But the development aid is not only a matter of volume and numbers

Most developing countries are still facing immense difficulties to reduce poverty, implement decent public services and ensure a favourable environment for economic and social activities. They remain very vulnerable to a wide spectrum of risks, as we remember the recent economic crisis and recent natural disasters.

The situation with regard to the Millennium Development confirms the need for financial transfers increased towards the countries of the South. New common challenges, such as pandemics, climate change, biodiversity loss and the scarcity of water, contribute to the needs for the sustainable development of these countries.

But the development aid is not only a matter of volume and numbers. First, we know that we can improve the impact of each euro of aid on the ground. We then know that funding is not neutral and that the type of instruments used to commit the resources can make a big difference. For a long time, the traditional aid especially relied on a fairly rudimentary tools box, made donations and concessional loans. The financial needs of developing countries are however much more various and fluctuating, for flexible and differentiated instruments. In some cases, mobilize a volume increased resources from the private sector through guarantee mechanisms can be, for example, more suitable than conventional funding. In others, more effectively mobilize local resources by strengthening domestic financial markets is the most effective way to increase the range of financial services to economic agents. Recognize these needs diversification led to refine existing financial tools and to imagine new.

The financial Toolbox is so sophisticated and expanded, to raise resources or increase the effect of leverage of public resources, flexible loans, forms new warranty and insurance or instruments built on incentives for better results. All these tools contribute to generate more resources for development, mitigate risks, absorb shocks and strengthen the impacts in terms of development. For the Group of the AFD, these concerns are translated by various initiatives. One of them is the loan concessional counter-cyclical, to assist developing countries to mitigate external shocks. This flexible loan allows the debtor country to suspend repayments to capital when export revenues decline significantly. Ariz (insurance for the risk of financing of private investment) is another example of this approach: the Fund, managed by the AFD, supports investments in developing countries by providing guarantees for loans and investment on equity to local financial institutions, including in portfolio guarantee.

This multiplication of financial responses largely was encouraged by the emergence of new partnerships for development, particularly in the sectors of health and infrastructure. Increasing flows of private resources are mobilized by new categories of philanthropists, migrants, social entrepreneurs, portfolio companies more conventional, conscious of their environmental and social responsibility and socially responsible investment. The traditional boundaries between public, private and market thus tend to fade. Complementarities of skills, flexible partnerships and smart instruments contribute to innovation and bring synergies and catalytic effects on the volume and effectiveness of aid.

The current landscape is exciting, with new approaches to mobilize, manage, and commit the financial resources to cope with the challenge of development. We need to collectively capitalize on the different initiatives around the world. It was our goal when we launched recently, in partnership with the World Bank and the Bill & Melinda Gates Foundation a competition of financial innovation for development projects. When we ourselves in Paris on March 4 and 5, to measure the results, we will continue our discussion and our work on ways and means to improve the efficiency of our tools for financing for development in poor and emerging countries.