The Post-2015 Agenda and the Privatization of Development

Tim Pfefferle

Photo Source: Ron Mader via Flickr

Photo Source: Ron Mader via Flickr

‘Greed is good’ – those are the eternal words of Gordon Gekko from the 1980s Michael Douglas hit Wall Street. Lately, this catchphrase has been applied with increasing frequency to international development strategies. There have been a plethora of initiatives to get international business more involved in reducing world poverty and increasing access to education, health care and other social services. The UN has created the Global Compact, a grouping of businesses dedicated to support and implement sustainable development initiatives. Individually, companies such as Unilever have become more interested in making their voices heard whenever there is a development conference or a roundtable. Even philanthropy has become dominated by big charities such as the Bill & Melinda Gates Foundation as well as IKEA Founder Ingvar Kamprad’s Stichting INGKA Foundation. What are we to make of this turn from international development as a primary concern of states to one of wealthy individuals and large businesses?

On the one hand, this development might not be so bad. It would be hard to make a case that international development strategies over the last fifty years have made much of a positive impact. Decade after decade we saw new strategies being implemented: capital-based industrialization in the 1960s, the basic needs strategy of the 1970s, Washington consensus in the 1980s and the subsequent post-Washington Consensus in the 1990s, and finally the Millennium Development Goals in the 2000s. None of these strategies produced the lasting impacts everyone wanted to see. Thus, getting business involved could make for an alternative approach. There is a good case to make: businesses love good investments. Thus, markets such as Sub-Sahara Africa or South Asia should make for good investment opportunities, which, if channeled the right way, could raise living standards. Hence, corporations want to get involved in development because it is in their best interests. Likewise, it certainly represents a positive development that wealthy individuals are devoting more financial resources towards international development. Bill Gates has been active in encouraging other billionaires to donate significant portions of their wealth to charity.

Yet, what are the downsides of these processes? It would be foolish to think that businesses and big philanthropy are not pursuing an agenda. For businesses, large parts of the rationale behind their involvement revolve around the fact that they want to shape the nature of the development agenda. They are looking to shape it in such a way that it is as conducive to their business interests as possible. Unfortunately, those interests do not always align with the people’s interests. Africa will not benefit from investment if businesses continue to remain blatantly under-taxed. Moreover, the absence of environmental regulations will lead to adverse social and environmental consequences. Yet, these are precisely the features that many businesses are pushing for when they get involved in international development. Currently, proposed free trade deals such as TTIP and TPP include an investor-state dispute settlement clause, which would essentially allow companies to sue sovereign states over regulations which cut into their profit margins. It is questionable how this aligns with the idea of sustainable development. Businesses will not advocate combating inequality or closing tax loopholes, making taxation systems more progressive or regulating international finance. However, these are some of the fundamental issues underlying a meaningful post-2015 development agenda. Thus, we should not fall for the fallacy that what is good for business is good for society.

Participants of the Rio +20 Summit in 2012 | Photo Source: Presidencia de la Nación Argentina via Wikimedia Commons

Participants of the Rio +20 Summit in 2012 | Photo Source: Presidencia de la Nación Argentina via Wikimedia Commons

At the same time, there are a number of problems associated with the rise of mega charities. How can democratic accountability be reconciled with the financial dominance of these groups? We generally think that countries should exercise ownership over their development. Yet, large charities have so much influence over what is put on the agenda and which policies should be adopted that ownership is compromised. Moreover, we have to think about the origin and location of these charities. Overwhelmingly, they are developed country charities. This means that they are more likely to endorse certain types of ideas over others. They also run the risk of promoting one-size-fits-all solutions when local community solutions may offer better alternatives. Lastly, there is an element of absurdity underlying these foundations. In many cases, they are headed by billionaires who have directly profited from the international inequality that forms part of the reason why some countries are more developed than others. Through their companies, they often help to maintain those policies which entrench inequality.

Thus, we should be careful about inviting big businesses and wealthy individuals to the international development table. Given enough room, there is the potential for them to shape the debate in a way that will be detrimental to the objective, crowding out other opinions by making use of their resources. This does not mean that corporate actors should not be playing an essential role within the discussion. However, we need to be aware of the biases they have while being mindful of their power.

For further interest, see this roundtable and this NGO report.

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