New Development Actors for the 21st Century / DAVOS 2025

Summary

This discussion at the World Economic Forum focused on new development actors for the 21st century, exploring innovative approaches to aid and development in fragile contexts. The panel included the President of Somalia, representatives from the World Bank, private sector, and philanthropy.

Somalia’s President highlighted the country’s progress in security and economic development, emphasizing the need for infrastructure support and human capital development. The World Bank representative discussed their strategy for fragile and conflict-affected countries, stressing the importance of prevention, remaining engaged during conflicts, and managing transitions. They also highlighted initiatives to connect Africans to electricity and create jobs.

The private sector perspective emphasized the untapped potential of small and medium enterprises (SMEs) in crisis-affected areas, noting their ability to generate employment and provide essential goods and services. The role of philanthropy was discussed as a catalyst for development, with trends pointing towards more strategic and technology-enabled giving.

A major financial institution representative stressed the importance of partnerships between governments, multilateral institutions, and the private sector in enabling economic progress. The discussion touched on the need for sustainable development solutions, the link between climate action and development, and the potential of the African Free Trade Agreement.

The panel concluded by emphasizing the importance of interlinking youth, SMEs, and human capital development to address global challenges and reduce the risk of conflict in fragile contexts. Overall, the discussion highlighted the need for innovative, collaborative approaches to development that leverage the strengths of various actors and focus on long-term, sustainable solutions.

Keypoints

Major discussion points:

– The need for new, innovative approaches to development and humanitarian aid, especially in fragile and conflict-affected countries

– The importance of engaging the private sector, philanthropy, and local entrepreneurs to complement traditional aid

– The critical role of infrastructure, energy access, and job creation (especially for youth) in fostering development and stability

– The potential of technology, impact investing, and blended finance models to mobilize more capital for development

– The challenges of attracting private investment to frontier markets and ways to de-risk and incentivize such investments

Overall purpose:

The discussion aimed to explore new models and actors for development in the 21st century, focusing on how to better leverage private sector resources, technology, and local entrepreneurship to address challenges in fragile states and complement traditional aid approaches.

Tone:

The tone was largely optimistic and solutions-oriented, with participants acknowledging significant challenges but focusing on opportunities and innovative approaches. There was a sense of urgency about the need for new models, but also excitement about emerging possibilities. The tone remained consistent throughout, with different speakers building on each other’s points constructively.

Speakers

– Mirek DuÅ¡ek – Managing Director at the World Economic Forum

– Hassan Sheikh Mohamud – President of Somalia

– Anna Bjerde – Managing Director of Operations at the World Bank

– Badr Jafar – Chief Executive Officer of Crescent Enterprises in the UAE

– Ernesto Torres Cantu – Head of International at Citigroup

Additional speakers:

– Melanie Alva – Member of the Global Shapers community

– Iqbal Dhaliwal – Global Director of J-PAL at MIT

New Development Actors for the 21st Century: Innovative Approaches in Fragile Contexts

This World Economic Forum discussion explored innovative approaches to aid and development in fragile contexts, focusing on new development actors for the 21st century. The panel brought together diverse perspectives from government, international organisations, the private sector, and philanthropy to address the complex challenges facing fragile states and explore novel solutions.

Key Themes and Discussions

1. Economic Development in Fragile States

The discussion began with a focus on the unique challenges and opportunities for economic development in fragile states. Hassan Sheikh Mohamud, President of Somalia, highlighted his country’s progress in security and economic development, emphasising the need for infrastructure support and human capital development. He stressed the importance of shifting the global perspective on Somalia from a security-focused view to one centred on economic development, particularly in areas such as infrastructure, energy, and human capital. President Mohamud also outlined Somalia’s current situation, including the need for investment in key sectors like energy, agriculture, and fisheries, and proposed the establishment of a Somali Development and Reconstruction Bank as a potential hub for investment.

Anna Bjerde, Managing Director of Operations at the World Bank, outlined the organisation’s strategy for fragile and conflict-affected countries, which is based on four pillars: prevention, remaining engaged during conflicts, managing transitions, and mitigating spillovers. Bjerde provided a sobering statistic, noting that by 2030, 60 percent of people in extreme poverty will be in fragile and conflict-affected countries. This underscored the urgency of addressing development challenges in these contexts.

2. Innovative Financing and Partnerships

A significant portion of the discussion centred on the need for innovative financing mechanisms and partnerships to drive development in fragile states. Badr Jafar, CEO of Crescent Enterprises, highlighted the untapped potential of small and medium enterprises (SMEs) in crisis-affected areas, noting their ability to generate employment and provide essential goods and services. He emphasised the importance of creating an enabling environment to attract private sector investment, stating, “The capital is a coward at the end of the day. So absolutely having the right enabling environment, the right legislation, the right networks and finding a number of champions and case studies that will then inspire others and create competition amongst investors to come.”

Ernesto Torres Cantú, Head of International at Citigroup, stressed the importance of partnerships between governments, multilateral institutions, and the private sector in enabling economic progress. He discussed Citigroup’s role in financing for impact, highlighting their work in mobilizing capital for development projects and their commitment to sustainable finance. Torres Cantú drew a powerful historical parallel to emphasise the critical importance of energy for development, stating, “The correlation between development and energy is 100%. You cannot explain the Industrial Revolution without the vapor motor, and that’s where it comes from, and everything that followed after that.”

The World Bank’s Bjerde discussed the potential of impact investing and blended finance models to mobilise more capital for development. She highlighted initiatives such as the World Bank’s ‘Mission 300’ project, which aims to connect 300 million Africans to electricity by 2030, as well as specific programs for vocational training and support for local businesses.

