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The Global Movement of Electronic Payments at the World Economic Forum

Posted by  on Wednesday, January 23rd 2013     

Originally appeared on The Better than Cash Alliance Blog

At the World Economic Forum Annual Meeting in Davos, Switzerland, this morning, the Better Than Cash Alliance hosted a roundtable discussion with Juan Jiménez Mayor, Prime Minister, Republic of Peru, Dr. Mauricio Cárdenas, Minister of Finance, Republic of Colombia, Florencio B. Abad, Secretary of Budget and Management, Republic of the Philippines, sponsored by Citi and Visa Inc.

Florencio B. Abad, Secretary of Budget and Management, Republic of the Philippines, Dr. Mauricio Cárdenas, Minister of Finance, Republic of Colombia and Juan Jiménez Mayor, Prime Minister, Republic of Peru speak about the transition from cash to electronic payments. Photo Credit: Better than Cash Alliance

The room was full of over 50 thought leaders from the government, banking, information technology, NGO, agriculture and consumer industries discussing the exciting global movement to shift the world away from cash to electronic payments.

The rich roundtable discussion led by The Economist’s Economics Editor, Zanny Minton Beddoes discussed how the transition from cash to electronic payments has the ability to achieve shared goals in emerging markets of increasing transparency and combating corruption, reducing costs and accelerating financial inclusion as well as stimulating long-term economic growth.

“Electronic payments are a powerful tool in development,” said Prime Minister Mayor. With Florencio B. Abad, Secretary of Budget and Management, Republic of the Philippines adding that “digitization of government promotes transparency.”

Insightful thoughts about the benefits and challenges of making this transition were shared by Bill Sheedy, Group President, Americas, Visa Inc., Ertharin Cousin, Executive Director, United Nations World Food Programme, Neal Keny-Guyer, Chief Executive Officer, Mercy Corps, Yawar Shah, Chairman of the Board of Directors, SWIFT and Marc Bichler, Executive Director of UNCDF  and many others.

In response to an audience question about the role of governments in accelerating the pace of change, Minister Dr. Mauricio Cárdenas, Minister of Finance and Public Credit, Republic of Colombia said, “Sometimes governments get in the way,” and shared Colombia’s plan to reduce transaction taxes and promote smart regulation to achieve their vision.

We know that partnerships are critical to our success. Together, with our founding organizations, the Bill & Melinda Gates Foundation, Citi, Ford Foundation, Omidyar Network, UNCDF, USAID and Visa Inc., we are pleased to welcome even more partners to the Alliance that are dedicated to making this transition a reality.

Our newest partner is the government of Afghanistan who will join the governments of Colombia, Kenya, Peru and the Philippines in a commitment to transition from cash to electronic payments. We hope many of our colleagues from the World Economic Forum will join us too.

Sharing the mission of the Better Than Cash Alliance with many of the attendees at the World Economic Forum has created even more momentum behind the movement to transition to electronic payments. With 2.5 billion adults—more than a third of the world’s population—excluded from the formal financial sector, we are determined to quickly move this transition forward making real progress in the year ahead.

FrontLines Year in Review: Aligning the Goals of Development and Business

Posted by  on Tuesday, January 8th 2013     

Dr. Maura O'Neill is the chief innovation officer and senior counselor to the administrator at USAID.

This is part of our FrontLines Year in Review series. This originally appeared in FrontLines March/April 2012 issue.

In the five decades since President John F. Kennedy asked Congress to create the U.S. Agency for International Development, the development landscape has changed tremendously. One of the most powerful changes is the growing role of the private sector.

The statistics speak for themselves: official development assistance has gone from being 70 percent of resource flows to the developing world in the 1960s to less than 13 percent today. Private sources of capital—from remittances and foreign direct investment to foundation grant-making—have outpaced official development assistance. This shift is transforming not only how development is funded, but how it is being done.

To be effective, development agencies must adapt to this trend and take steps to make private-sector partnerships a key part of their work. Crafting effective public-private partnerships is no longer a luxury, but a necessity.

As USAID Administrator Rajiv Shah has said, “If we are going to encourage truly sustainable, broad-based economic growth in developing countries, we have to do a far better job of working with private firms—be they domestic or foreign, established or entrepreneurial.”

