Monday, 13 June 2011

DFID and the role of the private sector

By John Humphrey

The Department for International Development (DFID) have just launched a paper setting out their approach to the private sector. It is a very public commitment to enhancing and expanding work with the private sector, and it provides a good overview of an extensive range of activities that are already being carried out. It covers both how DFID proposes to improve the environment within which the private sector operates, and also how DFID would wish to work with the private sector to achieve development goals. It highlights a number of ways in which businesses are already contributing to the achievement of these goals.

An excellent blog by Zahid Torres-Rahman on the Business Fights Poverty website highlights the many positives in the paper, and also points out a few omissions.

The document explicitly says it is not a blueprint for future work, and it is very much establishing the terrain of existing DFID private sector activities and how they make contributions to development rather than planning out a future strategy. Nevertheless, the first two sentences of the document set out an ambitious goal: to put the private sector at the centre of generating opportunities and prosperity for poor people in developing countries.

To achieve this, a lot of work will need to be done in three areas:
  1. creating a vision for the private sector's contribution to development,
  2. complementing this vision with an understanding of the private sector's own visions, motivations and ambitions for its operations in developing countries, and
  3. a deeper understanding of which types of engagement between public agencies and the private sector contribute most effectively and cost-effectively to growth and poverty reduction.