REAL CHALLENGES. REAL SOLUTIONS. PUBLIC PRIVATE PARTNERSHIPS Doing Business through Partnership.

REAL CHALLENGES. REAL SOLUTIONS. PUBLIC PRIVATE PARTNERSHIPS Doing Business through Partnership.

GDA s Defined Global Development Alliances are a marketbased approach to partnerships between the public and private sectors to address jointly defined business and development objectives. Alliances are co-designed, co-funded, and comanaged by partners so that the risks, responsibilities, and rewards of partnership are equally shared.

Who USAID Partners With Universities Local/ National Governments Investors Foundations NGOs Shared Objectives Religious Institutions Diaspora Local/ Regional Business Multinational Corporations Implementers Donors Think Tanks

Alliances Make Sense Business Interests Alliance Opportunity USAID Development Goals

Focus on Shared Outcomes Business Outcomes Potential High Value Alliances Development Outcomes Increase access to sufficiently qualified and skilled talent Education & Workforce Development Increase employment rate Increase individual income Strengthen quality and vitality of the supply chain Reduce cost of products, services and distribution Supplier / Industry Development Strengthen local industry and scalability of local products and services Increase access to new markets Develop new products and services Market Entry Increase access to products and services Improve relationship with key stakeholders Increase visibility through thought leadership Mitigate risk of market entry Government Capacity Building Improve democracy and increase political stability

Alliances from 2001-2009 Over 900 Alliances to date: 127 in Europe & Eurasia More than 1,700 distinct partners Average GDA Leverage: 2.7:1

Global Alliances: 1999-2009 Family Planning 1% 4% y 4% Energ 4% /HA ict nfl Co IT HI V/ AI Ds 4% Dem ocra c and Gove y 8% rnan ce En vi ro nm en t1 3% e ltur ricu Ag 13% 10% n e io cat rkforc u d o E. W ing) l c (in rain T Economic Growth 26% He alt h1 3%

Types of Alliances Piloting a project Promoting better business practices Proving a concept Promoting a stable work environment Demonstrating new approaches Expanding the reach of a program Providing a business solution to a development challenge

Alliance Approach MOU Project Implementer Corporate Partners 9

Alliance Characteristics Jointly defined problem and solution Share resources, risks, and responsibilities Innovative Mutual Investment

Why partner With USAID? Relationships with local and national governments Technical expertise across industries and sectors Network of local, regional and global partners Funding Convening power Long-term country presence Credibility and goodwill

Why USAID partners with business Business minded, market-driven approaches Funding Access to global supply chains and markets Skills, services and products Communication and marketing Technology and intellectual property transfer Relationships with local business actors

GDA Annual Program Statement Issued annually in November Fully competed solicitation Enables USAID to engage in dialogue before formal application process Details entire process for launching partnerships Criteria for eligibility and leverage Clarifies application and Award process Funding comes from Missions Missions can issue Addendum

The Evolution : How have alliances evolved at USAID? GDA (the first 5 years) Largely NGO led Opportunistic approach Funded by Washington with incentive funds Helped private sector meet philanthropic objectives Pilots Focus on leveraging cash GDA (current) USAID convenes relationships Tied to mission strategy Catalyzed in the field using Mission funding Helps private sector address core business interests Scaling successful models Focus on leveraging cash, knowledge, technology, and other resources 14

A Final Word Multi-actor approach to complex problems Collaboration between USAID & company Delivers development benefit that is a public good Companies are co-donors Governed by an MOU Not a thing we do but a way we do the things

Considering PPPs Effective partnerships can break down barriers that often isolate countries from the community of nations and a world of ideas. Partnerships can also break down barriers that are caused when government, businesses and communities simply do not speak each others language or at worst, distrust each other. A key tool for increasing efficiency, effectiveness and reach of development programs in all areas, leveraging crucial resources

Getting Started Visit: www.usaid.gov/gda Contact: Nancy Wildfeir-Field Regional GDA Advisor, Europe & Eurasia Regional Services Center Szabadsag ter 7-9 Bank Center, Granite Tower 1054 Budapest, Hungary Tel: +(36-1) 475-4994 Mobile: +(36-30)749-5603 nwildfeir-field@usaid.gov

At least 2 Distinct Types of PPPs Government Contracting Out (BOT) To achieve government s purpose IS the core business of private sector partner No leverage is sought Donors may participate Development Alliances (GDA) To achieve Donor s purpose Overlaps with or draws on core business of private sector partner Seeks inputs (leverage) from private sector Host government may participate

The Drivers Respond to a changing global environment Increase effectiveness and impact in meeting development objectives Leverage additional resources for development activities Bring scale, sustainability, legacy

