Engaging the Private Sector for Development
Upcoming SlideShare
Loading in...5
×
 

Engaging the Private Sector for Development

on

  • 671 views

Dr. Bruce Byiers, ECDPM ...

Dr. Bruce Byiers, ECDPM
Development and the Private Sector Meeting
Ministry of Foreign Affairs and Ministry of Employment and the Economy
14-15 February 2013, Helsinki
Bruce Byiers gave a presentation at this meeting as keynote speaker.

Statistics

Views

Total Views
671
Views on SlideShare
671
Embed Views
0

Actions

Likes
0
Downloads
20
Comments
0

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment
  • Purpose: "The private sector and development - best practices," for TEAM FINLAND - innovation and entrepreneurship to stimulate development seminar: 1) The need to focus on Finnish added value: what is needed in the emerging markets and on specific know-how Finland can offer?; 2) Increased co-operation between academic, business and non-governmental organizations; 3) Development Financing in Social development cooperation and business in the emerging markets - check DAC peer review doc of Finland
  • Motivation for paper- lack of clarity among stakeholders, discussion at cross-purposes, overlapping areas of interests, analysis etc., “common or conflicting interests’ captures dome of the main concerns/debates Paper not the final word and not presenting any new analysis- more a reorganisation of existing knowledge Changing context familiar to most but worth summarising- may have implication for how the PS4D agenda is approached Need clarity given lots of actors, interests and challenges for development policy (& opportunities)
  • Suddenly it’s all about the private sectorSeoul Development Consensus for Shared GrowthUN Millennium Summit in 2010, 11 bilateral donorsxvii issued the Bilateral Don␣␣␣␣␣ Statement in Support of Private Sector Partnerships for Development at the UN Private Sector ForumUN Millennium Summit in 2010, 11 bilateral donorsxvii issued the Bilateral Don␣␣␣␣␣ Statement in Support of Private Sector Partnerships for Development at the UN Private Sector Forum
  • So this isn’t necessairly a new story, just one of donors trying to fit into something that is happening anywayAlthough mut also say that in general this is highly focused on resource-rich countries…
  • So, when we are talking about engaging with the private sector, who do we mean?
  • Also, incumbents and newcomers
  • The latter two can feed the first but not necessairly for finance…
  • Germany’s develoPPP.de, the US Global Development Alliance Program (GDA), and Sweden’s␣IAP program, all of which seek to leverage private sector funding and innovation, are open to firms from any country. The Netherlands Programme for Cooperating with Emerging Markets (PSOM) followed a similar model. The Private Sector Investment programme, which replaced PSOM in 2009, includes a list of tied countries for which only Dutch firms can apply. Denmark’s␣DANIDA Business Partnerships program and the United Kingdom’s Food Industry Retail Challenge Fund are only open to national firms.
  • To ste

Engaging the Private Sector for Development Engaging the Private Sector for Development Presentation Transcript

