We need the private sector to finance the SDGs. But will the quest for profit trump the objective of poverty eradication? In an interview with Devex on the eve of #EDD15, European Commissioner for International Cooperation and Development Neven Mimica explained the EU’s new strategy to align both goals.
“We have designed a framework for private sector engagement in development, which should allow to make a difference in developing countries in a safe way for their people,” EU Commissioner for International Cooperation and Development Neven Mimica told Devex Associate Editor Richard Jones ahead of last week’s European Development Days forum in Brussels. “We will of course look at lessons to be learned, but I am convinced that this is the way forward.”
That way forward includes supporting responsible supply chains and a “smart mix” of voluntary and binding measures to promote corporate social responsibility.
Some Devex readers remain skeptical.
Would corporate leaders be able to sacrifice their first concern: return to shareholders? That’s an issue for Christopher McDermott.
“I could easily imagine the most successful development corporation being taken over or losing shareholder value as they go off theme and try to ‘do good.’ That's why major private investment that has been made in malaria, food and nutrition, come from wealthy private firms/foundations, they don't have expectant stockholders watching the quarterly dividend,” McDermott wrote.
Priyanthi Fernando shared McDermott’s view, noting that private sector record in development issues “is not encouraging.” She gave the example of Sri Lanka, where companies have railed against conservation laws to destroy forests in order to grow bananas, and in Pakistan where firms have extracted water in areas where the resource is scarce.
She said: “I am not sure the tiger will change its stripes!”
Elvira Beracochea, meanwhile, called for more transparency in how the private sector works, adding “Wall Street taught us that lesson with its speculative practices that crashed and brought global recessions in so many countries.”
What should be done to ensure private sector engagement helps rather than hinders development efforts? Let us know what you think by leaving a comment below.
Currently based in New York City, Eliza is a veteran journalist focused on covering the most pressing issues and latest innovations in global health, humanitarian aid, sustainability and development. A member of Mensa, Eliza has earned a master's degree in public affairs and bachelor's degree in political science from the University of the Philippines.
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