5 Responses

  1. Bob McMullan
    Bob McMullan July 30, 2015 at 6:42 pm

    Thank you for the comprehensive analysis. Thank you in particular for keeping the Pacific DFI concept at the forefront. I acknowledge the upfront cost from a diminishing aid budget. However, my understanding is that Austria established its own DFI recently with upfront money from their EFIC equivalent. This is not necessarily the best solution but it is an interesting idea. My experience in the Pacific is that no-one else is or would be prepared to do this in the smaller countries of the Pacific. I believe it could be beneficial and it seems to be an idea which would appeal to the current governments in both countries.

  2. Chris Nelson
    Chris Nelson July 29, 2015 at 12:22 am

    Robin, thanks for the useful overview.

    Just a query re: support for a bilateral DFI. This was also raised in the Jim Adams piece the other day. Why do you think there is a gap that cannot be filled by the IFC out of the World Bank Group Sydney office? I know they struggle for traction, but it is pretty well resourced and I don’t see why there isn’t viability in extending their influence if there is truly demand for financing services in the Pacific.

    How would a bilateral DFI be any different? Is it a risk issue? If so, having just come back from a trip to DFID and having a conversation with the DFI guys there, my experience on this is that these undertakings are not straight forward.

    I know I would be reticent to impose this kind of complexity on the current Australian aid program, but I would like more on your views. Perhaps it warrants a separate Blog topic?

  3. Marianne Jago-Bassingthwaighte
    Marianne Jago-Bassingthwaighte July 28, 2015 at 2:10 pm

    Robin, thanks for another entertaining, incisive and frank assessment of Australian aid policy.

    I am interested to read your caution, brief though it is, on the potential role of Government in impact investing. You say that “For example, in its discussion of social impact investment, the committee’s assumption at all times is that the government must figure out how to climb into the picture. But the government need not do that, and risks creating distortions if it does.” Impact investing reminds me of my days working on anti-corruption policy for the aid programme – it was going to be the cure that ended all ills. It wasn’t, and yet when done well it’s a powerful and galvanising agenda. I do see social impact investing as galvanising for many players in the private sector who want to “do good” or “give something back” – terms that they themselves use. Like any effective development approach, it can bring together disparate interests and actors to share both their genius, and the risks involved. There are some good case studies set out for example in a number of reports by Australian-based Social Outcomes, which describe the positive roles that government funders (outside the international development sector) have played in the development of social impact bonds and other innovative financing mechanisms. I also see that effective development expertise (if not funds) is exactly what shared value and other social impact conscious approaches from within the private sector are looking for, and at least some of that expertise resides in the public sector.

    Can you say more about the distortion that you worry about when governments get involved in impact investing?

    With thanks.

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