Conference Presentation, Panel
Building Bridges to Developing Economies: Reports From Field Practice
- Expanding the global fellows program to include students from Hebrew University locations in Africa, India, and Asia, alongside a new development practice program launching at Hebrew University and in California next fall.
- A social bank currently undergoing a regulatory process is anticipated to be approved soon, while the California-Israel Innovation Agreement will be highlighted at an upcoming reception.
- The Israeli government has enacted three cabinet resolutions regarding Africa, China, and India, with expectations that the state will assume initial risk as a "first to fail" partner in a future fund combining government, financial institution, and global bank capital.
- Cross-border financial flows and investments in emerging markets have halved since 2010, with cross-border finance dropping by two-thirds; this decline is expected to persist unless specific capital channels are established.
- Portfolio and FDI flows decreased from 23% of global GDP in 2008 to approximately 6%, with current investment growth remaining below long-term averages.
- A $90 trillion infrastructure investment is projected as necessary by 2030, requiring institutional capital to move from sidelines and be treated as a legitimate asset class comparable to sovereign debt.
- The primary barrier to investment is identified as a lack of investable projects due to deficiencies in project preparation, the rule of law, and the regulatory environment, rather than a shortage of capital.
- The CIDIP group aims to crowd in $100 billion for difficult developing country projects by providing early feedback to improve bankability, with examples including the Canadian Road Annuity Program and the Mexico City Airport project's inclusion in Morningstar's infrastructure index.
- Strategic focus for future customer bases and structural GDP shifts is directed toward sub-Saharan Africa and Asia, supported by the belief that the "New World" has surpassed the "Old World" in PPP GDP shares.
- The Rwandan Innovation Fund and Kigali Innovation City are actively expanding, with universities like Carnegie Mellon setting up operations and the private fund aiming to help entrepreneurs commercialize ideas.
- Technion is expected to serve as a model for human capital development in Rwanda and is currently developing $1.50 diagnostic units for TB in Africa with Gates Foundation support.
- China-related companies are projected to converge on water purification and environmental programs, while the speaker intends to deploy a large workforce to achieve projects yielding 40% to 50% water savings, 30% higher yields, and a 36% reduction in CO2 emissions.
- Future project design must address 30% to 40% of post-harvest losses through improved storage and chilling infrastructure, while microfinance is viewed as useful for vulnerability management but insufficient for formal economy integration without intervention.
- A fund open for three years is projected to reach $70 million in capital, having already financed approximately $600 million across 30 active countries (out of 55 where factoring finance occurs).
- Electronic invoicing is expected to increase tax collection and reduce fraud, though fintech platforms cannot replace the necessity of factoring knowledge and business cycle experience.
- Target investing in the real economy is predicted to match or exceed current market returns with net return expectations of 5 to 8 percent, set against the backdrop of a potential end to the 35-year bond bull market over the next five to ten years.
- Governments seeking innovation are advised to invest in higher education for the best return on investment, while the SDGs are anticipated to be achieved in Africa and the developing world by 2030.
- Global health initiatives, including digital health and cyber-secure records, are expected to contribute to economic growth, and policy/market uncertainty must be addressed to successfully complete the first quarter of the 21st century.