Driving Economic Growth: The Role of Development Finance Institutions

Overview

Driving Economic Growth: The Role of Development Finance Institutions is a 1.5-day course that analyzes the actors and tools that shape economic growth in developing countries, from the perspective of both agencies and banks and the recipient countries affected by their policies. Development finance institutions like the International Monetary Fund (IMF) and World Bank are a relatively new type of financial institution, initially established to offer loans for agriculture and land development and, after World War II, to rebuild nations and pull people out of poverty. Their roles and missions have changed over time and have now become controversial, particularly when such institutions have imposed strict conditions when bailing out countries in financial distress. In recent years, development finance has been used as a tool of strategic competition to fund massive infrastructure projects to assert influence—or compel countries to align with specific policies and rules.

In this course, you will examine the range of financial tools available to policymakers, the institutions that work in this space, and how nations and key stakeholders use development finance to achieve development, political, and diplomatic goals. Through interactive seminars, case studies, and a dynamic simulation exercise, engage with other leaders and professionals on topics such as U.S-China competition in geostrategic locations, recipient country perspectives, and the future of development finance. No previous finance experience is required.

Curriculum

Seminars

• The Role of Development Finance
  • Development finance institutions (DFIs) have emerged as one of the fastest growing agencies pursuing innovative financial solutions to support development efforts worldwide. They are highly sought after in the developing world and carry the reputation of being a trusted partner of private capital. This session will explore the history of development finance, sustainable development goals, its role in foreign assistance and government finance, and how it works with the private sector and recipient countries.
• The U.S. Toolkit
  • Several U.S. agencies offer financial tools, including loan guarantees, debt financing, political risk insurance, export financing, and equity financing to support investments overseas. This session will assess how the U.S. International Development Finance Corporation, USAID, Export Import Bank, and the U.S. Trade and Development Agency work together—and separately—to promote U.S. national security and foreign policy goals through  development financing and the types of investments that it promotes.
• Multilateral Development Banks
  • Many of the multilateral development banks (MDBs) we are familiar with today, such as the World Bank, IFC, International Bank for Reconstruction and Development (IBRD) and the International Monetary Fund, were born out of Bretton Woods Conference after World War II. The intention was to create a system of economic order and international cooperation that would help countries recover from the devastation of the war and foster long-term global growth. Have MDBs fulfilled this mandate? In this session, we will unpack the controversies surrounding MDBs and the fulfillment of their missions in developing countries.
• Strategic Competition and Infrastructure
  • China’s continent-spanning infrastructure initiative, the Belt and Road Initiative (BRI), and the creation of the Asian Infrastructure Investment Bank (AIIB), have attempted to make better use of Chinese foreign currency reserves and address its frustration with the slow pace of reforms and governance of MDBs, which are heavily dominated by American and European interests. Over time, BRI has emerged as a significant counterweight to the institutions that have dominated the development finance world since World War II. This session delves into the role BRI and AIIB play in relation to MDBs and what challenges they play in competing with the U.S. and the rules-based order it seeks to enforce.
• Development Finance Recipients
  • Low- and lower-middle income countries take on debt and public-private sector partnerships to kickstart economic growth, attract foreign direct investment, address infrastructure needs, and fulfill commitments to sustainable development goals. However, finance comes with strings attached, with some partnerships receiving disapproval from the public or becoming misguided debacles. Participants will learn from case studies of both positive and negative outcomes and hear the firsthand perspectives of development finance recipients.
• Managing Debt and Default
  • Elevated debt in low-income countries and emerging market economies in recent years has raised concerns about countries’ capacity to sustain these levels of debt. COVID-19 significantly added to spending needs and the resulting rise in public debt has heightened the tension between meeting important development goals and containing debt vulnerabilities. Nearly 60% of BRI recipients are no longer in a position to take on more debt despite the need for financial assistance. This session covers the topic of debt sustainability and what happens when a country reaches debt distress or default.

Simulation Exercise

Participants will apply insights gathered from each session in an innovative and interactive simulation exercise. This exercise will reflect a real-world situation in which participants will evaluate a development and project finance scenario while taking into account national security, foreign policy, and financial and commercial viability considerations.

How to Register

The online application includes a short entry form, statement of interest, brief bio, and resume. Entries will be reviewed on a rolling basis. Please note that spaces are limited and the course may fill before the deadline. Incomplete applications will not be considered.