Private Sector (for) Development: Development-oriented & commercial instruments to engage the private sector
1. Development-oriented & commercial
instruments to engage the private sector
5th Informal Donor Dialogue meeting
ECDPM, Economic Transformation & Trade Programme
Brussels, 20th of October, 2015
Private Sector (for)
Development
2. Outline
• Background of the study
• Context
• Introduction
• Analytical approach
• Public support instruments
• Similar challenges
• Differences
• Opportunities
• Conclusion
• Questions for the discussion
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3. • Private sector key for development
• Public instruments: development cooperation vs.
other public instruments
• ECDPM mapping in the context of PS4D
→ Unique overview of both development AND
commercially-oriented public support
instruments
Background of the study
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4. • Developing countries promote their own
development
• Donors increasingly engage with PS4D
• Simultaneously, donors support their private
sector to internationalise
• pure development cooperation vs. economic
diplomacy
•But there are trade-offs and challenges! ...
•… and at the same time opportunities of
commercially-oriented instruments
Context
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5. • Growing donor driven PS4D agenda
• Private sector interest
- Support to access new markets in foreign countries
- Risk mitigation
• Donor interests
- mobilise European businesses so to make development
more effective
- access to foreign markets
- economic exchange
- benefits of businesses operating in market competition
Introduction
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6. • DCED categories of partnerships and engagement
with the private sector
- Match-making mechanisms
- Funding mechanisms
- Technical support programmes
- Proposed categories for development & commercially-
oriented instruments:
1. Matchmaking/business facilitation
2. Financial support/cost sharing
3. Technical assistance/advisory services
Analytical approach
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7. Public support instruments
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Development-oriented Commercial
Matchmaking BCtA, GIF,
Finnpartnership,
NL MF
COSME, SME
Internationalisation
Portal, Clusters
Financial
support
DFIs, AECF, GIF,
DeveloPPP.de,
IDH/DGGF,
Danida BE
ECAs, COSME,
H2020 SME
Technical
assistance
BCtA, DeveloPPP.de,
Finnpartnership
Export helpdesk,
H2020 SME,
EU MS’ support
programmes
8. • Financial:
○ Accountability to taxpayers
○ Financial know-how and capabilities
• Transparency:
○ Results and development impact and their
measurement
○ Data availability and access for public
• Practical:
○ Targeting the ‘right’ companies
○ Distortionary/driving biz out the market
○ Instruments design as private sector is diverse
• Sustainability:
○ Implementation and monitoring
○ Standards to avoid harmful investments
○ Achieving sustainable and responsible business
conduct
Similar challenges
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9. • Objectives and motivations to work
together
• Underlying criteria at times
• Geographical focus
• Development instruments’ challenges
○ tied aid?
○ additionality/attribution of results
○ scaling-up
○ pressure to disburse funds?
• Commercial instruments’ challenges
○ sustainability → doing no harm to
development (social, human &
environmental rights)
○ limited positive impact on development
Differences
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10. • Better data publicly available and
accessible
→ to inform about objectives, progress,
outcomes and impact
• Criteria and principles of sustainability
→ Need for more coherent application
across instruments
• Harnessing opportunities to better learn
from each other’s sustainability criterias
• Reform of ECAs
• Unification of private sector support in one
ministry?
Opportunities
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11. • Challenges and opportunities are similar
• Main differences: objectives, criteria and
targeted countries
• Increased synergy and coherence feasible
• Private sector support could be more
development-friendly through:
○ more coherent sustainability criteria
○ better evaluation and learning opportunities
○ increasing transparency
Conclusion
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12. • How to best combine development objectives with economic
diplomacy interests?
• What are the key distinctions that need to be made
between these different types and their role and objective?
How best to foster synergy and avoid duplication?
• What are the key lessons from public instruments to
support private sector, between those with development
objectives and those with commercial interests?
• What kind of criteria and evaluations are required to build
on the synergies between both sets of instruments?
• Is there an added value to acting at a European level to link
commercial and development-focused instruments?
Questions for the discussion
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