USAID Embraces the Private Sector

Categories: Events

Raj ShahAs part of USAID’s Partnership Forum on The Strategic Value of Connecting Business and Development held October 20th, IGD co-sponsored the lunch event, at which Administrator Raj Shah gave the keynote address entitled “Embracing the Role of the Private Sector in Development.”  The speech signaled that in the same way companies are making development part of their core business, the private sector will be fundamental to USAID’s business model going forward.  Shah took on directly the mistrust that has often pervaded conversations about the role of corporations in development, noting a number of examples of “creative, enlightened capitalism” and calling for USAID to step out of its comfort zone of working with governments and NGOs to include leveraging resources and sharing risk with both the international and local private sector.

To this end, Shah outlined three concrete steps USAID will take to do development differently: establishing IDEA – the Office of Innovation and Development Alliances, to serve as a single point of contact within USAID on partnerships and to provide coherence in approaches and metrics throughout the organization; recruiting a cadre of “investment officers” to serve as dedicated points of contact and “deal originators” in priority missions; and reallocating Development Credit Authority resources to leverage local capital to meet entrepreneurial needs across countries.  More immediately, he stated that action plans would soon be finalized in order to implement the President’s vision for more sustainable development in Partnership for Growth countries (starting with El Salvador and the Philippines, followed by Ghana and Tanzania).

Throughout his remarks, Shah made a strong link between past U.S. assistance programs and the economic powerhouse of today, such as South Korea and Taiwan, which account for significant U.S. exports and jobs.  He asserted that the countries with which the U.S. will sign free trade agreements in the future are likely recipients of U.S. development assistance today.  IGD looks forward to supporting USAID in its efforts to work with the corporate community to make U.S. foreign assistance more effective, in particular, by serving as a resource to help integrate what the private sector can bring to development into future USAID strategies and partnerships.