DEVELOPMENT

4 The Afd2025 scenarios
BABEL 3.0
GREENING
WITHOUT STATES
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The Green Climate Fund (GCF) is also sending out signals of change. In fact, its founding
texts harbor a major innovation that amounts to a paradigm shift in the international
development finance system. Since the Bretton Woods Agreement of 1944 and the creation
of the World Bank and the IMF, development assistance finance has been highly centralized,
largely in the hands of a dozen or so institutions: the multilateral, regional and bilateral
development banks and the United Nations specialized agencies. However, the conditions
for accessing GCF funds in principle open the door to a broad spectrum of financing actors
(public, private, international, but also regional and local) to intermediate and/or implement
these resources. Never before has a large multilateral fund been so open to the direct
implementation of international funds by local institutions. Moreover, this evolution is
helping the Fund to achieve its “transformational” objectives: by working with a greater
number of financiers, including at local level, it is able to promote wider recognition of
the climate change issue among those actors that play a key role in the functioning of the
economy. This approach also enables the Fund to foster greater sharing of responsibility
between rich and developing countries for climate change actions, even though this is a
political question and cannot be addressed through the Fund alone. This decentralized
functioning of the GCF is supported by numerous actors including the IDFC.
Private actors are also evolving. Created in 2000, the Bill and Melinda Gates Foundation
has been introducing healthcare innovations on a planetary scale. Today, the Foundation
has a USD43.5 billion endowment and in 2014 invested USD3.9 billion, sometimes
operating in partnership with the traditional donors. Its slogan “All lives have equal value”
and the emphasis on the cost-effectiveness of each intervention make it one of the foremost
philanthropic financiers of sustainable development.
Mike Bloomberg recently announced the creation of a new mega-foundation. After amassing
a fortune estimated at some USD30 billion during his career, he plans to devote the next
ten years to using it for the common good through his foundation “Bloomberg Philanthropies”.
In fact, philanthropy and migrant remittances are playing an increasingly important role
in development financing.
In this context, and in line with the conclusions of the recent Financing for Development
conference held in Addis Ababa in July 2015, it seems both possible and even desirable that
by 2025 a broader variety of key development financing actors, both public and private,
emerge, leading even to mixed forms of governance that transcend the traditional North-
South divides.
Foresighting for Development
Development agencies, steering through future worlds. Afd2025
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