Development Aid, Philanthropy and the Curse of Inequality

The panel comprised country directors of leading development aid and non-profit organizations which included Stephanie Funk and Jan Vossen of DFID - UK
The panel comprised country directors of leading development aid and non-profit organizations which included Stephanie Funk and Jan Vossen of DFID – UK

Remarks by Ms. Stephanie Funk, USAID Mission Director, My Space Panel Discussion Prepared Remarks

Good morning and thank you for the opportunity to speak to such an inspiring group of people determined to build a bright future for Zimbabwe.   When I received this invitation, the name “The Space” struck me as an appropriate title for why we are here – to create space for people to discuss innovative ideas for development.  This is often where the best ideas originate, when we provide space for creative and committed people, like you, to come together and discuss the key topics of the day.

USAID’s Model and Results

I’ve been asked to speak about USAID’s model for development and our results.  Our primary objective is to end extreme poverty.  President Obama called for an end to extreme poverty by 2030 and designated USAID as our government’s lead development agency to tackle this challenge.  Ending extreme poverty is about building resilience for the world’s most vulnerable people.  Hence, our development model emphasizes local ownership, innovation, partnerships with the private sector and other non-traditional partners, and empowering young people to serve as agents of positive change.  Through this model, we ultimately aim to make people less dependent on development assistance.

When we picture a world without extreme poverty, we see a world where doctors do not have to save lives in the dark and students do not have to close their books at sunset.  We see a world where families are free from hunger, protected from disease and prepared if disaster strikes.  A world where the moment of birth is one of joy and not fear.

Here in Zimbabwe, we work to achieve results in the wide variety of sectors that we work in.  For example, in agriculture, we are helping hundreds of thousands of smallholder farmers to develop the skills, tools and market connections to become more resilient.  We’ve created partnerships with the private sector to provide access to loans, markets and income for these farmers.  In the Honde Valley, we assisted banana farmers by providing high-quality tissue-cultured banana seedlings, as well as training and technical assistance in good agricultural practices, irrigation development, and business skills.  As a result, farmers who used to make $200 a month are now making up to $2,000 a month—a tenfold increase in just five years.  These results are staggering, and the skills these farmers learned have changed their lives for the better, forever.

In health, we are providing 160, 000 HIV – positive Zimbabweans with anti-retroviral drugs each year, a lifesaving measure for each and every one of them.  AND in our work with the youth, we provided more than 8,600 youth with life skills for professional growth and employment, and in partnership with other donors and the private sector we will assist 22,000 more in the next two years.

What can we learn from USAID?

We’ve also been asked to comment on what you can learn from USAID.  USAID is proud of its commitment to sustainability and of its long-standing tradition of building the capacity of local organizations.  We invest directly in local institutions, the private sector, and civic groups, so that they, as institutions, become stronger than the individuals who lead them and sustainable beyond that leadership.  We have learned that building this capacity and sustainability takes time, persistence and partnership.

In my more than 25 years with USAID, I have also learned that population growth matters.  Most of the world’s population growth in the next 40-50 years is expected to come from Africa—already the “youngest” continent in the world. We cannot go on letting the number of people collapse the systems we have collectively fought so hard to build.  In my last assignment in Malawi the population has doubled in the last 20 years and it is projected to triple by 2030 if the fertility rate is not changed.  The health, education, and agriculture extension services that we worked so hard to build 20 years ago, literally collapsed under the weight of that population, reducing the quality of those services today.  The same can happen right here in Zimbabwe as the population has nearly doubled over a 30 year period from just over 7 million in 1980 to a little over 13 million in 2010.  These growth rates put our development gains at risk and threaten all our efforts to end extreme poverty.

We have also learned at USAID that ending extreme poverty will not happen with traditional bilateral donor aid alone.  We must constantly seek out nontraditional partners, and foster local ownership to harness the extraordinary talents and potential of young people.

We believe in the potential of young people, such as yourselves, to shape your own destiny.  This is why we are proud to be part of President Obama’s Young African Leaders Initiative, where a total of 60 outstanding young leaders from Zimbabwe have already participated and been exposed to global best practices in business and civic leadership.  These leaders, from diverse professional backgrounds traveled to the United States with over 470 other young African leaders for a six-week program at 20 prestigious U.S. universities.  When they returned to Zimbabwe they had the skills to strengthen their businesses and the opportunity to compete for grant to assist them in doing so.

In sum, we believe it is possible to end extreme poverty if governmental and non-governmental institutions and individuals make choices that lead to sustainable development — choices in agriculture, family planning, entrepreneurship, and institutional capacity.  We work in partnership with our local counterparts so that together we can make those choices in the collective “space” that we all share in this development arena.  That’s the space we are proud to share with all of you.  Thank you.

Questions and Talking Points

When we talk development aid, how and where do we locate USAID?

Answer: Twenty years ago, if we had wanted to assemble the, quote, “development community” – we would not have gone very far beyond the walls of USAID and other major bilateral and multilateral donors.  Today, that community has expanded dramatically, with leaders who recognize the importance of our work, bringing new skills to the field from different disciplines. These include corporate leaders like Indra Nooyi of PepsiCo, David O’Reilly from Chevron and other private sector organizations like Microsoft, Master Card and Zimbabwe’s very own Econet Wireless, who understand the power corporations have to reach millions and the potential of that power to improve lives. They also include philanthropists, like Bill Gates and Mo Ibrahim, who have studied these issues deeply and have lent a business perspective and an investor’s desire for success to a field that needed both. And they include international celebrities like George Clooney, Angelina Jolie, and Ashley Judd, who have brought heightened attention to development issues and humanitarian crises in countries such as South Sudan, Democratic Republic of Congo, Haiti, Syria, and Afghanistan. But perhaps the most important leaders who’ve joined our field are the grassroots leaders in our communities: the church groups who advocate for humanitarian relief, the youth who come up with innovative ideas that create jobs, increase incomes and drive development.

