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31. Beyond 2025: The Future of the African Growth and Opportunity Act

Author:
Daniel F. Runde and Sundar R. Ramanujam
Publication Date:
03-2022
Content Type:
Policy Brief
Institution:
Center for Strategic and International Studies
Abstract:
Over the past two decades, the United States has provided assistance and support for sub-Saharan Africa’s efforts to transform its economic and trade relationships, centered around the African Growth and Opportunity Act (AGOA). First enacted into law on May 18, 2000, AGOA was designed to significantly enhance designated sub-Saharan African countries’ market access to the United States by providing duty-free treatment for specific import categories. The legislation’s primary goal was to promote economic growth through good governance and free markets. To qualify and remain eligible for AGOA, countries were expected to demonstrate progress toward market liberalization and to improve the rule of law, human rights protections, and core labor standards. More than 20 years later, AGOA continues to provide preferential treatment to 44 countries in the region, spanning over 6,500 tariff lines. Since May 2000, AGOA has been amended four times, mostly to clarify preferential treatment terms, technical standards, and sunset deadlines. The act was initially designed to be valid for eight years, expiring at the end of September 2007. In July 2004, however, President George W. Bush signed the AGOA Acceleration Act, extending it to 2015. Toward the end of his second term, in June 2015 President Barack Obama extended its validity by signing the Trade Preferences Extension Act, under which AGOA is set to expire in 2025. The global political and economic landscape has changed profoundly since AGOA was enacted in 2000, even before the Covid-19 pandemic created new disruptions and accelerated several ongoing changes. The mobile telephony revolution has created new opportunities for millions to participate in the digital sphere, use mobile banking and payments systems, and receive commercial, educational, and medical services via the internet. Even as the sub-Saharan African region’s middle class continues to grow, it is also set to experience a youth population boom in the next three decades—which, under the right conditions, could pay a demographic dividend and avert a social crisis. Meanwhile, the United States has also entered an era of great-power competition with China. With China’s influence in sub-Saharan Africa rising significantly, this competition is also playing out through the region’s political and economic institutions. Considering these opportunities and challenges, leaders in Washington (and their constituents across the United States) ought to look at Africa as a prospect for deepening commercial partnerships, not as a continent that needs to be “saved” through foreign assistance. Accordingly, the United States can consider one of the three following scenarios in response to AGOA’s current expiration timeline
Topic:
Development, Economics, International Cooperation, and International Trade and Finance
Political Geography:
Africa

32. Two Shades of Blue: Europe and the Pacific Islands, Strategic Partners in the Indo-Pacific Era

Author:
Celine Pajon
Publication Date:
04-2022
Content Type:
Policy Brief
Institution:
Institut français des relations internationales (IFRI)
Abstract:
In recent years, France and the European Union (EU) have published their respective Indo-Pacific strategies and a Ministerial Forum was held in Paris on February 22, 2022, bringing together over 60 foreign affairs ministers from European and Pacific Island countries. France and the EU are re-engaging in this strategic region, which is an economic and political center of gravity whose stability is threatened by transnational risks (climate change, epidemics, pressure on natural resources) and by inter-state tensions exacerbated by US-China rivalry. However, the area spanning the 22 member countries and territories of the Pacific Community (SPC) has received less attention and can even be described as a blind spot in these Indo-Pacific discussions. Yet, although they have a population of only 13 million, these Pacific Island states and territories have a combined Exclusive Economic Zone (EEZ) of almost 40 million square kilometers (km2) and are strategically located close to East Asia. These territories and their natural resources have attracted and still attract keen interest and sometimes very violent competition between powers. Today, the Pacific Islands are on the front line of the global existential challenges of climate change, biodiversity protection and sustainable development, but also geostrategic rivalries. Due to the geographical distance and Europe's still limited knowledge of this region, political, economic and media interest is often lacking. For this reason, Ifri and the Pacific Community (SPC) have decided to organize a research program on the strategic importance of the Pacific Islands. This Briefing is based on discussions that took place at the program’s opening conference on March 10, 2022; contributions from panelists will therefore be highlighted. This report provides an overview of current regional issues in the Pacific Islands and argues for greater European engagement in the region. This rapprochement is justified firstly because European and Pacific Island countries share similar values and face similar challenges, and secondly because new European interest and facilities make Europe a partner of choice to support sustainable development in the Pacific Islands. Since this engagement will come with various challenges, recommendations for European decision-makers are outlined in the conclusions.
Topic:
Climate Change, Development, and European Union
Political Geography:
Europe, France, Indo-Pacific, and Pacific Ocean

