Remarks by Dr. Rajiv Shah, USAID Administrator, at the Global Philanthropy Forum

Monday, April 16, 2012

[As prepared]

In 1945, 50 governments and a number of NGOs gathered in San Francisco to sign the charter that would form the United Nations, an effort that would change the shape of foreign affairs forever.

Inspired by a world coming together, the World Affairs Council of San Francisco formed, dedicated to helping a diverse crowd engage with the rapidly transforming state of global affairs.

In 2001, another remarkable transformation was occurring, this time in American philanthropy. Anchored for centuries by the Foundations of early corporate titans like John D. Rockefeller, Andrew Carnegie and Leland Stanford, new philanthropists in Silicon Valley and elsewhere began to emerge. Having made their fortunes in a competitive private sector, they dedicated themselves to bringing the same level of rigor and analysis to that philanthropic work.

I, myself, am a product of that movement, having spent nearly a decade at the Gates Foundation, developing a deep respect for the importance of bottom-line results and social returns on investment.

But in another show of foresight, the World Affairs Council-in an effort led by Jane Wales-formed this Forum, bringing together a community of like-minded donors to champion this new approach to giving.

That approach is as critical as ever-generosity, even during times of adversity, remains a bedrock of American values.

This past year, despite enduring the long hangover of the global financial crisis, the fifty largest donors gave $10.4 billion dollars.

Today, we at USAID are working to capture the tremendous potential of this community-partnering in new ways to leverage your experiences, expertise and resources. And focus on pivotal opportunities in development will enable us to get ahead of global trends that are placing unprecedented pressures on planet.

In the next forty years, the world will welcome another 2.5 billion people-the equivalent of adding two Chinas. In order to support a population this large, we'll need to double global food production. All while a changing climate leads to warmer temperatures, more erratic rains and longer, more vicious droughts.

The only way we're going to get ahead of this curve is to fight poverty and spur economic growth is to take advantage of three critical opportunities today.

We have to help communities build real resilience to disasters-so that droughts don't shatter development gains or give rise to instability. We need to strengthen food security and drive economic growth. And we need to help countries reap a demographic dividend-focusing on efforts that ensure all children can enjoy healthy, productive lives.

Across each of these efforts, we have new ways to partner than ever before: from our Development Innovations Ventures, which supports entrepreneurs around the world with cutting-edge ideas, to our Global Development Alliances, which leverage the vast potential of the global-and local-private sector.

Every year, as many of half of USAID's emergency staff mobilizes to East Africa. Over the last decade, we've spent more than $11.5 billion in humanitarian assistance for the region. Each of us here is familiar with this similar experience-and a similar pattern of crisis, generosity and response.

This past year's crisis in the Horn of Africa was just the latest example.

As many of you know, last summer, the worst drought in 60 years put more than 13 million people at grave risk. And in Somalia, where decades of conflict and disorder have contributed to the breakdown of governance, drought led to famine. While we can't stop these droughts from occurring, we can do more to help people withstand them.

The development community has to expand our focus from relief to resilience-from responding after emergencies strike to preparing communities in advance. These are exactly the kinds of investments we've been shifting our focus to in the Horn.

Through our Global Development Alliance, we're partnering with companies like Swiss Re to provide insurance to pastoralists. This past October-during the height of the crisis-more than 600 cattle herders received payments.

And we're working with PEPSICo buy chickpeas from 30,000 farmers in Ethiopia-turning their product into a nutritional paste that the WFP can use to save lives. Just an example of the most than 1,000 partnerships we've formed with more than 3,000 private sector players through GDA.

But if we're going to truly help countries escape the cycle of emergency and relief, we have to help them address the root causes of hunger and malnutrition.

In 1985, Official Development Assistance in agriculture was high as $20 billion, but by 2003 it has fallen to a mere $3 billion. When food prices spikes in 2007, millions suffered-increasing the ranks of the hungry for the first time in 40 years.

To reverse this trend, we are helping bring the world together around a new approach to food security-boosting harvests, reducing hunger and laying the foundation for broad, inclusive economic growth.

This approach was first outlined at the 2009 G8 Summit in L'Aquila, where governments pledged to reinvest in agriculture-but in a very different way. Aligning their assistance with plans developed by partner countries and focused on smallholder farmers. But public investment is not enough.

To reach the scale needed to sustainably end hunger, we need to mobilize private sector investment in agriculture. We need companies to sell better seeds to poor farmers, insure them against failure, and help get their crops to market.

Through our Development Credit Authority, we're using small investments to unlock the power of local capital. This past year, we forged a partnership between J.P. Morgan and the Gates, Gatsby and Rockefeller Foundations. This enabled a Kampala-based fund manager to invest $25 million in at least 20 agricultural enterprises-raising incomes for at least a quarter of a million households. And the partnership stands as a great example of bringing philanthropic, public and private sector together to leverage new resources and achieve results on a dramatic scale.

