31 May 2011
Businesses, entrepreneurs and investors will take a more prominent role in the UK’s development work across Africa and Asia, as part of a new approach aimed at using the potential of private enterprise to fight world poverty.
The new approach paper on the role of the private sector in development will seek to harness the expertise and resources of private enterprise to boost investment and provide better public services in the poorest countries, creating jobs and income opportunities for more than ten million people.
At the heart of this new approach will be a reformed and revitalised CDC – the development finance institution owned by the UK Government.
CDC’s new business plan, launched alongside the UK’s new approach, will make their work more tightly focused on the poorest countries, more flexible, more transparent and entirely driven by the objective of development.
The new approach includes
Make it easier to do business: by reducing barriers, costs and risks of doing business, cutting red tape and expanding markets and trade.
Wider access to finance: Support programmes to provide 50 million people with financial services, for example through mobile banking and supply credit to 300,000 enterprises.
Improved public services: Working with the private sector to extend and improve the delivery of healthcare, schooling and other basic services. For example, supply chain experts will speed up the delivery of free bednets in high-burden malaria countries like Nigeria and find more effective ways to deliver anti-malarial drugs in Mozambique.
Investment in infrastructure: We will increase private investment in long-term infrastructure schemes through the Private Infrastructure Development Group. Since it was launched in 2003, it has helped secure $14.5 billion of private investment in telecoms, energy and transport infrastructure to serve nearly 100 million people in the poorer developing countries.
A reformed CDC: They will gain the ability to invest directly in companies where it's needed most. They will become more flexible and better able to control and manage capital with a direct influence on the results it achieves. In addition, all future investments will be made in the poorer countries of South Asia and Sub-Saharan Africa.
International Development Secretary Andrew Mitchell said:
"For too long, not enough has been done to tap into the potential of the private sector as part of the UK’s wider development efforts. "Aid alone will never be the answer - it is business, trade and enterprise that will stimulate the economic growth that will help people, communities and countries to lift themselves out of poverty. "This new approach will help to do just that, bringing jobs, investment and opportunity to countries that desperately need it."
"For too long, not enough has been done to tap into the potential of the private sector as part of the UK’s wider development efforts.
"Aid alone will never be the answer - it is business, trade and enterprise that will stimulate the economic growth that will help people, communities and countries to lift themselves out of poverty.
"This new approach will help to do just that, bringing jobs, investment and opportunity to countries that desperately need it."
Read the full press release
“The Commonwealth Business Council is delighted to see a reinvigorated approach for working with the private sector to enhance economic growth in the poorest countries.”
“We work with the private sector across the globe to promote inclusive markets and business models that positively involve poor people as market traders, producers and workers. We welcome DFID’s work with the private sector to generate long-term solutions for the poorest people."
“We welcome this fresh approach to the private sector as stronger partners in development. We sense it will open up new possibilities for building green and inclusive economies."
“As co-chairmen of Business in the Community’s International Leadership Team, we welcome the Department of International Development’s private sector strategy. We believe that industry can play a key role as an engine of growth for the economy, and are demonstrating this support through our actions. We look forward to partnering with DFID to encourage the creation of collaborative and innovative solutions that respond to the developmental opportunities and challenges identified."
“The International Business Leaders Forum fully supports DFID's approach as laid out in this report focusing, as it does, on the role of the private sector in creating prosperity through innovative, market-based solutions. In particular, we acknowledge and support the recognition given to creating wealth and opportunities through inclusive business models and through improved access to markets for poor people. To be most effective, this approach will have to be built on cross-sector partnerships delivering mutual advantage to both the public and private sectors, which we believe are essential if the anticipated development outcomes are to be achieved."
"DFID has long recognised the importance of businesses’ contribution to development, and I welcome the added momentum and focus that this paper brings. Companies like ours are actively pursuing policies of beneficiation – driving millions of dollars of value into the local economy - in our case through our local Diamond Trading Company operations. Our priority is delivering impact at scale, and DFID has an important role to play in convening and supporting platforms that catalyse the multi-stakeholder partnerships that this requires."
"We welcome this statement by DFID on the very important role that the private sector can play in driving socio-economic development at all levels in society. Harnessing this role requires an integrated strategy that, on the one hand, builds the business climate in which enterprise can flourish, and on the other, encourages business innovation that expands opportunities for poor people. We look forward to seeing more detail on how DFID intends to embed the strategy across the organisation and sectors, including with respect to agriculture which we believe needs a much stronger emphasis, and on how DFID plans to scale up and more strategically develop its cross-sector partnerships."
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Businesses will play a key part in creating jobs and boosting growth. Picture: Simon Davis / DFID