33. China’s Evolving Approach to Foreign Aid

Author:
Jingdong Yuan, Abhishek Andasu, and Xuwan Ouyang
Publication Date:
05-2022
Content Type:
Policy Brief
Institution:
Stockholm International Peace Research Institute
Abstract:
China’s role in foreign aid and, more broadly, in development cooperation on the global stage has grown significantly since it began seven decades ago. Particularly in recent years, through such platforms as the Belt and Road Initiative (BRI), China’s profile and engagement in global governance in foreign aid and related areas have been further enhanced. China’s ambition is to take a more proactive approach in foreign aid and move towards a model of international development cooperation by linking with the United Nations 2030 Agenda for Sustainable Development and by including the BRI as a major platform to achieve key development goals. This paper provides a timely analysis of the evolution of China’s foreign aid policy in the past seven decades with a particular focus on the developments since 2000. It discusses China’s development finance to Africa and the major sectors receiving Chinese aid. It also analyses recent trends of Chinese foreign aid and identifies some of the challenges that China faces as it becomes a major player in international development financing.
Topic:
Development, Foreign Aid, Infrastructure, Sustainable Development Goals, and Belt and Road Initiative (BRI)
Political Geography:
China and Asia

34. The ABCs of Sovereign Debt Relief

Author:
Rakan Aboneaaj, Jocilyn Estes, and Clemence Landers
Publication Date:
10-2022
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
We are living in a time when many countries face heightened debt vulnerabilities. Already high before the pandemic, debt levels reached a 50-year peak following the growth in government spending to combat COVID-19. Debt is not inherently bad; borrowing can allow countries to finance vital government investment. But unsustainable levels of debt can have devastating consequences for a country’s population, crowding out government spending on even basic necessities including food, medicine, and fuel imports. In Sri Lanka, for example, 71 percent of government revenue was spent on debt service before the country defaulted. Even where the tradeoff is not so dire, unsustainable debt service can limit productive investments in infrastructure, education, healthcare, and other sectors, hampering the economic growth necessary to reduce a country’s debt burden. After a decade-long period of low borrowing costs, a confluence of rising interest rates, inflation, and commodity shocks have raised the likelihood of overlapping debt crises in developing countries. The International Monetary Fund (IMF) now estimates that 30 percent of emerging market countries and 60 percent of low-income countries could face trouble paying down their debts or will soon. There is no international bankruptcy mechanism for countries that default on their external obligations. Instead, countries have historically depended on a patchwork of precedents, contracts, and conventions to bring creditors to the table for debt relief negotiations. The United States has a legacy as the lead architect of large global debt relief initiatives, from the Brady Bond plan for Latin America to the Heavily Indebted Poor Countries (HIPC) Initiative that kickstarted debt relief for poor countries in the 1990s. However, the global creditor landscape has changed significantly over the past decade. Low-income sovereigns’ largest creditors today—China and private bondholders—operate under much different principles than the leading bilateral creditors of the past, making the traditional norms and structures less effective for present debt challenges. The objective of the international financial architecture—historically overseen by the IMF and its shareholders— will be to corral these new creditors into a cooperative arrangement to deliver on debt relief.
Topic:
Debt, Development, Governance, Credit, and Sovereign Debt
Political Geography:
Global Focus

35. ABCs of the IFIs: The African Development Fund’s 16th Replenishment

Author:
Jocilyn Estes and Erin Collinson
Publication Date:
08-2022
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
Many African countries, particularly those in sub-Saharan Africa, continue to grapple with the consequences of the COVID-19 pandemic while simultaneously confronting the challenges posed by slowing global growth, private capital outflows, debt distress, and the impacts of climate change. An estimated 55 million people on the continent have been pushed into extreme poverty since the onset of the pandemic. This devastating trend has been exacerbated by the ripple effects of Russia’s invasion of Ukraine—supply chain disruptions, tightening fiscal space, and growing pressure on the cost of food, fuel, and fertilizer. International financial support for the continent has fallen woefully short of levels required to prevent the current crisis from derailing long-term development. The African Development Bank (AfDB) is the largest regional multilateral development finance institution on the continent. It provides critical financial support to countries across the region, including investment in vital infrastructure projects. The African Development Fund (AfDF) is the Bank’s concessional window, providing financing in the form of grants and concessional loans to resource-constrained governments responding to the growing challenges on the continent, including gaps in critical infrastructure and rising debt burdens. Amid ongoing and overlapping global emergencies, the stakes for the AfDF’s upcoming replenishment could hardly be higher. The AfDF is making the case to donors—who will come together later this year for a final meeting of the AfDF’s 16th replenishment (AfDF-16)—that the Fund needs substantial new resources to continue to support African people, businesses, and governments and make up lost ground in the fight against poverty. An ambitious 16th replenishment—coupled with policy and governance reform commitments—presents an opportunity for donors, including the United States, to complement long-standing investments in regional growth and infrastructure, offer a sustainable alternative to non-concessional Chinese lending, and make headway on the long road to economic recovery from the pandemic and worsening food security crisis.
Topic:
Development, Investment, Pandemic, and COVID-19
Political Geography:
Africa

