Wednesday, November 03, 2010

Developing the private sector for developing the world

More and more people involved in international development are realizing that the private sector and business should play a big role. Governments and donor aid agencies have avoided working with business in the past, but it is jobs that the poor need and always ask for.

From this essay that we found in the Guardian, writer Zahid Torres-Rahman from Business Action for Africa talks about the need for busineeses to be involved in development.

And it is when we think about what will drive development in a truly long-term way, that it becomes clearly important to focus on enterprise, jobs and economic opportunity. Ask a poor person what they see as their exit strategy from poverty, and they reply growing their business or getting a job. Two successive surveys of over 60,000 poor people by the World Bank have clearly demonstrated that.

As a result, DFID – and many other donor agencies around the world, 11 of which have released a statement (PDF) – are starting to think more constructively and creatively about how they can harness the private sector for development impact, and to generate the millions of jobs needed in developing countries. The same goes for a growing number of civil society organisations, such as Oxfam and Care, both of which have dedicated teams looking at how to partner with business.

This includes helping small businesses to grow and small-holder farmers to earn a more stable living. But it also includes engaging with large corporates – both international and national – from which much of the development community have instinctively shied. Yet it is in this area of big business engagement that much of the most innovative and promising solutions are emerging.

Best of all, these are not solutions being driven by "corporate social responsibility" or philanthropy, but by business sense and commercial opportunity – which makes them intrinsically sustainable and scalable.

The Business Call to Action, housed at the UN, provides some inspiring examples of companies having an impact through business models that create opportunities for poor people – as employees, suppliers, distributors or customers. To date, according to Helen Clark, head of the United Nations Development Programme, companies that have made commitments under the Business Call to Action will bring access to affordable IT, finance, healthcare and agricultural goods and services to over 10 million people, as well as jobs for nearly 40,000 people and better livelihoods for hundreds and thousands of farmers in Africa and India.

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