A Countdown for
Engaging the Private Sector for
Development
European Centre for Development and Policy
Management (ECDPM)
...
5 Main Actors
4 Main Narratives
3 Broad Agendas
2 Distinctly driven models
1 Overriding issue!
Many impact tradeoffsECDPM ...
• Business sector
• Developing country governments
• Donor country governments
• CSOs/NGOs
• Academia
5Main Actors
ECDPM P...
• Business – Big/Small, Int’l/Domestic,
Formal/Informal, Food/extractive/services
etc, BoP/impact inv., constraints, m’kt
...
ECDPM Page 5
• Business – Big/Small, Int’l/Domestic,
Formal/Informal, Food/extractive/services
etc, BoP/impact inv., constraints, m’kt
...
4Main Narratives
ECDPM Page 7
• “Africa Rising”
Next investment frontier, risks &
rewards
• Win-win-win in a post-2015 world 
Development, econ. & comm...
Push: Crisis, aid squeeze &
“value for money”
ECDPM Page 9
Push : Jobs, competition & “new
models”
ECDPM Page 10
Pull factors: Learning
ECDPM Page 11
• The private sector is going there anyway…
Push & pull – flows to Africa
ECDPM Page 12
…but largely to mining and
mineral...
• Private sector development
• Private sector finance for development
• Private sector investment for development
3related...
• Private sector development
Old agenda: domestic, enterprise growth,
value-addition, exports, access to credit,
business ...
• Private Sector Development
… if only developing country businesses were
able to startup and expand
• Private Finance for...
• Regulatory reform
• Access to finance
• Public-private dialogue
• Value-chain integration
• Business development service...
• Leveraging private finance
• Foundations, investment/pension funds
• Blending grants, loans & private finance
• Various ...
• Less clarity on agenda and processes
• Different underlying approaches/ideology
• From CSR to "core business model”
• Pa...
• Public-perspective
• Challenge funds
• Development impact bonds
• Coalition models e.g. GAIN
• Blending mechanisms (fin....
• Public-perspective
• Challenge funds
• Development impact bonds
• Coalition models e.g. GAIN
• Blending mechanisms (fin....
External
• Supply chain security (food, extractives)
• Consumer pressure
• New (risky) markets
• Finance & gov. backing?
•...
1Overriding issue
ECDPM Page 22
Politics
1Overriding issue
ECDPM Page 23
Politics• Business environment reforms
• Regulatory/tax application
• Firm selection for support
• Partners and partnershi...
• “Africa Rising”
Maximising benefits vs minimizing harm
Profitability vs development outcomes
Eligibility criteria vs cor...
• Private investment a key engine
• Roles for ODA and non-ODA in working with
the private sector?
• MNEs and linkages with...
New Discussion Paper:
“De-coding Partnerships”
http://www.ecdpm.org/dp161
ECDPM Page 27
Thank you
www.ecdpm.org
Bruce Byiers bby@ecdpm.org
Twitter: @brucebyiers
www.slideshare.net/ecdpm
Page 28
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A Countdown for Engaging the Private Sector for Development

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  • 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
  • So, when we are talking about engaging with the private sector, who do we mean?
  • So this isn’t necessairly a new story, just one of donors trying to fit into something that is happening anyway
    Although mut also say that in general this is highly focused on resource-rich countries…
  • The latter two can feed the first but not necessairly for finance…
  • The latter two can feed the first but not necessairly for finance…
  • To ste
  • A Countdown for Engaging the Private Sector for Development

