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New Kids On The Block Fundraising in the New World Order. Mike Muchilwa. Who are the worlds largest ODA donors?????. Major DAC Donors (2009). Country USD 1. United States – $28.67 billion 2. France – $12.43 billion 3. Germany – $11.98 billion 4. UK – $11.50 billion
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New Kids On The BlockFundraising in the New World Order Mike Muchilwa
Major DAC Donors (2009) Country USD 1. United States – $28.67 billion 2. France – $12.43 billion 3. Germany – $11.98 billion 4. UK – $11.50 billion 5. Japan – $9.48 billion 6. Spain – $6.57 billion 10. Netherlands – $6.43 billion 12. Sweden – $4.55 billion 13. Norway – $4.09 billion 14. Canada – $4.01 billion 15. Italy – $3.31 billion 16. Denmark – $2.81 billion Country USD 17. Australia – $2.76 billion 18. Belgium – $2.60 billion 19. Switzerland – $2.31 billion 20. Finland – $1.29 billion 21. Austria – $1.15 billion 22. Ireland – $1.00 billion 23. South Korea – $0.82 billion 24. Greece – $0.61 billion 25. Portugal – $0.51 billion 26. Luxembourg – $0.40 billion 27. New Zealand – $0.31 billion
DAC Donor as % of GDP (2009) Country % of GDP 1. Sweden – 1.45% 2. Norway – 1.06% 3. Luxembourg– 1.04% 4. Denmark – 0.88% 5. Netherlands – 0.82% 6. Belgium – 0.55% 7. Finland – 0.54% 8. Ireland – 0.54% 9. UK – 0.52% 10. France - 0.47% 11. Spain – 0.46% 12. Switzerland– 0.45% • Country % of GDP 13. Germany – 0.35% 14. Canada – 0.30% 15. Austria – 0.30% 16. Australia – 0.29% 17. New Zealand – 0.28% 18. Portugal – 0.23% 19. United States – 0.21% 20. Greece – 0.19% 21. Japan – 0.18% 22. Italy – 0.16% 23. South Korea – 0.10%
DAC Donors • Richest countries provide the largest aid. • The EU contributes $80,655 billion out of worlds $120 billion (ODA) • US contributes$ $28.67 billion per year. • Next 4 industrial nations (Japan, France, Germany, UK) are the next biggest donors. • Italy is a small donor despite economic size
Humanitarian Assistance –Non DAC (2009) Country US$ 1. Saudi Arabia – 51.8 million 2. UAE – 35.3 million 3. Kuwait – 34.2 million 4. Russia – 32.5 million 5. India – 14.6 million 6. South Korea – 13.2 million 7. Qatar – 12.9 million 8. Turkey – 4.8 million 9. Czech Republic – 4.3 million 10. Hong Kong – 4.0 million 11. Others – 16.5 million ` • Contribution breakdown • U.N 83.6% • Gov 7.3% • NGOs 3.3% • Others 5.8%
Emerging Donors • Emerging economies are quietly changing the rules of the game. • Have been increasing their aid to poorer countries. • Giving aid on their own terms • None belong to the OECD Development Assistance Committee (DAC). • Difficult to know the scale of South-South humanitarian & data not readily available • Conservative estimates suggest aid provided by some is over $1 billion • Some have focused on technical co-operation programmes for more than 35 years!
Emerging Donors • New donors : • China • UEA • Saudi Arabia • Korea • Venezuela • India • Kuwait • Brazil • South Africa • Others Donors: • Israel • Chile, • Thailand • Malaysia • Argentina • Egypt • Singapore • Tunisia • Cuba
Emerging Donors • South Africa • Launched the South African Development Partnership Agency (SADPA) • Brazil • Doubled between 2007 & 2008 and tripled from 2009 to 2010 to 50 million dollars. • 53% given to Africa, rest to Latin America • Funds through the • Brazilian Co-operation Agency (ABC), • UNDP • WFP (support from US$1 million in 2008 to US$ 27 M in 2011 • Trade flows between Brazil & Africa, growing to $27.6 billion in 2011 from $4.3 billion in 2002. • Indian • Development coop exceeds $2 billion annually • 50% goes to Afghanistan. • Recently created a Development Partnership Administration within the Ministry of External Affairs. • Has followed China into Africa.