3. Focus on Youth and Job Creation

A recurring theme throughout the discussion was the critical importance of focusing on youth employment and job creation. President Mohamud emphasised the need to engage young people in economic development, while Bjerde outlined World Bank initiatives for education and job creation. Jafar highlighted the role of SMEs in creating employment opportunities, particularly for young people. In his closing remarks, President Mohamud stressed the importance of interlinking youth, SMEs, and human capital development for sustainable growth.

4. Sustainable and Long-Term Development Approaches

The panel agreed on the need for sustainable, long-term approaches to development. Bjerde discussed the importance of building resilience and managing transitions in fragile states, while Jafar advocated for a shift from charity to investing in resilience. The discussion also touched on the importance of integrating climate action with development goals, highlighting a growing recognition of the interconnectedness of climate and development issues in fragile states.

5. The Role of Philanthropy

Jafar provided insights into the evolving role of philanthropy in development, suggesting that “the future of global giving will blur the lines between investment and charity.” He elaborated on this concept, explaining how philanthropic capital can be used to de-risk investments and attract more private sector funding to development projects. This points to an emerging trend in philanthropy that could significantly impact development financing, potentially combining different types of capital (philanthropic, private, public) to address development challenges more effectively.

6. Challenges in Attracting Private Sector Investment

The panel addressed the challenges of attracting private sector investment to Africa, as highlighted by Mirek Dušek at the beginning of the discussion. Currently, Africa receives only 3.5% of global Foreign Direct Investment (FDI). The panelists discussed various strategies to increase this figure, including improving the business environment, developing local capital markets, and leveraging blended finance models to de-risk investments.

Conclusion and Future Directions

The discussion highlighted the need for new, innovative approaches to development and humanitarian aid, especially in fragile and conflict-affected countries. Key takeaways included the importance of partnerships between governments, multilaterals, the private sector, and philanthropy; the need to focus on youth employment, SMEs, and human capital development; and the potential of innovative financing mechanisms like blended finance and impact investing.

The panel also highlighted the Humanitarian Resilience Investing initiative by the World Economic Forum as a potential model for future development efforts. This initiative aims to bring together various stakeholders to develop innovative financing solutions for fragile contexts.

Unresolved issues included how to effectively increase private sector investment in Africa beyond the current 3.5% of global FDI, specific mechanisms to better integrate local SMEs into humanitarian response efforts, and how to ensure long-term sustainability of development projects beyond initial funding.

Overall, the discussion painted a picture of both significant challenges and promising opportunities in development efforts for fragile states, emphasising the need for collaborative, innovative, and sustainable approaches to address these complex issues in the 21st century. The panel noted that by 2024, an estimated 91% of humanitarian funding will be directed towards protracted crises, underscoring the urgency of finding new solutions to long-standing development challenges.

Mirek DuÅ¡ek: Good afternoon, everyone, ladies and gentlemen, friends here in the room in Davos at the annual meeting of the World Economic Forum. Good to see you. I hope you’re well. This session is also live-streamed, so I am greeting everyone who is following us online. I am Mirek DuÅ¡ek

, I’m Managing Director at the World Economic Forum, and it is my pleasure to be spending some time with all of you, but also with our illustrious panel today. In a session we titled New Development Actors for the 21st Century. This is one of our pivotal sessions here in conversations, dialogues at the annual meeting. We are overall gathered here amid quite seismic shifts for the world economy, for the world, if you will. You may know that the theme overall for the annual meeting is collaboration for the intelligent age, where we are pointing to the fact that we are living through quite a unique period of technological advancement and innovation, and of course the opportunities and the risks involved in that, and then we’re also, of course, pointing to the forces of fragmentation that we’re seeing geoeconomically, geopolitically, and also societally in certain corners of the world playing out. So it is in this context that we wanted to look at what it means for development, hence new development, new development actors. As I said, I’ll introduce the panel in just a bit, but just to say that I think you would all recognize that number one, of course, the aid and development model that we’ve had have saved lives and have been very, very important over the past decades. But as we are looking in other areas, how are we more fit for the new reality? We feel it is very important to also be innovative and creative while thinking, how can we make these approaches fit for what is ahead of us? And we do know that of course, in certain instances, it has come short. And for example, one statistic stands out, 91% of humanitarian funding globally in 2024 was going to protracted crises. So we have these protracted crises where societies are either in continuous strive or relapse into strive. So it calls for imagination. It calls for innovation. We also know that with the donor countries, there are political developments, structural shifts. We know that the official development assistance continues to fall short. So the whole point of this session is, we wanna point also to the role of the private sector. We wanna point to the role of philanthropy and how together they can maybe help us think through new models. But I wanted to underscore that of course, we recognize the great work that’s been done by all the stakeholders that have been involved. Ultimately, we just wanted to put on the table, we have $1 trillion, which is the global impact invest market or investing market. So how can we make sure that we’re innovative enough to channel some of that more into societies, into frontier markets, into societies that need it? So this is a conversation, I’ll stop here. I’d like to introduce my panel. I would like to welcome Honorary Hassan Sheikh Mahmoud, President of Somalia. I wanna welcome your excellency. Thank you. Please give him a… Ms. Anna Bjerde, Managing Director of Operations at the World Bank, warm welcome. Badr Jafar, Chief Executive Officer of Crescent Enterprises in the UAE, warm welcome to you. And last but not least, Ernesto Torres, Head of International at Citigroup, warm welcome. I’d like to kick us off with you, Mr. President. Help us understand the situation in your country right now, and particularly on the humanitarian front.

