Benefits

The Global Clearinghouse is aimed at mobilizing the enormous resources of the private sector in developing countries, thereby creating jobs and reducing poverty. The Tools are also cost-effective means in which the public and private sectors can collaborate to overcome impediments and create an improved business-enabling environment.

The Local Development Finance Challenge: All stakeholders worldwide have recognized the critical role of the private sector in fostering economic growth, poverty reduction, and the attainment of the Millennium Development Goals (“MDGs”) and other internationally agreed development goals. Despite the commitment of all UN Member States to mobilizing the private sector in the 2002 Monterrey Consensus and innumerable other initiatives, concrete results on the ground have been insufficient. The improvement in business-enabling environments, including access to affordable domestic financial services and adequate local infrastructure required for private sector development, are still widely lacking across the spectrum of developing countries.

The recent global financial crises has led to additional challenges, given decreases in official development assistance and further reduced availability of finance and risk capital in developing countries. Therefore the longstanding imperative for mobilizing private sector capital and leveraging limited official sector funds has escalated in importance. Especially critical is unlocking domestic financial sectors that lack the capacity and long term financing to fund strategic local infrastructure and other investment projects that could unlock private sector development and bring about poverty reduction.

In summary, in order to realize the full potential of private sector led-growth at the local level, enhanced focus is required by development partners and governments alike on creating business-enabling environments – particularly as regards strategic infrastructure and activation of domestic financial sectors.

Global Clearinghouse advisory, coupled with training, information and communication tools provide the following benefits:

Overall Benefits

  • Promote technical solutions and open, transparent decision-making processes, thereby enhancing transparency, accountability and governance
  • Leverage scarce public sector resources and increase access to private sector finance, expertise and resources to overcome impediments and implement development plans, resulting in economic growth, job creation, and poverty reduction
  • Encourage direct public-private sector collaboration and consultation on issues and solutions, thereby enhancing the business-enabling environment, job creation and poverty reduction
  • Reduce public sector costs, inefficiencies, and miscalculations in policy, thereby helping government better realize its development objectives
  • Reduce likelihood of economic and financial crisis given public sector commitment to improve business climate and governance
  • Facilitate access to critical information resources, thereby mobilizing private sector investment to enable economic growth, infrastructure improvements, job creation and poverty reduction
  • Enable improved donor coordination and aid effectiveness by promoting an alignment between donor support and public sector objectives and plans
  • Facilitate creation of partnerships (international, domestic; public, private)

Public Sector Benefits

  • Leverage limited official resources by increasing access to long-term private sector finance
  • Improve intra-governmental coordination across government agencies, increasing overall management efficiency
  • Promote the efficient identification of investment impediments and possible remedies, mobilizing private sector expertise and support for needed changes in governmental and other processes
  • Enhance government ability to openly consult with private sector on draft plans, projects, policies, laws and regulations before adoption, with greater potential for positive outcomes
  • Enable the cost-effective dissemination of critical information resources, opportunities and success stories
  • Heighten investor confidence, through the public sector's demonstrated commitment to improved business environment and governance

Private Sector Benefits

  • Facilitate access to finance, partners, markets, and coordination in developing business alliances to overcome impediments and realize opportunities
  • Provide private sector with the ability to give direct, constructive views to government on issues and possible remedies (on the record or anonymously)
  • Enable the private sector to recommend possible solutions to issues, such as infrastructure or access to capital, soliciting support from governmental, multilateral and donor agencies
  • Improve access to enabling-information resources provided by government, development agencies, and the private sector, such as sources of capital, marketing toolkits, risk mitigation products, and statistics

Donor Benefits

  • Permit first-hand knowledge of priority issues impeding investment and development finance
  • Facilitate the reduction of redundant donor efforts by openly working with other donors to harmonize policies related to specific issues and needs
  • Enhance ability to implement the Paris Declaration of "aid effectiveness" through leveraging the private sector (finance and resources)