On the 19th of April the g7+ partnered with the International Finance Corporation (IFC) and the Ministry of Foreign Affairs of Denmark to present an event focussed on the role of private sector development in g7+ countries.
In her opening remarks at the meeting, held in Washington DC, Chair of the g7+ and Minister of Finance of Timor-Leste, Her Excellency Emilia Pires, pointed out that
“private sector growth and engagement is critical for meeting the peacebuilding and statebuilding goals and minimising conflict.”
She noted that this was especially important for young people and reminded that in designing investments the “priority is to do no harm and to maximise benefits.”
Opening remarks were also shared by Jin-Yong Cai, the Executive Vice President and CEO of the IFC, and His Excellency Christian Friis Bach, Denmark’s Minister for Development Cooperation.
A panel discussion moderated by Joel Hellman of the World Bank featured g7+ Ministers from Afghanistan, DRC and Haiti, along with business people from Cote d’Ivoire and Papua New Guinea. Other g7+ Ministers and focal points participated from the floor.
Recently appointed Minister of Economy and Finance, His Excellency Wilson Laleau, said that the Government of Haiti is focussing on the needs of small companies and working to address the disconnect between the market and local producers. Minister Laleau pointed to infrastructure reform, particularly in port facilities, and updated legislation, as keys to assist the big potential for growth in Haiti’s private sector activity.
His Excellency Armand Kasumbu Mbaya Borrey, the Regional Minister of Planning for ‘Province Orientale’ in the Democratic Republic of Congo said “In DRC our priority is not Foreign Direct Investment but it is about local businesses and developing our own economic structure locally.” The Minister stated the challenges of DRC plainly when he said “50% of the population is below 25 years old, poorly educated and with no employment, people need incomes and we know that any person out of work is a potential risk to security.”
“We need to develop the capacity of local companies”, declared Afghanistan’s Deputy Minister of Finance, his Excellency Mohammad Mustafa Mastoor. The Afghani population of 29 million are challenged by poverty and unemployment, especially amongst youth. Approximately 34% of employment is in the public sector where the capacity is highest. International Companies prefer to work with local partners rather than the government, but low capacity in these companies can prove to be a fuel for corruption.
Further discussion on ways to address the challenges of g7+ countries included improving institutional setups in the private sector, expanding access to finance and increasing financial inclusion, minimisation of risk for investors and the adoption of incentives for private sector growth.
It was pointed out that Foreign Direct Investment needed to contribute to the lives of citizens. DRC noted that currently investors, particularly in the mining sector, were looking for big returns and quick returns with most of the money going abroad. A focus on supporting Agriculture and Tourism was seen to be a way to make a real impact on the ground. Cote d’Ivoire identified institutional stability as key and shared that new legislative elections will lead to legitimate officials to support currently improving growth.
Ireland’s Minister for Trade and Development said that political instability, weak institutions and lack of basic infrastructure have been identified as key constraints.
The meeting ended with a presentation on “Doing Business in the g7+ in 2013, Smarter Regulations for Small and Medium-sized Enterprises” by Pierre Guislain from the IFC. Guislain explained that whilst g7+ economies rank comparatively low on the ease of Doing Business, all have implemented business regulation reforms since 2005, with most of these focussed on simplifying business start up and expanding access to credit. The presentation concluded with the theme that investment climate reforms were inexpensive and an area of opportunity for g7+ countries.
Participants from the g7+ recognised that this event had provided a good start for ongoing discussion on Private Sector Investment and Job Creation in g7+ countries. They looked forward to continued peer sharing on these issues as well as interaction with international partners and the IFC.
The g7+ thanked event partners the Ministry of Foreign Affairs of Denmark and the International Finance Corporation.