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Dipa Patel

February 14th, 2018

Cutting Edge Issues in Development: Leveraging the private sector to achieve development

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Estimated reading time: 5 minutes

Dipa Patel

February 14th, 2018

Cutting Edge Issues in Development: Leveraging the private sector to achieve development

0 comments

Estimated reading time: 5 minutes

On Friday 9 February, Laura Kelly, Head of the Business Engagement Hub at Department for International Development, delivered a talk about leveraging the private sector to achieve development. The talk was part of the Cutting Edge in Development series, hosted by the Department of International Development.

Two graduate students, Sylvia Cesar and Francesco Giacomini, both with very different views of the theme reflect on the talk. 

A powerpoint slide full of graphics, data, references, and new concepts greeted us all last Friday afternoon–a sight we are not accustomed to see at these often informal lectures. We would soon find out that Mrs. Laura Kelly would be treating us students just as she would a business client for the UK’s Department for International Development Business Engagement Hub, with a clear, optimistic and very well-structured presentation of the work she does. It wasn’t all graphics and high-level academics, however; the value and supply chain was quickly illustrated to us as she asked: “What part of your laptops or your mobile phones comes from Africa?” The answer was cobalt, for the battery, and “it is usually imported from war-torn countries like the DRC.”

Immediately one saw where she was headed, and she stayed on that track throughout the rest of the lecture: responsible investment and trade. Not 20 minutes into her lecture, she brought up the UN’s Sustainable Development Goals, and “whether we knew about them?” It was one of those moments when everyone knows the answer, so no one raises their hand. Very politely, ignoring that we may all be students of development unaware of the SDGs, she went on to explain the importance of two or three of the goals, and how the Business Engagement Hub seeks to, precisely, engage business and the private sector in contributing to the SDGs in international investment. Terms like “empowerment of women,” “decent work,” and “reduction of poverty” flooded her slides, and one had the impression these words were far from meaningless for the work of Mrs. Kelly and her team.

Her colorful graphics, ever under the slogan of UKAID, would speak for themselves when she showed us the partners that DFID works with across the world: USAID, Unilever, Mastercard, Sainsbury’s, etc., all of whom have committed to investing and trading with the developing world whilst upholding high environmental and labour standards. As is often the case with development students at the LSE, we were all immediately skeptical about whether multinational corporations were, in fact, guiding their investment decisions by something other than profits. The skepticism was not lost on Mrs. Kelly, nor was it absent in the long and difficult round of Q&A, but she never reversed her claim that “companies like Unilever are setting a good example for MNCs across the world,” and that large companies with vast supply chains have been providing great export opportunities for many developing countries. She leads the UK government’s work on responsible international investment, so who were we to question her?

And so the expert bureaucrat from the UK’s DFID went on to deliver what is possibly the first “Cutting Edge” lecture that left us with an optimistic sense that there is a way to solve some of the world’s problems, and that there are people working for it. One would hope every social worker has the expertise, the comprehensive and realistic world view and, above all, the sense that there is a solution, as Mrs. Laura Kelly so effortlessly radiates.

Sylvia Cesar is an MSc Development Management student from Nicaragua. Sylvia previously studied International Economics at Georgetown University, with a focus on economic development in Latin America.

_______________

There is a general consensus that Foreign Direct Investments (FDI) are the way forward for development. This was the overall message for this #11 Lecture of Cutting Edge Issues in Development: ‘Leveraging the private sector to achieve development’. However, tonight’s speaker Laura Kelly, who currently leads the Department for International Development’s Business Engagement, argued that many companies are moving towards a more respectful approach to linking business and development. In order to highlight the importance of private firms in our everyday life she started the lecture with two questions for the audience: “How many of you think business is good for development? And how many of you are thinking to join a private company in the future, maybe related to development?”. Half of the theatre lifted their hands. She then went on to make a (half) point in showing us that at least 50% of our peers are realists and believe in the power of business.

She also added that tools like Sustainable Development Goals (SDG) will help foreign firms to direct their future investments towards more sustainable forms of development, and, that they will be used as a compass that business will use to sail across the sea of development.

Here is my issue with SDGs. They are definitely valid, and one could easily agree with them but… How do you measure them? Let’s take #17 for instance. This SDG never fails to make me gulp. It states: “Revitalize the global partnership for sustainable development”. The key word is “partnership” and the question here is: What kind of partnership are we talking about? Are the actors of this partnership meant to be equal? How can this model create a new local class of investors that are not reliant on FDI? After foreign firms create these new markets, will they be willing to share them with local companies?

Lately, many Transnational Corporations (TNC) have been hijacking words such as partnership, sustainability and environment and I would like to believe that some of these investors maybe be genuine. Nonetheless, companies exist to maximise profits. The champions for FDIs will argue that these investments will create new jobs and opportunities in developing countries. However, we have already experienced the consequences of policies that give free ground to large firms; in the West inequality has been on a steady rise since the 80s. For example, London’s Poverty Profile reports that 43% of children in the borough of Tower Hamlets are living in poverty – a striking fact. Funny enough, Tower Hamlets is the borough that sits between the two financial hearts of London; the City and Canary Wharf. How do we account for that? If large firm investors have not reduced inequality at home, how can they now be the solution to reducing inequality in countries with limited state capacities?

Francesco Giacomini is a Msc in Political Economy of Late Development. He moved from Italy to London in 2007 and worked for several years in companies related to food and commodities, particularly coffee. He is an avid traveller and explorer of developing countries. In 2016 he hitch-hiked Across the Americas for nearly a year as a solo traveller (Mexico–>Argentina). His academic interests include monetary policies, alternative economic models and environmental policies. He will never say no to ice-cream.


The views expressed in this post are those of the author and in no way reflect those of the International Development LSE blog or the London School of Economics and Political Science. 

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Dipa Patel

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