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Contributions from
the Column
InWEnt News
Millennoum Project .”Private sector is a key partner”
MDGs: The need for PPP
Vocational Training: Making appropriate use of e-learning
“Ch@t of Worlds” – a tool for sustainable development
04/2005 |
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MDGs: The need for Public-Private Partnerships
Development and poverty reduction are a bigger political and public issue than ever, according to Germany’s Federal President Horst Köhler. The former head of the International Monetary Fund stresses, however, that the Millennium Development Goals cannot be achieved by public funding alone. Tanzania's President William Mkapa agrees, arguing that the MDGs need not only be attained but also sustained on a long-term basis. In his view, an adequate level of economic growth is required along with an economy driven by a dynamic private sector.
Typically, African countries face two problems: they receive hardly any of the international capital invested worldwide and their own economies run largely on the back of informal micro-enterprises with hardly any scope for expansion. German Development Minister Heidemarie Wieczorek-Zeul says that micro-enterprises in many partner countries are under-promoted. This criticsm was accepted by Mkapa at a conference hosted by InWEnt, KfW development bank and the German Development Ministry in Berlin in February. He promised his government would pay more attention to the informal sector in future.
All participants stressed the importance of inward investment. But the conference also agreed that investors should not only act in search of profits. Federal President Köhler affirmed that "respect for environmental and social standards is also in the interest of private enterprise". President Mkapa said that canvassing for investment must not lead to a race to the bottom in the developing world. He regretted the fact that hardly any companies were prepared to invest in Tanzanian agriculture. "Foreigners readily invest in our gold mines because they can take home profits after just three years", he said.
The conference's conclusion was that politicians need to create good conditions for business, but business also needs to be ready to take risks and not just speculate on short-term profits. A public-private partnership on a scale like that could make an effective contribution to poverty reduction. (ell)
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