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Directorate for Sustainable Economic Development

Directorate for Sustainable Economic Development. Private sector development in developing countries: is agriculture still on the agenda? Stakeholder Meeting: Rethinking Agriculture in Development The Hague, December 14th 2006. Private sector development and agriculture.

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Directorate for Sustainable Economic Development

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  1. Directorate for Sustainable Economic Development Private sector development in developing countries: is agriculture still on the agenda? Stakeholder Meeting: Rethinking Agriculture in Development The Hague, December 14th 2006.

  2. Private sector development and agriculture Link economic growth – poverty alleviation • Growth income per capita • Pro-poor growth and job creation Economic growth through: • Productivity growth • Trade, FDI, etc • Private sector development

  3. Three levels of intervention • International markets (IM) • National enabling environment (NB) • Direct business support (OB)

  4. Six challenges in PSD organised in clusters • Legal and regulatory environment • Infrastructure • Market access and market development • Financial sector development • Access to skills and knowledge • Public-private partnerships

  5. Legal and regulatory environment • Why? Less costs and risks for business and better level playing field. • What? Property rights, customs, commercial law, corruption, business registration and labour law. • How? • Bilateral: policy dialogue, PPD, embassy programs • Multilateral: ICF, Doing Business, partnerships with WB / IFC/ AfDB

  6. Infrastructure • Why? Basic services are needed for economic development • What? Roads, energy, ICT, water and sanitation, transport • How? • Bilateral: FMO (ORET and LDC), with DMW on water and energy (EUR 400 mln), embassy programs • Multilateral: PIDG, PPIAF

  7. Market access and development • Improve market access through: • Negotiations: WTO, EPA’s • Influence EU market regulation • Stimulate rural-urban linkages in the countries • Promote market development through: • Capacity-building: Aid for Trade (WTO-related) • Market information: IFDC, CBI • Market chains • Standards: Eurepgap, SPS and TBT

  8. Financial Sector Development • Developing the access to financial services, microfinance and insurances and improving the capacity of financial institutions. • Bilateral instruments: • FMO: Massif (credit, equity, microfinance) • Partnerships (NFX, HIF, NPM) • Embassy programs • Multilateral instruments: • IFI’s (e.g. IFC): CGAP • FIRST, CRM

  9. Access to skills and knowledge • Vocational training, business capacity building, CSR, business membership organisations. • Bilateral instruments: • EVD (PSOM, PESP, marketing, match-making) • PUM • DECP • POP • Trade Unions programme • Embassy programs • Multilateral partnerships

  10. Public-private partnerships • Why? More leverage, additional resources, effectiveness to achieve development goals • How? Collaboration through pooling knowledge and resources and coordination efforts • Examples: NFX, HIF, AgriProFocus, WSSD partnerships

  11. PSD as instrument to promote agriculture • 70% of the funds channelled through PSOM are for agriculture • The Netherlands supports the removal of subsidies (WTO) • Producer organisations, fair trade org., CBI etc. • Partnership with IFDC • PPP’s (9 in agriculture) • WSSD, Land Alliances for National Development, BNPP • Agri-Profocus

  12. Challenges to be addressed • Understanding and improving the rural environment and the role of agriculture in the economy • Professionalisation of agriculture • Privatization of agricultural services and industries • Improving the competitiveness of agriculture in low income countries • Increasing access to markets • Appropriate legal and regulatory frameworks for promotion of agriculture • Building knowledge and capacities and developing instruments to do the above.

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