A Countdown for
Engaging the Private Sector for
Development
European Centre for Development and Policy
Management (ECDPM)
Dr Bruce Byiers
Lisbon 28 April 2014
5 Main Actors
4 Main Narratives
3 Broad Agendas
2 Distinctly driven models
1 Overriding issue!
ECDPM
Many
impact tradeoffs
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5 Main Actors
• Business sector
• Developing country governments
• Donor country governments
• CSOs/NGOs
• Academia
ECDPM
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5 Main Actors
• 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
ECDPM
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ECDPM
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5 Main Actors
• 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, marketoriented, FairTrade,
• Academia – business, economics, poverty,
trade, behavioural
ECDPM
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4 Main Narratives
ECDPM
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4 Main Narratives
• “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
ECDPM
Economic transformation, more and
better jobs, indust. policy, + value added
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Push: Crisis, aid squeeze &
“value for money”
ECDPM
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Push : Jobs, competition & “new
models”
ECDPM
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Pull factors: Learning
ECDPM
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Push & pull – flows to Africa
• The private sector is going there anyway…
ECDPM
…but largely to mining and
minerals…
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3 related but distinct agendas
• Private sector development
• Private sector finance for development
• Private sector investment for development
ECDPM
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3 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
ECDPM
New agenda: international, partnering with
developed country firms, offset risk, link
producers & suppliers
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3 Agendas & Assumptions
• 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
ECDPM
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3i) PSD – (Jobs jobs jobs?)
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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 etc
Challenges
ECDPM
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Complexity
The PE of economic reforms
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3 ii) Private Sector finance for
Development (Next frontier?)
•
Leveraging private finance
•
Foundations, investment/pension funds
•
Blending grants, loans & private finance
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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
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3 iii) Private Sector Investment for
Development (All 4 narratives!?)
•
Less clarity on agenda and processes
•
Different underlying approaches/ideology
•
From CSR to "core business model”
•
Partnerships - public-private cooperation
models and CSO-business
ECDPM
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DFIs, ODA, non-ODA
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Promoting outwards FDI
•
Links to PSD and finance
•
Who’s leading whom?
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2 Partnership perspectives
• Public-perspective
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Challenge funds
Development impact bonds
Coalition models e.g. GAIN
Blending mechanisms (fin. & investment)
• Private-perspective
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ECDPM
With MNCs - IDH model
SAGCOT Corridor
Equity funds
Business-CSO partnerships
Fairtrade?
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2 Partnership perspectives
• Public-perspective
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Challenge funds
Development impact bonds
Coalition models e.g. GAIN
Blending mechanisms (fin. & investment)
PIDG
TradeMark East Africa
• Private-perspective
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ECDPM
With MNCs - IDH model
SAGCOT Corridor
Equity funds
Business-CSO partnerships
Fairtrade?
Are firms interested anyway?
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Business drivers?
ECDPM
(regardless of donors!)
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
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1 Overriding issue
ECDPM
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1 Overriding issue
Politics
ECDPM
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1 Overriding issue
Politics
ECDPM
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Business environment reforms
Regulatory/tax application
Firm selection for support
Partners and partnership formation
Local impacts?
Policy leverage?
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Many
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Impact Tradeoffs
“Africa Rising”
Maximising benefits vs minimizing harm
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ECDPM
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?
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Where are we in the narratives?
ECDPM
• 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!!!
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New Discussion Paper:
“De-coding Partnerships”
http://www.ecdpm.org/dp161
ECDPM
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Thank you
www.ecdpm.org
Bruce Byiers bby@ecdpm.org
Twitter: @brucebyiers
www.slideshare.net/ecdpm
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