WASHINGTON — Novelist William Gibson once said, “The future is already here; it’s just not evenly distributed.” This is especially true of development aid. Now, the U.S. is leading the way for development aid reform for the future.
In June 2015, world leaders, stakeholders, nongovernmental organizations and private business entities met in Addis Ababa, the capital of Ethiopia, for the U.N. sanctioned Financing for Development Conference. There they discussed how to efficiently maximize finance for the 2030 Sustainable Development Goals (SDGs).
After three days, the conference published a negotiated outcome with comprehensive strategies to fix the inefficiencies in global development finance.
The outcome includes a new framework to realign available capital flow with development priorities. It also includes more than 100 policy measures adopted by UN Member States, which specifically target ways to improve upon and translate finance, technology, innovation, trade and data into systematic success.
In September 2015, the UN gathered at its headquarters in New York and ratified the 2030 Agenda for Sustainable Development. The Agenda includes 17 goals and 169 targets. Goal 17, to “strengthen the means of implementation and revitalize the global partnership for sustainable development,” draws on the outcome of the Financing for Development Conference.
Beyond the Conference and the Agenda, individual countries are responsible for financing and implementing the SDGs. So what are the U.S.’s plans for financing the SDGs?
First and foremost the United States Agency for International Development (USAID) stresses the need for better data. Better data is necessary for planning and evidence-based decision-making, as well as overseeing programs, analyzing results and defining progress.
In October 2014, USAID launched its Open Data Policy called the Automated Directives System 579 (ADS 579). ADS 579 is a central repository of information collected by USAID that is meant to promote transparency, data sharing and efficiency. It is already being used in programs from health to agriculture and from the U.S. to Kenya.
USAID also plans to utilize its past successes with its Development Credit Authority (DCA) to continue to find innovative and efficient ways to fund the SDGs.
The goal of DCA is to fill in the finance gap in under-served markets. The DCA uses risk-sharing agreements with anyone from small farmers to entrepreneurs to provide them with the microfinance they need to grow their businesses in the developing economy.
Since its inception in 1999, the DCA has tapped in to $3.7 billion in private financing for more than 166,000 entrepreneurs in more than 70 countries. By using better data and continuing to refine their program, USAID-DCA will be a large part of funding the SDGs.
USAID will also depend on new global partnerships. Through partnerships USAID procures hundreds of millions of dollars in resources each year. Just last year, USAID partnered with more than 450 government agencies, private firms and other organizations.
At the Financing for Development Conference this year, USAID announced three new partnerships with the Addis Tax Initiative, Global Financing Facility and the Sustainable Development Investment Partnership. These partnerships aim to work together to leverage funds for developing countries.
Lastly, USAID recognizes the need for continuous innovation. “Quite simply, the targets we all hope to achieve won’t stand still while we come up with solutions,” says USAID’s Chief Strategy Officer Carla Koppell in her blog.
In 2014 USAID created a new Global Development Lab. The Lab operates “on the belief that science, technology, innovation and partnership can accelerate development impact faster, cheaper, and more sustainably.”
Koppell writes that as the world begins to work toward the 17 SDGs, “The possibility of under-performance should not stifle innovation.” In the effort to eradicate global poverty, any effort is better than no effort.