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Happy Groundhog Year? Why we must adapt and innovate in 2013

This time last year I wrote about how uncertainty and risk are shaping not only everyday events but also how we think about development and humanitarian practice.  As I sit down to reflect on the challenges ahead in 2013, it feels a bit like Groundhog Day. Much of the uncertainty of last year remains – the long shadow of the global financial crisis, the fiscal crunch in Europe, the growing number and intensity of extreme weather events, and the fracturing trajectory of the increasingly deadly Syrian conflict.

There are also new uncertainties: the scale of fiscal drag on the US economy and the political degrees of freedom available to the Obama administration to spearhead critical reforms not just domestically but internationally too, a new leadership in China, the uncertain path of recent conflict in central Africa, the dark cloud of the Rakhine crisis in Burma, and rising tensions in the south China sea.

Risk and uncertainty are hardly new and can be a spur to creativity and innovation; but as the theme of this year’s annual meeting of the World Economic Forum in Davos suggests, they gather critical potency in a fast-changing, hyperlinked world in which there is ‘no risk-off setting’.  2013 will be a testing time for decision-makers everywhere as they seek to find ways to bring adaptation and resilience to the fore as essential attributes of both private- and public-sector business models.

Against this backdrop, development and humanitarian actors are also being tested – on their agility and speed as well as their capacity to adapt to new disruptors in the aid and development space. ODI’s recent work on creative destruction in the aid industry points to a number of critical disruptors for aid agencies in the coming decade: from the increasing role of private aid flows (via internet platforms such as Kiva and Just Giving), to the shifting dynamics of south-south cooperation, the emergence of new private-public financing instruments, and the changing aetiology of international cooperation, particularly in the climate space.

The work of ODI’s Humanitarian Policy Group also points to disruptors that are changing the humanitarian space, from the number of crises generated by natural hazards and the importance of regional bodies in responding to emergencies, to new civil-military dynamics in conflict zones and increasing engagement with non-state actors in access to and delivery of humanitarian assistance.  

As well as proofing themselves for future trends, development actors need to be ambitious in the face of a number of opportunities and challenges in 2013. 

  1. The UK presidency of the G8 this year is undoubtedly an opportunity. The last time the UK chaired the G8 was 2005, a landmark year in which a new consensus on aid and on African development was reached amongst the richest nations of the world. In 2013 a great deal has changed. Several African economies are among the fastest growing economies in the world, and while development indicators still lag overall there are real signs of development progress. Although aid levels have failed to reach the heights promised in 2005, neither have they collapsed in the face of growing austerity, though the critique of aid spending in the UK is intensifying and we should expect more in 2013.

    Set against this context and that of flagging ‘G-power’, the UK will try to steer the conversation this year towards a new set of collective action challenges that influence the global environment for development: trade, tax compliance and transparency – the ‘three Ts’.  ODI’s research points to a worrying increase in protectionist tendencies in the EU, something that the G8 should do its best to counter. Any collective agreement on closing tax loopholes and improving global standards on tax compliance will be popular, but there are equally pressing issues for developing countries, including trade mispricing that, according to Global Financial Integrity, contributes close to 80 per cent of illicit capital flows globally. 

    Finally, transparency is a sine qua non of continued support for aid from the G8, but the G8 mustn’t treat transparency as an issue only for developing nations, nor should it treat it as an end in itself. Evidence on transparency shows that not only does the disclosure of data and information matter, so do the enabling conditions that encourage the use of such information in and for the public interest. The ‘three Ts’ potentially offer an important way for the G8 to reposition itself on a global agenda, but whether they will restore G-power is still to be seen.
  2. The High Level Panel (HLP) on the post-2015 development framework is due to report in May.  Ambition has to be the name of the game, but then so does focus – not easy bed-fellows. The HLP needs to set out a strong narrative for ‘what next’ while treading carefully through the forest of ever more ambitious demands for the post-2015 framework.   The process is riddled with risk and not a small dose of uncertainty. 2013 will need to deliver a stronger sense of direction if the 2015 deadline is to be achieved. ODI is contributing evidence and ideas to help define a possible narrative for post-2015, including being part of a team putting together the 2013 European Report on Development on the topic and a global experiment designed to crowd-source citizens’ views on priorities for a post-2015 global framework.  
  3. Early 2013 will see renewed efforts to agree the EU’s budget for 2014-20. There is already much focus on the size of the budget, and aid watchers are concerned that cuts could fall disproportionately on Europe’s development budget. But new ODI research argues that it is not the volume of spend that matters most for EU citizens or for global development, but the direction of that spending and the distribution of spending across budget headings. What is needed now is a fuller understanding of how the EU budget can help the EU fulfil its role in the global economy in such a way that benefits EU citizens and global development more broadly.
Managing uncertainty remains a big theme for 2013. In 2012 I argued that complexity and uncertainty demand more innovative policy solutions to the shared problems of development, and more innovative alliances to deliver them. The message in 2013 stays pretty much the same. Public- and private-sector actors must find new ways to combine their interests and capacities across multiple domains – economic, social and political – if we are to continue to aspire to better outcomes for all.  Let’s hope 2013 delivers more reasons to be cheerful.