This page summarises some of the published PSD strategies (as
hyperlinked). The strategies do not necessarily represent fully what the agency
is actually doing in the field, particularly in agencies where decision-making
is either decentralised and/or largely made with or by partner governments. The
Note is intended as a resource for DCED members engaged in strategy
formulation; the summaries have not been reviewed by the agencies referred to. For a mapping of donor support by the Aspen Institute, June 2010, click here.
Contents
Stimulating Sustainable Economic Growth. CIDA's Sustainable Economic Growth Strategy, 2010
Supporting the growth of a productive and competitive private sector is a key aim of CIDA's sustainable economic growth strategy. Overall, the strategy comprises three main paths: building economic foundations, growing businesses, and investing in people. Under the theme of economic foundations, CIDA's investments focus, among other things, on public financial and economic management capacity-building, improving legal and regulatory frameworks and their implementation and support to regional and global economic integration,. In the area of growing businesses, CIDA seeks to strengthen micro-, small and medium enterprises, with a special emphasis on women entrepreneurs, value chain development and increasing access to finance. The third path includes essential training such as in numeracyt and literact, and technical skills development, including in agricultural, to increase the productivity and revenue generating potential of farmers.
Business Growth and Development: Action
Programme for Danish Support to Private Sector Development in the Developing
Countries, 2006
Danida intervenes primarily at the policy level. Through
its investment climate programmes, the agency strives to update private sector
legislation, improve both company registration and customs processing, and make
corporate taxation more transparent. Similarly, Danida supports land titling
for the poor and instruments to speed up the handling of commercial disputes. At the sector and enterprise levels, most of Danida’s PSD work is in capacity development, business development services, training and supply chain development. The agency also engages in infrastructure development and finance.
Going forward,
Denmark
intends to give greater support to microfinance, and to leverage more Danish
and multilateral investment capital in its projects. Danida is looking to
incorporate PSD into other programme areas, notably agriculture, education
(training and materials) and healthcare (affordable medicines). Overall, PSD
has gained a higher profile in Danida following the
report
of the Danish-led
Africa Commission.
The Social and Ecological Market Economy – A Model for Asian Development?, 2008
Germany’s Development Cooperation is underpinned by the country’s unique development model.
GIZ defines the Social and Ecological Market Economy as ‘an open market economy
with in-built social security factors’. GIZ specialises in areas where the
German model has developed a leading edge, such as the strengthening of
national competition policies. Likewise, GIZ assists governments to actively
develop specific sectors, regions or localities where improved coordination,
innovation or inputs could unlock dynamic growth.
Business environment reform and business development services are important parts of GIZ’s PSD programmes.
While many donors have separate programmes for value chain and business
environment interventions, GIZ tends to favour their integration. Increasingly, GIZ also integrates ecological
concerns into PSD, for example by helping enterprises to access carbon markets.
Private Sector Development Strategy, 2004
IADB’s PSD Strategy has several notable features. Firstly, the
strategy focuses above all on business environment reform (BER).
Secondly, IADB
channels a lot of its assistance to SMEs and disadvantaged ethnic
groups.
Thirdly, IADB uses a broad range of instruments to deliver PSD. These
include
technical assistance, guarantees, loans and investment facilities.
Alongside BER, IADB also intervenes at firm and sector level. The Bank
promotes business clusters, training, technology and innovation, and
quality enhancement. Similarly, IADB supports the private provision of
financial and business services to poor and disadvantaged entrepreneurs.
IADB
also supports forums that foster public-private dialogue.
Creating Opportunities for Small Business,
2007
IFC utilises its experience as an investor and provider of business advisory services to support PSD in four ways. Firstly, IFC
collaborates with other World Bank agencies to improve the business environment
in partner countries. Within business environment reform (BER), IFC specialises
in regulatory simplification, alternative dispute resolution and investment
policy promotion. Secondly, IFC helps
SMEs and private sector-led infrastructure projects to access finance.
Thirdly, IFC promotes access to markets, business skills and
information. The agency’s
SME Toolkit and Business
Edge
training packages have been rolled out extensively. The fourth area of IFC’s
engagement with PSD is what the agency calls ‘creating new opportunities
through innovation’. This includes the supply of credit to promote sustainable
business practices, technology transfer and the development of green sectors.
Results measurement is a priority at IFC, where standardised indicators have
recently been created to enable comparison across projects and the aggregation
of results.
