It is time to redefine the role of foreign aid, funding lines and focus and to reposition the work done by the Second Pillar.
--BY VAIJAYANTI KHARE
The axis of the series of articles in the past few months has been sustainable development and the role of the Second Pillar and Foreign Aid dynamics. The success narratives of each of these should rightly be the culminating story. As it emerges the two are intertwined and need to be treated as such in terms of approach by the government, public perception and their own perception about the self and the other. To understand, implement and sustain the Sustainable Development Goals is not the prerogative of the foreign aid agencies alone, in fact, it can neither be implemented nor sustained by them alone, at all. The Second Pillar, read the private sector, is the key player in development.
As a small exercise in the proof is in the pudding, key in the words ‘private sector’ and ‘development’ on your search engine. Go on do it. The search will come up with a list of how the private sector needs to ‘be developed’ to undertake the development of its people. And more, that the foreign aid agencies can develop the private sector. You will find case studies and work done in Africa, developing countries, and so on by the Austrian development Aid, USAID, Swiss Agency and so on. And even that is highlighted (marketed!) as a success story of the foreign aid dynamics in that sector, country, region and such.
What an irony, right? And yet, the good people in the private sector and the government take no heed of this anomaly. Even here in Nepal the foreign aid dynamics claim to train, develop, partner the ‘development of the private sector’. And yet, click on any of the links that appear in your search, and you will read that the foreign aid agencies do not deny the significance of the private sector and entrepreneurs in development. The many reasons they quote are generally on the lines that entrepreneurs and the private sector are:
- a major driver for employment, productivity and inclusive economic growth through their investments and innovations
- make an effective contribution to poverty reduction
- provide basic goods and services, such as food, education, health and energy
- can draw on expertise in various sectors of sustainable development and develop innovative business models
- provide capital, develop innovative financing arrangements and generate tax revenue
- operate in areas where government can exert hardly any influence for political, economic or logistical reasons
It is indicative that as the ‘activity’ of the Second Pillar, namely business enterprise, results in fulfilling any one or more of the above it does in effect bring about development to a certain degree. And so, each activity is a success narrative, in terms of development.
The business and management fraternity has long acknowledged the role and success of the private sector in development. Peter Drucker, Michael Porter and Kramer may be quoted as the representative voice.
“The enterprise is an organ of society and its actions have a decisive impact on the social scene. It is thus important for management to realize that it must consider the impact of every business policy and business actions upon society. It has to consider whether the action is likely to promote the public good, to advance the basic belief of society, to contribute to its stability, strength and harmony” (Drucker, 1954)
Porter and Kramer, however, argue that corporations are not responsible for all the world's problems, nor do they have the resources to solve them all. Each company can identify the particular set of societal problems that it is best equipped to help resolve and from which it can gain the greatest competitive benefit (Porter and Kramer, 2006)
The foreign aid agencies and donor organisations pepper their talk of ‘development’ with five key words: innovation, investment, capacity building, partnerships and advocacy. And there is no gainsaying the fact that the Second Pillar is definitely more suited to bring in all of these. Where then, does the gap and the discontent lie. Where are the two at odds. And, where can they work together for sustainable development.
The Second Pillar needs a comprehensive strategy, a basket of development activities, resources dedicated to conceptualise, deliver, monitor, review and sustain and a definite track of impact and success. The foreign aid / development sector beats the Second Pillar on these counts. Thus, creating the gap and discontent.
The Second Pillar here in Nepal has a long list of development activities, goals and successes. For instance the Chaudhary Foundation can talk of Enduring Social Responsibility, Livelihood and Skill Development, Post Disaster Response and Management, Enterprise Development, Heritage and Spiritual Development, Quality School Program, WASH and such. Nimbus Holdings works with farmers and womenfolk in capacity building, micro-investment, insurance schemes, warehousing, marketing training and such. Asian Paints works to enable education, employability and health. Surya Nepal works to foster hope, skills, entrepreneurship, health and education. Dabur focuses on aquaculture, pisciculture, herb-farming, honey-making, community forestry and such. And so many more organisations and their activities can be cited. Every small, medium and large business enterprise will have at least one activity towards development and social engagement to cite.
What they all have in common is the absence of a definitive long term strategy, a select basket of activities, strong continuity, measured impact and review and monitoring mechanisms. And their linkage with the local or national government and the partnering with the national plan for sustainable development. And that’s what makes the donor agencies’ work different, their limitations notwithstanding.
To take a page from the World Business Council for Sustainable Development (WBCSD), the enterprises of Nepal could combine forces to accelerate the transition to a sustainable development by making more sustainable businesses more successful. The WBCSD is a global, CEO-led organisation of over 200 leading businesses working together to accelerate the transition to a sustainable world. On similar lines with our homegrown, youth-driven, Himalayan Climate Initiative, we could pursue a cohesive strategy to make business success a sustainable development success. Simple themes like ‘how brands can promote aspirations that encourage sustainable lifestyles’ and ‘innovative and practical solutions for water-smart agriculture’ can trigger a host of exciting collaborative work.
It is time to redefine the role of foreign aid, funding lines and focus and to reposition the work done by the Second Pillar. Only then will the dynamics of both these players find more relevance in the drive to sustainable development.
Vaijayanti Khare is known for her dynamic engagements in the corporate, academic, social and development fields in Kathmandu over the past decade. Her writings are a reflection of her hands-on work, insights, studies, success and challenges.