With the growing global emphasis on country-led initiatives, are we on the brink of a new alignment?

Alfred Hannig

Monique Nsanzabaganwa, Vice Governor at the National Bank of Rwanda (NBR), participates in the 2015 Global Policy Forum (GPF) in Maputo, Mozambique, in September. NBR has made specific commitments under the AFI Maya Declaration to advance financial inclusion.

When the United Nations launched the Millennium Development Goals (MDGs) in 2000 they were celebrated for including specific goals and targets to reach by 2015, including the eradication of poverty on earth. Now that we have reached the target dates, we can see that MDGs results have been encouraging, however we remain far from eliminating poverty. So did anything go wrong?

Developed with the best of intentions, the MDGs were conceived and supported by the world’s largest international organizations to benefit of the world’s poorest nations. But, despite the high profile and international backing at the highest levels, this common set of proposed targets did not always match the diversity of challenges that were actually being faced on the ground. The countries who were being targeted often felt no ownership over the MDG process and as a result there was no real national pressure or incentive to achieve the targets. As the International Planning Committee for Food Sovereignty so succinctly summarized, “The major limitation of the MDGs was the lack of political will to implement due to the lack of ownership by the most affected constituencies.”

The Alliance for Financial Inclusion (AFI) was founded on the belief that the development of financial inclusion policy must be country-led, but it was not until 2011 that we looked into combining the country-led approach with a more specific global initiative known as the Maya Declaration. The MDGs had shown that true commitments could not be made on behalf of nations so we needed a way to have commitments be made by nations. Of course there were concerns raised about this approach as well. Would national commitments be challenging enough? Could countries allocate the appropriate resources? Would country-led targets get the same level of attention and praise as universal goals such as the MDGs? Would institutions even be willing to place themselves on the record to make this kind of commitment?

Banco Central de Timor-Leste (BCTL) Governor Abraão de Vasconselos is pictured at the 2015 Global Policy Forum in Maputo, Mozambique, in September.

However, when the moment came at the 2011 AFI Global Policy Forum (GPF) in Mexico for our members to come forward, we found institutions were not only willing to step into the spotlight and make Maya Declaration commitments, they were eager to do so. And in the following year we witnessed not only more commitments made, but also an enthusiastic acceptance that commitments must be specific, measurable and quantitative. Today, of course, the Maya Declaration is one of the foundations of AFI and the more than 50 commitments that have been made under it have been instrumental in driving a reduction in the world’s unbanked.  Others have highlighted the benefits that national commitments bring to institutions, including Bangko Sentral ng Pilipinas (BSP) Governor Armando Tetangco Jr. on this very blog, but there is another aspect that is also important to emphasize.

What has elevated the Maya Declaration from just a collection of separate national targets into a larger movement was the fact that institutions were making them publicly and making them together. We saw that with ownership came pride, a gentle competition between members and even a little peer pressure as targets were reached and exceeded. Today, the Maya Declaration has truly become a single movement of individual commitments. A common vision, with realistic targets and goals that are tailored to each country. There is no question that after four years the Maya Declaration’s country-led approach to developing and achieving financial inclusion targets has changed the face of AFI. But has it had an impact outside of our network?

Alfred Hannig speaks at the 2015 Global Policy Forum in Maputo, Mozambique, in September.

Alliance for Financial Inclusion (AFI) Executive Director Alfred Hannig speaks at the 2015 Global Policy Forum in Maputo, Mozambique, in September.

Over the past few years I think we have seen a change in how major institutions are dealing with financial inclusion issues. Not only is financial inclusion more prominent on the international stage, the idea of rallying around country-led targets and commitments is increasingly being supported at the highest levels. This month, I took part in the IMF-World Bank Annual Meetings in Lima and was privileged to be on a flagship seminar on financial inclusion and macro-economics. I was pleased to see the public information briefing on the session recognized that “more than 60 governments across the world have set financial inclusion as a formal target”, with a vast majority of those targets being Maya Declaration Commitments. The importance of these national targets was highlighted in the discussion by IMF Deputy Managing Director Min Zhu. During my many discussions in Lima, the idea that each country had different needs, faced unique challenges and required home-tailored solutions was never questioned—it was simply acknowledged as an obvious truth.

Recently the World Bank’s Senior Director for Finance and Markets Global Practice, Gloria Grandolini, published an interesting piece on five major challenges to achieving universal access and what she learned from interacting with AFI members on these issues at the 2015 GPF in Mozambique. In it, Ms. Grandolini highlighted the Maya Declaration, noting, “More than 85 percent of the reduction in the global unbanked population between 2011 and 2014 came from AFI member countries — some 55 percent were from countries with a Maya Declaration Commitment.” She also made the point of describing how the World Bank’s own 2020 Initiative complements the Maya Declaration goals.

Gloria Grandolina pictured at the 2015 Global Policy Forum in Maputo, Mozambique, in September.

Gloria Grandolini, Senior Director of Finance and Markets Global Practice at the World Bank Group, pictured at the 2015 Global Policy Forum in Maputo, Mozambique, in September.

But for even more concrete evidence of how the current thinking of country-led approaches to financial inclusion planning, look no further than the recently announced United Nations Sustainable Development Goals (SDGs) and in particular the supporting Addis Ababa Action Agenda (AAAA). Unlike the top-down approach of the MDGs, the new UN goals heavily emphasize the need for country-led approaches for a variety of targets, including financial inclusion: “We recognize that there are different approaches, visions, models and tools available to each country, in accordance with its national circumstances and priorities, to achieve sustainable development…We acknowledge the importance for international financial institutions to support, in line with their mandates, the policy space of each country, in particular developing countries. We recommit to broadening and strengthening the voice and participation of developing countries.” These are not the words of an organization looking to impose commitments on others. If the MDGs were a pointed finger, the SDGs and Addis Agenda are an open hand.

We appear to have reached a point of convergence, where the priorities of the international community are coming in line with the needs and realities of individual nations. I have seen an openness and respect between peers that gives me hope the financial inclusion challenges we face can be overcome—sooner than we imagine.

Alfred Hannig is the Executive Director at the Alliance for Financial Inclusion.

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