On November 16-18, InterAction and The Annenberg Foundation Trust at Sunnylands convened top nonprofit and private sector leaders to advance a new conversation about scalable private investments in fragile contexts that supports inclusive growth.
This three-day retreat, titled “Global Cooperation at the Frontier: Innovative Financing for Development in Emerging and Fragile Contexts,” was held at the historic Sunnylands estate in Rancho Mirage, California.
Foreign direct investment (FDI) from private firms is one of the top sources of development finance outside of foreign government assistance. In fragile states, FDI has grown tenfold over the past 20 years.
Despite this acceleration, private investment in fragile states still only accounts for less than 1% of global FDI. Of that, most is concentrated in a handful of countries such as Egypt, Nigeria, Angola, Ethiopia, and Iran, according to the 2018 OECD States of Fragility Report.
Bridging this investment gap could generate massive value by providing much-needed capital and market alignment in communities where basic needs are not being met.
To better understand the challenges and find real-world ways to address them, Sunnylands and InterAction conducted intensive roundtable sessions to identify market-based solutions that support sustainable development in places where investment has not typically gone.
Participants included InterAction member NGOs with programs in fragile contexts including CARE USA, Mercy Corps, and World Vision, as well as representatives from the U.S. Institute of Peace (USIP), The Rockefeller Foundation, Overseas Development Institute (ODI), Expectation State, UN Office for the Coordination of Humanitarian Affairs (OCHA), CrossBoundary, Natural Resource Governance Institute (NRGI), FINCA Democratic Republic of the Congo, Kupanda Capital, Faysal Bank Limited Pakistan, and the Global Innovation Fund (GIF).
These discussions generated a number of findings and principles that have the potential to meaningfully impact this field.
Particularly, retreat participants identified the need to “build the middle,” meaning to flesh out largely unexplored vehicles and scaling approaches between first-loss investments, such as those provided by humanitarian and development organizations, and more commercial investments. Participants concluded that “building the middle” could advance both resilience-building and market growth in fragile contexts.
“Sunnylands demands that its convenings generate real impact and this retreat was no exception,” said Sunnylands President David J. Lane. “The global conversation around sustainable development today is focused heavily on impact investing and innovative finance, and this retreat positions Sunnylands and InterAction at the leading edge of how to drive this conversation in an impactful, real-world way.”
Sunnylands and InterAction are excited to continue to partner together to drive these retreat findings forward in the coming weeks and months, and we assess that additional conversations will be held soon to help advance this discussion globally.
“InterAction is thrilled to have co-hosted, with Sunnylands, leaders from the international nonprofit community alongside private sector executives, foundations, and technical experts, to discuss private investment in fragile contexts,” said Sam Worthington, CEO of InterAction.
“The rewarding conversations on the ‘who, what, where, when, why, and how’ of increasing private investment in fragile contexts at the national and sub-national levels suggested real possibilities for collaboration and learning. By bringing both for-profits and nonprofits to the table, we see opportunities to foster cooperation that can expand markets through new forms of finance while helping emerging states achieve peace and prosperity. I look forward to continued engagement with Sunnylands and our retreat participants to advance these ideas.”
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