unleashing entrepreneurship making business work for the poor marta ruedas, deputy regional director...
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UNLEASHING ENTREPRENEURSHIPMaking Business Work For The Poor
Marta Ruedas, Deputy Regional Director
Regional Bureau for Europe and the CIS (RBEC)
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OVERVIEW
• The Commission and its Objectives
• The Commission’s Report
– Key Messages
– Recommendations
• Implementation
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BACKGROUND AND OBJECTIVES
• UN Secretary-General Kofi Annan convened the Commission of public leaders, thinkers and chief executives
• A six-month effort, not aimed at expansive research, but focused on action-oriented recommendations and concrete initiatives to follow up
• Recognize the importance of the private sector for achieving the Millennium Development Goals by– Unleashing domestic entrepreneurship – Better utilizing private sector capabilities for
development
Who
Task
Objectives
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WHO – COMMISSION CO-CHAIRS, plus…
CO-CHAIRS
The Right Honourable Paul MartinPrime Minister, Canada
Ernesto ZedilloDirector, Yale University Center on GlobalizationFormer President, Mexico
EX–OFFICIO MEMBERS
Mark Malloch Brown (United Kingdom)Administrator, United Nations Development Programme
Maurice Strong (Canada)Special Adviser to the Commission
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PUBLIC LEADERS & THINKERS, andEduardo Aninat (Chile)Former Deputy Managing Director, International Monetary Fund
Jorge Castañeda (Mexico)Former Minister of Foreign Affairs, MexicoDistinguished Professor of Politics & Latin American Studies, New York University
Luisa Diogo (Mozambique)Prime Minister, MozambiqueFormer Minister of Planning and Finance, Mozambique
Peter McPherson (United States)President, Michigan State University
C.K. Prahalad (United States)Harvey C. Fruehauf Professor of Business Administration, University of Michigan Business School
Juan Somavia (Chile)Director-General, International Labour Organization
Hernando de Soto (Peru)President, Institute for Liberty and Democracy, Peru
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CHIEF EXECUTIVESCarleton Fiorina (United States)President and CEO, Hewlett - Packard Company
Rajat Gupta (India)Senior Partner Worldwide, McKinsey & Company
Anne Lauvergeon (France) Chairman of the Executive Board, Areva Group, President and CEO, Cogema
Jannik Lindbaek (Norway)Chairman, Statoil ASA
Alan Patricof (United States)Vice-Chairman and Founder, Apax Partners
Kwame Pianim (Ghana)CEO, New World Investments
Robert Rubin (United States)Director and Chairman, Executive Committee, CitigroupFormer Secretary of the Treasury, United States
Miko Rwayitare (South Africa)President and Executive Chairman, Telecel International
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OVERVIEW
• The Commission and its Objectives
• The Commission’s Report
– Key Messages
– Recommendations
• Implementation
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FIVE KEY MESSAGES1. Why the private sector is so important in alleviating poverty• Strong expansion in sustainable private sector investment is the main driver of
accelerated economic growth, essential for reducing poverty and making rapid progress towards the Millennium Development Goals.
2. Constraints on the private sector in developing countries• Domestic private initiative and entrepreneurship, particularly within the small and
informal sectors, have enormous potential—but they are trapped in disabling business environments.
3. Unleashing the potential of the private sector• Governments need to create an enabling environment for a competitive private sector
to develop. For domestic and foreign players to thrive requires a strong rule of law and a level playing field.
4. Engaging the private sector in development• Private initiative driven by market-based incentives has the demonstrated capacity to
contribute to important development goals. The private sector, properly enabled, can do substantially more by developing and replicating successful models.
5. Recommended actions• To ensure progress towards the MDGs, all stakeholders—governments, development
institutions, the private sector and civil society—need to collaborate more effectively and expand the use of private sector capabilities in meeting development objectives.
