As European Commission Communications go, “A stronger role for the private sector in achieving inclusive and sustainable growth in developing countries” is pretty good. It covers all the possible angles for working with, through and for the development of the private sector, and even gets down to proposing principles, criteria for working with firms and specific actions to undertake (see infographic for a summary).
The Communication apparently also went through a wide range of consultations during preparation, will have two sets of EU Council Conclusions instead of the usual one, and numerous meetings to discuss its operationalisation, including a side meeting last Friday on the margins of the Policy Forum for Development.
But despite its comprehensiveness, there are still numerous “policy to practice” challenges to the Communication. We discuss these in our recently published Briefing Note: EU Engagement with the Private Sector for Development: Setting Up a One-Stop-Shop? But the key messages relate to two questions:
At one level, it is an internal document, aimed at bringing all the EC Directorate Generals, the EEAS, the EU Delegations and other institutions onto the same page in thinking about engaging with the private sector for development. And it may have an important role to play in doing so, given the myriad of other policy areas and priorities that different DGs and individuals within them are faced with.
It is also clearly aimed at the 28 EU Member States, bringing the EC up to speed with the approach adopted by some leading Members and leading the way for those that are not so advanced or engaged in development policy. Given the large differences between Member States in experience and perhaps objectives in engaging the private sector, a common approach is helpful.
The Communication is also presumably aimed at ‘the private sector’, European companies and firms in particular. Given that EU policy towards the private sector has hitherto been seen as either an internal market issue or one of private sector development in partner countries, this is the first time that the two are being explicitly linked through policy. That, and the general recognition of the role of the private sector in development, can only be welcomed by private sector actors – but as our Briefing Note points out, the basis for the Communication is still very donor-led, potentially missing opportunities to be had from applying donor finance to maximize the development impact of existing private sector investments and ideas.
The Communication is clearly also for Non-Governmental Organisations NGOs, Civil Society Organisations CSOs and other development actors who see themselves as representing different beneficiaries of EU development policies. This includes organisations working with firms in multi-stakeholder partnerships as well as cooperatives, both in some ways ahead of the EC in thinking about working with the private sector, as well as those CSOs more inclined to be suspicious of the private sector as a ‘development actor’.
Although they get little mention, the Communication presumably also has partner governments as a target audience given that it will underpin policy dialogue around development support for regulatory reform of the more traditional private sector development form.
So given the wide range of differing roles and interests within each of these five audiences, never mind between them, how will any of the concrete actions proposed be taken forward?
As development policy is an area of ‘parallel competence’ in Euro-lingo, this Communication is something between a hopeful plea for Member States to align with its contents, and a framework which some hope will be endorsed and maintained in all of their future work with the private sector. Although it mentions harmonising private sector engagement across Member States, it is not clear if there is genuine appetite for joint activities and on what level or scope.
Some also read the Communication as a call for EU Delegations to begin promoting development-friendly business linkages between Europe and partner countries (and why not?), while others question if there is such a thing as a ‘European private sector’ in the first place.
From a private sector perspective, strong institutions and regulations in developing countries remain key, but beyond that it remains unclear who to speak to at the EU level about actually getting support for developmental investment projects. Without that, some in the private sector wonder if it has any relevance to them at all.
As for NGOs, there are a range of good examples of cooperative and multi-stakeholder partnerships that might benefit from, and are requesting, more support from the EU to help them to scale up. But as with the private sector, it is not clear how this will work in practice and who will take charge.
One of the three concrete ‘tools and modalities’ proposed by the Communication, and also the topic of last week’s meeting, is ‘structured dialogue’. Proposed at the global, EU and partner country level, and thematically or sector focused, this seems a relatively modest and uncontroversial proposal – who is against more shared learning and dialogue?
But as the meeting last week highlighted, calling a dialogue ‘structured’ does not make it so, while the Policy Forum on Development itself (a potential vehicle for this structured dialogue it seems) took five years to get to what participants find an acceptable form.
So while the goal is to be “action-oriented” and to avoid duplication of other similar platforms, some more practical thinking on focused, specific outcomes might be a better way to operationalise the Communication. What are the concrete investment opportunities, in which countries, with which organisations, and through which Member State support mechanisms that these joint approaches can be piloted?
Maybe that would be a good structured dialogue to meet the ambitions of the Communication and show its relevance beyond the EC itself.
In addition to structural support by ECDPM’s institutional partners The Netherlands, Belgium, Finland, Ireland, Luxembourg, Portugal, Sweden, Switzerland, and Austria, this publication also benefits from funding from the Department of International Development (DFID), United Kingdom.
The views expressed here are those of the author, and not necessarily those of ECDPM.