Blogs

Development Channel

The Development Channel highlights big debates, promising approaches, and new research and thinkers addressing opportunity and exclusion in the global economy.

Latest Post

Mossack Fonseca law firm sign is pictured in Panama City, April 4, 2016.
Mossack Fonseca law firm sign is pictured in Panama City, April 4, 2016. Carlos Jasso/Reuters

Corruption Brief Series: How Anonymous Shell Companies Finance Insurgents, Criminals, and Dictators

The latest paper in the Corruption Brief series from the Civil Society, Markets, and Democracy program at the Council on Foreign Relations was published this month. In the brief, Dr. Jodi Vittori, senior policy advisor at Global Witness, addresses the myriad problems posed by anonymous shell companies – corporate entities with few or no employees and no substantive business, which offer a convenient way to privately move money through the international financial system.

Read More
Energy and Environment
Water Abundance Is Within Reach
Emerging Voices features contributions from scholars and practitioners highlighting new research, thinking, and approaches to development challenges. This article is from Efrat Peled, Chairman and CEO of Arison Investments, which creates long-term business investments that combine substantial financial results with sustainable moral responsibility. The world faces a widespread water crisis – and it’s not just how much we use, but how we use it. Global shifts are big contributing factors, as climate change and population growth are challenging and putting acute pressure on existing water supply. An estimated 2.8 billion people worldwide live in areas under severe water stress – where demand exceeds the amount available – with almost two-thirds of these affected populations residing in developing countries. But in many instances, access to clean, safe water could be expanded simply with better use and better management of the current supply. In the United States, there are an estimated 240,000 water main breaks per year. It’s also estimated that every day, mainly due to aging infrastructure, approximately 6 billion gallons of treated water leak out of old pipes and then back into the ground after being polluted by urban cities. In emerging market nations, the problem is worse: an average of 38 percent of water supply is lost due to leaks and even theft. The economic and social costs of this waste are obvious: poor water management limits access to this crucial resource, wastes investment, and contributes to widespread health problems. Leaking pipes and crumbling infrastructure can remain hidden underground, becoming apparent only when there is a catastrophic pipe burst. In an ideal world, entire cities could be lifted up and ageing pipes could be replaced en masse. But this would be almost impossible to execute and prohibitively expensive. Replacing 1 million miles of pipes in the U.S. would cost approximately $2.1 trillion. Other equally costly options include expanding the supply of fresh water by building dams and reservoirs, diverting rivers, or developing facilities like desalination stations. Fortunately, technology, talent, and new innovative ways of solving and financing the rehabilitation of old infrastructure are starting to emerge. The solution to the world’s water crisis requires a combination of public and private expertise. Take Manila: a city with a population of 11.8 million that recently overhauled its aging water utility creatively and efficiently. Maynilad Water Services, a utility in western Manila, faced the challenge of supplying potable water to 9 million customers with a 130-year-old infrastructure strained by booming population growth and significant leaking. The city government knew they needed to improve water management, but lacked the funding to pursue traditional fixes. So they invited companies to offer radically new ideas and encouraged this inventive thinking by eliminating traditional barriers, such as rigid technical requirements and financing structures, in the bidding process. The new approach paid off. Miya, an Arison Investments company that optimizes water supply in urban water systems, spent several years partnering with Maynilad to develop and apply nanoscale technology and new software to go right to the source of the problem. As a result, Maynilad was able to identify and repair leaks in aging pipes with much greater precision. The end result speaks for itself: the city now saves more than 185 million gallons of water every day (the equivalent of eight desalination plants), and an additional 2.6 million people are connected to the system for the first time. Maynilad has also quadrupled its income within five years. Manila’s success is easy to replicate. City leaders in places such as the Bahamas and Brazil are trying to follow similar paths. Making small, targeted repairs to improve the efficiency of systems, integrated with new tools and old fashioned teaching and training, goes a long way toward ensuring water supply. This kind of pragmatic solution will only become more appealing as the exploding global middle class puts increasing pressure on old-tech utilities. Today, about 1.8 billion people in the world are middle class, but by 2030, that number could reach 5 billion people – nearly two-thirds of the world’s population. Ultimately, water loss doesn’t have to be the norm. Governments can use new technology and partnerships to become more responsible stewards of natural resources. Consumers also have a part to play in water conservation. The San Francisco-based startup WaterSmart, for example, incentivizes water conservation by providing customers with personalized reports showing their water use compared with neighbors and offering water-saving tips. The company’s tactics have already contributed to average per-customer water savings of 5 percent, and these seemingly small gains at the household level are translating into substantial savings for the startup’s partner utilities. Clearly, when consumers, governments, and public utilities work together, water abundance is obtainable.
