Principles for public-private partnerships – towards sustainability? Lessons from SAGCOT, healthcare in Lesotho, and Better Factories Cambodia ecdpm.org/dp194 Sebastian Grosse-Puppendahl Trade, Investment and Finance Programme 06 February 2018

1. Context Growing recognition that challenges are multi-faceted & complex, requiring collaborative, multi-stakeholder alliances between all sectors of society → public-private partnerships Need for smart use of aid & public funding Increasing focus on leveraging private finance and investments → e.g. EU External Investment Plan, OECD Blended Finance principles majority of bi-/multilateral donors have PSE programmes 4 SDGs → economic growth, job creation & market development key factors in most donors’ support to developing countries → PSE/economic growth focus reflected in institutional set-up criteria / principles to ensure more ‘developmental’ private sector engagement (PSE) ecdpm.org/dp194

2. Public-Private partnerships (PPPs) PPPs implemented through wide range of departments (i.e. development, trade, DFIs etc.) & diverse definitions, categories ‘Successful’ partnership → beyond private returns (financial viability), public returns key to ensure social, political & environmental sustainability Challenge: balancing dual objectives!! Country bias: commercial interest → developed/stable markets BUT developmental needs more in poor/fragile countries e.g. 60% of PPP investments targeted to UMICs However, more development principles/sustainability criteria in place governing PSE programmes (e.g. CAFOD et al. work) → reflects degree of convergence on appropriate PS behaviour → challenges remain! compliance & enforcement To ensure compliance, donors must strike the right balance between legally binding regulations & softer measures → business incentives for voluntary principles vs. effectiveness ecdpm.org/dp194

3. Case study on agriculture: Southern Agricultural Growth Corridor of Tanzania (SAGCOT) Interesting case: massive scale in terms of finance and geographical area → important lessons for other PPP frameworks / future PPPs WEF flagship, mainly business-driven partnership, determining / influencing power dynamics among different stakeholders Regional in nature → geographical area Holistic approach, SAGCOT tries to address various gaps/issues, such as: engaging local farmers, raising overall agricultural productivity, thus contributing to broader economic transformation and decreasing (rural) poverty, increasing job creation, and improving regional coordination towards food security/market dev ensuring environmental sustainability ecdpm.org/dp194

3.1 Case study on agriculture: SAGCOT SAGCOT objectives and principles to achieve fair & inclusive Agricultural Green Growth However: Translation of policy (e.g. Greenprint) to practice? Different actors, different language (e.g. incl, sust invest) → reports: environmental/social objectives controversial or at risk → Need for closer monitoring/independent assessment & review Sustainable development principles → no mention of financial sustainability & demand for such investments Conflicting interests → national/local elites & overall business environment constraints as negative factors for PPP to develop → Land conflicts, land management, land use: direct (negative) impact on PPP rather than positive one on FDI ecdpm.org/dp194

4. Conclusion ecdpm.org/dp194 Two concerns raised most frequently regarding development PPPs: → additionality & transparency defining, ensuring, measuring additional impact due to public finance availability of reliable information on the negotiation, the design, the implementation and the results of PPPs Analysis reflects wide & widening definition of PPPs + lack of data!! → 2 basic questions for evaluating PPPs’ success & sustainability Is the PPP the best tool to address the identified needs in a specific context, in comparison to the alternative options? Does the PPP deliver what it promised to deliver? Need to better understand the distribution of costs and benefits → greater transparency required based on available data → underlying PPP design to reflect likely power imbalances between powerful MNEs, smallholders & public sector in weak environments ecdpm.org/dp194

Thank you! sgp@ecdpm.org | @SebGroPup ecdpm.org/dp194 www.ecdpm.org European Centre for Development Policy Management