Hassan Sheikh Mohamud: Thank you very much. It is a pleasure and honor to be here in Davos, in general, and providing me this opportunity to share with Somali experience globally. It’s a great opportunity. Somalia is a country that went into a difficult era, but recovering, and recovering very fast. The civil war has ended, the transitional period has ended, and now we are in a fully fledged state, under the challenge of, of course, terrorism and all this. Somalia is a place where the terrorists have been occupying, and since the last two years, we work very hard to liberate a large territory of Somalia, and create a certain hope for the Somali people that they can prevail, the terrorists, and they can… Of course, we are very much grateful for the full support that has been provided to us. Not only working with the security side, but also we focus on building state institutions within a framework of multiple challenges that we are facing. We are very much grateful for that as well. Today, the economy of Somalia has started improving. Our economic development model is a private… driven economy and knowledge-based economic development. So the private sector in Somalia is improving, and the government has done the most important regulatory framework that creates the conducive environment for the private, both local and international, to look into Somalia. So that’s how we’re starting. Now for the first time, the remote or the rural people of Somalia are enjoying to have a digital accessibility and to have public services. We increased the role of the human capital institutions, human capital development institutions in the country, and today we have revitalized the education, both at the local level and the higher education level. So the country is now moving towards that direction. Challenges are still there. Infrastructure is still a big challenge to the economic recovery. Some parts of Somalia, still security is not the way we would have liked to see, but most of Somalia today is stable. Institutional building is also another challenge. Reconciliation is parallel going on. So we have all the up and downs of a fragile status, but the last two years we have made a lot of progress and improvement. Our GDP has been growing 4% every year, and we have cleared, we got out of the debt clearance with the support of, of course, the international partners, IMF, World Bank, and European Union, and all can support Somalia. Now Somalia is free from debt, and we have so many other sanctions and embargoes that have been imposed on Somalia during the difficult era. We cleared Somalia, all of these embargoes and sanctions and debt and everything. Now Somalia is free. is a normal country that’s playing a major role in regional economic integration of the whole of Africa. So that is the reality on the Somalia of today.

Mirek DuÅ¡ek: Thank you so much. Could I ask you, if you were to, for people in the room, but also for people that are watching us, what are the things that Somalia would need more that you’re not seeing right now, either from the multilateral system or from other actors?

Hassan Sheikh Mohamud: Well, many partners and many people in the world, Somalia looks in the lenses of security only, since the terrorists were there for a long time. But the reality is different. Now, the lenses of, that we wanted the world to look into Somalia is lenses of economic development. And for economic development, infrastructure is very important. Energy is very important. Human capital is very important. These are the areas and the issues that Somalia is focusing now. So that will help, even if the country, the whole thing is interlinked. And the nexus, the bottom of the axis of this interlinked is the economy. Security, if you want security, you cannot make, close to 70% of the population are young people, below 30 years old. So imagine this massive part of the population, if they have, if they don’t have a gainful employment, public, private, whatever it is, then the option is the devil, the evil actors will attract them. And so what we are trying is that to create opportunities for the young people so that they can join the mainstream of the state building of the economic recovery through that lines. So the most important thing for Somalia is economic infrastructure support and human capital development support. Of course, infrastructure is not only parties. highways, airports, but also energy is very important. As of now, we are, energy is one of the challenges that we have when it comes to economic development. Somalia has ample of natural resources, but Somalia has no, the financial capacity to invest, and in many areas, the know-how to use those natural resources. So these are the areas that we are focusing right now. Investment, attractiveness.

Mirek Dušek: Mr. President, just a very short follow-up before I go to Anish, we also have an initiative around it at the World Economic Forum, we call it Humanitarian Resilience Investing, and there we are really trying to see how we can connect better local entrepreneurs with impact investor, with development organization, with humanitarian organizations. What would be your advice if there are entities out there that wanna connect with your young entrepreneurs? Are there certain mechanisms that are already set up in your country where they can do that? Yes, there are a lot of private organizations that work in that, bank is other institutions, but the major one that we want to be the hub

Hassan Sheikh Mohamud: for this issue is the Somali Development and Reconstruction Bank, which is now active, which provides all the facility engaging the young people, the entrepreneurs for minimum investment and loans and all this. So what we would like is the world to focus and invest on the Somali Development Bank so that the bank covers, engages the young generation for their own gainful employment. That is where the humanitarian, yes, always Somalia has been in a humanitarian situation for the last couple of decades, but that cannot continue as of now, even we’re feeling the kind of fatigue. that has many donors on Somalia when it comes to humanitarian. So what we wanted the world to focus, yes, humanitarian is very important, but what we wanted the world to focus, and our expectation is that since a large part of Somalia is now free from the terrorists, what we are expecting is that the productivity of Somalia will increase, particularly in the agriculture and in the blue economy, whereby focus has been put on that two areas as food security areas. But the most important is engaging the young people and giving them an opportunity to contribute to the economic development and reconstruction of Somalia. So the Somali Development and Reconstruction Bank is the hub that is facilitating all these investments. Thank you so much.

Mirek DuÅ¡ek: Thank you. Turning to Mrs. Bjerde, Managing Director of Operations at the World Bank, but also leading the delegation from the World Bank at the annual meeting. First of all, congratulations on the latest IDA. I know you’ve had a big involvement. It’s a big, big milestone, very important. And I know overall you are the pivotal person in terms of how you work on countries that are experiencing fragility, conflict and violence. And I mentioned at the beginning, of course, there’s been a lot of great work done in the past, but I know your institution is very much on the front foot thinking about the future. If you could just share with us a little bit of that thinking. Thank you. Yes. No, thank you so much.

