Government of Canada

Foreign Affairs, Trade and Development Canada

www.international.gc.ca

Private Sector and Development

Working with the private sector as partners in development

The private sector is the driving force behind economic growth and is essential to achieving meaningful development outcomes that raise people out of poverty and put them on the road to prosperity. It is the primary source of economic growth, job creation, government revenue to finance essential public services, and the goods and services required to improve people's quality of life.

Many developing countries are not fully benefiting from the opportunities that can be generated by a robust private sector. Developing countries often have weak domestic private sectors, and do not have sufficient tools and policies in place to encourage private-sector-led economic growth.

The potential benefits of private financial flows are not being maximized to contribute to economic and social development outcomes. A lack of capital and investment to grow businesses, a lack of private sector ingenuity to provide solutions to specific social and health challenges, and inadequate leveraging of private sector entities by development agencies and partner countries, limit the potential for private sector activity to create opportunities for people most in need.

For these reasons, the Government of Canada is helping developing-country partners create the conditions for strong and sustainable private-sector-led growth through its Sustainable Economic Growth Strategy. The strategy's three paths—building economic foundations, growing businesses, and investing in people—target the main prerequisites to achieving poverty alleviation through private-sector-led sustainable economic growth.

In addition, the Government of Canada is leveraging local, Canadian, international and multinational private sector actors of all sizes as part of its efforts to promote private-sector-led growth in developing countries. Recognizing that private enterprises have an important role to play in achieving lasting development impact, the Government of Canada is committed to strengthening its engagement with private sector actors as partners to help reduce global poverty.

The opportunities for collaboration are compelling. Canada has more than four decades of international development experience in a variety of areas in which the private sector can bring unique skills, resources, innovation and know-how to bear. By working with private sector actors that adhere to responsible business and investment practices, along with non-governmental organizations, multilateral institutions, and partner countries, Canada can contribute to the creation of jobs, mobilize private investment, unlock innovative solutions to intractable development challenges, and deliver products and services that improve the lives of people in poverty.

Private sector partnership opportunities

The Government of Canada will continue to collaborate with local, Canadian and international private sector partners to deploy the most appropriate resources, approaches and expertise in support of poverty alleviation. In pursuing this goal, the Government of Canada's private sector and development approach pursues strong results in the general areas of investment, partnerships and innovation.

Investment for development

Challenge: Capital and expertise to grow businesses and address development needs is lacking.

Action: The Government of Canada supports market-oriented incentives for the private sector to target investments that achieve meaningful development impact. For example, Canada supports investment projects such as the Mennonite Economic Development Associates in Ethiopia which provides working capital and skills training for women entrepreneurs in the textile industry.

Partnerships for development

Challenge: Few international development projects effectively bring together public, private, and civil society entities to improve the lives of people living in poverty and to create shared value (i.e. projects that achieve both business and development objectives).

Action: The Government of Canada encourages multistakeholder partnerships with private sector and non-for-profit organizations that support projects and initiatives demonstrating clear benefits in the Government's development thematic priority areas. These partnerships require private sector actors to share in the costs of delivering a particular project.

For example, the Government of Canada supports the Zinc Alliance for Child Health with Teck and the Micronutrient Initiative to develop and scale up zinc treatment programs to improve nutrition and help save children's lives. The Government also supports the Building Collaboration for Sustainable Economic Growth in Peru project with World Vision Canada and Barrick Gold to leverage the economic impact of mining operations in Peru by increasing income and standard of living for families. This initiative also supports Canada's Corporate Social Responsibility Strategy for the Canadian International Extractive Sector, which seeks to enhance the capacity of developing countries to manage the development of their natural resources to alleviate poverty.

Innovation for development

Challenge: In many developing countries, viable business models that make access to goods and services possible are lacking. The potential of the private sector to apply its ingenuity to approaches and technologies that can improve the delivery of essential public services is not being maximized.

Action: The Government of Canada supports innovations that generate game-changing solutions to international development challenges. This includes supporting innovative approaches, finance instruments, and technologies that encourage private sector actors to create products and services and enhance the delivery of public services in developing countries to improve the lives of people most in need. For example, Canada has a strategic partnership with Grand Challenges Canada to scale up promising innovations in the area of global health, many of which are generated by social entrepreneurs.

The Government of Canada also supports an innovative financing approach in partnership with the GAVI Alliance that brings the public and private sectors together to develop and deliver much-needed vaccines to treat pneumococcal disease—a leading cause of child deaths in developing countries.

Are you a private sector organization interested in working with the Government of Canada in international development?

The Government of Canada encourages private sector organizations to engage in supporting Canada's international development objectives. In order to support engagement and facilitate dialogue an email address has been established. To learn more about Canada's international development priorities, how the Government of Canada is working with the private sector, and to discuss potential collaboration opportunities, please contact privatesector@international.gc.ca.

The Government of Canada's programming processes, including its calls for proposals, are open to all development actors, including the private sector, who can help improve the lives of people living in poverty. For more information on the call for proposals process, see Working with DFATD. The Government of Canada will also be launching new initiatives to engage the private sector in investment, alliances, and innovation for development in the coming months.