UN report identifies reforms to help private sector flourish in developing world

From small measures such as cheaper fees for registering businesses to large steps such as liberalizing financial and capital markets, there are many potential ways to unlock the private sector in poorer countries, the authors of a landmark United Nations report said today.

Canada’s Prime Minister, Paul Martin, and former Mexican President Ernesto Zedillo, co-chairmen of the Commission on the Private Sector and Development, presented their report – Unleashing Entrepreneurship: Making Business Work for the Poor – to Secretary-General Kofi Annan at UN Headquarters.

Kofi Annan

Mr. Annan welcomed the report, saying the UN has so far “only sporadically tapped the power that can be drawn from engaging the private sector” in developing countries.

At a press conference, he said he was “heartened that the launch of the report will be followed by a plan of action and a set of initiatives, to be developed further as catalysts for actions on the Commission’s main recommendations.”

Prime Minister, Paul Martin

Mr. Martin said one of the keys to reform was to create partnerships between governments, businesses, civil society organizations and others to stimulate private enterprise.

He said entrepreneurship was on display in the world’s poorest countries, even at the village level, as people found ways to eke out a living despite the difficult circumstances. He said this “huge potential” could be harnessed domestically if the economy and regulatory environment is stable.

“No one solution for economic growth, no one model fits all countries, fits all situations…Nevertheless what most developing countries do have in common is an entrepreneurial spirit that is strong and is local,” he said.

Ernesto Zedillo

Mr. Zedillo said “go to any shantytown or village in a developing country and you will find small entrepreneurs working hard to provide for their families.”

He added that such examples are normally constrained to largely operate “in very small markets…and consequently they are unable to harvest the rewards of productivity and competitiveness that stem from economic specialization in the wider marketplace.”

The report, requested by Mr. Annan last year, also calls for governments to do more to enable private companies to flourish, including by providing better-targeted subsidies and tax incentives and legal systems for protecting property rights that are internationally regarded as credible.

Video of the press conference [1hr 6mins]