Anna Bjerde: And great to be with you. So indeed, working in fragile and conflict affected countries for us is not really optional. First and foremost, we have a new vision and mission at the World Bank, which is to end poverty on a livable planet. And we have to recognize, I think the number we’ve been using is that by 2030, all the poor people, the extreme poor, 60 percent will be in fragile and conflict affected countries. We’re actually revisiting those numbers now. slightly, it could be even higher. But we also have overlaps with so many other challenge. For example, nine out of 10 countries where the largest number of population face food insecurity is in FCV countries, Fragile and Conflict Affected Countries. And also 15 out of the 25 most climate vulnerable countries also happen to be Fragile and Conflict Affected Countries. So in many ways for the World Bank Group to do its job, we absolutely have to be in this space. So for us, it’s our business model is to be there. We have a strategy that has four pillars. And this is a strategy that is now in its fifth year of implementation. We will be renewing this strategy this year. And we’re learning a lot over the last few years, which have been really, really difficult on many, many countries. But the strategy comprises, the first pillar is really to work on prevention. And that deals with some of the issues His Excellency raised, which is if you have a large part of your population comprising youth who are unemployed, that’s a vulnerability. If you have inequality in your country, regionally, geographically, between different groups, that’s a actually vulnerability of fragility. And lack of infrastructure and services also deprives people of being able to prosper in life. And that’s another route. Of course, there are cross-border conflicts. There’s also a huge impact from natural resource management, but prevention is really important. Understanding the drivers of fragility is really important. I would say this has been the most difficult part of our strategy to really do well. And we’re really trying to learn and see how do we make sure that we can really double down on this working countries upstream to be able to preempt and anticipate. Second area is on remaining engaged. And this has been so game-changing for us because it used to be that. When a war or a conflict erupted, the World Bank would sort of say, look, when it’s over, we will help you with reconstruction. Well, we found you cannot do that. So some years ago, we said we just have to remain engaged. We have to help countries through this difficult time. And that meant working with others. It meant working closely with the government, local communities, to really make sure that we don’t erode human capital further. We don’t erode institutions further. And that people in great numbers leave the country and you have brain drain, because then the reconstruction work becomes so much more difficult. And of course, poverty is impacted. The third has been to really try to help countries manage through transitions, which is very important because you get peace, you get ceasefire. But how vulnerable is it? And how likely is it that you will fall back into conflict? So managing transitions is something that we’ve also focused on. And then trying to work on limiting spillovers of conflicts to neighboring countries. This has been really important. And I think what we have really found is that you have to work in a true partnership with others. We cannot do it alone. So we have really benefited from working with CSOs, both international and local. We have benefited from working with UN agencies. And we have benefited, of course, from partnering with the government, both national and local, and really listening to the citizens. That’s been very, very important. So there’s a lot to be learned here. It’s very difficult, but this is the world that we’re in. And we have to make sure that we work together to, in many ways, scale up what works, double down on issues that are difficult, like prevention, and make sure that we go forward understanding that there’s a huge overlap when it comes to economic development, prosperity, and poverty reduction, and managing countries that are fragile. Thank you so much.

Mirek DuÅ¡ek: Could I, just as a follow-up question, you mentioned managing… transitions and you also mentioned young people. Could you mention a few tools or mechanisms that you have for that? So I think the most important part for young

Anna Bjerde: people is of course education. We see a lot of interest across the continent of Africa right now in vocational training because people want to have the readiness of skills that match the job market. So we’re looking also how do we increase our investment in vocational training. I think the second thing is to really support local businesses and entrepreneurship because at the end of the day the jobs are created to a large extent by local firms and we see that sometimes up to 60-70% of new jobs come from SMEs. So it’s incredibly important to support those and what we also find is that often small companies, very small companies start but they don’t grow and when they have to close down the jobs are lost. So we want to also see growth in jobs that’s very important and then of course I find it very very important that we focus on things like enabling. So digital services, energy services, basic infrastructure services. Without that it’s very hard to imagine a world where people can secure jobs and have dignified jobs. I will mention just two initiatives that we’ve launched that I think also speak to His Excellency’s point. One is something called Mission 300 which is our ambition with partners and with countries to connect 300 million Africans to electricity who are today not connected. We have set this goal by 2030. It’s going to be very difficult but we like difficult things because it makes us focus and the IDA that you mentioned will help so much. We’re very happy about that and the other is that we have created a council for jobs because we really need to understand how we can accelerate the creation of jobs and what we have learned over the years and we actually… We see that in many ways the access agenda on electricity is also very linked to jobs because the off-grid, the distributed renewable energy component of our plan actually does end up creating quite a few local jobs. So we’re excited about this, but we need everybody in. So join us in Mission 300 and focusing on jobs.

Mirek DuÅ¡ek: Thank you. No, thank you. It’s a very important project. Very excited about it. Speaking of Africa, I just have one more thing, which I hope you don’t mind me asking. We look, for example, here specifically for Africa, only 3.5% of global foreign direct investment is going to Africa. Less than 2% of global venture capital goes to Africa. IFC, your private sector arm, I’ve met them many times and of course others. There is, of course, always this dialogue with the private sector and how can we crowd in more private sector capital. I do also talk to investors and sometimes there is this, at least from that side, there is this, we don’t speak the same language. Any ideas, you’ve been at it for a while, any ideas how we can actually finally crack that and really unleash more private sector capital through those partnerships with development banks?

Anna Bjerde: Yeah, it’s a great point. The World Bank Group, through the International Finance Corporation, is actually the largest multilateral development institution when it comes to private investment into Africa. I think IFC, the International Finance Corporation, provided about seven billion into the private sector in Africa in our previous fiscal year, fiscal year 2024. But it does require certain prerequisites, if you will, really increase that and what we have seen is that a lot of investors of course are wary about regulatory and policy uncertainty even for this mission 300 program and project we have that’s really the starting point in order to step up investment so it’s very important to work together with government and for government really to put in place those regulations that will help provide the certainty outlook for the investors to feel like there’s an environment to invest in that is somewhat predictable so that’s one important point having said that even when you have that de-risking is very important and de-risking we can do through a number of different ways blended finance sometimes to buy down the cost we have guarantees that we can use both political risk insurance but also project-based guarantees so that investors feel there’s a fallback opportunity should they need it and then we have something under IDA which is very important which is the private sector window and we have provided support to about close to 300 projects now in 50 different countries using the private sector window of IDA which is resources under IDA that go to IFC and MIGA in our institution so that they can actually provide support so that lower-income countries and the poorest countries around the world can attract and benefit from the role of the private sector so yes difficult certain prerequisites and then we need tools and

