The Private Sector and its role in Development - A trade union perspective

1. The Private Sector and its role in Development - A trade union perspective TUDCN – Sao Paulo, March 2014

2. Whatisit? • direct recipient of public aid, including ODA • for their investments and activities (subsidies and loans); • contractor in implementing aid projects • through traditional public procurement procedures); • a commercial and/or financial partner within a public-private partnerships • or through blending commercial loans with aid grants; • provider of aid-equivalent development resources • private philanthropic foundations and corporate donations); and/or • facilitator in networking and policy making processes • through business forums and networks.

3. ODA (USDbn)

4. ODA, 2006 base 100

5. The drivers • Business groups as “equal partners” of government • Leveraging and tied aid • Inclusive business

6. “Unleashing the Power of Business” • Semantic shift from • Private sector development ("contribute to sustainable development“), to • Private sector for development ("true partner in development“, “systematic engagement of business”, “a two-way street”, “Development is about the business of business” • Stating the obvious • “Business is operating as a partner in development when: Business aligns its investments with a country’s development priorities Social and environmental development”

7. Methodology & narrative • Micro necessarily applies macro • “how to”, case study approach, “pockets of good practice” • Subjective & disconnected from normative approach • Subjective, “vision, “beliefs”, "cultural divide" between business and government • “alignment” • “achieve a ‘Level 4’ society in which public and private interests are more strongly aligned and in which collaboration across the sectors becomes the ‘new normal’.

8. Not about privatisation, but • “not suggesting in any way a watering-down of the role of government”, “not a manifesto for privatisation” but: • “a call to explore why companies might be strategically interested in development priorities and finding ways to engage them much more systematically through partnership” … • PPPs & inclusive business • what kind of employment, and in what fields? • Water, Health, Energy, Finance

9. The inclusive business model & PPPs • To “demonstrate why public private partnerships for development (PPPD) are usually essential” • to address “underdeveloped public services, social challenges, lack of skills, regulatory hurdles, poor infrastructure, inefficient manufacturing or agricultural production and limited access to finance”. • To address “uncertainty” around the idea of business, through a partnership, appearing to get involved in delivery of a 'public good’ • Subtle difference between “PPP for D” & “Regulated PPPs”

10. Policy Priorities • Asserting the developmental role of the state • Upholding a rights-based approach to development through rule of law & social dialogue • Holding multinational businesses to account • Setting standards for aid effectiveness, measuring impacts and results • Supporting SMEs and entrepreneurship, tackling informality

11. Taxevasion & taxavoidance • Tax avoidance • Legalised but « aggressive » tax planning • reform to intra-group transfer pricing regulation • mandatory disclosure country-by-country tax reporting. • Tax evasion • illegal • Global forum standard • enforcing automatic exchange of information between tax authorities