Question

How does international financial institution help poverty alleviation?

Answer 1

Answer:

In 2018, approximately $2.5 billion of bilateral donor aid was invested by and in Development Finance Institutions (DFIs) in private sector projects in developing countries. As this investment grows, DFIs will be under increasing pressure to provide evidence of their impact on the first Sustainable Development Goal (SDG) – ending poverty.

So, if donors are investing more aid in DFIs, what do we know about the impact on tackling poverty? The simple answer turns out to be – not as much as we should.

DFI investment creates jobs, but what impact do they have on poverty?

There’s no doubt that DFI investment creates jobs. And as we noted in our recent essay series on DFI impact, the collective investment of members of the European Association of Development Finance Institutions (EDFI) supported 5.4 million jobs in 2017. This is approximately 0.2% of the global workforce — a number not to be sniffed at.

Jobs offer people the chance to escape poverty. And we know that nine in ten jobs in developing countries are created in the private sector, so it is not surprising that DFIs see the creation of job opportunities as the main measure of their impact on the SDGs – specifically SDG 8. But what impact do these jobs have on poverty?

Three ways DFIs can step up their game

The problem is that we know very little about where these jobs are created, who gets them, their quality, and the impact they have on poverty. This was a key finding of our evidence assessment where we were simply unable to draw any firm conclusions on whether DFI investment truly contributes to alleviating poverty. This is a worry given that the $2.5 billion invested in and by DFIs is set to rapidly scale.

Explanation:

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Answer 2

Answer:

The workshop was jointly conducted and sponsored by the Technical Cooperation Directorate (TCD), Ministry of Foreign Affairs (MFA), Singapore, the Colombo Plan Secretariat and the ADB Institute. The participants were middle- to senior-level officials of central banks and representatives from NGOs and the academia from Bangladesh, Cambodia, the People's Republic of China, India, Indonesia, Lao PDR, Malaysia, Pakistan, Philippines, Sri Lanka, Thailand and Viet Nam.