Investing for Impact in Emerging and Frontier Markets

Context and Strategic Focus

• The session addresses the dual crisis of global health and economic depression caused by the pandemic, aiming to transition from emergency relief to sustainable, demographically driven growth.
• Participants emphasize that 60% of global GDP is now generated in emerging and frontier markets, a figure projected to reach 70% by mid-century, primarily in Sub-Saharan Africa and Asia.
• The $12 trillion in business opportunities identified by the 2015 Sustainable Development Goals (SDGs) requires immediate mobilization to prevent a pandemic-triggered economic depression.
• A primary objective is leveraging digital technology and finance to create a resilient, inclusive, and regenerative post-pandemic economy, moving beyond traditional aid models to impact investment.

USAID and MASHAV Partnership Initiatives

• Deputy Administrator Bonnie Glick (USAID) and Ambassador Gil Haskell (MASHAV) highlighted a shared vision based on transparency, democratic values, and free-market principles to counter authoritarian development models.
• USAID's MEDA program targets the $16 trillion U.S. institutional investor community to co-invest in African infrastructure, aiming to reduce risk perceptions and build local pension fund consortiums.
• Both agencies are prioritizing the deployment of trusted 5G and digital infrastructure to prevent security risks while supporting economic growth, with a focus on countries where only 19% of the population currently has internet access.
• A global MOU between USAID and MASHAV seeks to expand collaboration in emerging markets through co-innovation, specifically targeting climate-sensitive agriculture, water management, and emergency medicine.

Panelist Insights on Investment and Development

• Strive Masiwa (African Union Special Envoy) argued that the primary barrier to investment in Africa is a "gap of trust" rather than a lack of capital, urging investors to listen to local sovereignty rather than imposing prescriptive solutions.
• Mulatu Kaba (Former Minister, Guinea) asserted that digital transformation in the public sector is essential to increase transparency, curb corruption, and collect better data to improve risk perception for investors.
• Weldon Turner (Renewable Energy Pioneer) identified "time" as the critical risk factor, stating that standardized, shorter approval processes are necessary to make projects "bankable" and attract institutional capital.
• Bonnie Glick noted that 90% of financial flows into emerging markets are already private, with the role of development agencies being to reduce political and regulatory uncertainty to facilitate further private engagement.

Structural Challenges and Solutions

• Risk Management: Participants challenged the biased perception of high risk in Africa, citing data-driven governance and impact investing (profits, people, planet) as tools to demystify risk and prove the viability of local projects.
• Localization: A recurring theme was the necessity of adapting technology to local standards and contexts, even if it initially lowers ROI, to ensure sustainability and local ownership.
• Energy and Infrastructure: The panel highlighted that $913 billion has been invested in green and social bonds, yet accelerating energy access for the unbanked 1 billion people requires integrating project development with financial innovation.
• Regional Integration: There is a call for deeper financial market integration within Africa, potentially leading to unified currency funding, to support the continent's growing population of 2.5 billion expected by 2050.

Forward-Looking Statements and Future Actions

• The Milken Institute scheduled an upcoming seminar on August 27th to discuss zoonotic diseases and planetary health, focusing on the link between biodiversity loss and infectious disease risks.
• Upcoming discussions at the October 12–21 global conference aim to refine strategies for mobilizing inter-regional trade and labor markets to accelerate post-pandemic recovery.
• Participants called for the formation of "co-innovation teams" across platforms to compress timeframes for project delivery and bridge the gap between development assistance and direct investment.
• The session concluded with a commitment to deepen the USAID-MASHAV partnership to support local entrepreneurs, citing the need for "patient investors" who can navigate the diverse and sovereign nature of African nations.