INNOVATION IN DEVELOPMENT:THE POWER OF ALLIANCE BUILDING

Office of Global Development Alliances
January, 2007

The principal US Agency for development
and humanitarian assistance
Provides nearly $16 Billion in annualdevelopment assistance1U.S. Total Flows to the Developing World in 2005:$150 BN

U.S. Public Flows
18%

U.S. Private Capital Flows
to the Developing World(FDI and Net CapMarkets)
46%
U.S. Other Private Flows
36%

Source: Bureau of Economic Analysis; Conference Board; Foundation Center; Faith Based Groups; World Bank; and USAID Internal
Estimates

January 2007

U.S. Total Flows to the Developing World in 2005:$150 BNU.S.
Government
Official
Development
Assistance
10%

U.S. Private Capital Flows
to the Developing World(FDI and Net Cap
Markets), 46%

U.S. Government OfficialDevelopment Assistance(Iraq and Afghanistan)
8%

U.S. Foundation Giving
Abroad3%
U.S. Corporate
Foundation Giving
Abroad*1%
U.S. NGO Grants Abroad
4%

Personal Remittancesfrom the U.S. to theWorld***, 21%

U.S. Based Religious
Organizations**
5%
U.S. Universities andColleges
1%

Source: Bureau of Economic Analysis; Conference Board; Foundation Center; Faith Based Groups; World Bank; and USAID Internal Estimates* Reflects only donations over $1 million.
** Numbers are for 2003. Numbers for 2005 are expected in the first quarter of 2007.
*** Accurate numbers on remittances flows are impossible to obtain due to the large degree of informal flows and problems in reporting. This number reflects BEA
estimates of US remittance flows to the entire world.

January 2007

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Why a Partnership Model?

Respond to a changing global
environment
Increase development effectivenessLeverage additional resources fordevelopment activities

Results to Date400 Alliances since 2001
More than 1500 distinct partners
USAID investment: $1.4 BillionPartner Resources invested: $4.6 Billion

3What is an Alliance?

A public-private alliance is a type of Public-Private
Partnership which:• Jointly defines a development problem and its solution• Values shared resources, risks and rewards• Engages new partners and/or traditional partners• Uses new innovative approaches• Entails significant resource leveraging (>1:1)

GDA: Model for Development

Universities

PublicDonors

PrivatePhilanthropy

Investors

MultinationalCorporations

National
Governments

Alliance

NGOs

Regional
Multinationals
LocalBusinesses

Contractors

4Mutually Beneficial Alliances
USAIDPartner•

Funding•

Funding•Development expertise•Markets and purchasing power•

Long-term in-country presence••

Network of local and globalpartners

Activity design better connected
to market realities••

Policy influence

Technology and intellectualproperty•

Skills, services and expertiseInnovative Lending for Sustainable Coffee• Goal:– Multi-million dollar sustainable producer cooperative inventory financing
fund, or consortium of funds. The funds will promote growing sustainable
coffee by significantly increasing working capital financing for developing
country sustainable coffee producers.

• Partners:––––•Green Mountain Coffee Roasters
EcoLogic Finance
Starbucks
Enterprise Ventures (EEV)

Funding:– $2.4 million total– USAID: $1.2 million– Other partners: $ 1.2 million

5Chevron• Goal:– To help Angola recover from its 27-year civil war with local
business development, recovery of the agricultural sector,
promoting peace and security, and resettling ex-combatants anddisplaced Angolans by:
1) Development of small and medium agribusinesses; 2)
microfinance lending program; 3) enterprise developmenttraining facility;• Partners:– Chevron• Funding:– $20 million total– USAID: $10 million– Chevron: $10 million

Continuous Improvement in the Apparel Workplace• Goal:– to increase the competitiveness of the apparel and textile industry
by improving labor standards at the workplace level• Partners:– Gap Inc., Timberland, Limited Brands,
DAI, Social Accountability International,International Textile, Garment andLeather Workers’ Federation• Funding:– $3.2 million for 2 years– USAID: $2 million– Alliance partners: $1.2 million

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West Africa Water Initiative• Goal:– to increase water supply, sanitation and hygiene services in Ghana,
Mali and Niger by providing:• Wells, alternative water sources, latrines, and training in water resource
management in homes and on farms• Partners:– Conrad N. Hilton Foundation, Cornell International Institute for Food,
Agriculture and Development, Desert Research Institute, HelenKeller International ,International Trachoma Institute, Lions ClubInternational, UN Foundation, UNICEF, WaterAid, World Chlorine
Council and World Vision International.

• Funding:– $41 million total– USAID: $6 million– Alliance partners: $35 million

What Motivates our Partners?

• Philanthropy• Or• Business competitive context

7Four Elements ofCompetitive Context
Availability of highquality inputs:- human resources- capital resources- physical infrastructure- natural resources

Context for
Strategy andRivalry

DemandConditions

FactorConditions

Capable, locally
based suppliers
Clusters instead ofisolated industries

Competitive environment- Policies encourage
investment and competition

Related andSupporting
Industries

Presence of demandfor product –customers in place

Lessons learned• Building on shared values• Vested interest in the success• Being creative• Building on institutional strengths,
assets, knowledge• Being courageous (risk-taking)8CONTACT INFORMATION
Visit:
www.usaid.gov/gda
Contact:
Office of Global Development Alliances

Jerry O’Brien
JO’brien@usaid.gov+202.712.4455 (USA)Michael Silberman
msilberman@usaid.gov+662-263-7448 (Thailand)9