The European Commission and industry are exploring ways to fund public-private partnerships in international development. Ongoing discussions mark the first joint effort to stimulate cross-sector activity to aid the poorest of the poor.

CSR Europe, the Brussels-based think-tank for corporate social responsibility, is facilitating discussions between the EC and interested private-sector organizations, including Vodafone, Microsoft, Danone, Unilever, Procter & Gamble and France Telecom, through a “Base of the Pyramid Laboratory,” a discussion forum that will result in a white paper due out in November 2008.

A draft of the white paper assesses the EC’s current development strategy and synergies between EC and private-sector initiatives. Plans for a new fund for cross-sector projects are also discussed in the draft.

The Base of the Pyramid demographic refers to the “poorest of the poor,” those living on less than $2 a day, considered as emerging markets for the private sector. Conventional business models are re-designed to help alleviate poverty and meet the needs of BoP consumers.

This is the first time the EC has engaged the private sector on developing business strategies for emerging markets.

“We have never had such structured dialogue with these parties from the group working with CSR Europe, over working in base of pyramid markets,” a spokesperson for the EC’s Aid Commission said.

“The impetus for this was this idea of how the private sector could benefit from some of the projects the EU is funding in development programs,” said the EC spokesperson. “[Our meetings] gave an overview of what the respective sides are doing. We are at the early stages of listening to ideas of private companies, and we have explained what programs we have been funding. The next step is to look at where there are possibilities … for the private sector to fund what we are doing but there is nothing concrete at this stage.”

Jani Lopez, CSR Europe member relations coordinator, said: “The objective of the lab is to bridge the gap between what the EC is doing on the ground, and what these companies are doing, and to bring these two actors together to talk about development issues and to get to know each other better.”

At a top-level meeting earlier in the year, attended by representatives from Vodafone, Microsoft, Danone, Unilever, CSR Europe and the Global Alliance for Improved Nutrition (GAIN), European Commissioner for Development Louis Michel said the EC is seeking to boost cross-sector collaboration and engagement with the private sector.

“Several decades of development aid did not bring the results we hoped,” Michel said at the meeting, according to a transcript. “Donors, including the Commission, concluded that we could not go on in the way we did.”

The private sector is the “essential engine of economic growth,” Michel said.

“This recognition has been at the basis of the global Aid for Trade strategy agreed some years ago alongside the ongoing international trade negotiations at the WTO,” Michel added. “It was recognized that developing countries needed to overcome many barriers to make their private sectors compete and to attract investments.”

Bérangère Magarinos serves as senior manager of investments and partnerships at GAIN, a non-profit organization that is active in promoting cross-sector collaboration in the area of nutrition and facilitated the widely-publicized venture between Danone and the Grameen Bank in 2006.

She said: “The European Commission is exploring what kind of part they would like to play here. The EC is not very experienced in dealing with the private sector in this way, and so we are still in the early days of defining things.”