A legacy of private sector engagement for sustainable development
07 Mar 2016 by Marcos Neto, Director, Istanbul International Center for Private Sector in Development
As the engine of growth in most developing and developed countries, the private sector contributes to poverty reduction indirectly by creating aggregate income and wealth, and directly by generating employment and providing affordable goods and services.
For 50 years, UNDP has worked with the private sector and in collaboration with national governments, to create jobs, establish value chains, build infrastructure and forge public policy and regulation that advance both national goals and the global development agenda.
Our engagement with the private sector has covered a range of areas, including agriculture, the extractive industry, tourism, education, energy, finance, health, and information technology, to create positive development in remote, rural and urban areas.
In the 1960s, in partnership with the International Civil Aviation Organization, we established training centres for key aviation personnel to help developing countries build their national airlines. UNDP’s support was critical in setting up Embraer in Brazil, now one of the world’s largest civilian aircraft manufacturers employing 19,000 people with revenues of US$ 6.4 billion. The collaboration also benefitted Ethiopian Airlines, Africa’s largest carrier, and Garuda Indonesia.
From our founding, we recognized the value of entrepreneurship as the driving force behind private sector growth. So in 1988, UNDP partnered with the United Nations Conference on Trade and Development to launch EMPRETEC, an integrated capacity-building programme that helps promising entrepreneurs build innovative and internationally competitive small and medium businesses. EMPRETEC programmes can now be found in 26 countries and have assisted more than 70,000 entrepreneurs pursue they dreams.
UNDP has had a long-standing commitment of linking economic growth with environmental sustainability. Our projects under the Global Environment Facility include the Central American Markets for Biodiversity project, which incorporates biodiversity conservation and sustainability within development and financing for micro, small and medium enterprises; climate preservation with major air-conditioning manufactures; and the UNDP-DHL partnership to ‘Get Airports Ready for Disaster’.
Since 1991, UNDP’s portfolio of ozone-related projects has reached 118 countries through 2,225 projects and has resulted into the prevention of over 68,000 tonnes of ozone depleting substances into the atmosphere. In Sri Lanka alone, our work with the country’s tea farmers led to a 98 percent reduction in the use carcinogenic and ozone depleting methyl bromide by 2011.
As our history has shown, UNDP sees a world where the private sector is a transformative partner in the elimination of poverty and inequality and the sustainable management of natural resources.
The world has changed dramatically since our early days. Perhaps the biggest change has been the rapid economic growth and improved standards of those living in developing countries. This growth, achieved in large part by the accomplishments of the Millennium Development Goals, helped move 700 million people out of poverty and created an entirely new and untapped consumer market. The collective purchasing power of people at the base of the economic pyramid now exceeds US$5 trillion, creating a demand for goods and services to meet their unique needs.
At the same time, the global community has transitioned from the socially- and environmentally- focused Millennium Development Goals to the more comprehensive and universally binding Sustainable Development Goals (SDGs). Between US$3.3-4.5 trillion a year will be needed in state spending, investment, and aid to meet the 17 SDGs and it is widely recognized that the majority of those resources will need to come from the private sector. This confluence of opportunity and demand offers an unprecedented opportunity to unleash the economic power of the private sector to help accomplish the SDGs.