USAID recognized this need early on. In 2001, the Agency established the Global Development Alliance program and pioneered a structured approach to public-private development partnerships. With over 1,000 partnerships under its belt, USAID is recognized as a global leader by its peers in the development donor community as well as by private sector organizations. We are proud of this legacy but we know there is still work that needs to be done if we are going to seize the full potential impact these partnerships can have in international development.

Strategy not Philanthropy

How the business community thinks about development is evolving. As experts like Jane Nelson at Harvard’s Kennedy School of Government and Michael Porter at the Harvard Business School point out, successful businesses increasingly consider development as a core strategy issue rather a matter of corporate philanthropy.

At a forum USAID hosted in December 2011, three Fortune 500 business leaders—Cargill CEO Greg Page, Walter Bell of Swiss Re, and former Merck Chairman and CEO Richard Clark—agreed that development was a core business issue for them. Companies and business leaders like these have a stake in development for a range of reasons such as broadening their access to markets and creating secure, stable, and sustainable supply chains. And what the development community provides is a combination of deep technical expertise, ground knowledge, access, and credibility.

For example, in one recent partnership, USAID is partnering with PepsiCo to help smallholder chickpea farmers increase their yield, which PepsiCo will turn into a high-energy paste that will be used by the World Food Program as well as sold commercially by Pepsi. This partnership is about addressing overlapping interests and leveraging expertise that are core to each of our organizations.

As the business world changes how it thinks about integrating development into its strategies, those of us in the development community also need to adapt how we think about integrating the business world into our strategies.

As Administrator Shah has said, “We must partner with the private sector much more deeply from the start, instead of treating companies as just another funding source for our development work.” [continued]

Read the rest of the article in FrontLines.

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Boosting Women’s Entrepreneurship Via Mobile Money

Posted by  on Wednesday, December 19th 2012     

This post originally appeared on Devex Impact.  It has also appeared in the Huffington Post and the Cherie Blair Foundation for Women.

This guest column was authored by Cherie Blair, founder of the Cherie Blair Foundation for Women, and Maura O’Neill, USAID’s chief innovation officer. It is published here as part of Devex Impact, a global initiative of USAID and Devex that focuses on the intersection of business and global development and connects companies, organizations and professionals to the practical information they need to make an impact.

For Marion, the challenge of starting her own business was not lack of initiative — she had plenty — but rather dearth of startup capital. At 20-years old, Marion dropped out of school because she didn’t have sufficient funds for school fees. In Dar es Salaam, Tanzania, where she lives, this is a common trend for many women and girls, one that stretches across sub-Saharan Africa and far beyond. But Marion was undeterred.

Thanks to her friend’s suggestion, Marion latched onto an idea of selling prepaid mobile airtime to financially support her parents and four siblings with whom she lives. She started working at a small restaurant as a server, in order to save enough money to break into the business. Marion saved and saved, and began to sell airtime in bits and pieces. Yet by the time she turned 22 and made the decision to do it full-time, she was 70,000 Tanzanian shillings ($43) short of the 100,000 TZS ($62) required to finance the initial capital. Marion had nowhere to turn to make up the difference. And now this shortage of cash is keeping her from pursuing what should be a tangible dream — to become an entrepreneur and move into her own home.

A woman sells prepaid mobile phone airtime credits. Photo Credit: Devex.

Fortunately, new opportunities that will address Marion’s challenges are emerging.

Mobile technology continues to be an enormous growth industry in developing countries, particularly in sub-Saharan Africa, where approximately 3.5 million jobs can be attributed to the mobile industry, according to GSMA. With the surge in mobile connections around the world, there is rightly a great deal of interest in using the technology to maximize development outcomes. This includes the delivery of key information and health services, the use of mobile money for those who are unbanked, and the ability to establish social and business networks without having to travel great distances. For women like Marion, this is an enticing pairing of potential long-term employment and enhanced livelihood.

Despite the gains the mobile telecommunications industry has had nationally, there continues to be significant gaps in how much individuals benefit economically from mobile services and applications. This includes the extent to which women have been able to participate in the retail channels of mobile network operators, beyond the sale of top-up cards and accessories that fetch little profit. These retail chains are not only where basic mobile necessities such as airtime and SIM cards are sold and marketed, but they also serve as the frontlines of the rapidly growing mobile financial services industry. This ballooning sector includes mobile payments and savings, insurance purchases and conditional cash transfers, services that are traditionally unavailable for the unbanked — particularly women. The business of selling mobile products and services can be an important income stream but, in most markets, women are not participating on par with their male counterparts.

