The MDGs and Business: Potentials of the Private Sector for Achievement of the MDGs-Remarks by Helen Clark, UNDP Administrator
I appreciate the opportunity to address this important side event on the potential for the private sector to support achieving the Millennium Development Goals (MDGs). I am particularly pleased to see the large number of people participating in this event, and I thank you for the commitment you are showing to the MDGs by being here.
When the MDGs were launched at the beginning of the new millennium, it was a time of hope. The eight goals were, and still are, the most comprehensive and universally agreed development goals. For the world’s poorest and most vulnerable people, they held out the promise of a better life.
Over the last decade, we have seen impressive progress on the MDGs, including in least developed countries. That shows that with the right policies, adequate investments, and international support, the MDGs are achievable. Yet, significant challenges remain: many countries and people are being left behind, and the crises of recent years have placed additional obstacles in the way.
To deliver on the MDG promise of a decade ago, we need strong partnerships. In our interconnected world, the dividing line between “their” problems and “our” problems is getting obsolete. If our neighbours are poor and struggling, our prospects are affected too. Development is everybody's business. In these efforts, the role of governments is critical, but they can’t deliver the needed development results alone. Broad partnerships, including with the private sector, are needed.
The Role of the Private Sector in MDG Achievement
Economic growth, which is essential for development, is driven largely by the private sector. In many ways, businesses – from multinational corporations to micro, small, and medium sized enterprises generate the growth which can support MDG achievement. For example, Mexico’s private sector created more than 12 million jobs in the decade fro 1989 to 1998 and microfinance has helped many of the world’s poorest people get a fresh start.
How Can Businesses Contribute?
There are many different ways in which businesses can contribute to MDG achievement: First of all businesses can benefit the poor by including them in their core business operations, whether that be it as producers and business partners in their supply and distribution chains; as employees in the workplace; or as consumers in the marketplace. There are many examples of companies which have successfully integrated the poor into their business models.
For example, A to Z Textile Mills of Tanzania is the sole African producer of long-lasting insecticide bed nets. Its products help the fight against malaria, and making them provides work for more than 3,000 women. That was made possible by a broad public private partnership, involving, among others, the Japanese chemical company Sumitomo. In the agricultural sector, another Japanese company, Key Coffee, is training, and providing a reliable source of income for, hundreds of Indonesian farmers, by sourcing quality Arabica coffee beans from them at fair prices. A recently published UNDP report, “The MDGs: Everyone’s Business”, whose executive summary has just been translated into Japanese, provides many more examples of how businesses can contribute to the MDGs. These examples show how it is possible both to be profitable and to improve the lives of poor people and communities. UNDP’s “Growing Inclusive Markets” initiative promotes exactly such business models, where the pursuit of wealth creation, human progress, and environmental sustainability are seen as entirely compatible. In Ghana, for example, UNDP’s Green Commodities Facility facilitated a partnership between the government and Kraft-Cadbury. The result has been strengthened extension services for cocoa farmers, enabling them to adopt sustainable agricultural practices and increase their incomes.
A second way which the private sector can make important contribution to advancing progress on the MDGs is through bringing low cost innovations to market. There is now low cost mobile technology to conduct life saving heart scans; as there are energy efficient LED lamps which enable allow poor children to do their homework at night; smokeless stoves which support better health for those who labour over them; and mobile phone and internet applications which support small farmers and fishermen get access to better prices. Innovations like these, when accessible to the poor, definitely can contribute to MDG achievement.
A third, and perhaps a more traditional way, for businesses to promote MDG achievement is by giving back to the community through corporate social responsibility activities and philanthropy. The scope and magnitude of these kinds of activities has multiplied in recent times – and indeed they need to be brought to scale more consistently to have wide impact. The Business Call to Action is a global partnership of businesses, governments, and the UN which encourages and supports companies to adopt inclusive business models to spread the benefits of development.
The companies implementing the Call to Action fully appreciate that what benefits their bottom line can also benefit local communities. By adopting inclusive business models, they have pledged to generate jobs, to help farmers increase their productivity and incomes, and enable people to access affordable technology. For example, Sumitomo Chemical, which I mentioned earlier, joined the Business Call to Action, and committed to increase the local production of bed nets in East and West Africa. That is generating 5,000 new jobs, and potentially saving 400,000 lives from malaria, over the next five years. Another member company, Vodafone, is providing poor communities with basic financial services through its mobile money transfer platform ‘M-PESA’. Launched in 2007 with Safaricom in Kenya, and now available in Afghanistan, Tanzania, and South Africa, it allows over sixteen million subscribers to transfer money and pay bills via their cell phones. I encourage all of the businesses represented here today to join the Business Call to Action if they have not already done so.
Looking forward, one of UNDP´s ambitions is to build broader and more strategic alliances with the private sector and other partners, around key development challenges of common concern, such as the provision of energy, job creation, and supporting green growth. By doing so, we not only advance development, but we also unlock the potential of the unrealized markets at the bottom of the economic ladder. UNDP’s new Istanbul International Centre for the Private Sector in Development, being established with support from the Government of Turkey, will be promoting best practice in inclusive business models and strategic dialogue with the private sector.
Helping to achieve the MDGs offers not only opportunities for corporate philanthropy, but also opportunities to build new markets and incorporate new players in value chains. All that is conducive to development, and will support development progress overall.