Is the private sector always welcome in development?

U.S. Agency for International Development Administrator Rajiv Shah believes that there is always a role for the private sector in any area of development. He underscored his agency's commitment to public-private partnerships at a recent event held at The Woodrow Wilson Center on Feb. 14. Photo by: USAID / CC BY-NC

Are there any areas of development where the private sector should not be involved?

According to U.S. Agency for International Development Administrator Rajiv Shah, the answer is plainly, “no.”

“There is really no element of any of this where I think I could just say with confidence that there is no role for the private sector,” he said on Friday at an event about public-private partnerships in development at The Woodrow Wilson Center on Friday in Washington, D.C.

While he didn’t announce any new partnerships or priorities within USAID, Shah underscored the agency’s commitment to PPPs.

“We call this approach a new model of development,” Shah said. “A model that relies on asking governments to reform the policies and programs that they put in place … but it’s a model that also requires us to do things differently, to be more nimble, to be more flexible, to reach out to private sector partners at home and abroad and to bring more engagement to tackle the types of problems we want to solve.”

Roughly 40 percent of USAID’s resources are programmed through this new model, up from 8 percent when Shah took over at the agency.

And what does he say to some critics who worry that these partnerships are too U.S.-focused and could prioritize American interests?

The majority of partnerships are with local partners, Shah explained, and most are happy to be working with USAID for it’s ability to help push reforms and create a better business environment. He’s proud that the agency can offer a platform for American companies to engage in the right way with transparency.

“The model we’re talking about is not just giving companies broad access to land and title in a way that’s not transparent,” he said. “The model we’re talking about is engaging in specific partnerships where we measure results and track out and report on them and hopefully create both private enterprise and public development gains.”

The need for private sector engagement and partnership doesn’t mean that any less public investment is necessary — in fact if anything, it is a reason for more, Shah concluded.

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About the author

  • Adva Saldinger

    Adva Saldinger is a Senior Reporter at Devex, where she covers the intersection of business and international development, as well as U.S. foreign aid policy. From partnerships to trade and social entrepreneurship to impact investing, Adva explores the role the private sector and private capital play in development. 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.