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UNLEASHING ENTREPRENEURSHIP Making Business Work For The Poor

UNLEASHING ENTREPRENEURSHIP Making Business Work For The Poor. Marta Ruedas, Deputy Regional Director Regional Bureau for Europe and the CIS (RBEC). OVERVIEW. The Commission and its Objectives The Commission’s Report Key Messages Recommendations Implementation. BACKGROUND AND OBJECTIVES.

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UNLEASHING ENTREPRENEURSHIP Making Business Work For The Poor

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  1. UNLEASHING ENTREPRENEURSHIPMaking Business Work For The Poor Marta Ruedas, Deputy Regional Director Regional Bureau for Europe and the CIS (RBEC)

  2. OVERVIEW • The Commission and its Objectives • The Commission’s Report • Key Messages • Recommendations • Implementation

  3. BACKGROUND AND OBJECTIVES Who • UN Secretary-General Kofi Annan convened the Commission of public leaders, thinkers and chief executives • A six-month effort, not aimed at expansive research, but focused on action-oriented recommendations and concrete initiatives to follow up • Recognize the importance of the private sector for achieving the Millennium Development Goals by • Unleashing domestic entrepreneurship • Better utilizing private sector capabilities for development Task Objectives

  4. WHO – COMMISSION CO-CHAIRS, plus… • CO-CHAIRS • The Right Honourable Paul Martin • Prime Minister, Canada • Ernesto Zedillo • Director, Yale University Center on Globalization • Former President, Mexico • EX–OFFICIO MEMBERS • Mark Malloch Brown (United Kingdom) • Administrator, United Nations Development Programme • Maurice Strong (Canada) • Special Adviser to the Commission

  5. PUBLIC LEADERS & THINKERS, and • Eduardo Aninat (Chile) • Former Deputy Managing Director, International Monetary Fund • Jorge Castañeda (Mexico) • Former Minister of Foreign Affairs, Mexico • Distinguished Professor of Politics & Latin American Studies, New York University • Luisa Diogo (Mozambique) • Prime Minister, Mozambique • Former Minister of Planning and Finance, Mozambique • Peter McPherson (United States) • President, Michigan State University • C.K. Prahalad (United States) • Harvey C. Fruehauf Professor of Business Administration, University of Michigan Business School • Juan Somavia (Chile) • Director-General, International Labour Organization • Hernando de Soto (Peru) • President, Institute for Liberty and Democracy, Peru

  6. CHIEF EXECUTIVES • Carleton Fiorina (United States) • President and CEO, Hewlett - Packard Company • Rajat Gupta (India) • Senior Partner Worldwide, McKinsey & Company • Anne Lauvergeon (France) • Chairman of the Executive Board, Areva Group, President and CEO, Cogema • Jannik Lindbaek (Norway) • Chairman, Statoil ASA • Alan Patricof (United States) • Vice-Chairman and Founder, Apax Partners • Kwame Pianim (Ghana) • CEO, New World Investments • Robert Rubin (United States) • Director and Chairman, Executive Committee, Citigroup • Former Secretary of the Treasury, United States • Miko Rwayitare (South Africa) • President and Executive Chairman, Telecel International

  7. OVERVIEW • The Commission and its Objectives • The Commission’s Report • Key Messages • Recommendations • Implementation

  8. FIVE KEY MESSAGES • 1. Why the private sector is so important in alleviating poverty • Strong expansion in sustainable private sector investment is the main driver of accelerated economic growth, essential for reducing poverty and making rapid progress towards the Millennium Development Goals. • 2. Constraints on the private sector in developing countries • Domestic private initiative and entrepreneurship, particularly within the small and informal sectors, have enormous potential—but they are trapped in disabling business environments. • 3. Unleashing the potential of the private sector • Governments need to create an enabling environment for a competitive private sector to develop. For domestic and foreign players to thrive requires a strong rule of law and a level playing field. • 4. Engaging the private sector in development • Private initiative driven by market-based incentives has the demonstrated capacity to contribute to important development goals. The private sector, properly enabled, can do substantially more by developing and replicating successful models. • 5. Recommended actions • To ensure progress towards the MDGs, all stakeholders—governments, development institutions, the private sector and civil society—need to collaborate more effectively and expand the use of private sector capabilities in meeting development objectives.

