Tuesday, April 13, 2010

Business and Overseas Development: Connecting for sustainability?

Business has always been a key section of international development, though that has not always led to sustainable results. One might remember that international development's precursor was colonialism - which thrived in part because of the profit advantages to being able to obtain immensely valuable natural and human resources for almost nothing. Some of the larger 'development organisations' - not least the IMF and the World Bank - have been accused of opening the doors for Western businesses to enter into the developing world and continue that colonial trend - to the great social and environmental detriment of people and planet in the 'developing' world. Not too surprising that the business-development nexus is one fraught with tension - especially since many development actors (though usually not the larger ones) tend towards a certain skepticism of the benefits of 'private public partnerships' (PPP). Who is really profiting from those partnerships - the public-private elite, or the masses?

Yet in the past decade or so, international agencies from the US to the UK to Sweden have increasingly reached out to the private sector. It isn't just a variation of these aid agencies growing more neo-liberal; its also a recognition that a) business can add real value to development and b) that business is there - just as one can not ignore economics, nor can one ignore businesses (including multinational corporations). Working with governments isn't enough to reduce poverty. And as a report by the Business Civic Leadership Center pointed out, One of the signs of their presence - multinational corporations gave $3.5 billion to overseas development initiatives. If they were a country, they would be in the top 20 donors. It makes good sense for development to engage with these major actors - on multi-national, national and community levels, for both 'development' and 'business' reasons. Businesses affect pressing developmental issues, from worker safety and well being to environmental challenges to developing emerging markets in healthy directions, and include both global and national programmes. Development agencies act as strategic advisors and broker knowledge.

It's not an easy game to play for either side. Development agencies are numerous, fragmented and it is difficult for those in the field to know who is doing what, much less those coming in from outside. It is hard for businesses to know where responsibility and accountability lie. Many 'rules of the game' (especially around leveraging capital) are not developed - or contradictory. Most multi national companies don't work in one of the key priority areas - Africa. Despite these challenges, there are some success stories. USAID has leveraged over $9 bill with over 680 alliances to mobilize investments in sectors ranging from water to micro credit to agriculture. And of course, the micro-credit (and, growing very slowly, the micro-insurance) arenas are well known ways in which much has been done. There are international intentions (such as the UN Global Compact) which are providing a sandbox for figuring out what to do where. I'm not always sure how much is sustainable, and how much isn't. But I know that create sustainable development, both sides need to work together - and hopefully, to get a clearer sense of what is needed to both transform business and aid practices for sustainable development.

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