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newsfeed nov13 1

Private Sector Proves Key Driver For Achieving MDGs

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Private sector development has long been considered a key driver for achieving the MDGs, with the EU in particular keen to provide support to reduce barriers to doing business, build capacities and improve the business environment in developing countries.

In its Council conclusions on the 2011 communication “An Agenda for Change,” for example, the EU pledged to help developing countries attract foreign direct investment, recognizing the need to work more closely with the private sector as its role in development grows.

Calls for the private sector to provide funding, employment opportunities and support in the form of training to improve skills and encourage the transfer of know-how and technologies have seemingly not gone unheeded.

World leaders on Wednesday agreed on how to kick off the debate on the post-2015 framework through a common set of goals for both rich and poor nations. The outcome document that will set the agenda for the next two years envisions a multi-stakeholder approach that includes the private sector and philanthropy to boost total investment in achieving the MDGs to $2.5 billion.

The document adopted at a special event during the 67th session of the U.N. General Assembly calls for “a strengthened global partnership” that will draw from all resource pools, public and private, and specifically calls on firms “to engage in responsible business practices” for sustainable development.

Indeed, during several meetings in New York, the private sector has made a number of important commitments to help achieve the MDGs before the 2015 deadline.
Amongst these are:

  • The provision of $80 million over the next five years to fund UNICEF programs in India focused on improving child survival and educating and protecting children.
  • $10 million to strengthen work on gender equality and women’s empowerment in the energy sector — particularly for universal energy access — as part of the Sustainable Energy for All initiative also supported by the national development agencies of Finland, Norway and Sweden.
  • Doubling of investment in innovative education solutions that deliver improved learning outcomes to $30 million, from $15 million in 2011. Partnerships focused on opportunities to employ ICTs and other innovative approaches to overcome learning barriers in Africa and other regions, particularly in marginalized communities.
  • Provision of low-cost access to solar lamps through service station networks, an initiative developed in partnership with IFC Lighting Africa. The distribution over one million energy-efficient and environment-friendly solar lamps to citizens in Burkina Faso, Ethiopia, Nigeria, Uganda and Senegal by 2015.
  • Seed funding for up to 50 innovative ICT projects run by young entrepreneurs, as well as 250 jobs for young people and $2.5 million in funding for start-ups in the technology industry by 2016.
There is huge interest now within the international development community on the role of business in development, including how business can contribute to achievement of the Millennium Development Goals or to a new post-2015 development framework.

Often, this debate is framed in terms of how governments or international bodies should stop businesses doing bad things – through regulation, standard setting, or transparency initiatives. Or, alternatively, in terms of how businesses could improve their impact through partnerships with donors or governments.

These discussions are valid but tend to lose sight of the fact that it is businesses, not the UN or government departments , that actually generate ‘development’: creating jobs, buying goods and services from poor people, generating government revenues, manufacturing medicines, building roads.

There is little doubt about the influence the private sector has on economies and societies. According to the Overseas Development Institute, the flow of foreign private investment into the developing world dwarfs official development assistance by about 4 to 1, even in the aftermath of the global economic recession.

If we want to increase jobs and reduce poverty, we must emphasize markets and the private sector, and include them in the post-2015 development discussion.

Broad development is severely impeded without active participation from a vibrant private sector.