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Cooperation with the private sector
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Development policy with a profit – development partnerships with the private sector
An alliance between development policy and the private sector with mutual benefits – is that possible?
The idea works, and has been tried and tested. Since the PPP Facility was launched in 1999, more than 3,000 such arrangements have been established worldwide.
In these development partnerships the state and private companies cooperate as equals. Both expect to benefit from the partnership, and both meet their share of the costs of implementing the projects.
Development partnerships mobilise additional private-sector inputs for development-policy processes and objectives, and promote the transfer of expertise and modern technology to developing countries. This means they generate enormous benefits for development cooperation. The private companies also profit in specific ways, though, because
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additional public funds are placed at their disposal;
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they are supported in their projects by experienced development-policy implementing organisations that possess sector- and country-specific expertise, and
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because they are able to tap into new markets for their products and services.
Volume of investment by development partnerships
Development partnerships now exist in around 70 countries, in all areas of German development cooperation work. These include projects for instance to improve labour standards in developing countries by introducing ecological and social standards, to disseminate new technologies or to pilot new cropping methods in agriculture. Many measures aim to help protect the environment and promote sustainable natural resource management, and create jobs – also in rural areas.
Development partnerships are not confined to large or international corporations – almost 70 per cent of these measures are implemented with small and medium-sized enterprises (SMEs).
The total volume of these partnerships to date is already more than 18.6 billion euros, a very large share of which is funded by the Deutsche Investitions- und Entwicklungsgesellschaft (DEG).
In 2008, some 2.5 billion euros were mobilised for development partnerships through bilateral Financial and Technical cooperation, and the PPP Facility and its successor programme develoPPP.de. For every euro of public money invested under the programme, 1.7 euros are generated through the private sector.
The BMZ's involvement in development partnerships
The BMZ supports these projects using the following instruments:
Information
Publications
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Forms of Development Cooperation Involving the Private Sector
BMZ Strategy Paper
(PDF 221 KB, accessible) -
Developing markets, creating wealth, reducing poverty, taking responsibility – The private sector as a partner of development policy
BMZ Strategy Paper
(PDF 419 KB, accessible) -
"Pro-Poor Growth" – a focal point of development policy
Special 146
(PDF 807 KB) -
Development partnerships with the private sector
Annual report 2009
(PDF 417 KB, accessible)
