Justine Greening has shed light on yet another aspect of her vision for U.K. aid. In her latest speech, she announced new measures that would encourage domestic businesses to join the government’s “development push.”
Economic development was the centerpiece of Greening’s speech delivered Monday (March 11) at the London Stock Exchange. The three drivers of economic development in developing countries, she said, are reducing barriers to trade, developing the private sector and boosting business investment.
The latter, she hopes, U.K. companies will take the lead.
“As the PM has said, we’re in a global race. But if you want to be ahead of the game, be at the front, you can’t simply follow the crowd,” she said. “I think it means being in emerging market countries — not just those of today, but those of tomorrow too.”
Greening mentioned some innovative partnerships the Department for International Development has embarked with a number of large companies. In Bangladesh, for instance, the agency is working with Tesco to create an entity that will help boost productivity and improve the working conditions of garment workers.
“But I believe we’ve only just scratched the surface,” she noted. “I want to see far more [British] businesses joining the development push with DfID.”
Greening wants to engage more companies in DfID’s work, including small and medium-sized ones — a move welcomed by nongovernmental organization VSO, which underscored the need for businesses to involve NGOs in their development work. But she understands the need to build a more enabling environment for businesses in developing countries.
DfID, according to Greening, will set up a tax capability-building unit within Her Majesty’s Revenue and Customs, a nonministerial department in charge of tax collection. The unit will provide DfID with an in-house team of tax experts in countries the agency works. Its first project will start in April.
“I expect that once we’ve built the unit up, by April 2017 we will have teams working in six or seven more countries,” she said.
The announcement seems to crytallize the agency’s plan in January to test out in-house work versus the use of external suppliers, following the completion of an internal spending review. The idea was floated at the same time DfID released its new code of conduct for suppliers, an addition to the agency’s changing procurement structure.
Greening also announced 51 million pounds ($76 million) for DfID’s International Growth Center, a research institute providing governments with advice on economic growth. The money will help the center expand its work to include Liberia, Malawi, Myanmar and Nigeria. She also announced the launch of a 5 million pounds commercial law and justice program, aimed at improving the legal environment for businesses in developing countries.
DfID is also taking a closer look at property rights in the developing world. Greening said this will form part of the United Kingdom’s agenda at the G-8, alongside other issues such as transparency.
“Expect to see my department looking at innovative financing approaches to help support this new style of development investment,” Greening said. The United Kingdom will also host an event on impact investment June 6.
Commenting on Greening’s speech, U.K. Aid Network’s Amy Dodd told Devex: “Economic growth is of course important to development but the link between growth and poverty reduction is not always as straightforward as the [secretary] laid out. India is the obvious example of a country that has seen substantial, sustained growth but still has huge problems of poverty and inequality … we would be interested to see more on how they will ensure that these programmes are pro-poor as well as pro-growth, particularly the kind of framework that DFID promotes.”
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