Private Sector Strategy - Deepening IFAD's engagement with the private sector, 2011 (for approval by IFAD's Executive Board)
This paper presents IFAD’s strategy on how
best to promote private sector development in rural areas. It builds upon and adapts
IFAD’s 2005 Private-Sector Development and Partnership Strategy with a view to respond to new global developments. Overall, it calls for IFAD to be more systematic and proactive in engaging with the private sector. Three broad themes to deepen engagement with the private sector are proposed: (a) Strengthening IFAD’s existing instruments, such as country strategic opportunities programmes (COSOPs), project loans and grants, partnerships, and policy dialogue as related to rural pro-poor private-sector development; (b) Further building the capacity and knowledge of IFAD and its staff in engaging with the private sector and establishing partnerships;(c) Exploring further and in a gradual manner the options for IFAD to better support the growth of rural small- and medium-sized enterprises (SMEs) in developing countries.
The Promotion of Sustainable Enterprises,
2007
Generation of
Decent Work is the over-arching goal of ILO’s PSD Strategy. To achieve it, ILO
views research as fundamental. The organisation designs and delivers training
courses to shares its research findings, and also uses local media for
dissemination. Prominent research themes include entrepreneurship development,
the investment climate, the labour market, value chains, gender, finance and
better workplace practices.
On the ground, ILO sees
public-private dialogue as important to PSD. The organisation aims to leverage
its tripartite structure to promote PPD. ILO also supports Local Economic
Development, where sets of interventions enable a region to develop new or
existing comparative advantages. ILO specifically seeks to support the various
stakeholders in the production process, not just entrepreneurs. This means that
job creation, social and environmental considerations are often emphasised.
The Netherlands Ministry of Foreign Affairs (MoFA), which oversees Dutch development cooperation, channels
most of its PSD support through non-governmental organisations, multilaterals
and multi-donor initiatives. The NGOs work mainly on market (value) chain
development, access to finance, advocacy, business skills and vocational
training. Multilaterals and multi-donor initiatives also play an important role
in The Netherlands’ PSD strategy, as do partnerships with the Dutch private
sector. Meanwhile, Dutch embassies work directly with partner governments to
improve the regulatory environment for business.
Across the various areas of
intervention, special emphasis is placed on support to disadvantaged groups and
regions. Fragile states have become a focal point of Dutch PSD efforts. Among
other things, the MoFA facilitates Dutch companies in making pro-poor
investments in conflict affected countries. Where partner governments have a
weak record of engagement with the private sector, the MoFA works to strengthen
domestic employers’, producers’ and workers’ organisations. Also within the
Dutch PSD portfolio are a number of substantial infrastructure development
programmes.
Economic Growth and Livelihoods: towards
a safe and just world, 2008
NZAID is primarily active in the
Pacific region, but also works in Asia, Latin America and Southern Africa. The
agency typically integrates PSD with its support for macroeconomic
reforms.
Through regional and multilateral
organisations, the agency promotes legal, regulatory and investment environment
reform in partner countries. In its Pacific partner countries, NZAID also
supports the provision of key economic infrastructure. Here the agency remains
sceptical about direct private sector provision, however, given the limited
scope for competition in small markets.
NZAID promotes the Making Markets
Work for the Poor (M4P) and Livelihoods approaches. Among other things, New
Zealand’s M4P programmes strengthen producer associations, improve research and
extension services and build public-private development partnerships. NZAID
also supports training colleges and small business support schemes, centres and
facilities. Food security is another key concern. NZAID addresses food security
by aiming to raise quality and productivity in agricultural value chains.
Promoting Pro-Poor Growth: Private Sector Development,
2006
OECD-DAC advocates a pro-poor growth agenda, focused mainly on business environment reform. Among the key reforms that fit the DAC's approach are the removal of barriers to formalisation and the strengthening of competition policy. In line with its emphasis on policy-level interventions, OECD-DAC calls for PSD and governance programmes to be merged.
The DAC also endorses pro-poor value chain development, BDS, innovation and cluster development, where donors play only a facilitation role. In addition, OECD-DAC recommends capacity building for inclusive public-private dialogue, compensation for poor people adversely affected by reforms as well as a range of methods to enhance women's market access.
Sector Strategy
Document: Economic Growth and the Promotion of the Business Sector (Crecimiento Económic y Promoción del Tejido Empresarial), November 2010.
The Spanish
MoFAC seeks to generate inclusive and equitable economic growth by focusing on five areas of intervention:
1. Promotion of the economic and business sector. This comprises, among
other things, promoting the infrastructure necessary for economic
activity, including through private sector provision, and improving the
coordination of and support to markets (e.g. promote productive
investments, improve financial services for enterprises, support to new
technologies and innovation)
2. Creating an institutional framework for market development. This
includes the promotion of entrepreneurial capacities and initiative
(e.g. through the promotion of a favourable regulatory environment for
the creation of enterprises and reliable market information)
3. Increasing the participation of the poorest sections of society in
economic growth. This includes the strengthening of entrepreneurial
capacities among the poorest sections of society (e.g. through business
support services, microfinance and ITC, and formation of cooperatives),
and encouragement of business formalisation).
