UNLEASHING ENTREPRENEURSHIP Making Business Work For The Poor

1
UNLEASHING ENTREPRENEURSHIPMaking Business Work
For The Poor

Marta Ruedas, Deputy Regional Director Regional
Bureau for Europe and the CIS (RBEC)
2
OVERVIEW

• The Commission and its Objectives
• The Commissions Report
• Key Messages
• Recommendations
• Implementation

3
BACKGROUND AND OBJECTIVES
Who

• UN Secretary-General Kofi Annan convened the
  Commission of public leaders, thinkers and chief
  executives
• A six-month effort, not aimed at expansive
  research, but focused on action-oriented
  recommendations and concrete initiatives to
  follow up
• Recognize the importance of the private sector
  for achieving the Millennium Development Goals by
• Unleashing domestic entrepreneurship
• Better utilizing private sector capabilities for
  development

Task
Objectives
4
WHO COMMISSION CO-CHAIRS, plus
CO-CHAIRS The Right Honourable Paul Martin Prime
Minister, Canada Ernesto Zedillo Director, Yale
University Center on Globalization Former
President, Mexico EXOFFICIO MEMBERS Mark
Malloch Brown (United Kingdom) Administrator,
United Nations Development Programme Maurice
Strong (Canada) Special Adviser to the
Commission
5
PUBLIC LEADERS THINKERS, and
Eduardo Aninat (Chile) Former Deputy Managing
Director, International Monetary Fund Jorge
Castañeda (Mexico) Former Minister of Foreign
Affairs, Mexico Distinguished Professor of
Politics Latin American Studies, New York
University Luisa Diogo (Mozambique) Prime
Minister, Mozambique Former Minister of Planning
and Finance, Mozambique Peter McPherson (United
States) President, Michigan State
University C.K. Prahalad (United States) Harvey
C. Fruehauf Professor of Business Administration,
University of Michigan Business School Juan
Somavia (Chile) Director-General, International
Labour Organization Hernando de Soto
(Peru) President, Institute for Liberty and
Democracy, Peru
6
CHIEF EXECUTIVES
Carleton Fiorina (United States) President and
CEO, Hewlett - Packard Company Rajat Gupta
(India) Senior Partner Worldwide, McKinsey
Company Anne Lauvergeon (France) Chairman of
the Executive Board, Areva Group, President and
CEO, Cogema Jannik Lindbaek (Norway) Chairman,
Statoil ASA Alan Patricof (United
States) Vice-Chairman and Founder, Apax
Partners Kwame Pianim (Ghana) CEO, New World
Investments Robert Rubin (United
States) Director and Chairman, Executive
Committee, Citigroup Former Secretary of the
Treasury, United States Miko Rwayitare (South
Africa) President and Executive Chairman, Telecel
International
7
OVERVIEW

• The Commission and its Objectives
• The Commissions Report
• Key Messages
• Recommendations
• Implementation

8
FIVE KEY MESSAGES

• 1. Why the private sector is so important in
  alleviating poverty
• Strong expansion in sustainable private sector
  investment is the main driver of accelerated
  economic growth, essential for reducing poverty
  and making rapid progress towards the Millennium
  Development Goals.
• 2. Constraints on the private sector in
  developing countries
• Domestic private initiative and entrepreneurship,
  particularly within the small and informal
  sectors, have enormous potentialbut they are
  trapped in disabling business environments.
• 3. Unleashing the potential of the private sector
• Governments need to create an enabling
  environment for a competitive private sector to
  develop. For domestic and foreign players to
  thrive requires a strong rule of law and a level
  playing field.
• 4. Engaging the private sector in development
• Private initiative driven by market-based
  incentives has the demonstrated capacity to
  contribute to important development goals. The
  private sector, properly enabled, can do
  substantially more by developing and replicating
  successful models.
• 5. Recommended actions
• To ensure progress towards the MDGs, all
  stakeholdersgovernments, development
  institutions, the private sector and civil
  societyneed to collaborate more effectively and
  expand the use of private sector capabilities in
  meeting development objectives.

