News

24/09/2014

New SSC Monitor

The new monitor "Private Investment and International Development: The Brazilian Experience" analyzes the growing trend linking cooperation initiatives for development through private investment. The monitor analyzes the wide range of roles that the private sector has taken and the possible impacts on the practices of development cooperation under two different perspectives: one that identifies this association as "uncomfortable friends"; and the other who sees this association as "necessary partners". 

The private sector has been recognized as an equal and active participation in development within the UN and OECD partner. The Monterrey Consensus (2003) is considered a milestone for this project, emphasizing the importance of the private sector in this area and raising funds for development cooperation. Funds from multilateral development banks alone increased from $ 5 billion to $ 40 billion between 2000 and 2010. 

The Monitor also highlights the direct link of this relationship with the context of financial crisis and the political effects of emerging countries and their economic policies, especially of Brazil, China and India, changing the focus back to the role of the state in promoting development, primarily through its industrial policies. This perspective argues that rather than 'friends uncomfortable', the private sector is a necessary partner. In this sense, the intersection between the private sector within the 'aid community' and South-South cooperation goes beyond the North-South divide. 

Both public and private actors from North or South recognize the centrality of private investment in fostering development. However, economic growth does not necessarily lead to sustainable human development. This intersection between private investment and international development raises two central questions: how likely would the interests of the private sector replace the goals of development? What are the chances of return or strengthen the conditionalities of aid? 

The Monitor therefore concludes that this highly unpredictable scenario brings up the need for control mechanisms and models evaluating this intersection and can prevent private investment to disguise themselves as development initiatives.

To read the publication, click here.

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