"3x5" AIDS Initiative Imperiled By Low Funding... (2)
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Dear Colleagues
There is something quite unreal about this whole 3X5 AIDS Ini-
tiative from WHO. The funding crisis in development needs to be
brought to a head with some very serious planning that includes
not only sector "dreamers" but the financial "gnomes" that are
in control of the global supply of financial resources. The peo-
ple at WHO need to learn from the problems faced by the Global
Fund (GFATM) in raising money... and all the other initiatives
of the ODA community that are not getting funded!
Almost every country in the SOUTH has a financial crisis. Public
Finance in the SOUTH is as bad relative to the NORTH as the
SOUTH/NORTH health crisis divide. But without addressing the
money and finance question all the sector ideas are dreams, and
will disappear when the dreamers wake up.
We have to set the stage to get some major changes in the fi-
nancing of development. Essentially the World Bank Group (and to
some extent regional development banks) have almost unlimited
access to capital market funds for their lending and their pro-
jects. But generally speaking, these loans have tended to miss
the local priorities and have merely satisfied "global" priori-
ties as defined by the donors. And the end result is, simply
put, failed development.
Nor am I not waiting for Foreign Direct Investment to make de-
velopment successful. The FDI business model is simple, and
while there is usually massive international corporate value
adding, at the community level there is usually value destruc-
tion (and often absolutely permanent!!!).
Community priorities that satisfy local needs should be at the
top of the financing agenda. But how is it possible to do this?
Clearly this is not something that the ODA community can handle,
including the World Bank, and the UN organizations, and national
governments. But it is something that a reformed financial sec-
tor should be able to do. MicroFinance institutions are starting
to do it. Some local banks are starting to focus on the possi-
bilities. The technology is available.
But the knowledge about all this is not yet good enough to jus-
tify substantial scaling up, and does not yet support a new set
of financial instruments to finance a revived financial sector.
I would welcome feedback about this. There has been virtually no
practical outcome from the Monterrey meetings on Financing for
Development..... HELP. The developing world needs financing, it
needs it now and it should be done in a way that builds value in
the borrowers' communities.
Sincerely,
Peter Burgess
ATCnet in New York
Tel: +1-212-772-6918
mailto:peterb@afrifund.com
http://www.afrifund.com
http://www.afrifund.com/wiki/index.pcgi?page=DevelopmentDialog