Mirek DuÅ¡ek: instruments to make sure that we even entice the private sector even more at the end of the day I also think it’s important to focus both on international but also very much the local private sector yes and I do think there are many countries in Africa that have that dynamism in the form of local entrepreneurship local interest to invest and they know the community so well so they also know what the customers really need thank you so much brother Jafar if I could turn to you speaking of entrepreneurship smaller companies. You are, you have been throughout the years a big advocate

Badr Jafar: around impact entrepreneurship and you’ve also recently been publishing specifically on the role of small businesses in crisis afflicted situations, economies. Tell us more about why you think this is important. So thank you Marek and congratulations really to the Forum for really starting this initiative, this humanitarian and resilience investment initiative. I know it’s already bearing fruit and I’m sure it will continue to grow. If I may just answer the last question that you asked my fellow panelists. I mean we, we are, as Crescent Enterprise we have a number of different operations and different platforms, ports, logistics, healthcare. A number of years ago we set up a venture capital platform. We’ve invested now so far over 500 million dollars in different parts of the world. I think the excuse that you’ve heard from some people that they don’t speak the same language is total nonsense. I don’t speak Hindi or Mandarin and we’re investing in India, we’re investing in China. That’s not what they meant. But even that, I understand. But going back to what you actually meant, the enabling environment, that’s extremely important. I have no doubt that there are incredible entrepreneurs across Africa. We invest in North Africa but not in sub-Saharan Africa and again the opportunity is that these entrepreneurs and these, you know, social entrepreneurs are closest to the challenges that they’re trying to address. The, the, the capital is a coward at the end of the day. So absolutely having the right enabling environment, the right legislation, the right networks and finding a number of champions and case studies that will then inspire others and create competition amongst investors to come. And I hope at some point soon we see that tipping point, everybody crowding in capital investment, really investments, not charity, but investments into Africa. Going to your question, which is predominantly I imagine about humanitarian situation, before I zoom into the role of the private sector. Useful to set some context. So today, more than 300 million children, women and men are in desperate need of humanitarian aid. OCHA estimates, as you mentioned, the average duration now of a humanitarian crisis is over 20 years. So this is almost a whole generation. And last year, less than 40% of humanitarian appeals were met. Less than 40%. Now, looking at the role of business, nine years ago now, when I was asked to join the Secretary General’s high-level panel on humanitarian financing, the percentage of engagement in meeting appeals, percentage of engagement by business in meeting those appeals was less than 5%. Today, nine years later, it’s less than 5%. Now, why so stubbornly low? I think there are three key challenges that existed nine years ago, still exist today, maybe improved slightly in some areas, but still, to a large extent, exist today. The first is the politics of the crisis. At the turn of the century, humanitarian crises were roughly evenly split between natural disasters and human conflict. Today, the vast majority of appeals are for human conflict situations, which inherently are very political in nature, which scares business away. And I think the governments can do a lot better job of actually guiding businesses and private investors as to how to engage and invest and donate as required to these situations. The second is still, I believe, despite the incredible work that the humanitarian system does, there’s still no clear platform for business to invest and to engage beyond just writing a check. So the humanitarian sector has still not done a good enough job, as the numbers show, of really engaging business for what they’re good at doing, beyond giving money, but for their skills, for their capacity, for their networks, for their innovation that they bring along. And this is a massive untapped opportunity. And the third, more broadly, is we have to move the overall narrative. again, from charity to investing in resilience. And I think once we do, we’ll see more capital, more real investment capital crowded. On the role of SMEs, obviously have, or maybe not obviously to some, but I’m very convinced that they have a transformative potential in addressing crises and building resilience. They make up over 90% of businesses globally in many developing and frontier markets. They generate up to 80% of formal jobs, and they are closest to the communities that are being affected. And the most important thing that small businesses and micro enterprises in these disaster zones can do is to get back up and running, to create the important and generate the important goods and services. And of course, the all important employment that we’ve just touched on. But today, I think there is SMEs are underutilized in the humanitarian system. And in some cases, humanitarian aid unintentionally makes it actually much more difficult for SMEs on the ground. When you flood, and this of course, isn’t across all situations, but there are many situations over the last few decades that we’ve seen where you flood free goods into a market, and without procuring from the local businesses, you actually harm those businesses. And you create these situations of perpetual dependency, which is why we’ve seen to some extent these humanitarian situations lasting for decades. The UAE takes a lot of these challenges very seriously. It is, as you know, today, one of the largest donors on a per capita basis. And more recently launched Earth Zayed, which really consolidated many of the existing humanitarian and development institutions and organizations in the UAE and in Abu Dhabi to make sure that we have better connectivity and efficiency, but also to better engage business sector and individual donors in the country. And we’ve also established the International Humanitarian and Philanthropic Council under… and that’s again to try and make sure that we are much more strategic in the way that we work together across sectors and of course across geographies. No, thank you and I think to your point on I think what IFC calls creating markets still,

Mirek DuÅ¡ek: I think that’s when I saw when IFC started doing that, I think that that’s very important working with startups and SMEs, funnel funds trying to really make sure and so as you said you’re doing similar things in North Africa, but you’ve also been very active in the role of philanthropy and so you mentioned capitalist coward and of course philanthropy if combined with other instruments can be that additional lever that we can use to really make an impact in fragile context as well. So any ideas though, it hasn’t been deployed as much in those environments yet, any ideas how we could turbo charge that? Yeah, I still and have for a while referred to philanthropy as a forgotten child of the capital system.

