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A stronger role of the private sector in achieving inclusive and sustainable growth in developing countries Seminar on "Business opportunities for cooperation with the EU in developing markets" organised by Polish MoFA and PARP Mariusz Tamborski, Directorate General for Development and Cooperation EUROPAID – European Commission Warsaw, 20 May 2015 ROLE of the PRIVATE SECTOR in DEVELOPMENT table of contents 1 2 3 ECONOMIC AND POLITICAL CONTEXT PRIVATE SECTOR COMMUNICATION EU INSTRUMENTS – OPPORTUNITIES FOR EU ENTERPRISES 2 Economic context - opportunities Private Sector provides 90 % of jobs in Developing Countries and thus it is an essential partner in the fight against poverty. Global needs for developing countries are estimated at USD 1.5 trillion a year while last year's Official Development Assistance (ODA) was USD 135 billion (OECD). Private capital flows are indispensable to bridge the gap, in addition to domestic tax resources. The private sector is needed as investor in sustainable energy, infrastructure, green economy and especially in sustainable agriculture and agribusiness to feed 9 billion people by 2050. Huge opportunities: 5%-6% of GDP growth on average in developing countries and emerging economies. On the African continent, the latest figures show eight countries registering a growth rate of 7%, nine countries at 6% and ten countries at 5%. But with challenges regarding… 3 Economic context - challenges Business and investment environment Repatriation of profits Registration of companies Customs procedures Taxation… Access to finance mainly for SMEs Skills gap Lack of skilled labour Lack of experienced management capacity… Information gap Lack of information, knowledge and experience which retain from engagement or give excessively risk adverse attitude to European enterprises. 4 Political context - a change of paradigm regarding private sector International level: 4th High Level Forum on Aid Effectiveness in Busan (2011) called for a more direct engagement of the private sector in the area of development policy design, resource mobilisation and the provision of goods and services which benefit the poor. The post-2015 framework: conferences in Addis Ababa in July, New York in September and COP 21 Climate change in Paris in December 2015. A way from Millennium Development Goals (MDGS) to Sustainable Development Goals (SDGs). The key role of the business in the post 2015 agenda. EU level: "Agenda for Change" (2011) sets new priorities: e.g. good governance, sustainable growth and jobs. A need to engage more directly with private sector partners in development cooperation. Policy document, Communication "A Stronger role of the Private Sector in achieving inclusive and sustainable growth in developing countries" adopted by the Commission on 13 May 2014. 5 Structure of the Communication 6 Proposed principles for strengthening the role of the private sector in EU development cooperation 7 Actions on PSD and PSE 8 Tools for implementation 9 EU Instruments – opportunities for EU enterprises (examples) Policy dialogue to ensure a fair and level playing field for European business in non - EU markets. International agreements such as Economic Partnership Agreements (EPAs) with African, Caribbean and Pacific (ACP) countries to improve the access to market for both European and partners' countries accompanying with development and economic measures. Development Policy instruments (EDF, DCI, ENI) and programs such National Indicative Programs (NIP), Regional Indicative Programs (RIP), continental programs (e.g. Pan-African Program) and global thematic programs established with developing countries on the basis of their priorities: Measures aiming at improvement of business climate and based on win-win approach EU enterprises participating in tendering procedures. Access to finance for example through blending. 10 Thank you! Mariusz Tamborski Sustainable Growth and Development Directorate European Commission, DG DEVCO – EuropeAid 11