World Economic Forum report to UN calls for greater business role to fight poverty
Study conducted for the United Nations concludes that public-private partnerships can help close financing gap by adding scale, efficiency and innovation to traditional government aid programmes

14 September 2005 - Geneva, Switzerland

The World Economic Forum has issued a report calling on the United Nations and its member governments to recognize the key role that partnerships with business can play in delivering education, health and water sanitation services in poor regions of the world. The report comes as leaders gather in New York to assess slow progress in meeting the Millennium Development Goals (MDGs), amidst growing calls for UN reform.

Business partnerships can harness new resources for poverty alleviation and public service provision in poor countries, according to the Forum’s Financing for Development Initiative. Entitled “Building on the Monterrey Consensus: The Growing Role of Public-Private Partnerships in Mobilizing Resources for Development”, the report was produced in cooperation with the United Nations Department of Economic and Social Affairs (UNDESA) and the Swiss Agency for Development and Cooperation (SDC).

The report examines the status and future promise of public-private partnerships (PPPs), which are formed when a private company joins with a government, international agency or non-profit group to work on a specific project. It summarizes a year-long process of consultation with over 200 public-private partnership practitioners and experts from governments, businesses, NGOs, philanthropic foundations and academia.

Partnering with the private sector can tap new resources and expertise that are greatly needed in development programmes, according to the report. Based on successful experiments with PPPs in recent years, it states that “the very concept of development appears set for a transformation”.

Resources leveraged by the private sector can help narrow the US$ 50-100 billion gap in financing to achieve the MDGs. In addition to providing direct investment, the report estimates that private companies are donating billions of dollars annually to support development programmes in low-income countries. These donations, both cash and in kind, represent a growing source of support for development projects.

Applying private-sector expertise to development may have even greater value than financing, the report suggests. The capacity of business to manage large-scale operations efficiently and develop innovative solutions to tough problems can be applied to projects and also transferred to governments through partnership efforts.

Yet most successful PPPs are still in the pilot stage. To scale up successful PPP models, the report recommends a number of actions that are needed:
· Political leaders should help strengthen public awareness and support for PPPs.
· The public sector should strengthen its capacity to engage in PPPs, and improve procurement rules to encourage private-sector participation in projects while avoiding conflicts of interest.
· Improving national policies and institutions is key to the success of PPPs.
· Voluntary guidelines and information on best practices can provide much-needed models for PPP implementation.
· Partnership brokering and facilitation is needed to help partners develop, negotiate and enact PPP arrangements.
· All sides should work to bridge the “cultural gap” between the public and private sectors; personal leadership in building such bridges is critical.
· Improved financing instruments are needed to facilitate private-sector engagement. These include loans, grants, risk finance, commercial capital and subsidies.

According to Richard Samans, Managing Director of the Global Institute for Partnership and Governance at the World Economic Forum: "This report adds to the growing evidence that public-private partnerships are a promising tool that deserves to be taken more seriously by everyone who has an interest in expanding growth and opportunity in developing countries. It builds upon our own growing experience in facilitating partnerships involving our member companies in the areas of health, education, water, energy, information technology and disaster relief."

The report identifies a number of PPP models that are working – and others that have significant potential – in the education, health, water and sanitation fields. The full report is posted on the World Economic Forum website at www.weforum.org

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