Badr Jafar: In many parts of the world it’s seen as playing on the peripheries and in some parts of the world it’s regarded with a high degree of suspicion, but philanthropy is not small, it’s large. Totally estimates are that anywhere between one and a half to two trillion dollars of philanthropic capital are dispersed. Closer to home if you look at examples like Islamic almsgiving across of course the Islamic world, majority of which is outside the Middle East, between zakat which is compulsory almsgiving and sadaqah, which is discretionary almsgiving anywhere between 400 billion to a trillion dollars a year is dispersed. At the lower end of that estimate that’s more than the total humanitarian and development aid budgets globally every year. So it’s not small money. The more exciting part of it is the quality of this capital. It can be, as you mentioned, more nimble, more risk tolerant, more equitable in its deployment. And this is why it’s often referred to as catalytic capital. Because in combination with business and government, it can help to create and generate that multiplier effect. Now, we see three trends that I think are all positive for the deployment of more strategic philanthropic capital. The first being this largest intergenerational wealth transfer that we’re seeing, that we’re witnessing. Estimates keep going up. The last I heard was $90 trillion expected to be transferred to the next generation within the coming two decades. And to my second point, this new generation are more. And evidence shows that they are more demanding of impact. They are more demanding of transparency and accountability. They’re more attuned to the interconnectedness of our crisis. And also, and to the third point, they’re better at using technology. And the third trend is that technology is, again, disrupting this space as it is with others. AI, obviously, now is able to collate and analyze data a lot more quickly and generate also insights, which are very important for philanthropic investors to better strategically engage their philanthropic capital. And I think technology overall is moving philanthropy from a one-to-many model, where a very wealthy individual would give to multiple causes or projects, to a many-to-one model, where now, using technology and these digital platforms, many individual donors, hundreds, in some cases, thousands, or even millions of donors can donate relatively small amounts of money towards a single cause or project. So I think this all bodes very well for strategic philanthropy. Again, I think the UAE has ambitions to become a hub of sorts for philanthropic capital. It’s seven hours. from two-thirds of the world’s population. It is deploying extensive amounts of capital in innovation and including, of course, in AI. And I think it has a great track record of helping to convene diverse voices from North, South, East, West to work together. Finally, I’ll just say that I think the future of global giving will blur the lines between investment and charity. And I think that that, again, bodes well for helping to see more private sector actors engage, which is, again, critical if we’re gonna move from the billions that we have today to the trillions that we need to address our global challenges and meet the SDGs in five years.

Mirek DuÅ¡ek: Thank you very much, Badr. I should have also mentioned that you are an official ambassador for these efforts in addition to being a CEO of your company. So thank you. Moving to Ernesto Torres at Citi. First, if you could, a major financial institution, obviously. What is your institution doing in terms of financing for impact? How are you aiding some of the other efforts that we’ve heard about with your work? Thank you.

Ernesto Torres Cantu: Thank you, Mirek. And we’re very glad to be here with all of you in this very important matter. And you framed it at the beginning rather well. In the 2015 Financing for Development Forum, it was spoken about turning billions into trillions. And the fact of the matter is, the number that we are at is the 4% that you quoted in terms of private assets going to emerging markets. That’s really where we are at. It is not an issue of money. There is plenty. There is abundant money in. in the world, looking for appropriate returns, et cetera, and where and how to invest. The way we see it working is – and to the point Your Excellency was making at the beginning – you know, you have the government and multilateral institutions, and also a particularly direct aid, and then you have private equity in terms of order, and then commercial banks come in. What works best is when these three work as partners. That’s the best results we’ve gotten. We do a lot of things with the World Bank and with many of our clients globally. We are, as you know, present in 95 countries in the world, directly with operations in the ground with local banks. We do business with another 60 countries, obviously. But that puts us in a very good position to partner with our clients and with all these multilateral institutions to achieve the better results. Aid has, particularly humanitarian aid, a very specific role, but what we’re talking about more is how do we enable economic progress. And that’s beyond humanitarian aid. And that’s what really we’re concentrated on. And I can give you several examples, but one example very clear is, for example, local currency lending, which we do with the IFC, by the way, which eliminates the FX risk in the country, which is not a minor thing, and we’re able to do that. to do it because we have that local funding. And several examples, this one recently of expanding the digital infrastructure in Kenya, for example, now $70 million. Or a 130 million securitization for Sun King solar energy that gives energy to more than a million households. Those kinds of projects that actually do turn into enabling economic progress is what we’re very much promoting. In the case of Africa in particular, Your Excellency, the project, you’re totally right about energy. The correlation between development and energy is 100%. You cannot explain the Industrial Revolution without the vapor motor, and that’s where it comes from, and everything that followed after that. The other project, particularly to Africa, that we’re very excited about, and I think we should all make the effort to make it work is the African Free Trade Agreement. That’s right. Only less than 15% of the trade of African countries is within Africa, even your neighbor. Many countries export more to Europe than they do to the country right next to it. And that just, and frankly, in a world where we’re coming into more barriers to trade, the creation of that free trade agreement in Africa and what it can and should enable is something that we all should pursue aggressively. Thank you.

Mirek DuÅ¡ek: Thank you so much. few minutes left and maybe if you don’t mind Mr. President I could come to you at the end for some reflections but before I do that anyone wants to come in with one or two questions or comments so we have a microphone so I have the lady there and the gentleman there and then we will close with the mr. president

Audience: hello thank you so much my name is Melanie Alva I am part of the global shapers community so my question is a following how can we ensure or how can these investments in in frontier markets be designed in a way that they truly contribute to long-term economic growth for these local communities and not the short-term gains that sometimes make you be dependent on foreign funds thank you so much and we will collect it also then from the gentleman there hi I’m Iqbal Dhaliwal the global director of J-PAL at MIT so question is for you and like the new president of MIT well now not not new anymore but Ajay came in because the US wanted the World Bank to focus much more on the climate agenda and like you said the mission is now much more driven by climate with the change in the Trump administration how do you see the World Bank kind of sticking to that agenda or facing pressure to get rid of the climate the US pulled out of the Paris

