A Countdown forEngaging the Private Sector for
DevelopmentEuropean Centre for Development and Policy
Management (ECDPM)
Dr Bruce ByiersLisbon 28 April 2014
5 Main Actors
4 Main Narratives
3 Broad Agendas
2 Distinctly driven models
1 Overriding issue!
Many impact tradeoffsECDPM Page 2
• Business sector
• Developing country governments
• Donor country governments
• CSOs/NGOs
• Academia
5 Main Actors
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• 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
5 Main Actors
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• 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
5 Main Actors
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4 Main Narratives
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• “Africa Rising”Next investment frontier, risks &
rewards
• Win-win-win in a post-2015 world Development, econ. & comm. diplomacy
• ExploitationLand-grabs, human rights abuse,
neocolonialism
• Jobs-jobs-jobsEconomic transformation, more and better jobs, indust. policy, + value added
4 Main Narratives
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Push: Crisis, aid squeeze & “value for money”
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Push : Jobs, competition & “new models”
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Pull factors: Learning
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• The private sector is going there anyway…
Push & pull – flows to Africa
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…but largely to mining and minerals…
• Private sector development
• Private sector finance for development
• Private sector investment for development
3 related but distinct agendas
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• Private sector developmentOld agenda: domestic, enterprise growth, value-addition, exports, access to credit, business climate, firm-level skills, industrial policy etc
• Private sector finance for developmentInput side – promote and leverage private sector finance
• Private sector investment for developmentNew agenda: international, partnering with developed country firms, offset risk, link producers & suppliers
3 related but distinct agendas
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• 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
3 Agendas & Assumptions
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• 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 etcChallenges• Complexity• The PE of economic reforms
3i) PSD – (Jobs jobs jobs?)
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• Leveraging private finance• Foundations, investment/pension funds• Blending grants, loans & private finance• Various purposes e.g. infrastructures, equity
fundsChallenges • Need to be profitable• Risk management and balancing • Legal environment • Capacity to use effectively • Primarily a lack of finance?
3 ii) Private Sector finance for Development (Next frontier?)
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• 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?
3 iii) Private Sector Investment for Development (All 4 narratives!?)
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• 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?
2 Partnership perspectives
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• 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?
2 Partnership perspectives
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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!)
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1 Overriding issue
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Politics1 Overriding issue
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Politics• Business environment reforms• Regulatory/tax application• Firm selection for support• Partners and partnership formation• Local impacts?• Policy leverage?
1 Overriding issue
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• “Africa Rising”Maximising benefits vs minimizing harm
Profitability vs development outcomesEligibility criteria vs corp. track record?Time & money of impact evaluation
• Win-win-win in a post-2015 worldScale vs depthBig firms (better jobs?) vs SMEsPublic vs Private risk-burdenOpportunity costs of finance
• ExploitationRegulation vs guidelines
• Jobs-jobs-jobsNational vs local conflictsTied aid, subsidies vs PCD Unfair competition?
Many Impact Tradeoffs
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• 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?
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New Discussion Paper:
“De-coding Partnerships”
http://www.ecdpm.org/dp161
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Thank youwww.ecdpm.org
Bruce Byiers [email protected]
Twitter: @brucebyiers
www.slideshare.net/ecdpm
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