Development Channel

Emerging Voices features contributions from scholars and practitioners highlighting new research, thinking, and approaches to development challenges. This article is by Deirdre White, chief executive officer of PYXERA Global. In January, the United Nations put forward the Open Working Group proposal for the Sustainable Development Goals (SDGs): a set of seventeen goals, along with 169 associated indicators. This proposal will be voted on by the United Nations General Assembly this September. While it has many merits, it doesn’t, in the end, help practitioners make the most progress in bettering people’s lives. First, the SDG proposal is overwhelming. Not only are there too many goals, but each one is also quite expansive. For example, the first goal to “end poverty in all its forms everywhere” is both broad and ambiguous. Many of the other SDGs such as “ensure healthy lives and promote well-being for all at all ages,” and “provide access to justice for all… at all levels” are similarly far-reaching. Because of their breadth, these goals will be difficult for development organizations to operationalize. For example, the first SDG—“end poverty”—does not translate easily into a specific set of interventions on the ground. Additionally, the SDGs approach human development in a piece-meal fashion, addressing poverty, food security, education, health, employment, and sanitation as stand-alone challenges. This isolationist approach is detrimental because it discounts the systemic nature of development challenges and thus makes the task of tackling them larger. Effective and efficient sustainable development requires coordinated rather than independent campaigns on all fronts. While it may be too late to reconceptualize the SDGs, framing them differently would help development organizations overcome their shortcomings. We at PYXERA Global have examined the seventeen SDGs and distilled them, as shown in the below graphic, into four lead focus areas: health, human rights, natural/human environment, and economic opportunity/employment. Click to enlarge: PYXERA Global four lead focus areas. Reframing the SDGs makes them more accessible and digestible for practitioners. By consolidating the overwhelming volume of goals, PYXERA’s framework enables organizations to concentrate on a specific focus area that they are well-suited to address. Additionally, the framework allows practitioners to recognize areas of overlap among different development objectives and to design programs that address their systemic nature. By taking into consideration the interrelatedness of the goals, practitioners will be able to address societal challenges more quickly and sustainably. For example, when addressing community health, one must consider not just health alone, but also issues of water and sanitation (goal six), food security (goal two), and the promotion of healthy lives at all ages (goal three) to ensure long-lasting change. Yet, it’s not enough to create an actionable development framework. It is critical that the United Nations and proponents of the SDGs also emphasize a tri-sector approach. While goal seventeen encourages global partnerships, a cross-sector approach explicitly brings together different sectors. Public, private, and social sectors all contribute unique strengths and tools. Each has a role to play in creating the systemic change needed to make sustainable and real progress on human development. Social sector organizations build legitimacy and trusted relationships at a local level. They also ensure that efforts deliver meaningful impact to the most vulnerable communities. Government, on the other hand, creates the enabling environment necessary for social change to be effective, providing infrastructure, educational facilities, and social services. And whereas the public sector rarely has a tolerance for failure, the private sector experiments with solutions to weed out inefficiencies, provide financial resources, and drive critical technological innovations. In my own work at PYXERA Global, I have seen how tri-sector partnerships align the strengths of different sectors to achieve better results. The Joint Initiative for Village Advancement (JIVA), for example, is a community development program aimed at enhancing livelihoods in three rural villages in Rajasthan, India. The program is a partnership between the residents of the three villages, the John Deere Foundation, PYXERA Global, and the community-based NGO Jatan Sansthan. Each partner brings complementary competencies and specific expertise in agriculture, community development, and gender. These contributions have translated into integrated interventions in agriculture, income security, education, and infrastructure. After two and a half years, JIVA has contributed much to these three villages: over half of households adopted at least one new agriculture practice, leading 50 percent of farmers to substantially increase their profits. JIVA’s after-school program enrolled 100 percent of primary school drop-outs across all of the villages, helping 84 percent of them reintegrate into formal schooling. At the same time, JIVA’s educational intervention helped students across the villages improve test scores. While the SDGs articulate our highest hopes for human progress, our efforts must be grounded in an integrated, tri-sector approach to truly ensure realistic, sustainable progress against today’s development challenges.

Emerging Voices features contributions from scholars and practitioners highlighting new research, thinking, and approaches to development challenges. This article is by Leora Klapper, lead economist for the World Bank’s development research group. On a recent visit to Dhaka, Bangladesh, I toured garment factories and spoke with factory workers about the financial challenges they face. In my conversations with female employees, I learned that although they own bank accounts, many don’t use them for an important transaction: paying their children’s school fees. Instead, these women pay in cash, costing them time and money. They take two long, expensive bus rides across town to the school. They take the day off from work, meaning a day without pay. Even the women’s employer isn’t happy with the situation; he’d rather they were able to work. Owning a bank account is a vital first step toward financial inclusion—a step these women have taken. But the real benefits come from frequent account use, meaning they have not reaped the full reward of account ownership. In this, these factory workers are not alone. Across Bangladesh, 10 million adults with bank accounts pay their children’s school fees in cash. And in developing economies globally, more than 500 million adults with an account do the same. The 2014 Global Findex database, an update of the world’s only comprehensive gauge of global progress on financial inclusion, tracks these figures. The World Bank—with funding from the Bill & Melinda Gates Foundation and in partnership with Gallup Inc.—launched the Global Findex in 2011. Like the first edition, the data for the 2014 update was collected from interviews with nationally representative and randomly selected adults aged fifteen and older. Nearly 148,000 people were surveyed in 143 economies during the 2014 calendar year. The 2014 data show that in East Asia and the Pacific, Latin America and the Caribbean, and the Middle East more than 60 percent of adults with an account pay utility bills or school fees in cash. In South Asia, 42 percent of adults with an account have left it unused for a year or more. In developing economies globally, almost 90 percent of adults who pay utility bills and 85 percent of those who make payments for school fees do so in cash. Yet the same cannot be said for high-income, OECD economies: among adults in those countries who pay utility bills, the majority makes such payments digitally, either directly from an account at a financial institution or via mobile phone. Why the discrepancy? Perhaps individuals in developing economies are not aware of an existing electronic payment option. Maybe those schools do not have electronic payment systems in place. If so, it is up to banks, mobile money service providers, and others to make the technology available to end users, like schools and utilities. Yet there is more that governments and the private sector can do to boost account use among adults worldwide. For example, both the private and public sectors can pay wages and other transfers, such as unemployment benefits, digitally instead of in cash—which could add over 400 million new account holders. Governments and the private sector can also encourage account holders to use digital services, such as remittance payments. Currently, 355 million adults with an account send or receive domestic remittances in cash or through a money transfer operator. But digital transfers could be even easier and cheaper for workers and their families. Governments and financial institutions can work together to support the transition to digital payments—governments through regulations permitting correspondent bank agents, and financial institutions by developing networks of mom and pop shops that make sending and receiving digital payments more convenient. For example, in China, over 800,000 small merchants disburse government payments made to accounts. However, digitizing payments and shifting cash payments into accounts is not without challenges. For account use to increase, governments and the private sector must make upfront investments in payments infrastructure and guarantee a reliable and consistent digital payment experience. New account owners need to be educated on the basic interactions involved in a digital payment system – using and remembering PINs, understanding how to deposit and withdraw money, and knowing what to do when something goes wrong. By presenting data on how adults globally save, borrow, make payments, and manage risk, the Global Findex quantifies the gaps in financial inclusion—and the market opportunities—and  reveals how governments and the private sector can help underserved populations benefit from financial services.