This leaves Marion and women like her at a distinct and, frankly, unnecessary disadvantage.

The U.S. Agency for International Development and Cherie Blair Foundation for Women, in partnership with leading mobile operator Millicom, or Tigo, have joined forces for an innovative project to correct this trend and maximize mobile financial service opportunities for women entrepreneurs and their communities throughout Tanzania, Rwanda and Ghana. This public-private partnership will showcase a sustainable and scalable approach to increasing the number of women entrepreneurs working as mobile money agents in the retail networks of mobile operators…(continued)

Read the rest of this post on Devex Impact.

Follow Cherie Blair and Maura O’Neill on Twitter.

Video: Connecting the Private Sector to Global Development

Posted by  on Monday, October 22nd 2012     

Last week, USAID’s Development Credit Authority and the USAID Uganda Mission released a new video that will make you rethink development. Take a look at how effective private sector partnerships can positively impact people’s lives

Live at UNGA – Day Three

Posted by  on Thursday, September 27th 2012     

To see the online conversation at UNGA, visit USAID's Storify Feed

Day three at UNGA included two marquee events spotlighting progress to date on the Millennium Development Goals (MDGs) and the New Alliance for Food Security and Nutrition.  We also announced a new partnership to expand access to contraception for 27 million women and girls in low-income countries.

With only 15 months until the Millennium Development Goals (MDGs) deadline, USAID partnered on an event with the UK Department for International Development for a second year to draw attention to the importance of the global community working together to reach the MDG targets by 2015.  The event brought to life the enormous development advancements made on the way to achieving the MDGs and featured innovators from across the development community sharing transformative programs and policies.  The world has met two MDG targets ahead of the 2015 deadline – poverty has been cut by 50 percent globally and the proportion of people with no safe drinking water has been cut in half.

That afternoon, Administrator Shah co-hosted with other G8 members the New Alliance: Progress and the Way Forward event.  President Obama announced the New Alliance for Food Security & Nutrition earlier this year, in which G8 nations, African partner countries and private sector partners aim to help lift 50 million people in sub-Saharan Africa out of poverty in the next 10 years by supporting agricultural development. Initially launched in Ethiopia, Ghana, and Tanzania, at the event, representatives from the New Alliance, G8 countries and the private sector announced the expansion to other African countries, including Burkina Faso, Cote d’Ivoire, and Mozambique.

Finally, Administrator Shah took part in the UN Commission on Life-Saving Commodities for Women and Children. Prior to the meeting, Dr. Shah joined the Commission Co-Chairs, Prime Minister Jens Stoltenberg of Norway and President Goodluck Jonathan of Nigeria, alongside former President Bill Clinton, to launch a new partnership to make a safe, effective, long-acting, reversible method of contraception available to more than 27 million women in the world’s poorest nations. Under the agreement, Bayer is reducing by more than half the current 18 USD price of its long-acting, reversible method of contraception, Jadelle, in return for a commitment to assure funding for at least 27 million contraceptive devices over the next six years.  Dr. Shah stated, ”The US Agency for International Development is proud to have funded the development of this life-saving product. Today is a major step forward to making this product more accessible to millions of women, empowering them with the ability to make decisions about their health and family.”

As always, follow us live on Twitter to keep up with the latest developments!

Working Together to Save Moms & Kids in Afghanistan

Posted by  on Wednesday, September 26th 2012     

A decade ago, Afghanistan’s health system collapsed, leaving crumbling and neglected infrastructure, widespread prevalence of malnutrition, infectious disease, and some of the highest maternal mortality rates the world had ever seen. Over the last decade, the Ministry of Public Health, in a strong partnership with the international community, has made major progress in improving the health of Afghan mothers and children. National programs to improve the quality of, and increase access to, basic health services and essential hospital services, along with programs to increase the number of trained female providers including midwives, and improved community-based healthcare, contributed to these significant achievements.

In Afghanistan, USAID is working with the Government to build capacity in its Ministry of Health, among midwives, and in local hospitals, and have helped to increase health coverage from eight percent to over 60 percent of the people over ten years.  This progress has helped the country realize an incredible drop in infant, child and maternal mortality rates, and the global community move the dial on Millennium Development Goals 4 and 5.

Watch Dr. Suraya Dalil, Minister of Public Health in Afghanistan, talk about this incredible milestone.

