PRIVATE ACTORS IN THE AID LANDSCAPE

Transcription

1 PRIVATE ACTORS IN THE AID LANDSCAPE Mapping an emerging segment of Norwegian engagement in Sub Saharan Africa

2 AGENDA Introduction Anne Welle-Strand Hybrid organizations Pernille Dehli The Business Sector Erik Kimmestad Civil Society Organizations Erik Kimmestad Concluding remarks Anne Welle- Strand

3 MOTIVATION Five factors: traditional development aid, foreign direct investments and business development, remittances, financial institutions, international regulatory organizations How are these five factors contributing to effective aid to developing countries?

4 FOREIGN DIRECT INVESTMENTS The primary engine for development Doing well and Doing good? Corporate Social Responsibility (CSR): Common business practice Organizational construction The value chain of a firm Friedman, M The Social Responsibility of Business is to Increase its Profits. New York Times, Porter, M. E., and Kramer, M.R The Competitive Advantage of Corporate Philanthropy. Harvard Business Review 80 (12):56-69.

5 Introduction Hybrid Organizations Business Sector Civil Society Organizations Capital flows Motivational factors Cooperation patterns Capital flows Motivational factors Cooperation patterns Capital flows Motivational factors Cooperation patterns Discussion Concluding remarks

6 World Bank framework: Private Foundations Corporate Philanthropy and SR Hybrid Mega foundations Corporate foundations Investment funds Small private foundations African Diaspora NGOs that raise their own funds CSR for int'l reputation Global firms CSR for license to operate globally and locally Initiatives Triple bottom line business models New wave corporate foundations Adjusted framework: Civil Society Organizations Business Sector Hybrid Organizations NGOs that raise their own funds Semi-government NGOs Corporate foundations CSR for int'l reputation Global firms Core activities Investment funds Venture philanthropists Triple-bottom-line business models Private individuals

7 HYBRID ORGANIZATIONS An umbrella term for Norwegian organizations that combines business methods with development objectives Utilizes the skills and competences of individuals and organizations As access to capital and competencies are key attributes, partnerships are needed in order to reach development objectives

8 HYBRID ORGANIZATIONS: Capital Flows Cooperation Patterns Motivational factors Varies from large privatepublic partnerships to small private foundations Amount spent in Sub Saharan Africa varies Funds tend to cluster that are recipients of Norwegian Official Development Aid All want more cooperation Lack of information is an obstacle need to establish/join networks Actors perceptions of cooperation with traditional actors vary Belief in business to have developmental impacts Aim to get most out of individuals' and organizations' knowledge, experience and skills

9 THE BUSINESS SECTOR Attention is increasingly being given to the role of businesses in developing countries 2009 government White Paper on development policy (nr 10) calls for increasing global capital and value creation in developing countries to fight poverty FDI to developing countries constitutes almost five times the amount of foreign aid from all OECD countries combined; aid has a lesser role

10 THE BUSINESS SECTOR: Capital Flows Cooperation Patterns Motivational factors Seeks to unite social and capital gains Corporate philanthropy less relevant for Norwegian companies Operates generally on a basis of reinvesting revenue with the aim of future gains Social benefits are generally spin offs from market economics Partnerships only initiated when operating outside of core area of expertise. Especially in CSR activities Usually confined to information exchange CSR understood as value-creation and risk management, not as philanthropy CSR a tool for obtaining business objectives Businesses wants to do more, but are kept from doing so due to organizational priorities Obstacles encountered are often country-specific

11 CIVIL SOCIETY ORGANIZATIONS: Claims operational independence is compatible with government dependency for funding Prospect of government dependency viewed as unproblematic; civil society organizations and the government have coinciding interests Availability of public funds lessen the need for private funding; unnecessary to cater to private sector demands

12 CIVIL SOCIETY ORGANIZATIONS: Capital Flows Cooperation Patterns Motivational factors Majority of funds stems from public sources, but increasing importance of funding from private sources. Private funding is regarded as a mean to increase organizational independence, legitimacy and accountability, as well as raising financial predictability Experiences regarding knowledge exchange and implementation of projects vary, but are often seen as being problematic. The actors usually appreciate the value of business operational methods, and realize the potential benefits for their organizations. Cooperation with private actors is likely to increase A shared desire to encourage development. Focus of operations is commonly determined by the organizations values, mission or religious belief. Budgetary restrictions and fear for fragmentation is the main obstacles for doing more

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15 NORWEGIAN FDI EXAMPLES Pride and Prejudice Business, Aid and Charity How is Grameenphone contributing to the overall development of Bangladesh? Welle-Strand, A. and Molden, L Grameenphone and Telenor affecting Bangladeshi Socio-Cultural Development: Pride and Prejudice. Oslo: MICRO, BI Norwegian School of Management, No. 1 Welle-Strand, A. (2008) Pride and Prejudice: Business, Aid and Charity. Telektronikk

16 GRAMEENPHONE STUDY: FINDINGS Technology and competence transfers Local competence development Transfer of sound policies for business and management conduct Great level of autonomy Social benefits Avoiding corruption Transparency

17 THE NEED FOR RESEARCH Creating Value (s) Norwegian Aquaculture and Hydropower Investments in Chile Biased media The three winners The developing country The private actors community Norway Welle-Strand,A. Toje, A.(2009) Creating Value(s)? Norwegian Aquaculture and Hydropower Investments in Chile