The private sector plays a significant role in development
The UN Sustainable Development Goals (SDGs) aim at eradicating extreme poverty from the world and at securing wellbeing in an environmentally sustainable way. This can only be done when the public and private sectors work together.
The UN has estimated that developing countries should invest approximately USD 3,300–4,500 billion per year to be able to reach the SDGs by 2030. Here companies play a central role as partners and as funders.
At the same time, development cooperation is needed as it strengthens the structures that provide an enabling environment for business activities. A well-functioning administration and an independent judiciary ensure stable conditions for business activities. An efficient public sector also serves the interests of the private sector. Education, in turn, ensures that competent workforce is available for companies. The public sector is also responsible for the planning and construction of an infrastructure that makes market entry easier. It is essential that companies promote the principles of responsible business conduct.
A growing private sector is an important employer also in developing countries. Africa is the youngest continent in the world. According to the African Development Bank and the UN’s Development Programme (UNDP), the labour markets in Africa will grow by 12 million people every year.
Aid for Trade strengthens developing countries’ ability to trade
The private sector in developing countries will be creating the majority of future jobs and economic growth. Aid for Trade (AfT) is an international initiative aimed at improving the capacities of developing countries to participate in global trade and benefit from it.
Support is directed, for instance, to building productive capacity, strengthening internal and foreign trade, improving the operating environment for entrepreneurship and businesses, and building trade-related infrastructure.
Several forms of funding are available for companies’ development cooperation
Developing countries offer vast opportunities for Finnish companies. The Ministry for Foreign Affairs allocates development cooperation appropriations to support Finnish companies’ partnerships and business opportunities in developing countries. The activities must always be aimed at promoting the economic, social or environmental development in the target countries. Companies are always expected to adhere to the principles of responsible business conduct.
Development cooperation appropriations are directed also to development cooperation projects, for which competitive tendering is organised. The majority of open calls for tender are announced in the Hilma service for public procurement. Guidelines for procurements related to development cooperation projects.
A number of direct forms of funding for companies are available. The most important ones are Finnfund, Finnpartnership and the Public Sector Investment Facility (PIF). Additionally, Developing Markets Platform (DevPlat), which is a joint platform developed by Business Finland and the Ministry for Foreign Affairs, offers funding for development innovations that are in line with the UN Sustainable Development Goals.