  9. WHY THE PRIVATE SECTOR IS SO IMPORTANT IN ALLEVIATING POVERTY MORE PRIVATE INVESTMENT – MORE GROWTH

  10. COMPONENTS OF THE PRIVATE SECTOR – SEEN AS AN ECOSYTEM Domestic private sector ecosystem Large Domestic Enterprises MultinationalCorporations Cooperatives Small-MediumEnterprises Microenterprises

  11. CONSTRAINTS ON THE PRIVATE SECTOR Domestic private sector ecosystem Large Domestic Enterprises MultinationalCorporations • Fewcompetitive small and medium enterprises • Lack of competitive pressure Cooperatives Small-MediumEnterprises Microenterprises Widespread informality

  12. INFORMALITY THRIVES IN POORER COUNTRIES Source: World Bank and International Labour Organization

  13. SMEs BECOME MORE IMPORTANT AND INFORMALITY LESS IMPORTANT AS COUNTRY GDP INCREASES Source: Meghana Ayyagari, Thorsten Beck, and Asli Kunt, Small and Medium Enterprises across the Globe: A New Database (2003)

  14. RECOMMENDED ACTIONS • To ensure progress towards the MDGs, all stakeholders—governments, development institutions, the private sector and civil society—need to collaborate more effectively and expand the use of private sector capabilities in meeting development objectives.

  15. FRAMEWORK FOR ACTION • In the Public Sphere –Promoting reforms of laws, regulations and other barriers of growth • In the Public-Private Sphere –Facilitating cooperation and partnerships between public and private players to enhance access to such key factors as financing, skills and basic services • In the Private Sphere –Encouraging the development of business models that can be scaled up and copied and that are commercially sustainable

  16. OVERVIEW • The Commission and its Objectives • The Commission’s Report • Key Messages • Recommendations • Implementation

  17. BRINGING THE REPORT TO LIFE Dissemination • Global • Regional • Country-specific • Public sector-driven • Private sector-driven • UNDP-driven Implementation Initiatives

  18. DISSEMINATION • Illustrative list of events Global • G-8 Economic Summit • UNCTAD XI • UN Global Compact Leaders’ Summit • Commonwealth Business Council • World Resources Institute • World Economic Forum 2005 • NEPAD/WEF Africa World Economic Summit • African Union Summit • APEC Economic Leaders' Meeting and CEO Summit • Country launches, e.g. Albania, Brazil, Bulgaria, China, India, Macedonia, Mozambique, Turkey • Rwanda Investment Conference • June • June • June • November • December • January • June • July • November • All 2004 • May Regional Country- specific

  19. INITIATIVES • Illustrative list of initiatives under consideration Publicsector-driven • Informality and Regulatory Reforms • Business School Network • Technology for Microfinance • Business Linkages • Bottom of the Pyramid Business Development • Annual Private Sector Report • SME Brokerage • Microfinance Private sector-driven UNDP-driven

  20. IN SUMMARY, THE REPORT: • Formally puts the UN on record on the important role of the private sector • Examines the issues from the viewpoint of the domestic private sector first and then looks outward • Includes the informal sector – and the poor as such – as a key element of the private sector • Emphasizes the critical nature of the linkages amongst all of the components of the eco-system, from microenterprises to MNCs • Focuses centrally on the rule of law and the need for a level playing field • Highlights many developmental activities of private players that are below the radar screen but offer great promise for sustainable market-based replication • Ends with a comprehensive program of action that cuts across all of the quadrants of developmental interventions for private sector development

  21. IN CLOSING • The main message from the Secretary General when he accepted the Report on March 1, 2004, was a Call to Action for the main stakeholders in the development coalition to join the UN in helping to bring to life the Commission's Recommendations • Thank you for your time and attention

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