Private sector companies and service providers have always been used in the development aid projects. However in the recent decade more and more tools and support mechanisms are being developed to raise the level and intensity of private sector engagement both in the traditional development aid projects as well as in growing economies in developing countries.
This includes the increasing flow of traditional development aid funds to support the establishment and inclusion of the private sector cooperation in developing countries, directly as partners of the development aid projects but also as actors of their own. IOM has engaged various private sector partners in its operations.
Often a win-win-situation
What is then the role private sector partners can play in development aid? First of all, they are usually flexible in terms of providing tailor-made solutions and services. They might have innovations they want to test and develop further. These could be solar panels or IT services which provide elements directly addressing the needs of the countries in their development efforts.
In the field of development aid, procurement is also massive in terms of items and services from reliable service providers and sources. Therefore, cooperation with the UN for example, can be highly profitable for the companies.
Knowledge is valuable
On the other hand, UN organisations and other development aid actors can provide something very valuable for the companies: knowledge of the local context, access to local authorities, contacts and most of all, identification and mapping of the local needs and gaps in services which could be addressed. As it is always riskier to operate in an environment with less established standards and procedures, the involvement of the donors or working with the aid organisations reduces these risks.
Closely related, the main goals for the development aid are to support the receiving countries in building stable environment and reliable systems with less corruption and less security risks. At the same time the goals include providing more secure business environment for the companies to operate within.
Following high ethical criteria
Often development aid is based on relatively short projects of few years. The private business tends to establish longer term relations and can be thus of higher interest for the receiving countries.
In case private sector cooperation happens through donor aid or in cooperation with the international organisations, these actors set high ethical criteria for the companies in all of their operations and functions. Similarly, they ensure that those contributions benefit all in the society, including vulnerable groups like women and children, disabled people and minorities. Cooperation is always based on respecting human rights and equality and these are monitored throughout the partnership.
Baby Aid Kits motivate mothers-to-be
IOM Finland has worked with private sector partners in the MIDA FINNSOM project. The projects have been implemented in the health and education sector in Somalia and funded by Finnish Foreign Ministry through development aid funds.
In one of the projects, the Finnish company Logonet provides Baby Aid Kits to expecting mothers in Garowe General Hospital in Puntland. Baby Aid Kits contain material for childbirth and nursing a new-born. The maternity package is a great Finnish innovation and has strongly motivated regular antenatal visits made during the pregnancy, making Finland one of the countries with lowest maternal and child mortality rates in the world. The package is used as an incentive for mothers in Somalia, to encourage them to make regular visits during the pregnancy to discover potential risks and complications in time.
Another Finnish company, Suomen kotilääkäripalvelu (SKP), provides online telemedicine consultations to local doctors and dentists in Somalia. This is a cost-effective manner to provide expert-to-expert consultation and trainings from Finland to Somalia.
More details on these co-operations will follow when the activities are scaled up. Some basic information is provided on MIDA FINNSOM’s website:
More information on IOM and the private sector:
The writer is working as Project Coordinator for the MIDA FINNSOm -programme at IOM Helsinki.