There are several key challenges to U.S. business involvement in international development and effective engagement in public-private partnerships, and Congress could help ease the way.
President Barack Obama and former Secretary of State Hillary Clinton talked about the importance of business in development, but we have to go beyond public statements and get it done, according to Tim Docking, head of IBM’s emerging markets funding group.
“It’s really putting actions around the policy that we’re hoping to inform and encouraging you to do as well,” Docking said on Tuesday at a Congressional Caucus for Effective Foreign Assistance briefing in Washington, D.C.
Docking, along with Sara Agrawal from Hewlett-Packard and Mamadou Beye of Chevron, discussed some of the key roadblocks to successful PPPs and how Congress can help business better participate in global development efforts.
The smaller, the better
IBM doesn’t have any PPPs in emerging markets because they are complicated, slow-moving, often require a significant upfront investment and provide unclear returns, according to Docking. There is also significant distrust both from businesses and development agencies that further hinders these partnerships, he said.
Chevron, on the other hand, has had some positive experiences with PPPs, but not without having to walk away from some and learning what doesn’t work, explained Mamadou Beye, the company’s manager for international government affairs.
Large partnerships — especially those that attempt to bring together multilaterals and bilaterals — can often prove difficult. Chevron attempted to do just that in Angola, but found it was not a viable solution, choosing instead to enter into individual partnerships with each potential partner agency, Beye noted, adding that PPPs that are set up with the primary motive of merely pooling financial resources will also rarely succeed.
Partnerships with predetermined objectives that don’t take into account an analysis of the situation on the ground and the various interests of potential partners are also likely to fail, stressed the Chevron executive. That situation sometimes arises due to limitations that donors such as the U.S. Agency for International Development have in allocating funding.
“[The] U.S. government and Congress need to look at it carefully,” Beye said. “Arming institutions with that flexibility is very important because that will allow them to really adapt their strategies with what is happening locally.”
Failed attempts
Agrawal mentioned a few other key challenges, including the perception among the business community that government sees PPPs as “private sector pays.”
Finding true alignment in order to partner is challenging and fairly rare, especially with both companies and aid agencies having such narrow sets of needs, she said.
Agrawal offered two examples of failed partnership attempts:
A team from HP wanted to meet with USAID in India because they were interested in partnership opportunities, but no project ever came about because HP didn’t have time to overcome the suspicion about their underlying intentions.
On another project, USAID global development alliance representatives wanted to move ahead with a project, but one person said that entering into a partnership would give HP a sales benefit and killed the idea.
“There are a few innovative thinkers but they are not talking to the other arms of the institution,” she said.
Knowledge sharing
There are several improvements that could help increase partnerships and improve business engagement. Chief among them is true knowledge sharing, according to Agrawal.
“The more advanced thinking is not just around money but it is around expertise,” she said, adding that “true knowledge sharing is in its infancy.”
But knowledge sharing today, Agrawal pointed out, is largely in the form of one-off events rather than an involved process over time, and the result of the lack of information exchange is that ideas and innovative solutions are not shared.
Congress could thus play a role in helping aid organizations align better and open up knowledge-sharing practices, she said.
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About the author
Adva Saldinger@AdvaSal
Adva Saldinger is a Senior Reporter at Devex where she covers development finance, as well as U.S. foreign aid policy. Adva explores the role the private sector and private capital play in development and authors the weekly Devex Invested newsletter bringing the latest news on the role of business and finance in addressing global challenges. A journalist with more than 10 years of experience, she has worked at several newspapers in the U.S. and lived in both Ghana and South Africa.