Tuesday, 20 September 2011

Is business the new aid?

By Noshua Watson

Yesterday, IDS hosted a panel titled “Is Business the New Aid?” at the Liberal Democrat Party Conference Fringe in Birmingham, UK.  We were fortunate to have Christine Svarer from Care International UK, Zahid Torres-Rahman from Business Action for Africa and two Liberal Democrat Members of Parliament, the Rt Hon Malcolm Bruce and Martin Horwood

The panelists first responded to the provocative question by defining what “aid” means and what it is intended to do. Official development assistance from government to government will continue to be important, but the volume of private flows that affect development, such as foreign direct investment and remittances (which are frequently invested in small businesses) cannot be ignored.  Most importantly, if the goal of aid is to advance economic development, it is difficult to do without business. Including the private sector in development also means monitoring and improving the impact of business and development.
The audience of party members, government officials, NGO executives, corporate executives and students, challenged the panel with questions including:
  • Why doesn’t the conversation around aid to Africa include more discussion about industry and investment instead of disasters and relief?
  • To what extent do inclusive business initiatives address women?
  • When governments partner with business, should they really be giving money to for-profit organisations to finance development programmes?
  • What is the role of business in fragile states or conflict areas?
The panelists drew attention to research done by IDS on African regional trade and investment initiatives and the intensive Chinese investment in Africa. They pointed out that Coca-Cola and Danone have programmes that specifically aim to integrate women into global value chains.  With respect to public-private partnerships, they generally tend to be “obligation-style”, rather than “opportunity-style” and they won’t be effective unless they clearly contract with businesses for specific tasks that play to their strengths.  The panelists confessed that there is much to be learned about the role of business in conflict areas.

For more discussion of ‘the new Aid’, check out this dialogue on Tales from the Hood.
*The third seminar series on business and development at the Institute of Development Studies ‘Conflicting Interests’ will begin on 18 October with a presentation from Mike Davis, Campaigner at Global Witness - everyone is welcome.

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