Economics
Calling Women
Emerging Voices features contributions from scholars and practitioners highlighting new research, thinking, and approaches to development challenges. This article is from Henriette Kolb, head of the Gender Secretariat at the International Finance Corporation (IFC), a member of the World Bank Group, and Olufemi Terry, communications specialist at the IFC Gender Secretariat. Worldwide, fewer women than men use mobile phones. Addressing this gender disparity could not only benefit mobile operators, but is also critical to empowering women and improving health and education. Women with cell phones can access important development resources such as M-Pesa, a mobile money transfer solution that was launched in Kenya in 2007 and has since expanded to other countries. With support from the Vodafone Foundation, a Tanzanian hospital recently set up a health care service that uses M-Pesa to help women receive treatment for obstetric fistula – a child birth-related condition that affects one million women worldwide. The service, called Text to Treatment, deploys 400 rural “ambassadors” to find women in need. Following a referral, prospective patients receive transfers via M-Pesa for transport costs; and the ambassador also receives a reward.  The program has helped almost 2,000 women get life-changing fistula operations. Another program, Knowledge is Power, uses mobile technology to combat illiteracy in Egypt. Knowledge is Power has graduated over 94, 000 people, more than half of them women, using a free downloadable mobile application that enables learning through images and a talkback function. According to a recent Vodafone report, scaling up Knowledge is Power and similar mobile technology-based learning programs could improve the literacy of over seven million women worldwide.  Literacy in turn enables women to become better workers, consumers, and entrepreneurs. Mobile technology can also help women run their businesses.  For example, the RUDI Sandesha Vyavhaar (RSV) mobile application allows rural Indian female retailers  to place orders, track inventory, and manage their operations via sms. The tool was developed by the Self Employed Women’s Association, Cherie Blair Foundation for Women, and Vodafone Foundation in India. Since its introduction in January 2013, RSV has eliminated inefficiencies in stock management, increased women’s sales by as much as 300 percent, and boosted their incomes. Closing the gender gap in mobile technology usage and ownership is a tremendous market opportunity for mobile operators: getting mobile phones to 90 million more women could contribute $6.6 billion in earnings and savings in the twenty-seven countries in which Vodafone operates.  Furthermore, Vodafone’s study projects that the benefits of improved wellbeing and health from mobile access would equal an annual $200 million as a result of higher productivity and cost-savings by 2020. Boosting literacy through mobile applications could also add $3.4 billion annually in additional revenue. In the words of H.E. Sheikh Abdullah al Thani, chairman of the Ooredoo Group, “Women should have equal opportunity to use a mobile phone, and this is not just a social imperative but a commercial necessity.”
Human Rights
New Report on Strategies to Stop Child Marriage
This post is from Gayle Tzemach Lemmon, Council on Foreign Relations (CFR) fellow, and Lynn ElHarake, research associate for the CFR Women and Foreign Policy Program. It has been edited from an original post on Girls Not Brides.  Each year, more than 14 million girls around the world will be married before they reach their eighteenth birthday. That’s 38,461 girls a day, twenty-seven every minute, or about one girl every two seconds, according to data from Plan UK. But while we know that child marriage is a global phenomenon that transcends geographical boundaries, religion, and faith -- one that stymies the health, education, and economic potential of girls -- a strong idea of how to combat this practice remains elusive. Last week, the Women and Foreign Policy Program at CFR published a paper that aims to answer this question. High Stakes for Young Lives: Examining Strategies to Stop Child Marriage reviews the challenges of addressing child marriage and highlights strategies from around the world designed to curb the practice. The paper offers recommendations on what sorts of interventions policy makers and civil society leaders could use in addressing the practice—and what additional information is needed. Despite domestic laws and international accords banning child marriage, the tradition persists in communities where laws go unheeded and unenforced. Even where prevention and elimination programs  provide girls with alternative options to marriage—whether by keeping girls in school, providing them with cash transfers, and/or regulating birth and marriage registrations—cultural norms preserve these traditions. As such, we argue that “no one option provides an answer to the challenge of child marriage. Instead, a mix of legal frameworks, education policies, enforcement standards, attitude shifts, and economic incentives is required in order to ensure that the practice is eradicated in all communities, including those where it is a deep-rooted cultural practice.” While more research on the social, economic, and cultural factors that contribute to child marriage is needed, some organizations are already trying to curb the practice. For example, the Berhane Hewan program in Ethiopia—a country with one of the highest rates of child marriage in the world—provides girls with school materials and livelihood skills that help them stay