9
WHY THE PRIVATE SECTOR IS SO IMPORTANT IN
ALLEVIATING POVERTY
MORE PRIVATE INVESTMENT MORE GROWTH
10
COMPONENTS OF THE PRIVATE SECTOR SEEN AS AN
ECOSYTEM
Domestic private sector ecosystem
Large Domestic Enterprises
MultinationalCorporations
Cooperatives
Small-MediumEnterprises
Microenterprises
11
CONSTRAINTS ON THE PRIVATE SECTOR

Domestic private sector ecosystem

Large Domestic Enterprises
MultinationalCorporations
Fewcompetitive small and medium enterprises
Lack of competitive pressure
Cooperatives
Small-MediumEnterprises
Microenterprises
Widespread informality
12
INFORMALITY THRIVES IN POORER COUNTRIES
Source World Bank and International Labour
Organization
13
SMEs BECOME MORE IMPORTANT AND INFORMALITY LESS
IMPORTANT AS COUNTRY GDP INCREASES
Source Meghana Ayyagari, Thorsten Beck, and
Asli Kunt, Small and Medium Enterprises across
the Globe A New Database (2003)
14
RECOMMENDED ACTIONS
To ensure progress towards the MDGs, all
stakeholdersgovernments, development
institutions, the private sector and civil
societyneed to collaborate more effectively and
expand the use of private sector capabilities in
meeting development objectives.
15
FRAMEWORK FOR ACTION

• In the Public Sphere Promoting reforms of
  laws, regulations and other barriers of growth
• In the Public-Private Sphere Facilitating
  cooperation and partnerships between public and
  private players to enhance access to such key
  factors as financing, skills and basic services
• In the Private Sphere Encouraging the
  development of business models that can be scaled
  up and copied and that are commercially
  sustainable

16
OVERVIEW

• The Commission and its Objectives
• The Commissions Report
• Key Messages
• Recommendations
• Implementation

17
BRINGING THE REPORT TO LIFE
Dissemination

• Global
• Regional
• Country-specific
• Public sector-driven
• Private sector-driven
• UNDP-driven

Implementation
Initiatives
18
DISSEMINATION
Illustrative list of events
Global

• G-8 Economic Summit
• UNCTAD XI
• UN Global Compact Leaders Summit
• Commonwealth Business Council
• World Resources Institute
• World Economic Forum 2005
• NEPAD/WEF Africa World Economic Summit
• African Union Summit
• APEC Economic Leaders' Meeting and CEO Summit
• Country launches, e.g. Albania, Brazil, Bulgaria,
  China, India, Macedonia, Mozambique, Turkey
• Rwanda Investment Conference

June June June November December January
June July November All 2004 May
Regional
Country- specific
19
INITIATIVES
Illustrative list of initiatives under
consideration
Publicsector-driven

• Informality and Regulatory Reforms
• Business School Network
• Technology for Microfinance
• Business Linkages
• Bottom of the Pyramid Business Development
• Annual Private Sector Report
• SME Brokerage
• Microfinance

Private sector-driven
UNDP-driven
20
IN SUMMARY, THE REPORT

• Formally puts the UN on record on the important
  role of the private sector
• Examines the issues from the viewpoint of the
  domestic private sector first and then looks
  outward
• Includes the informal sector and the poor as
  such as a key element of the private sector
• Emphasizes the critical nature of the linkages
  amongst all of the components of the eco-system,
  from microenterprises to MNCs
• Focuses centrally on the rule of law and the need
  for a level playing field
• Highlights many developmental activities of
  private players that are below the radar screen
  but offer great promise for sustainable
  market-based replication
• Ends with a comprehensive program of action that
  cuts across all of the quadrants of
  developmental interventions for private sector
  development

21
IN CLOSING

• The main message from the Secretary General when
  he accepted the Report on March 1, 2004, was a
  Call to Action for the main stakeholders in the
  development coalition to join the UN in helping
  to bring to life the Commission's Recommendations
  
• Thank you for your time and attention