Anna Bjerde: agreement today and then do you foresee any pressure on Ajay now thank you so much and I’ll let you answer if anyone wants before I go to mr. president very good thank you so first to the question on how do you make sure you get long-term gains from the development interventions I think it really comes down to one word and it’s sustainability and that’s sustainability in many ways is multifaceted you know it’s it’s very tempting sometimes in very difficult situations to think about things like handouts, cash transfers, social safety nets, and we do a lot of those, and they’re good, but I like them the most when they’re combined with livelihood and revenue-generating opportunities. And many times when I meet beneficiaries of our programs, they love it the most when they have been able to set up, let’s say, their own shop or their own little company or it can be a woman who is able to do some small businesses by having a collective in a community and they’re selling and generating revenues and then they’re investing back into the company and they’re employing people. Even if it’s small, it’s a sustainable solution in my view. The second, when it comes to sustainability, is also that there is cost recovery in projects. Take an infrastructure project. You may initially need to have some subsidies to make it come off the ground, but over time it’s very good when it can see that it can pay for itself because then you keep seeing investments go into it, you see maintenance and operation go into it, and the project lasts for a longer time. So I’m very focused on making sure when we do our assessments that there’s sustainability assessment analysis, and if it needs startup capital and it takes a little bit of time, I think that’s okay, but I want to see at which point do we reach sustainability. On the question of climate, I think we at the World Bank recognize very strongly that there’s a close link between climate action and development. We have some years ago started developing an analytical piece of work called Country Climate and Development Reports, and they really combine the opportunity for countries to generate more economic growth, but at the same time take climate action. And what these reports have found is that they’re not mutually exclusive. You can actually do both. In fact, they require both. So, I think in many ways, we have the analytical and the technical evidence base to be able to pursue this. And many countries around the world who have launched these reports with us are implementing these types of reforms now. And we’re all very focused on making sure countries can grow faster, have attained higher growth because growth, while it has stabilized, it’s too low, it has not recovered to pre-COVID level. So, we believe there’s a strong development rationale to continue to focus on climate change. We have also seen that our investments in climate has actually increased over the years for projects that allow communities, allow countries, again, to grow, create jobs at home, attract investment, and make sure they build resilience through adaptation measures. And I’ll just answer your specific questions with the following. In the last 10 years, so if you look back from 2015 to 2025, we have steadily increased every year our annual commitments to climate action, including during the previous administrations that have changed over time in the U.S. And I think we have done that successfully by investing in good projects for economic growth, for creation of local jobs, and for building resilience in countries. Thank you so much. We are at time. I’d like to give the floor to Mr. President just for final reflections before we close.

Hassan Sheikh Mohamud: Thank you very much. First of all, what has been said on both sides, on the philanthropy side and the multilateral side, the only thing that we need is how we can make them join together to move for the betterment of the world economy. I would like to conclude that our success will mainly depend on how we interlink the youth, the SMCs, and the human capital development. Then the rest will be easy for the infrastructure, the energy, the other things come. But even if we build the infrastructure and develop the energy without having a… a properly oriented and skilled youth, and the necessary environment, which is the SMECs that can employ them fully, that reduces the risk of conflict, the risks that emanate from the fragility. So I think the both sides, if we get together and move towards that direction, it will change the challenges that the world is facing today. Perfect message. Thank you. Thank you so much. Thank you for the discussion today. Just to say that the World Economic Forum will, of course, continue with our work around the Humanitarian Resilience Investing Initiative.

Mirek Dušek: Thank you. Thank you very much. Thank you. Thank you.

Agreement Points

Importance of economic development in fragile states

speakers

– Hassan Sheikh Mohamud
– Anna Bjerde
– Badr Jafar
– Ernesto Torres Cantu

arguments

Somalia’s economic recovery and development needs

World Bank’s strategy for fragile and conflict-affected countries

Role of private sector investment in development

Importance of infrastructure and energy for economic growth

summary

All speakers emphasized the critical role of economic development in fragile states, highlighting the need for infrastructure, energy, and private sector involvement to drive growth and stability.

Focus on youth employment and job creation

speakers

– Hassan Sheikh Mohamud
– Anna Bjerde
– Badr Jafar

arguments

World Bank initiatives for education and job creation

Role of SMEs in creating employment opportunities

summary

Speakers agreed on the importance of focusing on youth employment and job creation, particularly through education, vocational training, and support for SMEs.

Need for innovative financing and partnerships

speakers

– Anna Bjerde
– Badr Jafar
– Ernesto Torres Cantu

arguments

Potential of impact investing and blended finance

Strategic use of philanthropy as catalytic capital

Partnerships between multilaterals, governments and private sector

summary

Speakers agreed on the need for innovative financing approaches and partnerships between different sectors to mobilize capital for development in fragile states.

Similar Viewpoints

Both speakers emphasized the importance of long-term sustainability in development efforts, advocating for a shift from short-term aid to investments that build resilience and self-sufficiency.

speakers

– Anna Bjerde
– Badr Jafar

arguments

Ensuring sustainability in development projects

Moving from charity to investing in resilience

Both speakers highlighted the critical role of infrastructure, particularly energy, in driving economic development and recovery in fragile states.

speakers

– Hassan Sheikh Mohamud
– Ernesto Torres Cantu

arguments

Somalia’s economic recovery and development needs

Importance of infrastructure and energy for economic growth

Unexpected Consensus

Integration of climate action with development goals

speakers

– Anna Bjerde
– Badr Jafar

arguments

Linking climate action with development goals

Moving from charity to investing in resilience

explanation

While not explicitly discussed by all speakers, there was an unexpected consensus between Anna Bjerde and Badr Jafar on the importance of integrating climate action with development goals. This consensus is significant as it highlights a growing recognition of the interconnectedness of climate and development issues in fragile states.

