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1. Models for Trade Related Private Sector Partnerships for Development Symposium on Private Sector Partnerships in International Trade Development Projects November 14-15, 2012 Based on a preliminary research report written by Shannon Kindornay and Kate Higgins with Michael Olender Governance for Equitable Growth program, The North-South Institute

2. Presentation Outline • Introduction • Main Findings • Models of Trade Related Private Sector Partnerships • Comparing Models • Lessons Learned and Key Challenges • Cross-cutting Themes • Conclusions

3. Introduction • Context • Aid for trade • Private sector and development • Research Objectives • Symposium

4. Main Findings • Hybrid model? • Sustainable development: Economic, social and environmental consideration come together • Poverty reduction one goal among many • Assessing results • Commercial results sensitive • Development results in a hybrid model

5. Main Findings • Private sector motivations • Different motivations exist for private sector partners • Implications for development intermediaries • Risk • How much? • Mitigating and communicating risk • External factors (climate, human, etc.)

6. Models of Trade Related Private Sector Partnerships • Project Inclusion • 30 projects • Criteria: buyer, seller, development intermediary International Buyer (retailer/manufacturer) Donor (including IFIs and Foundations) Development Intervention to support growth/sustainability of the exports Exports (goods, services) $$$ Developing Country Supplier (community/ company/ industry) Implementation Actors (local/international NGOs, government agencies, etc.)

7. Models of Trade Related Private Sector Partnerships • Models • Donor-led • Coalition • Company-led • NGO-business alliance • NGO-led

8. Models of Trade Related Private Sector Partnerships • Donor-led (15 projects) • Specific programs aimed a harnessing private sector funding, innovation, and/or expertise • Shared risk, potential for scaling up • Partnership criteria varies across donors • Programs do not target trade-related partnerships only

9. Models of Trade Related Private Sector Partnerships • Coalition (6 projects) • Generally multi-stakeholder in their funding, design, governing, and implementation • Partners include governments, civil society, private sector actors, research institutions and private sector associations • Value chain approach • Certification schemes common

10. Models of Trade Related Private Sector Partnerships • Company-led (6 projects) • Initiative developed / led largely by private sector partner • Includes civil society implementing partners • Donor/foundation funding for some components of the initiatives

11. Models of Trade Related Private Sector Partnerships • Business-NGO Alliance (3 projects) • Projects’ roots in business and/or NGO seeking to partner with one another • May include donor funding but donor is not primary motivator • Donor/foundation funding for some components of the initiatives

12. Models of Trade Related Private Sector Partnerships • NGO-led (1 project) • NGO initiatives that led to creation of a viable social enterprise or for-profit company • Ten Thousand Villages included • Others identified but lacked international buyer from project outset

13. Models of Trade Related Private Sector Partnerships • Project composition • Sector composition • Agriculture – 24 projects • Artisanal – 6 projects • Geographic composition • Africa – 17 projects • Latin America – 4 projects • Global Initiatives – 4 projects • Asia – 3 projects • Caribbean – 2 projects

14. Comparing Models • Funding Strategies • Key Activities • Role of Private Sector Partners • Development and Commercial Results

15. Comparing Models • Funding Strategies • Donor-led • minimum funding matching requirements • private sector eligibility requirements vary • maximum cap on donor contribution levels • Coalition • funded by public and private sector partners • different funding mechanisms (fee structure, matching funds) • aim of decreasing reliance on public funds over time • Other models

16. Comparing Models • Key Activities • Improving quality (26 projects) • Improving productivity (all projects) • Training or technical support (all projects) • Improved business models (23 projects) • Added value explicitly targeted (13 projects) • Fair trade, organic or other certification (20 projects) • Services or programming beyond improving export capacities (15 projects)

17. Comparing Models • Role of Private Sector Partners – mixed - Funders • Buyers • Implementing partner • expertise • training activities • extension services • Governance (coalition) • Establishment and promotion of industry standards

18. Comparing Models • Development and Commercial Results • Hybrid model for sustainable development? • Commercial results lacking / sensitive • Quantitative development results for outputs • Qualitative development results available • Improved capacity as transformational for project participants

19. Lessons Learned and Key Challenges • Risk • Innovation versus risk • External factors matter: individual personalities, human capacity, market fluctuations, etc. • Getting the incentives right • Private sector partners • Benefits vary depending on the partner (large, small, domestic, foreign, etc.) • Getting the ‘right people’ around the table

20. Lessons Learned and Key Challenges • Replication and Scaling Up • Different models amenable to replication and/or scaling up • Donor-led candidate for both depending on success • Coalition models more amenable to scaling up rather than replication • Balance visibility with support for broader coalitions • Remaining models more ad hoc but likely to continue and grow given increase in socially conscious consumers and declining aid budgets

21. Cross-cutting Themes • Which market-based approach? • Mainstream market transformation (6 projects) • Do not necessarily make use of premiums • Seek to create consumer/industry demand • Holistic approach • Critical mass needed for success

22. Cross-cutting Themes • Which market-based approach? • Niche markets (5 projects) • Benefits to smaller groups • Demand for fair trade and organic certified projects growing • May not be about fundamental changes to core business practices • Creating consumer demand • Artisanal sector • Success demonstrated across projects examined

23. Cross-cutting Themes • The business case • Securing sustainable supply (13 projects) • Company commitment to socially conscious practices (6 projects) • Investment opportunities

24. Conclusions • Hybrid model? • Sustainable development: Economic, social and environmental consideration come together • Poverty reduction one goal among many • Assessing results • Commercial results sensitive • Development results in a hybrid model

25. Conclusions • Private sector motivations • Different motivations exist for private sector partners • Implications for development intermediaries • Risk • How much? • Mitigating and communicating risk • External factors (climate, human, etc.)

26. Thank you!The North-South Institute55 Murray Street, Suite 500Ottawa, Ontario CanadaK1N 5M3Tel.: (613) 241-3535Fax: (613) 241-7435Email/Courriel: nsi@nsi-ins.caWebsite: www.nsi-ins.caThe North-South Institute thanks the Canadian International Development Agency for its core grant and the International Development Research Centre for its program and institutional support grant to NSI.