Following Nirj Deva, Conservative Member of the European Parliament for the South East’s, report on the Private Sector and Development, the European Commission has undertaken a fundamental shift in its approach to development aid, recognising the private sector as a key actor in the future of international development efforts.
3.1 billion Euros will be invested in projects with the private sector in Africa and in EU neighbourhood countries, marking a revolution in EU development financing.
Nirj Deva MEP, welcomed the new EU investment plan for development but emphasised that ensuring these goals will require strong cooperation with financial institutions:
“For this to be really efficient, we need to define public-private partnerships better and avoid any sort of corruption”.
Following 40 years of hand-outs of untied development aid, Commissioner Mimica presented the improved plan for development in the European Parliament today.
Nirj Deva’s report, overwhelmingly accepted by Plenary in April 2016, focuses on the critical need for private sector involvement in tackling poverty; delivering innovative ways in which to mobilise private capital in the fight against global poverty as part of a broader approach to development. While traditional aid transfers from rich to poor countries have proven insufficient, the private sector might well hold the key to achieving grounded, sustainable growth and poverty eradication.
In a period marked by financial instability the expected costs of international development goals have soared, leaving an ambitious bill that already overburdened taxpayers will be unwilling to pay.
Yet, “in the long run, development finance in the form of direct investments can be profitable to both sides, alleviating poverty, attracting valuable business opportunities for EU companies and significantly reducing the pressure on our taxpayers”, Deva said.
The Commission will publish concrete details of the investment plan after the summer hiatus, orchestrating a high-level conference with the European Parliament and the financial sector during the autumn.