By Emilie Turner, MAGG Graduate (2018)
This past month in the UNDP Indonesia office I have been more actively involved in supporting the innovative financing portfolio. As mentioned in my previous blog post, innovative finance is, or was, a totally new field for me. As someone who struggled through every single one of her economics classes, the idea of working on projects related to finance was quite nerve-wracking. But being eager to learn about new projects, I decided to commit myself to learning more about this quickly emerging field, despite my initial apprehension.
For those who are not familiar with the concept, innovative finance refers to the non-traditional use of financing mechanisms to mobilize additional capital. Innovative finance, which can include social finance, Islamic finance and blended finance, is used to complement traditional forms of finance for development such as official development assistance. As Indonesia is home to the world’s largest Muslim population, Islamic finance represents a massive untapped potential for mobilizing funds for social impact. What has become apparent is that Indonesia does not lack capital for investment, but that there is a disconnect, or rather a lack of both knowledge and capacity, concerning how and where to invest, which hinders the amount of funds directed towards social initiatives.
This is where the UNDP comes in. The agency is able to bring partners together and bridge the gap between those who want to invest and those who need the investment by helping to channel funds through a variety of different mechanisms. For example, by hosting an “Innovative Finance Lab,” UNDP was able to bring together a diverse range of private, public and religious sectors actors for a weeklong exchange on the design of a “sustainable finance roadmap” for the region. Although still a work in progress, getting different stakeholders together to discuss the creation of a collaborative roadmap that will aim to help attract, channel and direct private and Islamic finance for the purpose of helping the region meets the targets set in the Sustainable Development Goals (SDGs).
Throughout the Innovative finance lab week, I heard many fascinating conversations relating to innovative finance, as well as many discussions on various challenges, opportunities and barriers that could limit its potential to affect transformative change. I was very pleased to see UNDP use approaches such as systems thinking and mapping, and think holistically about new solutions to both old and new issues. Interestingly for me, the experience made me reflect back on a course I took while at BSIA through the University of Waterloo on “social innovation in complex systems.” It was exciting to see how concepts learned in class translate to real world scenarios.
Outside of my internship, I continue to explore the very busy and very big city of Jakarta, whether trying new food in Jakarta’s Chinatown, walking through new neighbourhoods or checking out local films – basically grabbing any and all opportunities to explore and try new things. Last weekend I had the unique opportunity of accompanying the Canadian Ambassador to Indonesia and the Canadian Ambassador to ASEAN to Indonesia’s biggest conference on foreign policy. Not only did I get to spend time at the Canadian official residence (and yes, there was a cut-out of a Mountie in the entrance), I had the pleasure of tagging along with two Canadian diplomats for the day and attending a conference highlighting some of the most pressing world issues facing Indonesia and the region.
These past few weeks have taught me to always remain open to new experiences and learning opportunities. As I keep learning about innovative financing for development, I am becoming increasingly excited about its potential. Most of all, I’m excited to see what other opportunities the coming months will bring.