In recent years, the arena of development cooperation has changed rapidly, in response to the impact of a series of severe global crises including the COVID-19 pandemic, the accelerating effects of climate change, escalating warfare, and hyper-inflating costs of living. Development actors have been called upon to create solutions for the world’s most vulnerable sectors, not just to address the present problems, but also “the needs of tomorrow,”1 as the risks posed to the marginalised seem likely to intensify rather than abate in the future.
In this light, an interrogation of the role of the private sector in development is more crucial than ever. The world is currently at the midpoint of the 2030 Agenda for Sustainable Development and it has become clear that the targets spelled out under the 17 Sustainable Development Goals (SDGs) will not be met. As the deadline looms, the prospect of the SDGs falling short—just like the preceding Millennium Development Goals, the unfulfilled eight-goal blueprint for global development for 2000 to 2015—has put greater pressure on leaders to find solutions. In this period of crises, the private sector has been held up as a ‘silver bullet,’ with private financing touted as a means of filling in the gaps in development that national governments and multilateral institutions have been unable to address.
Private sector engagement (PSE) has long been hailed as one of the primary sources of innovation, growth, and risk-taking in development; private sector actors are relied upon to “bring best practices” into public policy2, particularly with regard to technological advancement, infrastructure expansion, and financing and investment. However, the actual experience of many developing and least-developed countries
(LDCs) with the private sector’s development efforts has been rife with controversy, as the emphasis on immediate profit generation has tended to eclipse legitimate concerns regarding the negative impact of private sector, particularly from large transnational corporations (TNCs), on marginalised groups and the environment. Meanwhile, the positive contributions of micro, small and medium enterprises
(MSMEs) and social enterprises (SEs) to domestic socio-economic development are often overlooked.