Emerging Donors - China • Channelsmost of its aid through the Ministry of Commerce. • Recently announced a US$20B 3 year package to Africa • Does not insist on human rights-related preconditions • In 2011, published its first official foreign aid policy report, or “white papers.” • It has 3 different types of aid: grant based loans, interest-free loans, and concessional loans. • Grant packages encompass social welfare programs & other human development related projects. • Interest-free loans include grace periods and repayment plans. These loans are mainly issued to assist in building and expanding public works facilities. • The concessional loans category provides aid to medium and large infrastructural projects
Emerging Donors • Southern contributors have responded to catastrophic events, e.g • The tsunami • Bangladesh floods • Latin American contributors also provided significant assistance • Hurricane Mitch • Floods in Guyana and Bolivia • South Africa has delivered humanitarian assistance to the Southern African sub-region at times of natural disasters (e.g. cyclones, droughts and floods). • Arab Countries provide Aid to: • Lebanon • The West Bank and Gaza
The Emergence of Non-State Actors • Philanthropic foundations e.g • Rockefeller Foundation • Ford Foundation • Bill and Melinda Gates Foundation) • Corporate philanthropic or Corporate Social Responsibility (CSR) • Safaricom • Equity Bank • Global funds e.g. • The Global Fund to fight HIV/Aids, Tuberculosis and Malaria • Private organizations have priorities that: • May not correspond to donor objectives • Have different implementation mechanisms • Private actors are financial heavy-weights in particular sectors or regions & can • Shape agendas • mobilise partnerships
Which were the worlds largest economies in 2010? • Which will be the largest in 2020?
Top 10 largest economies as a percentage of the world total GDP in PPP terms: 2020
Worlds Largest Economies, 2010, 2012 2010 • PPP is a method of measuring the relative purchasing power of different countries' currencies over the same types of goods and services • Six of 10 top ten are developed econ. • Emerging economies in the top ten were India, Russia and Brazil. • Overall, emerging countries have fared better than advanced economies during the global economic recession. By 2020 • 2017: China overtakes the USA • Emerging economies rise will impact on funding & investment • Large consumer markets in emerging economies will present enormous business & funding opportunities • Income per capita will remain higher in advanced countries • In 2020, annual disposable income per capita is forecast at US$5,807 in BRIC countries, well below US$31,050 in the eurozone in US$ terms;
Advanced Economies are Slowing Down • Since the 1990s, advanced economies have experienced much slower growth compared to the developing world • Declining trend of advanced economies accelerated by global financial crisis • The USA share in world GDP in PPP terms has declined from 23.7% in 2000 to 20.2% in 2010. • The USA real GDP contracted by 2.4% in the USA in 2009. • Japan's economy recovered slightly in the mid-2000s after a prolonged period of stagnation due to inefficient investments, global financial crisis and aging population • Japan’s annual real GDP shrank by 5.2% in 2009 • In 2010, the European Union (EU) economies account for 20.6% of world GDP measured at PPP terms, down from 25.1% in 2000. • Population ageing and rising unemployment have contributed to EU slowdown • Annual real GDP growth of advanced economies was 2.3% in 2010 and 2.4% in 2011 after a contraction of 3.2% in 2009. • Asian countries achieve d8.7% in 2010 and 2011 • Many advanced economies face the challenge of reducing public debts & government budget deficits
Emerging Countries are Catching up and Will Overtake • Five emerging countries will be join the top 10 economies creating a new world order by 2020 • China's share in world total GDP in PPP terms has increased from 7.1% in 2000 to 13.3% in 2010. By 2020, it will reach 20.7%. • China will become the world's largest economy in 2017; • India is the fourth largest economy in 2010. By 2014 it will have overtaken Japan to become the world's third largest economy • By 2020, Russia will rank higher than Germany and become the fifth largest economy. • Brazil will have overtaken both the UK and France to become the seventh largest economy in 2020. • By 2020, Mexico will have overtaken Italy to be the world's 10th largest economy . A growing population and proximity to the USA aid the country's economic development;