in school, extend their education, and eventually increase their household income. The Safe Age of Marriage project in Yemen has facilitated a shift in community perceptions of child marriage by training volunteers to conduct educational outreach activities. The program’s efforts have reached nearly 29,000 people and program data shows that it has helped reduce the rate of child marriage in targeted communities. Similar initiatives engaging with religious leaders, men, and boys, the gatekeepers for women in many societies, can allow for changes in cultural norms that lead to delayed age of marriage and improved educational and economic opportunities for girls and women. Mandating birth and marriage registration can allow governments to give children official identities, track if children are getting married, and better enforce age of marriage laws, as evidenced in Bangladesh. One of the most followed child marriage prevention programs, Apni Beti, Apna Dhan (ABAD), employed conditional cash transfers as a way of encouraging families in the Indian state of Haryana to keep their daughters unwed until age eighteen. Early evidence from a first round of evaluations conducted by the International Center for Research on Women (ICRW) shows that beneficiaries of the ABAD program were more likely to be in school at age eighteen than non-beneficiaries, a positive indicator given that more years of schooling for a girl often leads to a delayed age of marriage, according to the United Nations Population Fund. While the impact of ABAD on age of marriage will not be seen until the second set of evaluations from ICRW next year, if the program proves effective, it will inform the conversation exploring whether cash transfers can be scaled in other locations to help reshape community perceptions surrounding the value of girls. Challenges may seem daunting given that child marriage rates, while declining over the past thirty years, have remained stubbornly high. But there are steps that the United States, in concert with other governments, NGOs, the United Nations, and the private sector, can take to curb and eventually eliminate child marriage globally. These steps include: - Support efforts to address the root causes of child marriage, particularly poverty and education levels. - Include child marriage elimination and prevention priorities in diplomacy. - Break out data on gender-related programs to separate dollars devoted specifically to curbing child marriage. - Focus on innovations and the role they can play in curbing child marriage. - Better track dollars and conduct more in-depth evaluations of programs targeting child marriage. - Target funding for programs in countries with high prevalence rates by proportion and absolute numbers. Download the full CFR report here.  CFR’s work on child marriage in FY2014 has been made possible thanks to a generous grant from the Ford Foundation. 
  • Economics
    Empowering Female Entrepreneurs in Rwanda
    Emerging Voices features contributions from scholars and practitioners highlighting new research, thinking, and approaches to development challenges. This article is from Benjamin D. Stone, director of strategy and general counsel at MicroCredit Enterprises, CFR term member, and vice chairman of Indego Africa; and Karen Yelick, CEO of Indego Africa. Here they discuss how Indego Africa’s Leadership Academy for female artisan entrepreneurs in Rwanda aligns with the country’s twenty-year history of empowering women leaders. On April 7, 2014, the world commemorated the 20th anniversary of the Rwandan Genocide, when more than 800,000 people were killed over three months of unimaginable violence. After the atrocities ended, women made up 70 percent of the country’s population. The Rwandan government wisely adopted ambitious policies and programs that invested in the power of these women to rebuild the shattered country. In the words of Rwandan President Paul Kagame: “Empowering women and ensuring gender equality ultimately enriches communities and entire nations.” In 2007, Rwanda turned to the handicraft industry as part of its strategy to tap into the economic potential of women entrepreneurs. Yet, despite their impressive artisan skills, Rwandan women struggled to engage with global handicraft markets. Indego Africa, a nonprofit social enterprise and lifestyle brand, aimed to fill this gap. By generating market demand for products made by Rwandan women, building an international supply chain, and delivering formalized business training to female artisans, Indego strove to help women lift themselves out of poverty and become the country’s next business leaders. Seven years later, Indego partners with more than 600 female artisans in Rwanda who run for-profit businesses called “cooperatives” and sells their jewelry, accessories, and home décor on its online store and through dozens of brands and retailers. Indego’s artisan partners, 65 percent of whom are their household’s primary earner, have re-invested their increased income in food for their families, school fees for their children, improvements to their houses, livestock, and new business ventures. At the same time, they have embraced Indego’s training programs in business, literacy, technology, health, and human rights, taught at each cooperative by Rwanda’s top university students. As a result, these female artisans are now increasingly competing in the global markets as independent, empowered businesswomen. As long-time artisan partner Emelienne Nyiramana explained, they are “dreaming dreams that before they never could have dreamed.” Many of Indego’s artisan partners, like Nyiramana, have emerged as inspiring leaders. They help their cooperatives engage with major retailers visiting Rwanda, such as Nicole Miller and Anthropologie. They hold prominent leadership roles in their communities. They teach and mentor other