Today, political and business leaders from around the world are attending the annual World Economic Forum in Davos, Switzerland to discuss some of the biggest challenges and opportunities facing the world.
One key issue on the agenda will be how to finish the job started by the Millennium Development Goals and eradicate extreme poverty in every country. The deadline for these goals is now fast approaching, and while we can point to many successes in many countries, there is still a long way to go to lift every country, and every person, out of poverty for good. We need to tackle the causes as well as the symptoms of poverty, and to look at the golden thread of issues underpinning development – rule of law, effective property rights, a stable business environment, and honest and responsive government. Momentum is building around an ambitious set of successor goals for the post-2015 development agenda. Last May the UN’s High Level Panel, co-chaired by the UK Prime Minister, set a vision for a post-2015 framework that would end poverty by 2030, leaving no one behind. The Panel was clear that this ambition could not be achieved by governments alone.
We need a global partnership that will see national and local governments, businesses, civil society, parliaments, journalists and young people working together to end poverty.
The Global Partnership for Effective Development Co-operation aims to build a partnership to identify practical actions for delivering the post-2015 development agenda. Its first High Level Meeting in Mexico in April will convene over 160 countries, international organisations, business leaders and civil society representatives to discuss how we can join forces in the fight against poverty.
As one of the Global Partnership’s Co-Chairs, my focus is on how businesses and governments can work in partnership to achieve the best development outcomes. I will be hosting a flagship event at Davos this week to discuss this work with business leaders from across the world.
It is now widely accepted that the primary driver of poverty reduction is economic growth, and the private sector is the engine of that growth. Businesses bring much needed investment, innovation, jobs, and tax receipts to a country. You need only look at China’s reduction of poverty rates or at Africa’s emerging economies to see how economic growth and a thriving private sector can improve the lives of millions.
The private sector has been a core driver of development for decades, but often the development community has seen these skills and potential as something separate to its own efforts. I think this is a mistake, and since becoming the Secretary of State for the UK’s Department for International Development, I have ramped up our focus on driving economic development, while critically working hand-in-hand with businesses to do this. For example, in Tanzania the UK is working with companies, including Unilever, to co-invest in business projects with good development outcomes. In South Sudan, the world’s newest country, we are working with SAB Miller to locally source cassava, providing a reliable income for at least 2,000 South Sudanese farmers.
The Global Partnership will make it easier for businesses, governments and civil society around the world to work together to support development. For example, we will develop a roadmap to enable businesses and governments to partner more effectively, and we are looking at how we can support “business hubs” in developing countries to help companies overcome investment barriers and maximize their development impact. These hubs will bring businesses, governments and civil society together to share best practice, identify risks and agree joint projects.
We will also look at how to support innovative financing approaches which catalyse development, for example through Development Impact Bonds. I believe development finance has an important role to play in supporting business transparency and accountability, and in helping to ensure that private sector investment benefits every sector of society, including women, minority groups and micro or household enterprises.
Growth does not reduce poverty automatically. The UK is working with countries to help them build their own tax base, squeezing out corruption and providing technical advice so that when economic growth does happen, countries are well placed to reap and reinvest the gains. It is vital that all governments support responsible business investment alongside a zero tolerance approach to corruption and that companies operate transparently, accountably and sustainably, respecting international standards.
The Global Partnership will look at how to align business and development objectives to create shared value, so companies help reduce poverty through their core business models, not as an add-on. At the first High-Level Meeting of the Global Partnership in Mexico next April, we will challenge businesses to commit to transparent, accountable and sustainable practices wherever they operate. Finally we will look at ensuring robust monitoring and evaluation of private sector partnerships, assessing evidence of what really works long term, and being clear about what doesn’t.
Where businesses operate transparently and sustainably they have a transformational impact on development, and it is essential we all work together to harness the power of entrepreneurs and wealth creators to lift people permanently out of poverty. The Global Partnership has a critical role to play and I am enthusiastic about taking this work forward in 2014.
Justine Greening is the Secretary of State for International Development of the United Kingdom. She was formerly the Secretary of State for Transport. She has an MBA from the London Business School and was a Finance Manager at Centrica plc before being elected as a Member of Parliament in May 2005.