Still shot of YouTube Video featuring Suraya Dalil

MDG Countdown: Working to Fulfill A Global Promise

Posted by  on Wednesday, September 26th 2012     

Susan Reichle is the Assistant to the Administrator for USAID's Bureau of Policy, Planning and Learning. Credit: USAID

We all have a deadline in 2015 that can be easily lost amid our busy day-to-days and crowded lists of to-dos.

In 2000,189 nations made a promise to free people from extreme poverty and to extend hope and opportunity to millions across the developing world – all by 2015.  Under the United Nation’s umbrella of the Millennium Development Goals (MDG), the 189 countries committed to eight development goals that were  ambitious in scale and yet vital.

That’s why this week, USAID and our counterparts at the UK Department for International Development are once again drawing attention to the MDGs at an event in New York,during the UN General Assembly.

The good news is that great progress is being made towards achieving the MDGs, and the global community can be inspired by the innovations and successes we are seeing around the world.

Poverty has been cut by 50 percent globally and the proportion of people with no safe drinking water has been cut in half, ahead of the 2015 deadline..   

As evidenced at the New York event this week, USAID is also making a significant contribution to meet the MDG’s:

  • In El Salvador, we work with the Salvadoran Ministry of Education to not only improve the quality of teaching and learning, but also partner with local communities to keep students in school and to recruit children who were not attending classes.  (MDG 2)
  • In Afghanistan, we work with the Government to build capacity in its Ministry of Health, among midwives, and in local hospitals, and have helped to increase health coverage from eight percent to over 60 percent of the people over ten years and helped the country realize an incredible drop in infant, child and maternal mortality rates.   (MDG 4 and 5)
  • In Indonesia, where only 40 percent of citizens receive water from a household tap, we worked to vastly improve the water and sanitation systems.  While our effort has scaled down, the program legacy lives on in private and public sectors’ support for clean water and sanitation, and proof that local and the central governments are willing to commit funds to the utilities to improve performance and expand services if a clear and compelling justification is presented.  (MDG 7)

Still, with only 15 months until the deadline we still have the other six goals to meet.  USAID is applying its resources more strategically than ever to enable countries to achieve the MDGs.  As outlined in USAID’s County Development Coordination Strategies, we are implementing the President’s Policy Directive on Global Development by focusing on those development imperatives that are priorities for the host country and USAID investment can make a difference.  These strategies are informed by evidence, rather than anecdote and lead to stronger projects designed in cooperation with host country counterparts, including government and civil society.

The challenges involved in meeting the MDGs by 2015 remain daunting, yet USAID along with our global partners are making significant strides.  Using breakthrough innovations, integrated approaches, and strategic partnerships we can achieve unprecedented progress in the years to come.

The Journey Towards “Cash Light”

Posted by  on Tuesday, September 25th 2012     

Around the world, 2.5 billion people lack access to formal financial services. As a result, most poor households live almost entirely in a cash economy. The Better Than Cash Alliance, a global public-private partnership dedicated to accelerating the use of electronic payments in place of physical cash.  USAID convened the Alliance, which includes forward-thinking partners like the Bill & Melinda Gates Foundation, Citi, the Ford Foundation, Omidyar Network, Visa Inc., and the U.N Capital Development Fund, to move the world toward a more transparent, efficient, inclusive, cash-light society.

Shifting to electronic distribution of social benefits, humanitarian aid or payroll payments can advance financial inclusion and help poor people build savings while achieving cost savings, efficiency and transparency.  The Alliance provides expertise and resources needed to make the transition from cash to digital payments to achieve the shared goals of empowering people and growing emerging economies.

Visit Betterthancash.org for more information.

From Conflict to Coping

Posted by  on Tuesday, September 25th 2012     

Tisda, Mercy Corps Program Officer, in Ethiopia. Photo Credit: Erin Gray, Mercy Corps

Last summer, amidst the Horn of Africa’s worst drought in generations, Mercy Corps received encouraging news from local officials in the Somali-Oromiya region of Ethiopia.  In this area – long known for conflict, scarce resources and harsh conditions – communities that had participated in USAID-supported Mercy Corps peacebuilding efforts were reportedly coping better than they had during less severe droughts in the past.

We were intrigued, so we sent out a research team—and the findings were striking: when local conflict had been addressed, people were far better equipped to survive the drought.