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WHY THE PRIVATE SECTOR IS SO IMPORTANT IN ALLEVIATING POVERTY
0
2
4
6
8
10
12
14
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< 3% 3-5% > 5Growth rates, 1970-98
Inv
es
tme
nt
as
pe
rce
nt
of
GD
P,
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70
-98 Private Public
MORE PRIVATE INVESTMENT – MORE GROWTH
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COMPONENTS OF THE PRIVATE SECTOR – SEEN AS AN ECOSYTEM
Microenterprises
Cooperatives
Domestic private sector ecosystem
MultinationalCorporations
Large Domestic Enterprises
Small-MediumEnterprises
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Widespread informality
Fewcompetitive
small and medium
enterprises
Microenterprises
Cooperatives
Domestic private sector ecosystem
MultinationalCorporations
Large Domestic Enterprises
Small-MediumEnterprises
CONSTRAINTS ON THE PRIVATE SECTOR
Lack of competitive pressure
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INFORMALITY THRIVES IN POORER COUNTRIES
Estimated share of nonagriculturalworkforce that is informal
80
70
50
40
38
30
Sub-Saharan Africa
India, Indonesia, Pakistan, Philippines
Brazil, Thailand, Turkey
Mexico
Chile
Portugal
Source: World Bank and International Labour Organization
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SMEs BECOME MORE IMPORTANT AND INFORMALITY LESS IMPORTANT AS COUNTRY GDP INCREASES
Source: Meghana Ayyagari, Thorsten Beck, and Asli Kunt, Small and Medium Enterprises across the Globe: A New Database (2003)
Percentage of GDP
37 30 36
1639
51
4731
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Low-incomecountries
Middle-incomecountries
High-incomecountries
Informalactivity
Small andmediumenterpriseactivity
Remainingactivity
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RECOMMENDED ACTIONS
To ensure progress towards the MDGs, all stakeholders—governments, development institutions, the private sector and civil society—need to collaborate more effectively and expand the use of private sector capabilities in meeting development objectives.
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FRAMEWORK FOR ACTION
1. In the Public Sphere – Promoting reforms of laws, regulations and other barriers of growth
2. In the Public-Private Sphere – Facilitating cooperation and partnerships between public and private players to enhance access to such key factors as financing, skills and basic services
3. In the Private Sphere – Encouraging the development of business models that can be scaled up and copied and that are commercially
sustainable
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OVERVIEW
• The Commission and its Objectives
• The Commission’s Report
– Key Messages
– Recommendations
• Implementation
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BRINGING THE REPORT TO LIFE
Dissemination
Initiatives
Implementation
• Global• Regional• Country-specific
• Public sector-driven• Private sector-driven• UNDP-driven
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DISSEMINATION
Global
Country-specific
• G-8 Economic Summit• UNCTAD XI• UN Global Compact Leaders’ Summit• Commonwealth Business Council• World Resources Institute• World Economic Forum 2005
• NEPAD/WEF Africa World Economic Summit
• African Union Summit • APEC Economic Leaders' Meeting
and CEO Summit
• Country launches, e.g. Albania, Brazil, Bulgaria, China, India, Macedonia, Mozambique, Turkey
• Rwanda Investment Conference
Regional
Illustrative list of events
JuneJuneJuneNovemberDecemberJanuary
June
JulyNovember
All 2004
May
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INITIATIVES
Publicsector-driven
UNDP-driven
• Informality and Regulatory Reforms• Business School Network
• Technology for Microfinance • Business Linkages• Bottom of the Pyramid Business
Development
• Annual Private Sector Report• SME Brokerage• Microfinance
Private sector-driven
Illustrative list of initiatives under consideration
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IN SUMMARY, THE REPORT:• Formally puts the UN on record on the important role of the private
sector
• Examines the issues from the viewpoint of the domestic private sector first and then looks outward
• Includes the informal sector – and the poor as such – as a key element of the private sector
• Emphasizes the critical nature of the linkages amongst all of the components of the eco-system, from microenterprises to MNCs
• Focuses centrally on the rule of law and the need for a level playing field
• Highlights many developmental activities of private players that are below the radar screen but offer great promise for sustainable market-based replication
• Ends with a comprehensive program of action that cuts across all of the quadrants of developmental interventions for private sector development
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IN CLOSING
• The main message from the Secretary General when he accepted the Report on March 1, 2004, was a Call to Action for the main stakeholders in the development coalition to join the UN in helping to bring to life the Commission's Recommendations
• Thank you for your time and attention