A significant opening address by William Ross, Head of International Relations at the French Treasury, provided an overview of the negotiated advances since the Paris Summit for a Global Financial Pact. The speech set the stage for the discussions with a dynamic perspective, instilling hope for future progress that FERDI aims to actively contribute to. Prior to the meeting opening, President Azali, the President of the Republic of the Comoros and current Chairman of the African Union, conveyed congratulations, gratitude, and best wishes to FERDI for its initiatives in the realm of international finance.
The first session delved into this question, by noting that for a quarter of a century, innovative financing has been perceived as having the dual objectives of generating fresh resources and influencing behavior – a duality that has led to its oversight. After Jean-Pierre Landau, the author of the renowned report on the subject published two decades ago, revisited the underlying issues, a recent FERDI study presented by Vianney Dequiedt shed further light on the matter. This new study examines the disparity in the distributional effect among countries of a tax on kerosene compared to another, more recently proposed tax on maritime transport. The results of the study show that, for an equivalent tax mobilization, the kerosene tax is less advantageous for countries in the North, while the proposed maritime transport tax is less advantageous for countries in the South. Michel Sidibé, a former Executive Director of UNAIDS, provided a robust narrative of his experience as a beneficiary of innovative financing, underscoring how it had proven both valuable, and yet insufficient, in addressing current challenges.
After Masood Ahmed, President of the Center for Global Development, introduced the second session by recalling the need for a new metric for resource allocation, the discussion unfolded in two directions. The first highlighted the limits of the conventional perspective that assumes no trade-off between the efforts to combat poverty and those addressing climate change. Indeed, despite the numerous and strong interactions between these objectives, there is, at least partially, from the perspective of impoverished countries, a trade-off between the two. This trade-off, currently implicit and opaque, should be made explicit and transparent by identifying a specific allocation for global warming mitigation, independent of support for country development, as illustrated by FERDI's research.
The second direction aligned with FERDI's longstanding advocacy for the recognition of vulnerability as a criterion for allocating concessional funds intended for country development. The vulnerability criterion is, of course, combined with that of per capita income. Abdou Salam Bello, Executive Director at the World Bank for 23 African countries, supported this position. An event on this topic was organized with him at the Annual Meetings of the Bank and the International Monetary Fund in Marrakech. Part of the session focused on discussing how to allocate resources and the objectives of the loss and damage fund currently in development. Both European and African panelists concurred that the Fund should be both preventive and curative.
This question, which has yet to emerge from the shadows, is what international financing can contribute to the development of small—and medium—sized enterprises on the African continent. This was the subject of the third session, and is crucial, but comes up against the constraint of financing and an unfavorable trade-off between risk and profitability on the part of investors. Starting with a vigorous message from Fatoumata Ba, founder and CEO of the Django Group, and co-director of the FERDI "Digital Confidence" Chair, in a session moderated by Jean-Michel Severino, who is director of the FERDI Impact Investment Chair, a discussion began on ways to reduce risk in order to massively support SME investment in Africa, particularly in the agricultural and agro-industrial sectors.
Ngueto Yambaye, Managing Director of Fagace and former Minister of Development in Chad, demonstrated the under-utilized potential of guarantee systems, such as those supported by the institution he heads, and Aivo Andrianarivelo, Governor of the Central Bank of Madagascar, showed the possibilities, but also the limits, of "derisking" by central banks. It also became clear that public support to limit the risk of private investment implies an assessment of the social and environmental impact of such investment, which must be able to justify such impacts. As different opinions were expressed on the possibility of justifying de-risking in this way, it became clear that this was an important area of reflection for FERDI.
The fourth session delved into the question of which institutions are best suited to ensure "accountability", and the criteria that should be applied. Sir Paul Collier sent a message underlining the lack of an effective monitoring and accountability system during the Sahel crisis, despite FERDI's prior recommendations, which he acknowledged. As for the institutions that should be responsible for assessing whether international public commitments to development financing have been fulfilled and if the direction of flows aligns with stated priorities, it became obvious that several institutions felt accountable in this realm, though with varying degrees of legitimacy and capacity. Much of the discussion focused on the role of the OECD's Development Assistance Committee (DAC), and its ability to broaden and share assessments with representatives of developing countries. The conversation also focused on the adequacy of instruments used to measure these public commitments and, more broadly, on the behavior of Northern countries as reflected in the distribution of various financial flows among countries and purposes. Accountability regarding commitments to concessional flows for economic development was compared with that related to financing global public goods, particularly the mitigation of global warming. Tertius Zongo, Director of FERDI's Sahel Chair, and Kerfalla Yansane, former Minister of Economy and Finance in Guinea, offered critical perspectives on current practices, but expressed a general openness to essential reforms aimed at rebuilding trust between North and South.
Due to the limited time available for the symposium, the discussions could not delve as deeply and conclusively into the topics as many participants had hoped. Nonetheless, as mentioned in my introduction, the symposium provided a valuable opportunity to assess issues that risk being overlooked as reforms in international development financing progress. These discussions will continue in various forums and locations over the coming year, and updates will be available on the FERDI website.
In any case, these discussions have underlined FERDI’s mission, as highlighted in my opening remarks, which are also accessible on the website. In those remarks, I reflected on FERDI's accomplishments over the past decade and its distinctive characteristics. I took the liberty of doing so in light of the discussions held during a colloquium organized by FERDI two months ago on "Pascal and the World Economy". Pascal's quote, which has adorned the back of our working documents for the past fifteen years, remains a guiding principle for our future endeavors, particularly in our considerations of the international architecture of development financing: "On what will he base the economy of the world he wishes to govern? Will it be based on the whim of each individual? How confusing! Will it be based on justice? He doesn't know!"
