First and foremost, it is crucial that donores/EU put their house in order and put the fight against poverty and inequality at the centre of its strategy on working with the private sector in development. What is clearly missing in current approaches is a focus on internal reforms and defining the private sector’s added value in development cooperation. The EU should ask what it can do itself to support the development of a productive and sustainable private sector that works for the poor, such as:
• incorporate development oriented considerations in procurement regulations to unlock the potential of the local private sector, in particular small and medium-sized companies (SMEs)
• adopt regulation to curb financial opacity, tax avoidance and evasion to ensure EU companies pay their taxes in partner countries. It should do this to increase domestic resources substantially and facilitate a level playing field for SMEs and firms based there.
• focus on how public finance can support the private sector to invest in essential services, such as health, education and social infrastructure. Those are the first conditions of any private sector development strategy working for the poor.