Engaging the private sector to spur global development and save the foreign assistance budget

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Gary Edson, CEO of the Clinton Bush Haiti Fund and Former Deputy National Security Advisor to President George W. Bush.

Foreign assistance experts gathered Wednesday to discuss the George W. Bush administration’s legacy on global development, focusing on lessons learned and applying them to the next decade and beyond, at an event hosted by the Consensus for Development Reform and the Modernizing Foreign Assistance Network in Washington.

The panel discussion revolved around a central theme – in order to successfully deploy foreign aid the U.S. must engage the private sector. As an example of how that can work, Sen. Johnny Isakson (R-GA) in his opening remarks talked about Coca-Cola’s investment in clean water and sanitation in Africa. For seven cents a day, families in the community can purchase five gallons of clean water from the water purification plant, he said.  A seemingly small amount, those seven cents are enough to sustain the plant’s operating costs, setting up the community to sustain its own access to clean water. In the end, it is worth Coca-Cola’s while; because, “our business needs strong, healthy communities to grow and be sustainable,” according to the company’s press release.

Isakson called on the U.S. government to create more opportunities for private corporations to contribute to the sustainability and economic growth in countries that receive U.S. taxpayer money. The event’s panelists repeatedly highlighted the Bush administration’s two shining contributions to success in foreign aid in this regard – the Millennium Challenge Corporation and the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR) program.

The Millennium Challenge Corporation (MCC)
Described as an independent U.S. government foreign aid agency, the MCC was launched in January 2004 and has since provided more than $8.4 billion in large-scale grants to fund country-led solutions for reducing poverty through sustainable economic growth in sectors ranging from agriculture and irrigation, to anti-corruption initiatives and access to health.

“Some people perceived it as a slap in the face to the [U.S. Agency for International Development],” said John Danilovich who held the post as CEO of the MCC for four years. He described the MCC as full of common sense and rational thought, and results oriented. Of particular interest was the accountability aspect. In order to be eligible to receive aid, countries have to meet a range of criteria from stances on political issues to indicators of overall stability and adequate governmental infrastructure to be able to receive and account for this infusion of funding.

“We see this as par for the course these days – but at the time that was revolutionary,” Danilovich said.

The U.S. President’s Emergency Plan for AIDS Relief (PEPFAR)
PEPFAR successfully shifted the foreign aid conversation from how much money are we putting in to what is the outcome we aim to achieve, said Gary Edson, CEO of the Clinton Bush Haiti Fund and former deputy national security advisor for President George W. Bush. “We began with what we wanted to achieve with PEPFAR, which was to turn the tide on the epidemic, and started talking about outcomes first. What do we need to spend to get there?” This changed the whole conversation.

However, “The countries in Africa have to take over more of the responsibilities for testing, delivery and care,” said Sen. Isakson, shifting the long-term responsibility for these interventions from PEPFAR to the host countries. Isakson named Tanzania as a success case in that regard. He said the country has been successful in reducing the infection rate and mortality rate of children born to mothers living with HIV, while at the same time taking on more responsibility in the public sector delivery of early HIV testing and distribution of antiretrovirals.

Former U.S. Global AIDS Coordinator Mark Dybul called for the U.S. to act as an intermediary between the public and private sectors in emerging economies, helping them work together to create an investment framework that includes incentives for private sector engagement in development. Former U.S. congressman Jim Kolbe, now a senior transatlantic fellow at the German Marshall Fund, noted trade within Africa as a potential example of where public-private partnership through supply chain management could spur economic growth. “Trade within Africa is significantly smaller than other continents. It’s a problem with policy,” he said, but a problem the private and public sectors could tackle together.

A real world example
South Africa made headlines earlier this week by tough-arming mining companies to take care of their mine workers, who are three times as likely to develop active TB as the general population due to increased incidence of silicosis. TB infection also makes them more susceptible to acquiring HIV infection and vice versa – those living with HIV are more than 37 times more likely to develop TB.  Poor living conditions for miners in often poorly ventilated and overcrowded hostels facilitate TB transmission.

“Deputy President Kgalema Motlanthe urged the mining industry to improve TB services by adopting the GeneXpert rapid TB test, upgrading health centers to allow for the treatment of drug-resistant TB, and by extending health services to those from surrounding communities and mines that may have limited access to healthcare,” according to IRIN PlusNews. The mining companies will also have to revise their HIV, TB and workplace safety policies to address these issues in order to renew their mining licenses – making it in the companies’ financial interest to take care of their employees.

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