The New Global Development Agenda beyond 2015: The Role of the Private Sector in Development Policy Jacqueline Mugo, OGW, MBS 27th Meeting of ACP-EU Economic and Social Interest Groups Brussels, October 31 st 2014

Who are we? The Federation of Kenya Employers The most representative employers organization in Kenya, representing employers’ Interests since Business Africa is the voice of Employers In Africa Who are we?

 The UN determining its development framework as targets of the MDGs expire in  Rio+20-strong business support for a linkage with the Post-2015 agenda emerges.  Rio+20-businesses voted by acclamation to take part in formulating and enacting this new set of goals; MDGs and Post-2015

 A better future for all requires action by all Governments, corporations, citizens, consumers, workers, investors and educators.  The private sector has a central role to play.  As the world’s main source of economic activity, business is at the heart of any widespread improvements in living standards.

Rise of the South  The rapid growth of developing countries is propelling millions out of poverty.  The proportion of people living on less than USD 1.25 a day fell by more than half, from 47% in 1990 to 22% in 2010 ( MDG report 2013 ).  In Africa this has increased by a factor of six during the past decade. Africa’s share of global FDI projects has reached 5.7%, the highest level in a decade.

Rise of the South  In the developing world, business is investing not only to obtain low-cost inputs, but increasingly to build strong markets and societies, and contribute positively to them.  Private sector plays a more active role in shaping the development path of countries,  There is also a shift in the assumption of social and environmental responsibilities.

Private Sector and growth  Business and investors are already the biggest engine of poverty reduction and economic growth in the developing world.  On average, business provides 60% of GDP, 80% of capital flows and 90% of jobs in developing countries.  It is the major source of the USD1 trillion a year needed to finance development.

Private Sector and growth  Supply chains for most industrial products and services now span the entire globe.  From 7,000 in 1970, the number of multinationals had grown to over 63,000 in  Decent jobs today are increasingly based on knowledge and skills.  Over 90% of jobs in developing countries are in the private sector.

Private Sector and growth  Private sector participation in infrastructure development and other services has become more important over the past 20 years.  Critical public issues related to food security, climate change, and environmental sustainability also depend on operations of private sector.  The private sector is the provider of most of the taxes.

Challenges  Inadequate government regulation, restrictive policies, poor infrastructure, severe skills shortages and mismatches between employers’ needs and available workers.  Focusing efforts on reforms that include strengthening institutions, efficient use of natural resources, contracting environment, and education and health will have a far higher payoff in promoting sustainable development than direct resource allocation.

Sustainable Development  A new post-2015 era demands a new vision and a responsive framework. Sustainable development that is enabled by the integration of economic growth.  For enterprises to create decent jobs for the population and pay taxes to government, they must exist in an environment that guarantees their existence in the long run.  An increase in investment is therefore crucial to the attainment of sustained growth

Parting shot  Eradication of poverty and ensuring that prosperity and wellbeing are sustainable are two of the most pressing challenges facing the world today.  Increased private sector participation will enable developing countries to effectively participate in global value chains.  The future debate should now focus on how best to achieve cooperation between all stakeholders without exclusion.

Parting shot  Employers’ Organizations play a critical role in ensuring good governance, economic growth and social equity.  Without these critical elements in an environment of freedom, good governance and sound macroeconomic policies, sustainable development might just a mirage.  We must not forget their role in sustainable development.