To understand why, put yourself in the position of an Ethiopian herder.  When a drought hits, you can cope in several ways.  First, you will sell the weakest animals in your herd, raising cash to meet your family’s short-term needs while reducing grazing pressure on a water-scare environment. You may migrate with the remaining herd to areas where the grazing potential is better.  Along the way, you will rely on sharing access to scarce remaining water resources wherever you go.

Yet conflict can make these coping mechanisms impossible – blocking market access, freedom of movement, and access to shared resources like water. In this part of Ethiopia, population pressure and climate change had strained resources, spurring violence that in 2008-09 resulted in massive loss of lives and assets. In response to that conflict, Mercy Corps initiated a peacebuilding process in 2009 with support from USAID.  We helped participating communities focus on establishing peaceful relations, economic linkages, and joint management of natural resources.

A “resilience” approach to aid focuses on understanding, and improving, how communities cope with drought and other shocks.  Instead of just providing assistance that meets immediate material needs, a resilience approach also focuses on factors that affect a community’s ability to cope.  As Mercy Corps found last summer in Ethiopia, this often means focusing on factors that fall well outside the traditional assistance toolkit.

The program had focused on reducing violence – but our researchers found that it also built resilience along the way. Communities that participated in Mercy Corps’ program reported greater freedom of movement and fewer barriers to accessing resources, markets and public services than did non-participating communities. They identified greater freedom of movement as the single most important factor contributing to their ability to cope and adapt to the severe drought conditions. As one herder from the Wachile community said, “It is very difficult to use or access dry reserves (grazing areas) located in contending communities in a situation where there is no peace…the peace dialogues in the area have improved community interaction and helped us to access these resources.”

Our research report – titled Conflict to Coping – confirmed the important link between conflict and resilience in this region, and demonstrated that effective peacebuilding interventions help build resilience to crises.  Participating communities showed less reliance on distressful coping strategies, especially depletion of productive assets, than other communities. Importantly, the increased peace and security has allowed participating communities to employ more effective livelihood coping strategies, enabling them to better cope with extreme droughts.

Equal Futures Partnership Advances Global Women’s Opportunities

Posted by  on Monday, September 24th 2012     

Sarah Mendelson is the Deputy Assistant Administrator for USAID's Bureau for Democracy, Conflict and Humanitarian Assistance. Credit: USAID

I am excited to have just returned from the kick-off of the Equal Futures Partnership to expand women’s opportunities around the world. The event was held in New York City and part of a number of events USAID is participating in during the United Nations General Assembly this week.

The world has made significant strides in expanding opportunity for women and girls; in the U.S., we just celebrated 40 years of Title IX, an act of Congress that changed the lives of many in my generation by enabling girls to have equal access to education playing sports. Equal access to sports in schools, particularly, taught many of us how to be fierce competitors and learn valuable lessons in team building.

Yet more work is needed to tackle the global gender inequality. Last week, I met in London with donors on this very topic where researchers discussed a number of startlingly facts:

  • In 2011, women held only 19 percent of parliamentary seats worldwide, while less than five percent of heads of state and government were women.
  • While in the past 25 years, women have increasingly joined the labor market, the World Bank’s 2012 World Development Report describes “pervasive and persistent gender differences” in productivity and earnings across sectors and jobs.
  • Though women are 43 percent of the agriculture labor force and undertake many unpaid activities, they own just a tiny fraction of land worldwide.

These realities demand an urgent response.

Building on President Obama’s challenge a year ago at UNGA, the United States government has partnered in a new international effort to break down barriers to women’s political participation and economic empowerment. The goal of the Equal Futures Partnership is to realize women’s human rights by expanding opportunity for women and girls to fully participate in public life and drive inclusive economic growth in our countries.

Through this partnership, the countries of Senegal, Benin, Jordan, Indonesia, Bangladesh, Tunisia, Peru, Denmark, Finland, Australia and the European Union are all making new commitments to action, and will consult with national stakeholders inside and outside government, including civil society, multilateral organizations including UN Women and the World Bank, and the private sector, to identify and overcome key barriers to women’s political and economic participation.  This partnership promises to be groundbreaking not only for the countries involved but also for those who are watching its implementation.

USAID and its Center for Excellence on Democracy, Human Rights and Governance stands by to provide assistance to these countries as well as many others throughout the world as they work to advance women’s political participation and economic empowerment.

This is thrilling work that helps make the promise of development real for everyone–not just a privileged few.

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