36. Breakthrough to Policy Use: Reinvigorating Impact Evaluation for Global Development

Author:
Julia Kaufman, Amanda Glassman, Ruth Levine, and Janeen Madan Keller
Publication Date:
07-2022
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
In 2006, when a CGD working group published its report When Will We Ever Learn? Improving Lives Through Impact Evaluation, very few social programs benefitted from studies that could determine whether they actually make a difference. Since then, there has been tremendous progress in harnessing better evidence to inform public policy decision making, especially from impact evaluations of programs in low- and middle-income countries. Impact evaluation is a rigorous approach that establishes the attributable net impact of a project or program, making it uniquely well suited to inform decision making about resource allocation, program design, and scale up or drawdown. But the COVID-19 pandemic put a spotlight on an unfinished agenda, underscoring the need for high-quality, timely, and context-specific evidence. The pandemic has demonstrated the cost in lives and livelihoods when policymakers make decisions based on incomplete or outdated evidence and data. Approximately 15 million more deaths took place in 2020 and 2021 than would have occurred in the absence of COVID-19, and cumulative economic losses from the pandemic are expected to reach 13.8 trillion. Given the potential real-world benefits, why have decision makers within governments, aid agencies, multilateral organizations, and NGOs not yet fully harnessed the value of evidence—including from impact evaluations—for better public policies? Looking ahead, how can the development community renew momentum and broaden bases of support for impact evaluation and the wider evidence agenda? In response to these questions and building on progress to date, CGD launched the Working Group on New Evidence Tools for Policy Impact. The working group aimed to develop a renewed agenda for investments in impact evaluation and related evidence systems to enhance their value for policy use. It brought together a diverse group of policymakers and experts to review recent progress and examine how to address remaining obstacles to the use and utility of evidence for global development, with a focus on impact evaluation. This brief summarizes the final report of the working group. The report collates resources and insights on progress in implementing and using impact evaluations for decision making and proposes five ways to improve impact evaluation funding and practice, directed to the development community—government policymakers; other multilateral, bilateral, and philanthropic funders; researchers, and NGOs
Topic:
Development, Governance, Leadership, NGOs, and Impact Evaluation
Political Geography:
Global Focus

37. Mainstreaming Evidence Use through Locally Led Development: Recommendations for USAID

Author:
Janeen Madan Keller, Amanda Glassman, Julia Kaufman, and Ruth Levine
Publication Date:
07-2022
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
ince the 2006 release of the CGD report When Will We Ever Learn? Improving Lives Through Impact Evaluation, there have been nearly two decades of progress in generating and using evidence for public policy decisions and development programs. There has been a steady increase in the number of impact evaluations—a rigorous approach that establishes the attributable net impact of a project or program. Their ability to assess attribution makes impact evaluations uniquely well suited for decision making. Nevertheless, the COVID-19 pandemic put a spotlight on an unfinished agenda and underscored the need for high-quality, timely, and context-specific evidence. Across sectors, decision makers in governments, aid agencies, multilateral organizations, and NGOs have not yet fully harnessed the value of evidence for better public policies. Numerous challenges limit evidence use. On the demand side, impact evaluations may lack relevance to policy decisions and fail to respond to decision makers’ priorities, timelines, and questions. On the supply side, decision makers often lack institutional incentives and funding to generate and act on relevant evidence. Current funding models compound these challenges by contributing to misaligned incentives between policymaker needs and academic researchers. In response to these challenges, CGD launched the Working Group on New Evidence Tools for Policy Impact to develop a renewed agenda for the next generation of investments in impact evaluation and related evidence systems to enhance their value for real-world decision making. The group brought together policymakers and experts to review the progress and obstacles to the use and utility of evidence for global development. Its final report highlights how far the field has come in addressing critiques about the scale, generalizability, and policy utility of impact evaluation, and offers recommendations to the development community on “what and how to fund to deliver on the promise of impact evaluation and bolster the broader evidence ecosystem.” The working group proposes five ways to improve impact evaluation funding and practice: (1) design evaluations that start from the policy question and decision space; (2) harness technology for timely, lower-cost evidence; (3) advance locally grounded evidence-to-policy partnerships; (4) enact new incentives and structures to strengthen evidence use; and (5) invest in evidence leaders and communities. This brief details how USAID can mainstream evidence use across the agency. It is based on working group discussions, numerous consultations with experts including current and former USAID staff, and background research over the course of the project.
Topic:
Development, Local, USAID, and Foreign Assistance
Political Geography:
North America, Global Focus, and United States of America