4. Promoting public-private dialogue, by strengthening the advocacy
capacity of the private sector and supporting public-private dialogue
initiatives.
Sida’s approach to PSD is strongly influenced by Making Markets Work for
the Poor (M4P). Within they agency’s PSD portfolio, business
environment reform is the largest component. BER represented 46% of PSD
expenditure
in 2007. In the same year, 42% was dedicated to strengthening value
chains,
business development services and business organisations. Meanwhile, 10%
was
allocated to employment and labour market development activities.
Geographically, Sida’s main focus is on Africa. The second
largest regional portfolio is that of Europe. Within Sida, PSD is led by the
Department of Infrastructure and Economic Cooperation. That said, the agency
aims to integrate PSD across departments and sectors. Sida also operates
partnerships, notably with the Swedish workers’ and employers’ organisations,
which come together to share Sweden’s unique experience in public-private
dialogue.
Private Sector Development: Towards better access to finance and business conditions for the private sector, 2007
SECO works on PSD in around twenty countries, most of which are middle-income.
SECO’s PSD interventions cover three areas:
business environment reform, access to finance and direct support for SMEs
(technical assistance and capacity building). Many of SECO’s activities are
conducted in partnership; key partners include IFC, EBRD, FIAS, FUNDES,
Swisscontact and SDC. The
Private
Sector Development division is one of four constituents of SECO’s Economic
Cooperation and Development Directorate. The others focus on infrastructure
financing, macroeconomic support and trade promotion.
The Engine of Development: The Private Sector and Prosperity for Poor People, 2011
This document is primarily aimed at the public, business people and
civil society, with a particular eye on those in the UK. It is not
intended as a policy document, nor to give comprehensive coverage of all
that DFID does or plans to do. Rather, it gives examples of activities
outlined in the Operational Plans of DFID country, regional and central
teams - and describes present and future activities aimed at
transforming the environment for business and investment; at opening up
economic opportunities for small businesses and poor women and men; and
at providing them with better services.
For DFID's 2008 PSD Strategy,
click here.
Fast Facts: UNDP and the Private Sector,
2008
Leveraging its outreach and research capacity, UNDP’s Private Sector Division encourages
businesses to invest in ways that serve the poor. The
Growing Inclusive Markets initiative creates information products that demonstrate
how entrepreneurs can do business with the poor and combine profit with poverty
reduction. Meanwhile, the Growing Sustainable Business initiative assists with feasibility studies, training and technical assistance to selected public-private
development partnerships. The Global Compact and the Business Call to Action are two related initiatives, also facilitated by UNDP.
In addition, UNDP advises governments looking to improve their business enabling
environment. UNDP also operates market development programmes. As part of the
UNDP’s response to climate change, the Private Sector Division works to build
developing countries’ capacity to draw upon carbon markets for clean energy
development and sustainable land use practices.
UNIDO, Programme and Budgets 2010-2011, 2009
UNIDO’s approach to PSD includes support for business environment reform, entrepreneurship, clusters and value
chain development. Equally, UNIDO engages in innovation and technology
promotion, human security and post-crisis rehabilitation. Where UNIDO is
distinct is in its level of engagement with industrial policy design.
The emphasis that UNIDO places on each type of intervention varies substantially by region. In Africa, industrial
policy is arguably UNIDO’s central concern. In the Arab region meanwhile, job
creation and women’s entrepreneurship are particularly important. In Asia and
the Pacific, the business enabling environment is among UNIDO’s top priorities.
In the transition economies of Europe, policies to encourage diversification
take precedence. In Latin America, the promotion of SME clusters features among
UNIDO’s key interventions.
Business environment reform is central to PSD at USAID. The agency
also conducts numerous “bottom-up” value chain interventions, contracting third
parties as implementers. Rebuilding the private sector in areas affected by
conflict has also emerged as a USAID priority, as has the harnessing of PSD for
improved food security.
USAID sees itself as a natural
leader in PSD: “Among donor programs that promote
private-sector-led economic growth, USAID has the strongest orientation toward
the private sector”. More specifically, USAID sees the size and relatively low turnover
of its in-country staff as a comparative advantage, along with its use
of grant funding.
PSD at USAID is carried out by
the Bureau of Economic Growth, Agriculture and Trade (EGAT).
Within EGAT, PSD is shared mainly among three Departments: Business
Enabling Environment, Microenterprise
Development and Enterprise
Development.