    1. 1. A Countdown for Engaging the Private Sector for Development European Centre for Development and Policy Management (ECDPM) Dr Bruce Byiers Lisbon 28 April 2014
    2. 2. 5 Main Actors 4 Main Narratives 3 Broad Agendas 2 Distinctly driven models 1 Overriding issue! Many impact tradeoffsECDPM Page 2
    3. 3. • Business sector • Developing country governments • Donor country governments • CSOs/NGOs • Academia 5Main Actors ECDPM Page 3
    4. 4. • Business – Big/Small, Int’l/Domestic, Formal/Informal, Food/extractive/services etc, BoP/impact inv., constraints, m’kt structure • Developing country governments • Donor country governments • CSOs/NGOs • Academia 5Main Actors ECDPM Page 4
    5. 5. ECDPM Page 5
    6. 6. • Business – Big/Small, Int’l/Domestic, Formal/Informal, Food/extractive/services etc, BoP/impact inv., constraints, m’kt structure • Developing country governments – Presidency, Min. Fin., Commerce, Line ministries, Tax, agencies • Donor country governments – aid agencies, Foreign Ministry, Min. Industry/Biz, DFIs • CSOs/NGOs – humanitarian/relief, market- oriented, FairTrade, • Academia – business, economics, poverty, trade, behavioural 5Main Actors ECDPM Page 6
    7. 7. 4Main Narratives ECDPM Page 7
    8. 8. • “Africa Rising” Next investment frontier, risks & rewards • Win-win-win in a post-2015 world  Development, econ. & comm. diplomacy • Exploitation Land-grabs, human rights abuse, neocolonialism • Jobs-jobs-jobs Economic transformation, more and better jobs, indust. policy, + value added 4Main Narratives ECDPM Page 8
    9. 9. Push: Crisis, aid squeeze & “value for money” ECDPM Page 9
    10. 10. Push : Jobs, competition & “new models” ECDPM Page 10
    11. 11. Pull factors: Learning ECDPM Page 11
    12. 12. • The private sector is going there anyway… Push & pull – flows to Africa ECDPM Page 12 …but largely to mining and minerals…
    13. 13. • Private sector development • Private sector finance for development • Private sector investment for development 3related but distinct agendas ECDPM Page 13
    14. 14. • 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 & suppliers 3related but distinct agendas ECDPM Page 14
    15. 15. • Private Sector Development … if only developing country businesses were able to startup and expand • Private Finance for Development …if only there was a way to bring in more finance for investments • Private Investment for Development … if only there was a way to encourage more inwards investment to link with the local private sector 3Agendas & Assumptions ECDPM Page 15
    16. 16. • Regulatory reform • Access to finance • Public-private dialogue • Value-chain integration • Business development services • Making markets work for the poor • Industrial policy • Innovation policy • Management skills – vocational training etc Challenges • Complexity • The PE of economic reforms 3i) PSD – (Jobs jobs jobs?) ECDPM Page 16
    17. 17. • Leveraging private finance • 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? 3ii) Private Sector finance for Development (Next frontier?) Page 17ECDPM
    18. 18. • 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 • Links to PSD and finance • Who’s leading whom? 3iii) Private Sector Investment for Development (All 4 narratives!?) Page 18ECDPM
    19. 19. • Public-perspective • Challenge funds • Development impact bonds • Coalition models e.g. GAIN • Blending mechanisms (fin. & investment) • Private-perspective • With MNCs - IDH model • SAGCOT Corridor • Equity funds • Business-CSO partnerships • Fairtrade? 2Partnership perspectives ECDPM Page 19
    20. 20. • Public-perspective • Challenge funds • Development impact bonds • Coalition models e.g. GAIN • Blending mechanisms (fin. & investment) • PIDG • TradeMark East Africa • Private-perspective • With MNCs - IDH model • SAGCOT Corridor • Equity funds • Business-CSO partnerships • Fairtrade? Are firms interested anyway? 2Partnership perspectives ECDPM Page 20
    21. 21. External • Supply chain security (food, extractives) • Consumer pressure • New (risky) markets • Finance & gov. backing? • Trade and industrial regulations!! Internal • CSR – defensive, charitable, promotional, strategic, transformational (Visser, 2011) • Motivate staff? • Do good? …depends on sector, size, inwards/outwards orientation, new/incumbent etc Business drivers? (regardless of donors!) ECDPM Page 21
    22. 22. 1Overriding issue ECDPM Page 22
    23. 23. Politics 1Overriding issue ECDPM Page 23
    24. 24. Politics• Business environment reforms • Regulatory/tax application • Firm selection for support • Partners and partnership formation • Local impacts? • Policy leverage? 1Overriding issue ECDPM Page 24
    25. 25. • “Africa Rising” Maximising benefits vs minimizing harm Profitability vs development outcomes Eligibility criteria vs corp. track record? Time & money of impact evaluation • Win-win-win in a post-2015 world Scale vs depth Big firms (better jobs?) vs SMEs Public vs Private risk-burden Opportunity costs of finance • Exploitation Regulation vs guidelines • Jobs-jobs-jobs National vs local conflicts Tied aid, subsidies vs PCD Unfair competition? Many Impact Tradeoffs ECDPM Page 25
    26. 26. • Private investment a key engine • Roles for ODA and non-ODA in working with the private sector? • MNEs and linkages with SMEs? • How to build on domestic policies/strategies? • What factors for successful public/private/CSO partnerships? • What about beyond global value-chains? Especially informal trade and women? • How to limit harm & maximise benefits? • Expectations and impacts • Incentives and politics!!! Where are we in the narratives? ECDPM Page 26
    27. 27. New Discussion Paper: “De-coding Partnerships” http://www.ecdpm.org/dp161 ECDPM Page 27
    28. 28. Thank you www.ecdpm.org Bruce Byiers bby@ecdpm.org Twitter: @brucebyiers www.slideshare.net/ecdpm Page 28

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