Public Private Partnerships in Latin America

Thank you for your invitation.

Before I begin, let me offer my congratulations to the candidates and the American voters on the recent elections.

Ladies and Gentleman, we are living in a world that is more interconnected now than at any point in history.

Events in one corner of the globe can have an immediate impact elsewhere; the global financial crisis brought this interdependence home to everyone.

It also revealed that globalisation, while bringing prosperity and progress, has come with significant challenges.

While open markets, greater access to goods and services, and new technology have increased levels of global economic integration, they have proved insufficient to build a truly equitable global society.

Today, we share both opportunities and threats, and therefore need fair and balanced policies that create a level political, economic and social playing field for all.

I would like to highlight six clusters of threats which most concern us today and in the decades ahead:

1. War between states;

2. Violence within states, including civil wars, large scale human rights abuses and genocide, violent political transformations, (the international response to political and humanitarian crises).

3. Poverty, infectious disease and environmental degradation – climate change, food security, energy and resource scarcity, and loss of biodiversity;

4. Nuclear, radiological, chemical and biological weapons;

5. Terrorism;

6. Transnational organised crime, including Narcotics Trafficking, human trafficking, and piracy (problem of failed/fragile States)

Even a cursory review of these threats should make it apparent that no one country however powerful can deal with them alone.

And that no single business entity can create the stable environments necessary to prosper and grow. We need to cooperate across national borders and the public/private divide, to be able to cope with these threats.

Above all, societies today must be built on solid foundations or what I call the three pillars. There can be no long-term security without development; and there can be no long-term development without security; no society can remain prosperous for long without respect for human rights and the rule of law.

As Secretary General, I had the privilege of working on various initiatives which recognized the role of the private sector in strengthening these three pillars.

In 1999, I proposed a Global Compact at the World Economic Forum, and urged companies to respect a set of principles in areas such as human rights, core labour standards and the environment.

The Global Compact’s 10 principles for responsible and sustainable business models reflect the truth that in an inter-linked world of finite resources, healthy, sustainable businesses depend on healthy, sustainable communities and environment.

In little over a decade, this simple call to action has become a multi-stakeholder partnership in which more than 8000 participants work to advance these principles.

The Millennium Development Goals are another important tool for tackling humanity’s most pressing issues-

They specifically recognise the power of partnerships in expanding access to goods, services and opportunities, and spreading development to the marginalised and poor.

And they acknowledge that partnerships can improve accessibility and delivery of health care, increase access to finance, transform business across entire regions, and create much needed jobs.

MDG 8 therefore calls for greater partnership with the private sector, and the results of such collaborations have been impressive –

The Global Alliance for Vaccinations and Immunisation (GAVI) and the Global Fund to Fight Aids, Tuberculosis and Malaria, are examples of particularly innovative partnerships.

They have transformed the scope of healthcare provision in Africa and worldwide, by saving thousands of lives and meeting objectives that no agency or actor could achieve alone.

In Tanzania, IBM, Novartis and Vodafone, with The Rollback Malaria Initiative and the Ministry of Health – used mobile phone technology to effectively track and control the availability of Malaria drugs.

Not only did this reduce deaths from malaria, it created an easily manageable and high-impact platform that can be replicated in any country.

Another great success has been the partnership to create the M-Pesa mobile money transfer service.

By allowing users to transfer money and make payments without visiting a bank, the Kenyan Government, the UK Department for International Development and the mobile provider Safaricom, have greatly increased access to finance amongst Kenya’s rural population.

At the same time, they have created a new self sustaining and profitable market for mobile banking goods and services, with 14 million customers, which is currently being replicated in Rwanda, South Africa, Tanzania and Uganda.

In the agricultural sector, the Alliance for a Green Revolution in Africa, an organisation which I Chair, has developed innovative financing mechanisms to provide access to finance for Africa’s farmers.

To date, AGRA and its partners have used $15 million in loan guarantee funds to leverage $160 million from commercial banks in Ghana, Kenya, Mozambique, Tanzania and Uganda, benefiting more than 85,000 smallholder farmers and helping to boost regional food security.

These innovative partnerships weave together the interests of local communities and the interests of private business, and have benefited both.

This evolving role for business is of course, not a new concept for governments and private investors in Latin America.

Some countries in the region have long had innovative and effective frameworks for attracting private investment in public projects.

However, the majority of public private partnerships are concentrated in mature markets and at the national level.

As in other places of the world, a lack of knowledge and awareness of the benefits of implementing partnerships, as well as difficulties in bringing projects to fruition, undermines their effectiveness across the region.

Despite these obstacles, and a more challenging financial environment, the number of public private partnerships has increased over recent years, rising in 2009 alone by 19% percent.

The private sector can play an important role in building frameworks to ensure that this new investment can be replicated across sectors, and spread across the region.

By fostering connectivity; in terms of investment, but also in knowledge and lessons learned, businesses will increase awareness of the potential power, and the proven successes of effective partnerships.

For example, Brazil, Chile and Peru have been recognized for having particularly strong frameworks to promote and support public-private partnerships in transport and energy infrastructure- other countries have been less successful.

To address this, and similar disparities in the region, the Multilateral Investment Fund, a member of the Inter-American Development Bank (IADB) Group, has announced a “Regional Public-Private Partnerships Advisory Services Program.”

The initiative is designed to enable governments to more effectively attract private-sector participation in infrastructure projects, and strengthen government capacities in the design, execution and management of public-private partnerships.

Infrastructure is only one sector which benefits; recently the IADB (Inter-America Development Bank) also announced a regional health initiative to improve health conditions for women and children living in extreme poverty.

With investments totalling $55 million dollars, the Salud MesoAmerica project aims to improve access to healthcare for 1.8 million women and children across eight countries by 2015.

The United Nations Development Programme, in partnership with Rainforest Alliance, is working with coffee traders, roasters and retailers across Latin America to build the demand for sustainable “Rainforest Alliance Certified” coffee.

The partnership has supported approximately 15,000 farmers and the growing demand for sustainable coffee has increased certified areas from 92,000 hectares to more than 300,000 hectares.

And the city of Rio de Janeiro, Barcelona football club, and the IADB (Inter-American Development Bank) have implemented a joint program to ensure that Brazil’s young people share in the benefits of the city hosting the 2014 Olympics.

The ‘Alliance for Sport and Development’ aims to promote social inclusion through sport, reaching children in need, preventing violence, and building inclusive, united communities.

The challenge now is to learn from these successes and replicate and extend these partnerships through new networks, and across geographic regions.

The IMF predicts that seven out of the ten fastest growing economies in the world in coming years will be in Africa; however, the continent is also home to six of the ten most unequal societies in the world.

And it is in the midst of significant demographic change; Africa’s population is growing faster than any other region, and 65% of all Africans are now under the age of 35.

To benefit from this demographic dividend, we must harness the energy and innovation of young people, and ensure they have access to jobs, and a real stake in society.

But it will be a challenge for African governments and the private sector to provide jobs for the 10 million young Africans who enter the labour market each year- investment from other regions is necessary.

Next week, the UN will host the first ever Global South Development Expo, a conference dedicated to showcasing successful Southern-based development solutions.

A forum will be dedicated to the question of financing South-South Development through innovative public and private partnerships.

I am sure you will agree that this will be a discussion worth following;

The impact of South-South flows of finance, technology, and expertise are well recognized, as is the growing, transformative power of partnerships.

I urge you to consider the manner in which you can benefit from both, and utilise your skills, resources, and competitive advantage to drive progress, and set a path for sustained economic growth and social development.