The Sound of Economics Fighting poverty, creating jobs: how development finance helps
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Jun 11, 2025 Alfonso García Mora, VP at the International Finance Corporation, and Jeromin Zettelmeyer, Director at Bruegel, delve into the pivotal role of development finance in combating poverty and fostering job creation. They discuss the shift from traditional aid to innovative financing strategies like blended finance, emphasizing its potential in countries like Ukraine. The guests explore global finance trends, the importance of effective partnerships, and how understanding default rates can reshape investment perceptions in emerging markets. It's a fascinating look at the intersection of finance and social responsibility.
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Addressing Job Creation Holistically
- Creating jobs requires working on both foundational infrastructure and human capital.
- 70% of jobs come from the private sector, so skills must meet private sector demands.
Europe's Soft Power Strength
- Europe lacks the hard power of the US and China but holds strong soft power through multilateralism.
- European development should balance partnership with principles to avoid transactional pitfalls.
Leverage Blended Finance Strategically
- Use blended finance to multiply private capital with donor funds, but cap subsidies to avoid overpaying.
- Create thematic asset classes like green and blue bonds to attract aligned investors.