But even if we are successful at fighting hungry and reducing poverty, rapidly rising populations in Africa still puts a brake pedal on its growth. In the next 20 years, Kenya and Ethiopia will see their populations double-and they won't be alone.

In order for these countries to meet the demands of tomorrow, they have to make important investments in their citizens today. They have to improve child survival, expand access to voluntary family planning and educate girls. When child survival increases, birthrates fall-as families willingly choose to have fewer children when they know each will have a chance at a healthy life.

As this pattern emerges, nations in Africa will be poised to reap an economic windfall that has fueled the fastest growing countries in Asia in the 70s and Latin America in the 80s.

Capturing this demographic dividend begins with ensuring every child has the chance to enjoy a healthy life.

Thanks to advances over the last several decades, the global community today has the knowledge and the tools to end preventable child deaths.

In Ethiopia, Bangladesh and 31 other countries around the world, a public-private partnership called Helping Babies Breath is training frontline health workers and giving them cheap tools to save infants' lives. A device made by Laerdal to fight asphyxia costs just $18. By working together, we leveraged six times the amount we invested.

Across the world, we're scaling up proven interventions like this one to ensure every child-no matter where they live-can enjoy a healthy life. From making sure children are born free of AIDS even when their mothers are HIV-positive to ensuring infants can freely take their first breaths to focusing nutritional efforts on the critical first 1,000 days of life to investing in vaccines and malaria prevention.

We don't often think of-or treat-these life-saving interventions as being part of a single effort, but together they have brought us within reach of this remarkable goal.

These are the opportunities we see today, but if we're going to take advantage of them, all of us in this room need to do more than what we've been doing in the past-and we need to do it differently.

Your community should be fundamentally focused on innovation-on taking larger risks and pushing the cutting-edge of this work. And unlike governments that are subject to very strict accountability for every dollar we spend, your organizations enjoy a degree of freedom and flexibility that allows them to be much more effective laboratories for innovation.

But currently many are as risk averse or more risk averse than we are. Philanthropy should also be much more focused on using their ties to the private sector to drive market activity in developing countries. We know that aid and charity alone can never achieve the sustainability and scale we need to affect real change.

Already we live in a world where foreign direct investment is almost 10 times higher than all official development assistance. We need your organizations to partner much more deeply with the private sector-helping channel capital towards investments that can deliver profit and accelerate inclusive growth.

Finally, we need your support and your ability to drive advocacy to raise awareness about the critical opportunities we face today. The truth is that resilience, food security and child survival don't have the advocacy community that other initiatives like PEPFAR do. It is up to each of us to generate the same kind of creativity and generosity that we seen during a crisis towards these long-term solutions.

The New York Times recently ran the story of one man-Andrew Rugasira-who was pursuing his dream of building a coffee company in western Uganda. His dream wasn't about starting collective that would sell beans to roasters in Italy or the U.S.

It was about building modern business that would roast world-class coffee in Uganda-shipping the product to elite markets around the world and allowing locals to capture the entire value chain.

It wasn't easy for him at first. The farmers he worked with lacked basic agriculture knowledge, including how to terrace their fields to improve yields. He didn't have any money for marketing, so it was hard for him to get most buyers to even listen to his pitch. And since Andrew couldn't find enough investors to finance his start-up, USAID stepped in to help-financing about one-eight of his company.

But Andrew persisted-determined that the future of his country would be shaped by business, not aid. Today, Andrew buys beans from 14,000 farmers and has signed deals in the U.K., Austria and America.

Farmers have seen their incomes skyrocket-from around $250 a year to $3,500. And Andrew is making investments to scale-up production, replacing hand-cranked pumps with high-speed processing stations across the region.

Although our assistance provided critical support at a critical time for Andrew, it didn't have the biggest role. Investors, farmers and entrepreneurs took center stage.

Ultimately, if we're going to realize a future with far more countries as partners in development than recipients in aid, then these are the stories that matter-and this is the role aid must play.

Because supporting local entrepreneurs to build capacity-instead of dependence-doesn't just strengthen their futures. It strengthens all of ours.

By making core reforms that allow us to intensely focus on results and expand our partnership base, we're not just bringing our communities closer together. We're changing perceptions about the nature of this work-and its critical importance to economic prosperity and security; we're transforming what's possible in some of the hardest places to work; and we're seizing pivotal opportunities to achieve generational legacies in development-and advance the values of compassion and generosity that unite this community and our country.

Thank you.

Fairmont Hotel, Washington, DC

Last updated: April 06, 2017

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