As I have already highlighted in my remarks, USAID is the lead U.S. Government agency that works to end extreme poverty and enable resilient, democratic societies to realize their potential.  President Barack Obama has called upon USAID, and our domestic and international partners to join the quest to end extreme poverty by 2030.

Extreme poverty is a life of not having verses having.  Not having access to healthcare, clean water, nutritious food.  In order to end extreme poverty was want more haves than have nots.

Let me give an example that demonstrates the impact of our work.  In 1990, 12 million children under the age of five died every year from preventable causes. Today, that number stands at 6.3 million. And, fewer than 300,000 women die each year due to complications in pregnancy and childbirth, down by nearly 50 percent since 1990. This progress is the result of all of us who work in development ….USAID, our development partners, host governments, civil society, and the private sector – and who have come together to strengthen health systems and support smart health interventions around the world. The results are impressive, but we are not done yet. We still need to invest more, harness innovation, and scale up proven interventions. As an example, our work to raise awareness of and prevent HIV has resulted in a 35 percent decrease from 2009 to 2012 in the number of children under 15 years of age around the world who become infected.

Is the current model of development aid fit for purpose as we move towards post 2015 Agenda? Why are we still trapped in a vicious circle of poverty and a rise of inequality?

Answer: Our current development model emphasizes local ownership, innovation, building partnerships with the private sector and other non-traditional partners, and empowering young people. At the core of this model is building resilient societies that can realize their potential and also withstand future shocks.

Admittedly, we live in a world of inequality, where one percent of the people control 50 percent of the wealth. Yet there are one billion people who still live on under $1.25 a day and are forced to make impossible choices between food, medicine, housing and education.  USAID believes that extreme poverty can be overcome. It is not theory or fate. It is not about geography or natural resources. It is about the choices that governments and their societies make every day.

For example, six weeks after an earthquake hit Haiti in 2010 and killed over 300,000 people, another one of greater magnitude hit Chile and killed 526 people.  The number of people who died in Chile is far less than those that died in Haiti. The question is why? It was not about the earthquake, but about the path Chile followed in advance of the earthquake, by providing central services to its population; creating and enforcing rigorous building codes; and building an economic foundation.  Hence, Chile was resilient while Haiti was crumbled.  We have learned that if we work more strategically and make long term investments then countries, communities and individuals will be more resilient.  This is why the United States has rallied the world behind an emphasis on resilience.

To dismiss the progress and the gains of our collective initiatives would be wrong. Although we still have an overwhelming number of people who live in extreme poverty, there has been great progress.  Compared to 1990, today nearly 700 million fewer people live in extreme poverty.  In 2010, the world achieved Millennium Development Goal One – that cut in half the poverty rate among developing countries – five years ahead of schedule.  The global rate fell to 20.6 percent (from 43.1 percent in 1990), and the aggregate poverty rates are now falling in every region, including in sub-Saharan Africa.

If we accelerate our progress and focus on scaling up successful, proven interventions in some challenging contexts, we believe we can lift one billion more people out of poverty by 2030.

How sincere is development aid to the needs of young people and vulnerable groups? Are young people not receiving the crumbles of the pie?

Answer: I have already highlighted the Zimbabwe Works activity that USAID, DFID and SIDA have launched which targets about 22,000 young people in Zimbabwe with life skills for professional growth, employment and entrepreneurship opportunities. This new jointly funded, three-year (2015 – 2017) second phase of the activity will provide an additional $8 million in funding to improve the economic prospects for Zimbabwe’s young people in eleven urban and rural districts nationwide.  The activity has already assisted about 8,600 youths between 2012 and 2014.

Although our programs integrate the needs of young people and other vulnerable groups like women, I believe that young people should not wait for development aid. Young people have so much potential to shape their own destiny through initiatives like entrepreneurship.   Let me re-emphasize that ending extreme poverty will not happen with traditional bilateral donors alone.  We must constantly identify new, innovative solutions to the most difficult development challenges. These innovative solutions lie within the next generation.

Young people are already touching the lives of many people. For example, a young Harvard student Mark Zuckerberg, along with classmates Eduardo Saverin, Dustin Moskovitz, and Chris Hughes started Facebook, a social network that has altered the conventional way of communicating and doing business.

Addressing fellows from the Young African Leaders Initiative last year, President Obama highlighted the work of a young woman working in Binga, Abbigail Muleya, whose work empowers women and girls to take up leadership positions so they find solutions to the challenges they face.

Another example President Obama gave is of Adepeuju Jaiyeoba from Nigeria who saw a close friend die during childbirth.  She now helps train birth attendants, and delivers kits with sterile supplies, helping to save the lives of countless mothers and their babies.

Hastings Mkandawire from rural Malawi saw towns in darkness without electricity.  So now he gathers scrap metal, builds generators on his porch, takes them down to the stream for power, delivers electricity so farmers can irrigate their crops and children can study at night.

If we are to win the fight against inequality, poverty and rising inequality how can young people locate themselves within the broader matrix?

Answer: Young people in Zimbabwe should start locating themselves within the broader matrix of development now.  The actions or positive innovations that young people implement today can contribute to ending extreme poverty by 2030.