A stronger role of the private sector in achieving inclusive and sustainable growth in developing countries

Transcription

1 A stronger role of the private sector in achieving inclusive and sustainable growth in developing countries Antti Karhunen, Head of Unit "Private sector development, trade and regional integration", Directorate General for Development and Cooperation EUROPAID European Commission Lisbon, 8 June 2015

2 ROLE of the PRIVATE SECTOR in DEVELOPMENT table of contents 1 ECONOMIC AND POLITICAL CONTEXT 2 PRIVATE SECTOR COMMUNICATION 3 EU INSTRUMENTS OPPORTUNITIES FOR EU ENTERPRISES 2

3 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 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

4 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 Risk adverse attitude of European enterprises often caused by the lack of information, knowledge and experience which retain from engagement in developing countries. 4

5 Political context - a change of paradigm in development policy 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 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 Its objective is to make private sector a true partner in development. 5

6 Structure of the Communication 6

7 Proposed principles for strengthening the role of the private sector in EU development cooperation 7

8 Actions on PSD and PSE 8

9 Tools for implementation 9

10 European Economic Diplomacy and Internationalization of the European enterprises High political interest in the EU for the Economic Diplomacy but respecting subsidiarity principle with MS; Need to better exploit synergies and complementarities among EU policies, tools and instruments to support the competitiveness of EU businesses and reinforce our industrial base through more access to markets in third countries; EU Development policy can contribute to this process with a win-win approach. It regards the EU support to private sector development in partner countries such as business climate, blending, access to finance which can be beneficial for both local private sector and European companies; Our support to the facilitation of the private sector engagement in development can also add value. 10

11 EU External Financial Instruments Pre-accession Instrument 11,699 M European Neighbourhood Instrument 15,433 M Development Cooperation Instrument 19,662 M Partnership Instrument (ex ICI and ICI+) 955 M Instrument contributing to Stability and Peace (ex-ifs) 2,339 M CFSP 2,339 M European Instrument for Democracy & Human Rights 1,333 M Instrument for Nuclear Safety Cooperation 225 M Humanitarian Aid 6,622 M Others (MFA, Guarantee Fund, Civil protection, etc...) 3,372 M Margin 2,285 M 11th European Development Fund (outside budget) 30,506 M TOTAL: 96,770 M ALMOST 80 Billion will go to the developing countries 11

12 Geographical coverage Eastern Europe Asia Caribbean Mediterranean Central America Africa Latin America South Asia Pacific European Neighbourhood and Partnership Instruments (ENPI) Development Cooperation Instrument (DCI) European Development Fund (EDF) South Africa and Pan African Program

13 EU Instruments opportunities for EU enterprises Development Policy instruments (EDF, DCI, ENI) translated in 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; and implemented through projects. 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. EU Delegations in third countries plays a key role. 13

14 Opportunities for EU enterprises - In practical terms (1) EU Delegations in developing countries: identify and formulate projects on the basis of established priorities facilitate dialogue with national public authorities contribute to improving the business climate ensure the link between the local and EU private sector (examples) Business centres in Asia EU Business Fora in Ghana, Sénégal, Ethiopia, Uganda, Tanzania; This is complemented, at HQ level, with the organisation of global or sectorial Business Fora such as EU Africa Business Forum; 14

15 Zambezi Bridge in Mozambique Built in Caia over and cofinanced by : - EDF : 30 million euro - Italy : 20 million euro - Sweden : 21 million euro Total cost 71 million euro Contractor : Consortium between 2 Portuguese companies Win Win situation : - Economic benefits for Mozambique through the link between the Nord and the South and access to SADC network; - Following the completion of the bridge, the members of the consortium have strengthened their presence in the competing Africa infrastructure market. 15

16 Opportunities for EU enterprises - In practical terms (2) Moreover, EU enterprises have an access to tendering procedures (supply, services, works) in the context of EU external actions Calls for proposal and procurement notices are available on anguage=en Practical Guide to contract procedures for European Union external actions (PRAG) is available on 16

17 Thank you! Antti Karhunen Sustainable Growth and Development Directorate European Commission, DG DEVCO EuropeAid 17