  • Engaging the Private Sector for Development European Centre for Development and Policy Management (ECDPM) Dr Bruce Byiers Helsinki February 2013
  • Overview • Policy Context • The “private sector” • 3 agendas in 1 • Instruments and issues • ImplicationsECDPM Page 2
  • In the beginning…growth & the private sector • Until at least the mid-1990s, Africa had “inclusive, sustainable, pro-poor, shared stagnation”. • Growth is necessary but not sufficient for poverty reduction • The elusive quest for growth… • aid for investment • education • health & population • conditional loans… • debt relief… Incentives matter!! • Need jobs, and therefore investment – need private sector!ECDPM Page 3
  • From pscyho to BoP and “shared value”ECDPM Page 4
  • “We want to industrialise” AIDAECDPM Page 5
  • “We want to engage the private sector…”ECDPM Page 6
  • “...and help our own…” • UK: “bring private sector ideas, innovation and investment into the heart of what we do...” • NL: “Dutch interests first, more so than in the past....PPPs, business instruments and economic diplomacy can lead to gains in both commercial profit and poverty reduction.” • DK: ”… strategic priority in Danish development cooperation to work for a strong private sector…important that Danish business participates actively...” • FL…ECDPM Page 7
  • Push factors: Fiscal crisis, aid squeeze & “value for money”ECDPM Page 8
  • Push factors: job cuts, competition & “new models”ECDPM Page 9
  • Pull factors: Learning from the private sectorECDPM Page 10
  • Large FDI flows anyway! • The private sector is going there anyway… …but largely to mining andECDPM minerals… Page 11
  • So who is the“private sector” we want to engage with? And what policy tools do we have to be “transformative”?ECDPM Page 12
  • ECDPM Page 13
  • “Many ways to skin a cat” Business level: Sectors: International Agricultural smallholders Large domestic Large-scale agricultural producer SMEs Manufacturers/processors Micro-household based Export-led industries Multinational enterprises Extractive sector firms State-owned enterprises Service providers National monopolies Market structure Informal traders Domestic/export Associations competitive/oligopolistic New entrants/incumbents Business models: Business constraints: "Raw" capitalism Credit access Shared value Infrastructure Core business models Capacity and education level Base of pyramid/social businesses Fair Trade Business linkages Corporate Social Responsibility Labour regulations People-centered business Market exclusion Cooperatives Business climateECDPM Page 14
  • Three related but distinct agendas : • Private sector development Old agenda: domestic, enterprise growth, value-addition, exports, access to credit, business climate, firm-level skills, industrial policy etc • Private sector finance for development Input side – promote and leverage private sector finance • Private sector investment for development New agenda: international, partnering with developed country firms, offset risk, link producers & suppliersECDPM Page 15
  • Assumptions – development would happen if only….. Private Sector Development … developing country businesses were able to startup and expand Private Finance for Development …there was a way to bring in more finance for public investments (and the private sector) Private Investment for Development … there was a way to encourage more inwards investment to link with the local private sectorECDPM Page 16
  • 1. Private Sector Development: Issues • How to promote structural transformation? • How prioritise & implement reg. reforms? • How to increase credit access? • What role for FDI and industrial policy? • How to promote innovation? • How to make it “inclusive” – SME linkages? • Big firms, better jobs? • How to build “capabilities”ECDPM Page 17
  • PSD Instruments • TA for regulatory reform • Value-chain development • Business development services • Making markets work for the poor • Industrial policy • Innovation policy • Access to finance • Management skills – vocational training etc Mixed results • Endogenous and exogenous firm conditions • The PE of economic reformsECDPM Page 18
  • 2. Private Sector finance for Development • About inputs – private finance for development ends • Foundations, investment/pension funds • Blending grants, loans & private finance • Various purposes e.g. infrastructures, equity funds • Challenges - Need to be profitable - Risk management and balancing - Legal environment - Capacity to use effectively - Primarily a lack of finance?ECDPM Page 19
  • 3. Private Sector Investment for Development • Less clarity on agenda and processes • Different underlying approaches/ideology • From CSR to "core business model” • Partnerships - public-private cooperation models and CSO-business • DFIs, ODA, non-ODA • Promoting outwards FDI? • What best value-added of donors here?ECDPM Page 20
  • PS Investment Tools/instruments ODA • Public-private dialogue • Challenge funds • Match-making • Multi-stakeholder partnerships • Corridors approach etc Non-ODA – under-analysed! • Domestic industrial policy • Outward FDI promotion • State-aid? • China – includes SEZs, export credit, etcECDPM Page 21
  • Debates: Common interests(?) • Private Sector: Image and reputation, CSR, risk absorption, high entrance costs to new markets, unfair competition from subsidised firms • Donors: financial crisis and decreasing ODA, new positive grand narrative, financial sustainability • Partner governments: employment creation, raised productivity, inclusive growth, growing capabiities, improved business climate, new types of investment, debt burden, interest groups, rents(?) • NGOs and CSOs: people centred business….ECDPM Page 22
  • Debate: Conflicting interests • Profitability vs optimal developmental outcome (or people vs profits!) • Risk-sharing balance • Opportunity costs of finance • National ownership • National vs local conflicts • Impact assessments • Eligibility criteria or corp. track record? • Tied aid, subsidies, PCD!ECDPM • Tax revenues! Page 23
  • Ongoing questions… • To what degree does the new agenda promote structural change? • What roles for aid and non-aid in working with the private sector? • What approaches for working with MNEs to promote linkages with SMEs? • What factors for successful public/private/CSO partnerships?ECDPM • Organisational settings and institutional Page 24 factors for donor engagement with PS?
  • On-going questions… • How to link donor agenda with local industrial policy and country ownership? • What about beyond global value-chains? Especially informal trade and women? • Focus on impacts – is this the key? • Data availability and analysis of levels of donor PS engagement? • Role/usefulness of internationalECDPM commitments (e.g. UN Global Compact etc)? 25 Page
  • In sum… If development is the ultimate goal, then: • Potential to find synergies – but also need care • Need to identify the trade-offs • Agree on how to identify & measure impact • Regulate expectations and understand the mandate and capacity of the other • Improve PS-donor-gov-CSO communication and mutual understanding • Focus on how to boost transformation, no matter the financing!ECDPM Page 26
  • Thank you www.ecdpm.orgBruce Byiers bby@ecdpm.org www.slideshare.net/ecdpm Page 27