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Directorate for Sustainable Economic Development

Private sector development in developing countries: is agriculture still on the agenda?

Stakeholder Meeting: Rethinking Agriculture in Development The Hague, December 14th 2006 . 4/30/2020

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Private sector development and agriculture

Link economic growth – poverty alleviation • Growth income per capita • Pro-poor growth and job creation Economic growth through: • Productivity growth • Trade, FDI, etc • Private sector development 4/30/2020

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Three levels of intervention

• International markets (IM) • National enabling environment (NB) • Direct business support (OB) 4/30/2020

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Six challenges in PSD organised in clusters

1. Legal and regulatory environment 2. Infrastructure 3. Market access and market development 4. Financial sector development 5. Access to skills and knowledge 6. Public-private partnerships 4/30/2020

Legal and regulatory environment

6 • Why? Less costs and risks for business and better level playing field. • What? Property rights, customs, commercial law, corruption, business registration and labour law. • How? – Bilateral: policy dialogue, PPD, embassy programs – Multilateral: ICF, Doing Business, partnerships with WB / IFC/ AfDB 4/30/2020

Infrastructure

7 • Why? Basic services are needed for economic development • What? Roads, energy, ICT, water and sanitation, transport • How? – Bilateral: FMO (ORET and LDC), with DMW on water and energy (EUR 400 mln), embassy programs – Multilateral: PIDG, PPIAF 4/30/2020

Market access and development

8 • Improve market access through: – Negotiations: WTO, EPA’s – Influence EU market regulation – Stimulate rural-urban linkages in the countries • Promote market development through: – Capacity-building: Aid for Trade (WTO-related) – Market information: IFDC, CBI – Market chains – Standards: Eurepgap, SPS and TBT 4/30/2020

Financial Sector Development

9 • Developing the access to financial services, microfinance and insurances and improving the capacity of financial institutions. • Bilateral instruments: – FMO: Massif (credit, equity, microfinance) – Partnerships (NFX, HIF, NPM) – Embassy programs • Multilateral instruments: – IFI’s (e.g. IFC): CGAP – FIRST, CRM 4/30/2020

Access to skills and knowledge

10 • Vocational training, business capacity building, CSR, business membership organisations. • Bilateral instruments: – EVD (PSOM, PESP, marketing, match-making) – PUM – DECP – POP – Trade Unions programme – Embassy programs • Multilateral partnerships 4/30/2020

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Public-private partnerships

• Why? More leverage, additional resources, effectiveness to achieve development goals • How? Collaboration through pooling knowledge and resources and coordination efforts • Examples: NFX, HIF, AgriProFocus, WSSD partnerships 4/30/2020

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PSD as instrument to promote agriculture

• 70% of the funds channelled through PSOM are for agriculture • The Netherlands supports the removal of subsidies (WTO) • Producer organisations, fair trade org., CBI etc. • Partnership with IFDC • PPP’s (9 in agriculture) • WSSD, Land Alliances for National Development, BNPP • Agri-Profocus 4/30/2020

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Challenges to be addressed

• Understanding and improving the rural environment and the role of agriculture in the economy • Professionalisation of agriculture • Privatization of agricultural services and industries • Improving the competitiveness of agriculture in low income countries • Increasing access to markets • Appropriate legal and regulatory frameworks for promotion of agriculture • Building knowledge and capacities and developing instruments to do the above.

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