Partnering is Key for Private Sector Development in a Changing World

Donors help IFC strengthen its impact in the developing world. They back much of our advisory services and help us develop innovative solutions to support private sector—led growth in emerging economies, and are key partners in defining our responses to global challenges.

The current financial crisis has put a strain on resources available for development. Given this, IFC sees an even greater need for strong partnerships and collaboration with our donors.

"Working together to ensure private sector development in emerging markets is vital. With ecomonic and financial conditions changing by the day, IFC is focusing resources where we can have the most impact." —Lars Thunell, IFC Executive Vice President & CEO

Strengthening Partnerships

IFC values the support of its donor partners and brings them together each year to discuss areas of mutual interest, with a focus on sharing knowledge and experience. This month, more than 100 representatives of governments, international state and aid agencies, and finance ministries attended an annual donor partners meeting in Washington, D.C., to discuss the role of private sector development in reducing poverty.

Speakers gave concrete examples of the value of collaboration between the private sector and governments. Hakon Gulbrandsen, the Norwegian State Secretary for International Development, cited the impact of investments by Norwegian companies such as Norsk Hydro in Angola. He also noted that the amount of taxes that Statoil pays to the Angolan government exceeds all the bilateral aid from Norway to southern Africa.

Botswana's Ministry of Finance Serwalo Tumelo presented the country's socio-economic framework as a model for collaboration between governments and development agencies, while Tom Albanese, Chief Executive of Rio Tinto, stressed the need to structure private sector investment with corporate social responsibility programs that benefit local communities.

There was general agreement at the meeting that IFC's role remains important, especially in light of the current economic climate. Rachel Kyte, IFC Vice President for Business Advisory Services, noted that key priorities for IFC include working closely with clients to assess vulnerabilities and focusing on projects that will have the most development impact.

Addressing Challenges

Partnering with donors allows us to maximize resources. For example, in fiscal 2008, we teamed with a range of partners to tackle the highest-priority challenges on the development agenda—including the food crisis, climate change, and aid to conflict-affected countries.

On the food crisis, IFC is working with the World Bank Group and the United Nations, focusing mainly on the agribusiness supply side. We also began a strategic dialogue with our donor partners, and will continue stepping up our collaboration.

To address climate change, we have joined with donor partners to catalyze the private sector. With our Nordic donor partners—Denmark, Finland, Iceland, Norway, and Sweden—we organized the first high-level, multistakeholder meeting on climate change in the region. We also organized a workshop with our Norwegian partners to scale up clean energy investments worldwide. In September, we partnered with Switzerland's State Secretariat for Economic Affairs and SwissRe to host a meeting on financing innovative solutions and new markets for climate change.

For conflict-affected countries, IFC established a $50 million global trust fund that will allow us to move swiftly to help with reconstruction. Efforts include rapid diagnostics and support for several priorities: a stronger investment climate; assistance to small and medium enterprises and related institutions; and more private sector participation in infrastructure. Ireland and Norway have already pledged their support to an additional trust fund aimed at helping conflict-affected countries in Sub-Saharan Africa.

In FY08, our donor partners helped finance the expansion of IFC's advisory operations, making a record $211 million contribution. Building on this work, we have renewed our commitment to working with donor partners in developing the private sector in emerging markets.

For more information contact:

Thoko Moyo
Communications Officer
Phone: (202) 458-8517
E-mail: TMoyo@ifc.org