Private sector as partners in development

Accelerating private-sector-led, sustainable economic growth is one of the most effective tools to eradicate poverty around the world. With a global focus on establishing post-2015 development goals and how to achieve them, it is essential to mobilize new partnerships and investments to achieve these goals.

Many developing countries are not fully benefiting from the opportunities that can be generated by a robust private sector. Developing countries often have weak domestic private sectors, and they do not have sufficient tools and policies in place to encourage private-sector-led economic growth.

Canada is committed to use its world-leading expertise in innovative financing to help developing countries grow their economies more sustainably, manage their resources more responsibly, and build tomorrow’s markets for trade and investment.

The Government of Canada is helping developing-country partners create the conditions for strong and sustainable private-sector-led growth through its Sustainable Economic Growth Strategy. The strategy’s three paths—building economic foundations, growing businesses and investing in people—target the main prerequisites to achieving poverty alleviation through private-sector-led sustainable economic growth.

In addition, the Government of Canada is leveraging local, Canadian, international and multinational private sector actors of all sizes as part of its efforts to promote private-sector-led growth in developing countries. Recognizing that private enterprises have an important role to play in achieving lasting development effects, the Government of Canada is committed to strengthening its engagement with private sector actors as partners to help reduce global poverty.

Canada’s role

Canada has more than four decades of international development experience in areas to which the private sector can contribute unique skills, resources, innovation and know-how. By working with private sector actors that adhere to responsible business and investment practices, along with non-governmental organizations, multilateral institutions, and partner countries, Canada can contribute to the creation of jobs, mobilize private investment, unlock innovative solutions to intractable development challenges, and deliver products and services that improve the lives of people in poverty.

The Government of Canada works with local, Canadian and international private sector partners to deploy the most appropriate resources, approaches and expertise in support of poverty alleviation. In pursuing these goals, the Government of Canada’s private sector and development approach pursues strong results in the areas of:

  • coordination
  • investments
  • partnerships
  • innovation

In May 2014, Canada’s Minister of International Development and La Francophonie was appointed as chair of the Redesigning Development Finance Initiative (RDFI) Steering Committee. The RDFI, established by the Development Assistance Committee of the Organisation for Economic Co-operation and Development and the World Economic Forum, is set up to create global mechanisms that will enable the blending of public and private capital to finance development goals, increase the effectiveness of international development investments and achieve sustainable results.

Canada, in its approach to poverty reduction, supports market-oriented incentives for the private sector to target investments that achieve meaningful development results. These examples show that commitment:

  • Global Health Investment Fund – A public-private blended finance partnership with the Bill & Melinda Gates Foundation, Swedish International Development Cooperation Agency, Grand Challenges Canada, and pharmaceutical companies such as Pfizer, this project is designed to provide financing for the development of drugs, vaccines, diagnostics and other interventions against diseases most prevalent in developing countries.
  • A New Partnership for Sustainable Impact Investing in Frontier Markets – In partnership with Mennonite Development Associates of Canada, Sarona Asset Management, and the MaRS Centre for Impact Investing, this project supports the launch of a 15-year investment fund for the Association of Southeast Asian Nations( ASEAN) member countries that leverages private equity investment of up to $400 million to help as many as 250 of the most promising small and medium-sized enterprises in developing countries grow and create new jobs.
  • Mennonite Economic Development Associates in Ethiopia – This investment project provides working capital and skills training for women entrepreneurs in the textile industry.

The Government of Canada also encourages multistakeholder partnerships with private sector and non-for-profit organizations that support projects and initiatives demonstrating clear benefits in the government’s priority areas. These partnerships require private-sector actors to share in the costs of delivering a particular project. Some of the projects create shared value, meeting both business and development objectives. These examples demonstrate Canada’s interest to implement projects with the private sector and civil society:

  • Tim Hortons Coffee Partnership in Honduras and Guatemala – Together with Tim Hortons Inc. and Trade Facilitation Office Canada, this project supports work with smallholder coffee farmers in the Trifinio region (a tri-border area spanning Guatemala, El Salvador and Honduras) and other coffee-growing regions of Guatemala and Honduras, by increasing the productivity of the farms, improving the profitability of coffee production, and expanding exports to international markets.
  • Zinc Alliance for Child Health – A maternal, newborn and child health project involving Teck and the Micronutrient Initiative, Canada’s support helps to develop and scale-up zinc treatment programs for improving nutrition and saving children’s lives.
  • Building Collaboration for Sustainable Economic Growth in Peru – In partnership with World Vision Canada and Barrick Gold, Canada is working to leverage the economic effects of mining operations in Peru by increasing the incomes and standard of living for families. This initiative also supports Canada’s Corporate Social Responsibility strategy for the Canadian International Extractive Sector, which seeks to enhance the capacity of developing countries to manage the development of their natural resources to alleviate poverty.

The Government of Canada invests in innovative approaches that support the development of viable business models that increase access to goods and services for the people who most need them. New approaches to finance and technology, for example, can generate game-changing solutions to international development challenges. Examples include:

  • Global Financing Facility (GFF) for Every Woman Every Child – A partnership announced by Prime Minister Harper at the United Nations General Assembly 2014, the GFF, located at the World Bank in Washington, D.C., is designed to provide the critical financial infrastructure to mobilize the capital required to scale-up health services for women and children. The new GFF will establish a multidonor platform to help developing countries build and strengthen their civil registration and vital statistics systems (CRVS).
  • Gavi, the Vaccine Alliance – This financing partnership brings the public and private sectors together to develop and deliver much-needed vaccines to treat pneumococcal disease, which is a leading cause of child deaths in developing countries.
  • Grand Challenges Canada – This partnership leverages public and private funding, expertise and technology to reduce preventable deaths of mothers and children in India, by introducing life-saving products such as a baby temperature band that continuously measures an infant’s temperature and uses intuitive alarms to alert a mother when her child needs to be warmed, which reduces the rates of neonatal hypothermia and severe infection, as well as the Aina device, a test strip reader that transforms a mobile phone into a blood analyzer to measure glucose levels.

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