Implications of economic shift towards emerging economies • With a huge population and rising household incomes, emerging economies will provide enormous opportunities for fundraising • In China, the number of households with an annual disposable income above US$10,000 (in nominal terms) will increase from 57.1 million in 2010 to 222 million households by 2020; • In 2010, the total population of BRIC countries stood at 2,856 million people, compared to 737 million people in the G7; • Emerging countries will be important foreign investors , influencing the global economy. • Since the early 2000s, China and India have become major foreign investors in Africa speeding up development
Emerging Economies - Implications • There is a continuing shift in power, in which new economic powers are emerging • Developing economies contracting .. Emerging countries are growing • Reflected in the changes to the size of foreign aid budgets. • A broader base of donors with a diversity of development experience & competing interests will favor recipient countries. • The West is loosing “soft power,” especially where it disagree with emerging market country commitments to democracy and human rights. • Some institutions e.g World Bank, loosing influence • The rise in economic importance of emerging countries will lead to a rise in their global political influence. China, for example, has since 2010 become the third largest shareholder in the World Bank;
What are the Implications? • Some have greater focus on business rather than social issues e.g China, India, Brazil. • Funding models beginning to change… . • Increasing focus on infrastructure • Increasing shift to concessional loans • Focus on value for money • Focus on opportunities for local businesses E.g Dutch, business co-funding programs (Swedish, British, Dutch)
Getting Strategic • Getting greater visibility on-line • Inviting emerging donors to your activities • Sharing experiences/publications • Seeking twins/partners in their countries • Visit the countries/Projects • Bill gates in China, Mexico • Exchange visits • Attend conferences/Workshops in new donor countries.
Africa - Rise of the Middleclass • According to the ADB, Africa’s middleclass was 313 million people as of 2010. • Represented 34 % of the continents population. • Predicts that it will grow to 42% of the population or 1.1 billion people by 2060. • According to consultants Merrill Lynch and Capgemini, there are now 100,000 Africans with at least $ 1 million to invest
Emerging Africa MNCs • South, West & East African companies are spreading their wings across the continent • Sectors include banking, retail, insurance, fast foods, and manufacturing. • Grown into African Multinationals in their own right. • KCB, Equity, ECO, & UBA Banks, • Shoprite, Nakumatt, Uchumi and Tuskies supermarkets • Castle & East African Breweries, Castle Breweries, • MTN, Econet Wireless • Nandos, Steers amongst other restaurants • Donating funds to build new markets. • Established foundations to support their work & are changing the investment face of the continent. • Include the Safaricom Foundation, East African Breweries Foundation and KCB Foundations.
Emerging Africa • Nollywood • Produces 200 films weekly. • World’s third largest film industry • Employs 200,000 people. • NGOs going international • e.g AMREF • Churches going international • e.g Winners Chapel
South African Philanthropists • Francois van Niekerk gave $170 million, (70 percent equity) of Mertech Group, to the Mergon Foundation. • Allan Gray bestowed $150 million to the Allan Gray Orbis Foundation. • Donald Gordon donated $50 million to charities • including the Donald Gordon Teaching Medical Centre at the University of Witwatersrand • British nonprofit, the Royal Opera House • Wales Millennium Centre. • Founder of the Donald Gordon Foundation • Mark Shuttleworth • Famed for his $20 million trip to space, • Spent $25 million in support of Ubuntu, a free open source software. • Committed US$ 20m to Shuttleworth Foundation • Others Include: • Cyril Ramaphosa • Tokyo Sexwale • Patrice Motsepe • Jay Naidoo
Emerging Africa - Philanthropists • Theophilus Yakubu Danjuma, granted $100 million to TY Danjuma Foundation. • Manu Chandaria • Reginald Mengi • SM Macharia
Emerging Africa • 2nd fastest growing region in the world after Asia. • In 2009, grew at 3.5% while the West grew at 2% • Weathered financial crisis and Euro Zone crisis • Continent now growing at 5% • Many countries will achieve middle income status within a decade at current rates of growth • COMESA, SADAC, EAC will bring together 26 countries and 525 million people and will have a $1 trillion market. • Big Business investing in Africa .. New partnerships.
In a Nutshell • Growing opportunities for aid from Africa • SA • Kenya to S.Sudan • Kenya to Somalia • Egypt • Tunisia • Opportunities to tap individual philanthropy • Mpesa • On-line • Special Events • Social media • Opportunity to tap corporates • National • African MNC • Others • National Governments