At Addis: More regulation needed for role of private sector in development?

13 july 2015

Guest Post by Siobhán Airey, doctoral researcher in international law and aid at the Faculty of Law, University of Ottawa, Canada.

Would you be happy if your local primary school; the operating theatre in your local hospital and the air traffic control in your nearest airport were delivered by for-profit businesses with no guarantee that they would adhere to the legal and regulatory standards that we’ve come to expect for our children, our ill loved ones, and ourselves when we get on a plane for business or pleasure? Would it be fair if you could afford the fees for your daughter to attend the only primary school near to you, but your brother living several miles away could not for his children? Ditto if you both needed surgery? And as for getting on that plane……

This scenario is not an unrealistic one if the contents of the Draft outcome document of the Addis Conference (7th July version) are to be taken seriously. It contains a number of statements that are unsurprising but of deep concern. Unsurprising is the prominence given to the private sector and new forms of development finance that increase the access to and role of the private sector in development. Of deep concern is the absence of (and based on observations from CSOs that have been closely following the negotiations on the document) -  almost antipathy to - any kind of oversight and regulation that will adequately track the impact of these new aid development finance modalities on the status of human rights of marginalised groups and communities; on the capacity of developing country and least-developed country states to properly fulfill their human rights obligations, and effectively plot a development pathway for their people, and on the wider legal and regulatory framework and institutions that manage domestic and international relations on development.

The third and final section of the Outcome document addresses ‘data, monitoring and follow-up’. It speaks of recognition of the need for high-quality, timely and disaggregated data on a range of areas including ‘domestic and international resource mobilisation and spending, as well as data on other means of implementation’ (para 126). It is obvious that this refers to the very necessary gathering of statistics and data on dedicated development initiatives, and the spending that goes into supporting them (including ODA).

However, completely absent is any recognition of the need for independent, long-term, dedicated research on the evolution, implementation and impact of the new forms of development financing and the modalities through which these are to be implemented.

CSO discussions over the last few days have raised deep concerns about the impacts of these new forms of development financing and implementation – which primarily involve new roles for private sector actors – on people in poverty and on the states of developing country and least-developed country states. Recent research by Eurodad on PPPs, for example, demonstrates the dubious, if not negligible, development outcomes of these on people in poverty and marginalised communities. Nowhere in the Addis outcomes document is there recognition of the need for these new initiatives to be human rights-compliant; to be adequately regulated or to be transparent and accountable to the governments of the countries, and the people in the communities that they operate in.

This is an important juncture in the institutional landscape on international development. What is now emerging is an international mandate for a significantly reconfigured development finance landscape –institutionally, in terms of development actors, and the legal, regulatory and policy framework that regulates these.

There is a clear need for hard evidence to prove that this altered institutional landscape can and will deliver on the goals upon which the engagement and input of new private sector actors is justified. The Outcome document must include recognition of the need for dedicated, independent, long-term research on the evolution, implementation and impacts of these new forms of development finance, and the significantly enhanced role for the private sector in development. This can be done through partnerships between academic and research institutions from the North and the South. Already, some high-quality research partnerships exist. The Irish government already has a recognised track record of supporting quality research on difficult and complex development issues that has real policy relevance (it funded a recent study on EPAs that was debated at European Council level during discussions on the Commission negotiations with ACP regions).

The stakes for most people – not just people in poverty - of a reconfigured development finance landscape are high. The proposals in the Outcomes document for new forms of development financing need to be properly monitored. The need for dedicated, independent research on these new forms of development financing is clear. The Irish government should insist on this.