Top Business Leaders Call for More Effective Development

IGDlogo_rgb_300x120MFAN Partner the Initiative for Global Development (IGD) represents a strong alliance of business leaders and development experts committed to ending poverty.  IGD is made up of a Leadership Council co-chaired by former U.S. Secretaries of State Madeleine K. Albright and Colin L. Powell; a Frontier 100 group that connects CEOs in the developing world with CEOs in the US and Europe; and a partner network made up of over 350 business executives.   MFAN Principal Jennifer Potter is IGD’s President and CEO.

IGD offers a business perspective on why development and foreign aid reform are so important.  In a paper titled “The Business Case for Foreign Aid Reform,” IGD presents a clear argument for why aid effectiveness is critical to US business and explains how to leverage best practices of the business world in order to improve development.  The paper offers a “business plan” for foreign aid that includes:

Start with a clear strategy

  • Formulate a comprehensive national strategy for global development that outlines clear objectives and encompasses all relevant trade, aid and investment programs
  • Put someone in charge: one individual responsible for coordinating all U.S. development policies and programs, who is accountable for delivering results and who serves as a unique development voice – distinct from diplomacy and defense – in interagency discussions
  • Know your customers: design assistance efforts so that they respond to local needs and priorities

Emphasize results

  • Evaluate development outcomes rather than dollars disbursed
  • Emphasize local management: give U.S. government development staff in country the flexibility and authority to allocate resources based on their knowledge of needs on the ground
  • Find more strategic ways to collaborate with the private sector to leverage impact

Invest for success

  • Put the right team in place: rebuild the government’s core development expertise
  • Support the strategy with adequate resources: increase funding for U.S. development programs over time
  • Leverage the investments made by U.S. development agencies with private sector commitments to catalyze greater development gains

The paper goes into detail about how foreign aid can promote long-term growth, create a bigger consumer market, and spur investment and trade.  Acknowledging the current inefficiencies with the US aid system, the paper even calls for a national strategy for global development.  Read it in full here and see a few excerpts below:

“U.S. business has a core interest in the economic health of the rest of the world. Increasingly, this includes the economic development of people in poor countries.”

“By helping to create an environment where private enterprise will thrive, foreign aid is often the necessary first step in a country’s climb out of poverty and into the global marketplace. This assistance is especially important in the face of the current economic crisis, which has hit the most vulnerable hardest.”

“U.S. aid has improved the lives of millions of people by helping spur economic activity – connecting people to markets, boosting the productivity of workers, giving entrepreneurs the tools they need to scale up, and creating an environment that attracts private investment.”

“Business leaders have expertise in job creation, investment evaluation and efficient use of resources. In addition, many companies have significant experience in the developing world – producing, purchasing, selling and investing. Companies can fight poverty directly through their investments and operations, but business can also strengthen its impact on development by using its expertise and experience to advocate for improvements to U.S. aid and trade policies.”

Tim SolsoHarold McGrawPrior to the announcement of the PPD, two members of IGD’s Leadership Council, Harold McGraw and Tim Solso, wrote a blog post outlining critical reforms the Obama administration should include in its new approach to foreign aid.  They list three specific reforms that will not only create a foundation for US development policies and programs, but that will go a long way in strengthening public-private partnerships and harnessing the resources of the private sector on these issues.  The three reforms they list include:

  • Create a national strategy for global development–a principal MFAN ask;
  • Place a greater emphasis on results and outcomes, not inputs; and
  • Rebuild development expertise and invest for success

Read the full piece here and see excerpts below:

“A national strategy with clear priorities will enable the private sector – particularly businesses looking to invest – to better understand U.S. commitments to specific countries and sectors. The upcoming speech to the United Nations is a perfect opportunity to unveil the key elements of such a strategy.”

“By moving forward with these three core reforms, the Obama administration has an opportunity to build a global development strategy, based on more strategic engagement with the private sector, that expands economic opportunity abroad, raises standards of living, and brings new hope to the world’s poorest people. In turn, it will also bring countless benefits to the United States economy by creating new customers for American goods, better educated employees for American companies, and new markets for American investment in a more stable global economy.”

Harold W. McGraw, III is Chairman, President & CEO of The McGraw-Hill Companies, Inc. and Tim M. Solso is Chairman & CEO of Cummins Inc.

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