38. ABCs of the IFIs: Understanding IDA20

Author:
Jocilyn Estes and Erin Collinson
Publication Date:
04-2022
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
With the COVID-19 pandemic hitting government balance sheets especially hard in low-income countries, the World Bank’s shareholders—including the United States—agreed to an advance replenishment of its grant and low-interest loan window, the International Development Association (IDA). By holding a pledging session one year early, donors sought to ensure IDA, which serves the world’s poorest countries, would have the resources to provide financing where it was needed most. In December 2021, following the final meeting of the 20th replenishment of IDA (IDA20), the World Bank announced a $93 billion replenishment package, leveraging $23.5 billion in contributions from 48 high- and middle-income countries. The United States reclaimed its position as IDA’s top donor, pledging $3.5 billion over three years to support pandemic response and an economic rebound in the world’s poorest countries. The United States has long had a vested interest in the World Bank, and in IDA in particular, working to ensure it is well run and resourced appropriately, and that its policy agenda reflects US interests. The US Congress plays a pivotal role in overseeing US engagement with the institution—managed by the Treasury Department—and providing funding to enable the US to meet its commitments. Due to the acceleration of IDA19, the US has two IDA installments due this year. The president’s fiscal year 2023 (FY23) budget request includes funding for a final payment to deliver on its IDA19 commitment and a partial first installment toward the latest US pledge to IDA.
Topic:
Development, Multilateralism, Sustainability, and Banking
Political Geography:
North America and United States of America

39. Recommendations for US-Africa Space Cooperation and Development

Author:
Rose Croshier
Publication Date:
03-2022
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
The United States, a leader in space exploration and innovation, has a unique opportunity to establish enduring diplomatic, commercial, and security ties with African nations through space cooperation—with the potential to yield substantial development benefits. The U.S. space sector is robust, an area of comparative strength vis-à-vis Europe, Russia, and China. By driving space cooperation, the U.S. can reinforce the rules-based order as articulated in international agreements like the Artemis Accords. Expanded space capabilities can also support the achievement of several of the UN Sustainable Development Goals, which range from improving data-driven governance to closing the global digital gap. U.S. policymakers have an opportunity to implement a collaborative approach with emerging African space actors both to grow a peaceful and law-abiding community in space and to benefit from Africa's contributions to the global space ecosystem. Space capability can also serve a crucial infrastructure role, yielding similar benefits to “traditional” infrastructure—including facilitating access to 5G connectivity through low orbit satellites and addressing clean water and food security needs through remote sensing and satellite communications.
Topic:
Development, International Cooperation, Space, and Territory
Political Geography:
Africa, North America, and United States of America

40. Egypt’s water policy after the construction of the Grand Ethiopian Renaissance Dam

Author:
Sherif Mohy El Deen
Publication Date:
03-2022
Content Type:
Policy Brief
Institution:
Arab Reform Initiative (ARI)
Abstract:
Egypt is one of the driest countries in the world. It is also the country that is most dependent on a single source of water: The Nile. The Nile River provides over 93% of Egypt’s water needs, according to Egyptian government documents. However, the water crisis discussion mainly focuses on the extent to which previous water agreements with other Nile Basin countries are binding, or on the truthfulness of the current news on the filling and operation of the Grand Ethiopian Renaissance Dam. Hence, this discussion is not addressing the main issue, which is the extent to which operating the Dam would affect the annual water use per capita in Egypt at present, as well as in the near and distant future. The Renaissance Dam crisis is recent, as it began when Ethiopia unilaterally decided to build the Dam in a border region between Ethiopia and Sudan. However, it is a main factor that could exacerbate and deepen the problem of water scarcity in Egypt. Other factors affecting water use per capita in Egypt include exponential population growth and increasing climate change. This policy brief aims to shed light on the main causes and background of the water crisis in Egypt. It will briefly discuss some examples of recent or upcoming projects by the Egyptian government under the new Water Resources Management Strategy (2016-2050). Finally, the paper will highlight the importance of conducting comprehensive and constant feasibility and impact assessments of these projects. These assessments should focus not only on the water dimension, but also on the economic, social, environmental, cultural, and political dimensions. This paper also provides some recommendations and lessons learned from the “Jonglei Canal,” an Egyptian-Sudanese water megaproject that launched nearly five decades ago.
Topic:
Development, Water, Infrastructure, and Dams
Political Geography:
Africa and Egypt