Foreword

Supporting the private sector in developing countries is a priority for the Agence Française de Développement (AFD) and especially its subsidiary Proparco. By financing the private sector in emerging markets, Proparco is helping to stimulate investment in growth and sustainable development, while at the same time working towards achieving the Millennium Development Goals. However, like other development finance institutions (DFIs), Proparco’s financing capacity can only go so far in meeting these countries’ needs. Beyond direct financing, DFIs have to create a ripple effect to boost private investment. The aim of the Private Sector & Development blog is to share know-how and best practices and boost development in low-income countries by encouraging private investment. The blog will spotlight the experience of Proparco, its networks and its private-sector partners in these countries. I look forward to reading your contributions and exchanging thoughts on these very important issues.

Françoise Lombard, CEO of Proparco

Stimulating private investment in developing countries

A dynamic, well-structured private sector is a prerequisite for the development of low-income countries. As a generator of employment and wealth, the private sector is one of the mainstays of economic development and the battle against poverty. In emerging and developing countries, support for the private sector has become key to achieving the Millennium Development Goals. However, there are considerably more obstacles to developing private initiatives in these countries than anywhere else. The environment can appear somewhat hostile to long-term investment: regulatory frameworks are often incomplete, property rights protection is vague, little information is available, the political and economic situation can be unstable, and so on. Against this backdrop, it is difficult for a business owner to adopt a standardised approach to replicating what has worked in other regions. In these countries in particular, one of the keys to success is the ability to adapt to local conditions.

The Private Sector & Development (PS&D) blog will analyse the conditions for ongoing support of the private sector in developing countries and highlight private companies’ successes. What made them successful? What specific needs did these companies meet and what innovative solutions enabled them to overcome the environment’s challenges? Spotlighting the experiences of private businesses – or businesses related to the private sector – is a way of promulgating practices tailored to the specific circumstances of developing countries. The blog aims to promote private investment with genuine added value for these countries’ development while exploring ways to maximise the impact. By publicising, comparing and analysing the ideas and experiences of investors who are directly involved in development issues, the PS&D blog hopes to create a community of private-sector stakeholders whose investments are helping to improve the living conditions of people in low-income countries over the long term.

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