Overall Assessment

Summary

The main areas of agreement included the importance of economic development in fragile states, the need for innovative financing and partnerships, and the focus on youth employment and job creation. There was also consensus on the need for long-term sustainability in development efforts and the critical role of infrastructure and energy in driving growth.

Consensus level

The level of consensus among the speakers was high, with significant agreement on key issues. This consensus implies a shared understanding of the challenges facing fragile states and the potential solutions, which could lead to more coordinated and effective development efforts. However, the discussion did not delve deeply into potential disagreements or challenges in implementing these shared ideas, which may require further exploration.

Different Viewpoints

Approach to development in fragile states

speakers

– Hassan Sheikh Mohamud
– Anna Bjerde

arguments

Somalia’s economic recovery and development needs

World Bank’s strategy for fragile and conflict-affected countries

summary

While President Mohamud emphasized immediate economic development needs in Somalia, particularly in infrastructure and energy, Bjerde outlined a broader, long-term strategy for fragile states that includes prevention, engagement during conflicts, and managing transitions.

Unexpected Differences

Overall Assessment

summary

The main areas of disagreement were centered around the specific approaches to development in fragile states and the role of different actors in the development process.

difference_level

The level of disagreement among the speakers was relatively low. Most differences were in emphasis and approach rather than fundamental disagreements. This suggests a general consensus on the importance of development in fragile states and the need for innovative financing solutions, but with varying perspectives on implementation strategies.

Partial Agreements

All speakers agreed on the importance of private sector involvement in development, but had different approaches. Bjerde focused on de-risking investments and using blended finance, Jafar emphasized creating an enabling environment, while Torres Cantu stressed the importance of partnerships between different sectors.

speakers

– Anna Bjerde
– Badr Jafar
– Ernesto Torres Cantu

arguments

Potential of impact investing and blended finance

Role of private sector investment in development

Partnerships between multilaterals, governments and private sector

Similar Viewpoints

Both speakers emphasized the importance of long-term sustainability in development efforts, advocating for a shift from short-term aid to investments that build resilience and self-sufficiency.

speakers

– Anna Bjerde
– Badr Jafar

arguments

Ensuring sustainability in development projects

Moving from charity to investing in resilience

Both speakers highlighted the critical role of infrastructure, particularly energy, in driving economic development and recovery in fragile states.

speakers

– Hassan Sheikh Mohamud
– Ernesto Torres Cantu

arguments

Somalia’s economic recovery and development needs

Importance of infrastructure and energy for economic growth

Key Takeaways

New approaches and actors are needed to address development challenges in fragile states

Partnerships between governments, multilaterals, private sector and philanthropy are crucial for effective development

Focus on youth employment, SMEs, and human capital development is key for long-term economic growth

Sustainable development requires balancing economic growth with climate action

Innovative financing mechanisms like blended finance and impact investing can help attract more private capital to developing countries

Resolutions and Action Items

World Bank to renew its strategy for fragile and conflict-affected countries this year

Continue efforts to implement the African Free Trade Agreement

Expand World Bank’s ‘Mission 300’ initiative to connect 300 million Africans to electricity by 2030

Unresolved Issues

How to effectively increase private sector investment in Africa beyond the current 3.5% of global FDI

Specific mechanisms to better integrate local SMEs into humanitarian response efforts

How to ensure long-term sustainability of development projects beyond initial funding

Suggested Compromises

Balancing immediate humanitarian aid with long-term development investments

Combining cash transfers and social safety nets with livelihood and revenue-generating opportunities

Allowing for initial subsidies in infrastructure projects while aiming for eventual cost recovery and sustainability

Now, the lenses of, that we wanted the world to look into Somalia is lenses of economic development. And for economic development, infrastructure is very important. Energy is very important. Human capital is very important.

speaker

Hassan Sheikh Mohamud

reason

This comment shifts the perspective on Somalia from a security-focused view to one centered on economic development, highlighting key areas for investment.

impact

It reframed the discussion around Somalia’s needs and potential, leading to more specific conversations about infrastructure, energy, and human capital development throughout the session.

By 2030, all the poor people, the extreme poor, 60 percent will be in fragile and conflict affected countries.

speaker

Anna Bjerde

reason

This statistic provides a stark illustration of the link between poverty and fragility, underscoring the urgency of addressing these issues.

impact

It set the tone for discussing the World Bank’s strategy in fragile states and led to a deeper exploration of the interconnections between poverty, climate vulnerability, and food insecurity in these contexts.

The capital is a coward at the end of the day. So absolutely having the right enabling environment, the right legislation, the right networks and finding a number of champions and case studies that will then inspire others and create competition amongst investors to come.

speaker

Badr Jafar

reason

This comment succinctly captures the challenges of attracting investment to developing markets while also suggesting solutions.

impact

It sparked a more nuanced discussion about the role of government policy, success stories, and competition in attracting private sector investment to challenging environments.

I think the future of global giving will blur the lines between investment and charity.

speaker

Badr Jafar

reason

This insight points to an emerging trend in philanthropy that could significantly impact development financing.

impact

It led to further discussion about innovative financing models and the potential for combining different types of capital (philanthropic, private, public) to address development challenges.

The correlation between development and energy is 100%. You cannot explain the Industrial Revolution without the vapor motor, and that’s where it comes from, and everything that followed after that.

speaker

Ernesto Torres Cantu

reason

This comment draws a powerful historical parallel to emphasize the critical importance of energy for development.

impact

It reinforced the earlier points about energy infrastructure and led to a more focused discussion on specific energy projects and their potential impact on development.

Overall Assessment

These key comments shaped the discussion by shifting the focus from traditional aid models to more innovative, multifaceted approaches to development. They highlighted the interconnectedness of various development challenges (poverty, fragility, climate, energy) and emphasized the need for collaboration between different actors (governments, multilateral institutions, private sector, philanthropy). The discussion evolved from identifying problems to exploring specific solutions and new models of development financing and implementation.