September 24, 2014 - New York, New York
Check Against Delivery
Good afternoon, ladies and gentlemen.
And thank you for coming.
I have to be honest, I consider the fact that we have come together to discuss this topic a success in itself.
There was a time when development financing revolved solely around official development assistance.
A time when development was the domain of governments alone.
Not anymore.
Remittances and private investment flows now outpace development assistance.
New donors continue to come forward.
And the vision and drive of these new players are transforming how we approach development.
As Canada’s Minister of International Development and La Francophonie, I have seen the challenges we face first-hand.
I have met with partners around the world who share Canada’s desire to eradicate global poverty.
I have talked at length with civil society organizations, NGOs and philanthropists.
And I have sat down with a wide range of private sector representatives.
Each of these players has a role in development.
Including the private sector.
It’s private businesses that drive economic growth.
That create jobs.
And that facilitate wealth distribution.
Ultimately, it is the income generated by private-sector-led economic growth that allows governments to deliver services to their citizens.
That is why Canada leverages private sector capital to invest in growing businesses.
And to create jobs in emerging economies.
It is also why I was proud to be named chair of the Redesigning Development Finance Initiative, or RDFI.
The RDFI is a joint global project between the World Economic Forum and the Development Assistance Committee of the Organisation for Economic Co-operation and Development.
Its main objective is to expand the pool of foreign and domestic capital to help accelerate social and economic progress.
And its main tools are:
- identifying and testing innovative public-private finance models; and
- scaling-up blended finance partnerships.
Recent years have brought a dramatic increase in market-based approaches to development.
But the needs remain immense.
Despite a deeper pool of resources, we still need to unlock additional funding and expertise.
Governments should be catalytic in providing assistance.
But they have neither the resources nor the expertise to meet these needs.
International development is now the domain of multistakeholder partnerships from a cross-section of society.
This is a massive paradigm shift.
And the private sector is key to this equation.
It has the resources, expertise and innovation needed to create new and more-effective products, services and technologies.
And it can do so at a lower cost.
Canada has already seen great success with this model.
And we are working to mobilize more private investment in developing countries.
Our focus is on shared-value partnerships that promote innovative solutions to development challenges.
For example, we are working with Sarona Asset Management to finance small and medium-sized enterprises in emerging markets.
We are funding Grand Challenges Canada to seed new ideas and find innovative solutions to persistent global health challenges.
And we are supporting the Grassroots Business Fund, which combines investment capital with technical support funding to help businesses.
This fund currently generates $40 million in income for 1.8 million workers in the developing world.
We are doing more than we ever thought possible 10—even 5—years ago.
And we will continue to do more.
We are working to introduce repayable grants.
This would be a key tool to leverage more private capital.
Especially for high-risk, high-impact initiatives.
We are looking to government-backed investment tools to promote higher-risk investing.
And we are promoting greater partnerships where benefits are shared on both sides of the globe.
Next year is an important year for development.
The world will launch the Post-2015 Development Agenda.
And we will hold the third International Conference on Financing for Development, in Addis Ababa.
The Redesigning Development Finance Initiative Steering Group and I have pledged to deliver two key objectives by then.
One: to create a portfolio of innovative finance models.
And two: to forge new blended-finance partnerships that lead to concrete projects and real development results.
We want to go beyond exploring models in the agriculture, energy and infrastructure sectors.
And start mobilizing more private-sector funding for health and education.
This will not be easy.
But I think we can agree that important things rarely are.
We need to change the perception of “aid” away from a 1970s colonial model.
We need to challenge the misconception that social impact compromises financial return.
We need to develop a common language across public and private actors.
And we need to strike a balance between catalyzing private capital and over-subsidizing or distorting markets.
I am keen to hear your views on this.
But my message to you is simple.
We want to work with you.
Some see the involvement of the private sector solely as an economic growth story.
But I see it as a development story.
And both have the same themes.
They’re about jobs and training.
About children’s access to education and opportunity.
About greater access to health care services for mothers and children—a Canadian priority.
And about better revenue and wealth distribution among all individuals, not just the few.
These are fundamental development objectives.
Ones we all share.
But we must adapt, innovate and evolve if we are to meet our goals.
Thank you.
