Latin American Private Sector Investment in meeting the Millennium Development Goals Antonio Vives Senior Deputy Manager Inter-American Development Bank September 13, 2005 Ottawa, Canada Direct Private Sector Investment in meeting the Millennium Development Goals

Content of the Presentation Private Sector and MDGs Private Sector and MDGs Philanthropy, CSR and MDGs Philanthropy, CSR and MDGs SMEs and MDGs SMEs and MDGs Private Sector, Multilaterals and MDGs Private Sector, Multilaterals and MDGs Private Sector, Governments and MDGs Private Sector, Governments and MDGs Can contribution be measured ? Can contribution be measured ?

Private Sector and MDGs Private sector as afterthought in the MDGs Private sector as afterthought in the MDGs But, MDGs unachievable without the PS But, MDGs unachievable without the PS Do not count on international private flows or remittances (portfolio and consumption) Do not count on international private flows or remittances (portfolio and consumption) Not all investment is development, much less MDGs achievement Not all investment is development, much less MDGs achievement Best antidote against poverty is a good job Best antidote against poverty is a good job

Private Sector and MDGs Products geared to low-income populations Products geared to low-income populations Services, especially infrastructure (water) Services, especially infrastructure (water) Technology (health and education) Technology (health and education) Care for the environment Care for the environment Financial resources: microenterprises Financial resources: microenterprises Bottom of the pyramid: predator or friend? Bottom of the pyramid: predator or friend?

Philanthropy, CSR and MDGs Philanthropy is the easy way out (only one measurable, but no data available) Philanthropy is the easy way out (only one measurable, but no data available) Corporate Responsibility is more effective, but not the panacea Corporate Responsibility is more effective, but not the panacea Fair wages, good working conditions, responsible products, concern for the environment, support for the community, local supply chain (microenterprises), etc.. Fair wages, good working conditions, responsible products, concern for the environment, support for the community, local supply chain (microenterprises), etc.. Profit, people and planet Profit, people and planet

SMEs and MDGs Multinationals have impact, but the world is bigger Multinationals have impact, but the world is bigger Recent IDB study found that even SMEs can and do contribute. Recent IDB study found that even SMEs can and do contribute % of employment, 30-50% of GDP in LAC 40-60% of employment, 30-50% of GDP in LAC Many CSR activities, specially “internal” Many CSR activities, specially “internal” 1% of sales donated to community activities (realistic?) 1% of sales donated to community activities (realistic?)

Private Sector, Multilaterals and MDGs Multilaterals work directly towards MDGs Multilaterals work directly towards MDGs MDB help create conditions for private sector to thrive and in turn support MDGs MDB help create conditions for private sector to thrive and in turn support MDGs Provide direct finance for projects Provide direct finance for projects Demand responsible behavior Demand responsible behavior Partnerships Partnerships

Private Sector, Governments and MDGs Macroeconomic and political stability Macroeconomic and political stability Policy reform and business climate Policy reform and business climate Investment and philanthropic partnerships Investment and philanthropic partnerships Business promotion schemes (very carefully) Business promotion schemes (very carefully)

Can all this contribution be measured? NO NO Does it matter? Does it matter?

Closing remarks Does the private sector in LAC know about the MDGs? Do they care? Does the private sector in LAC know about the MDGs? Do they care? Need to disseminate benefits (private sector is an expert in assessing costs) Need to disseminate benefits (private sector is an expert in assessing costs) Couch it in business lingo. Couch it in business lingo.

Latin American Private Sector Investment in meeting the Millennium Development Goals Antonio Vives Senior Deputy Manager Inter-American Development Bank September 13, 2005 Ottawa, Canada Direct Private Sector Investment in meeting the Millennium Development Goals