Nine out of ten jobs in the developing world are in the private sector. Hum-drum enough, but for the development community this is something of an epoch. There is a growing consensus in international development that the private sector is the engine of development and donors and development stakeholders should design and plan around this major source of change. In 2011, CSIS and Chevron launched a five-year partnership—the Project on U.S. Leadership in Development—to review U.S. development and consider how the role contribution of the private sector to development. The center-piece of this effort is a year-long high-level Council that met over the course of 2012.
In particular, we focused at the changed environment for international development. Over the last forty years the paradigm of engagement between wealthy and poorer countries has shifted from one that is aid based to a growing trade and investment relationship. In the case of the United States, this is illustrated by the dramatic change in financial resource flows. At the time the Kennedy administration created USAID, 70 percent of all financial flows from the United States to the developing world were public, primarily official development assistance. That figure is now less than ten percent, the rest is private.
The Development Council concluded in its final report released in March 2013 that the United States needs to reorients its development policies around the private sector understanding that the private sector in partnership with a functioning government providing a constructive enabling environment and effectively delivering public goods such as education, health, and rule of law that are critical to development.
- How can the United States government move beyond the traditional model of partnerships and engage more fully with the private sector?
- What are the benefits of engaging more closely with the private sector in development?
- Looking beyond simply engaging with the private sector, what role should trade and investment play in creating long-term development?