women across Rwanda. And a few have even traveled to the United States to meet designers, buyers, and investors. But as these leaders surfaced, Indego realized that it could no longer effectively or efficiently deliver the same level of business training to all of the women. In 2013, focus groups of artisan partners confirmed this view and suggested that Indego concentrate more on the dynamic leaders poised to take the cooperatives to even higher levels of success, while delivering basic, less time-intensive training to other women who just want to go to work and earn a steady income. The artisans also recommended that Indego’s training programs include more real-life examples and exercises. Based on these insights, Indego is evolving. This summer, Indego will launch a Leadership Academy to provide advanced business training to its most ambitious and entrepreneurial artisan partners. Every six months, Indego’s partner cooperatives will collectively select 25 participants for tailored, twice-weekly leadership sessions at Indego’s Kigali office. Classes will cover subjects ranging from customer care to technology to financial literacy to marketing. Each lesson will include assignments that are directly applicable to the women’s businesses, including writing emails to clients, sourcing raw materials, managing their cooperatives, and researching design trends. The Leadership Academy will also encourage women teaching other women by hiring Teaching Fellows from the pool of nineteen Indego artisan partners who graduated from the Goldman Sachs’ 10,000 Women initiative. Indego will also organize networking events, field trips, and seminars led by successful local and international female entrepreneurs and educators. In the end, Leadership Academy graduates can use their training to not only help their cooperatives generate more income, but also to serve as mentors and inspirations for their co-workers, families, communities, and country. Perhaps one day some will even join Rwanda’s Parliament, where women hold an unprecedented 64 percent of seats, the highest proportion in the world.
  • Development
    Legal Rights on the Books and in Practice
    Emerging Voices features contributions from scholars and practitioners highlighting new research, thinking, and approaches to development challenges. This article from Juan Carlos Botero, executive director of the World Justice Project, is part of an ongoing Development Channel series on global justice and development. About half of all countries today lack or have seriously outdated freedom of information legislation—a critical element of government accountability. Even countries that have passed freedom of information acts do not always enforce them or lack the requisite structures to facilitate information flow. The Global Right to Information (RTI) Rating assesses the strengths and weaknesses of governments’ freedom of information legislation and legal framework . This rating offers crucial information about government accountability and citizens’ rights to information around the world. But RTI reports only how freedom of information laws are written, and not how they are enforced. To combat systematic problems such as police or judicial corruption, increase government accountability, or remove restrictions on freedom of speech and assembly, reformers also need reliable data on how rule of law and freedom of information legislation is experienced by citizens in practice. To help fill this knowledge gap, the World Justice Project (WJP), where I serve as executive director, recently released its Rule of Law Index 2014, which among other issues measures the extent to which governments around the world provide information to their citizens. The report is based on 100,000 household and 2,400 expert surveys measuring over 500 variables on how the rule of law is experienced in everyday life in 99 countries. The following chart shows a scatterplot of the WJP Rule of Law Index 2014 measurement of Open Government scores on the x-axis and the Global RTI Rating on the y-axis. The chart shows a negative correlation between the two datasets, highlighting the gap between the laws on the books and in practice. Take Austria and Germany, for example. They are among the worst performing countries in the world according to the Global RTI Rating, signaling very weak rights to information in these countries. However, these two countries perform very well in effectively delivering an open government and guaranteeing the right to information in practice, according to the WJP Rule of Law Index. On the other hand, Liberia, El Salvador, and Sierra Leon excel in the Global RTI Rating, but their performance in delivering information rights in practice is below average, according to the WJP Rule of Law Index. Both a clear understanding of the existing legal framework and institutional arrangements, and how these laws and institutions are function in practice, are critically important to effective reforms efforts.  Of course indicators are only tools, which must be used appropriately. The limits of such data must be taken into account and, to the extent possible, several different types of information (official and privately-produced; local and global; qualitative and quantitative) must be considered in the decision-making and reform process. It is also important to acknowledge how non-legal issues can sideline reform. India, for example, dramatically improved its freedom of information legislation over the past decade, but bureaucratic barriers, lack of resources, and competing policy priorities, among other causes, have led to partial collapse of the system. This shows that effective reforms are not a one-time push for change but rather an ongoing process of changing institutions and agendas. Laws, regulations, procedures, practices, and customs must be aligned for reform to truly take hold.