By Joni Akpederi
World Bank President Dr Jim Yong Kim knows that the onerous task of ending poverty cannot be handled by government alone. Nor can the Bank whose mandate specifically enjoins it to help find ways of achieving the feat do much without the cooperation of other segments of society, notably the private sector. He said so much when he lauded, yesterday, the growing “complementary of the efforts of the public and private sectors” in solving mankind’s development problems.
Like all participants at the seminal discussion on “Transforming Economies to Benefit the Poor”, President Kim knows that any country that does not make lifting of the majority of its population out of poverty its main goal is not likely to survive for long. The Bank’s obsession with the challenges of inclusive growth over the years is open testimony to that stance.
The contribution of Ethiopia’s Finance and Economic Development Minister Mr Sufian Ahmed clarifies the position of government on the vexed issue. A veteran of pro-poor policy delivery and targeted reform initiatives to pull the weaker segment of society out of despondency, Mr Sufian believes that the answer lies in the modification of the mindsets of all three players in society: government, private sector and civil society.
Drawing copiously from Ethiopia’s experience, Mr Sufian recommends that roles must be clearly defined. Government, he says, must be honest and willing to transform the economy with the assistance of other stakeholders. The private sector, on its part, must be willing to comply with legitimate policy directives and to “voluntarily” and perhaps happily, pay taxes to shore up government’s fiscal position. And the civil society, he adds, must assess policies and where feasible, advise and ginger government to live up to its responsibility. Ethiopia, he says, has chalked up an average growth of 11 per cent in the last decade, following these principles.
Pitching in for the private sector, Standard Chartered’s Group Chief Executive Peter Sands could not agree more. The top banker says the private sector has a social contract with society just as governments do and it is in its interest to promote growth. His institution has fashioned a slogan that keeps it tied to the communities in which it operates: ‘we are here for good”
Sands discloses that the bank has extended a total of $1.7 billion to microfinance institutions for on-lending to medium and small-scale entrepreneurs, made up mostly of the poorest and weakest in society. He cites his institution’s financing of infrastructural projects as vital to development. “Government alone cannot provide the funds for critical infrastructure in power and transport and communication sectors,” he declares matter-of-factly.
The Standard Chartered’s Chief Executive agrees with Mr Sufian that private sector players must pay taxes to fund government, but notes that the tax base in developing economies is often too narrow. The unpleasant consequence is that corporates are sometimes over burdened, even when they are paying more than their fair share. He sees nothing wrong with profit-making, without which a business cannot expand and ultimately contribute meaningfully to society.
Sands’ counterpart in industry, Ali Ansari, President Engro Corporation, echoes the sentiments. Working with General Electric, and government, his corporation recently built a small power plant in Nigeria, a country with enormous power challenges. “Business must believe it is meant to be forever and support development,” he asserts. Ansari goes to the core of public-private partnership. “If government sees you as a solution provider, it is good for business,” he says.
Such symbiosis is also evident in the philosophy of businesses that go out of their way to invest in capacity building. “If people are not educated”, he argues, “they are not employable”. Engro Corporation has trained 20,000 female livestock managers to help expand and modernize the agricultural sector in its native country. For Ansari, it is all about “the long term view”, which enables everyone to benefit.
Trust the only lady in the discussion, UK Secretary of State for International Development, Justice Greening, to supply the session’s gender-balance. Inclusive growth, she says, is when the disadvantaged, who are mostly women, are factored into the development agenda. Advocating the deliberate facilitation of access to credit for women, Greening reminds all of studies that prove that women are less guilty of bad debts than men when extended micro-credits.
She has the support of President Kim who cites Japan’s reform initiative that is enabling more women to join the workforce, thus unleashing a potential it had ignored over the years.
The last word, naturally, belongs to the World Bank boss. Critical as PPPs are to the overall development of the global economy, Dr Kim is unhappy that many such arrangements run into trouble in many developing countries. To prevent partnerships getting stranded midstream in development projects, the Bank boss advocates professionalism. He calls for PPPs to avail themselves of expert inputs and professional advice before take-off.