the past decade. The violence overshadowed opening of a $3.5 billion railway line between Addis Ababa and next-door Djibouti. One-third of the population lives on less than $2 dollars a day, and with a declared state of emergency foreign investors in horticulture and other sectors have withdrawn. Mozambique has run into trouble on its $725 million “tuna bond” after previewing another large write-down with discovery of another $1.5 billion in state-backed loans, bringing total debt/GDP above 125 percent. The IMF suspended its rescue program pending a thorough audit, and the government hired Lazard, which guided previous Greece and Ukraine operations, as its restructuring adviser. Bondholders including Allianz and Black Rock indicated they would seek to ring-fence future gas revenue as future collateral. They also threaten legal action against the arrangers of the secret loans, particularly Russia’s VTB. In the Central Africa franc zone Chad has turned against Exxon-Mobil, which produces half its oil, by levying a $75 billion local court fine for alleged export duty evasion. The company has appealed to the Arbitration Court in Paris, as critics accuse President Deby of diverting attention from his poor economic management and human rights record. The World Bank, which originally backed the project, has demurred on the dispute, but the latest governance index results from the Mo Ibrahim Foundation show the country at the bottom of the list among the continent’s resource rogues.