RHSC Financing Mechanisms

Workstream A « Mobilizing Additional Dollars »

Phase I

Dr. Wolfgang Bichmann, KfWConsultant: Sandra Rolet

RHSC MeetingBonn, October 19-20, 2006

SSG focus on “Better $ “ & on “More $”

Origin: Den Haag & Seattle meetings - (Gates Foundation Mercer Study / DFID studies)

Agreement to support further work

Gates Foundation proposed two workstreams, as above

– Gates Foundation pursued “Better $” (McKinsey)– BMZ/KfW offered to support “More $” (This study /

Phase I)

Phase I study - Findings

The specificity of RH commodities supply

Changes on the development finance scene / Possible sources of new finance

Extensive review of “innovative development finance” potentially relevant for RHCS

What it takes for the RHSC to make progress in raising additional $

Specificity of RH Commodity Supplies More at stake than money & …

… Absence of a dedicated global RH instrument …

Pros & ConsCoalition members express reserves

Wide choice of approaches to fit different situations and constraints

Raising large amounts √ Working on small scale Requiring political support √ More “ready to go” Fit for one single situation √ For a larger swat of

countries Feasible for sophisticated, cohesive group of

countries √ Accessible to the poorest

Each solution has its logic, development fit, cost-benefit ratio and specific requirements

It is a time of opportunity for the RHSC

Overall need is there

ODA architecture more “dynamic”

Innovation “in” (2006: Year of the pilots)

New partnership and alliances possible

Before an option can be chosen, a few key issues need resolving 1. Where would the RHSC like this to go: What would

the $ be for? To fill which gap? Objectives need to be narrowed down into a compelling agenda

2. Where would the additional $ go?– To the Coalition itself?– To one or several members?– To one country or to a group of countries?– Elsewhere?

3. Championing the cause: Through which channel would the financing option be pursued? Would the Coalition itself champion the effort?

Suggestion for next steps…

RHSC and SSG to reflect/confirm fundamental strategic choices (Previous slide)

Small ad hoc SSG sub-committee (with financial leaning) to interact with consultant on choice of route to fit these choices

RHSC to pursue short-term opportunities in the meantime (Ex: Air ticket tax)