US Foreign Resource Flows US Total Resource Flows to the Developing World in 2005: $164 Billion US Resource Flows to the Developing World in the 1960s: $5.1 Billion Public Flows Public Flows 16.8 % 71 % Private Flows 83.2 % Private Flows 29 % Private Capital Flows (FDI and Net Cap Markets 42,1%) U.S. Officiale Development Assistance 68 % Remittances 25,0 % Private Rows 29 % Universities and Colleges 2,8 % Other official Flows 3% Religious Organizations 3,3 % NGOs 8,2 % Foundations 1,3 % Corporations 0,5 % U. S. Government Official Development Assistance 9,4 % Iraq and Afghanistan 7,4 %

Transforming Development Impact USAID health project with no contributions Company contributes products Company also trains health care workers Company also provides Training of Trainers Company also builds a sustainable training institute/curriculum high Training Institute TOT development impact Training Input contribution Traditional Project low leverage low high

GDA Project Life Cycle Source: Global Partnership Center, Department of State (Draft)

Criteria for Success Development Results Number of people reached Leverage Improvement in standards or skills Decline in negative behavior Change in practice or behavior Alliance creates/provide a public good Technical expertise Market access Relationships Brand value Ability to expand and/or sustain a project Jobs Technology Distribution Networks Funding Partner s commitment Core business interest Staff champion Expected long-term presence in country Senior management support Joint planning Shared risks, rewards Catalytic Pilots new approach that can be adopted by others Mission Resources Amount of staff time to manage Amount of implementer Accelerates or time changes company s Availability of business Mission practices funding resources and Innovative ease of approach procurement Engages new people/actors Potential to continue after the project s end Level of complexity for MOU, reporting requirements, etc.

Game Changers

Alliance Funding Models 1 Resource Partner to USAID 3a Parallel 2 USAID to Resource Partner 3b Parallel 25

Challenges Human Resources Financial Resources Partner Differences Alliances are staff intensive Alliance building requires special skills Timing of money Emphasis on cash vs. in-kind Different partner expectations & language Obligation schedules, procurement concerns, etc. Alliances involve greater ambiguity and increased risk

Future Trends Global Food Security Climate Change, Renewable Energy Global Engagement with the Muslim World Global Standards Base of the Pyramid (BOP) Markets Diaspora and Remittances Stabilization in Fragile States Social Entrepreneurism Private Investment and Venture Capital

Tech Transfer: Cisco Academy Goal: Establish 70 network academies in 16 African countries to provide a comprehensive, global e-learning program targeted to a university population Partners: Cisco Systems, Inc, Government of Uganda, Hewlett Packard, Sun Microsystems, UNDP Funding: Partner Contribution: $13.7 million USAID Contribution: $1.23 million

Rainforest Alliance Goal: Increase the volume and value of sales for key certified products to improve rural livelihoods and well-being in Central America and Mexico by: 1) increasing market access for certified products; 2) improving environmental management, and 3) expanding the sustainable certification process for improved producer competitiveness Partners: Citigroup, AMANCO, Balzac Brothers & Co., Company, Cascadia Forest Goods, Pfizer, Procter & Gamble Funding: $78.6 million total USAID: $8.6 million Other partners: $70 million Boyd Coffee Chiquita, Ford Foundation, IKEA,

Continuous Improvement in the Apparel Workplace Goal: to increase the competitiveness of the apparel and textile industry by improving labor standards at the workplace level Partners: Gap Inc., Timberland, Limited Brands, DAI, Social Accountability International, International Textile, Garment and Leather Workers Federation Funding: USAID: $2 million Alliance partners: $1.2 million

Innovative Public - Private Partnerships USAID Alliances Local Enterprise Job Creation Environment Stable Society Competitiveness Win Win Workforce Development Sustainable Supply Secure Business Environments Economic, Environmental, and Social Sustainability Enhanced Quality of Life

Summary Thoughts Alliances are voluntary and build on the respective strengths of each partner For success, they need to optimize allocation of resources and achieve mutually beneficial results over a sustained period Involve written agreements that specify purpose and duration of partnership, governance, as well as exit arrangements They can add enormous impact to development results

Memorandum of Understanding Elements of a strong MOU I. II. III. IV. V. VI. Documents Partner Details Names, Points of Contact Details the Purpose, Goals, Objectives and Other Key Aspects of the Alliance such as Beginning and End Dates and Critical Activities Designates Partner Roles and Responsibilities Including Value and Timing of Cash and In-kind Contributions Establishes a Governance Structure and Addresses Provisions for Amendment of the MOU Includes the USAID Disclaimer (non-binding) Reflects Specifics in Annexes (e.g. Branding and Marketing, Communications Protocols, Monitoring and Evaluation)