The UN Secretary General convened the Commission on Private Sector and Development in July 2003 in an effort to identify and address the legal, financial and structural obstacles blocking the expansion of the indigenous private sector in developing nations. It includes internationally recognized leaders in business, development economics and government’s representatives from both the industrialized and developing worlds, and it is co-chaired by Prime Minister Paul Martin of Canada and Ernesto Zedillo, Mexico’s former President.

The UN Secretary-General challenged the Commission to answer two basic questions: “How can the potential of the private sector and entrepreneurship be unleashed in developing countries? And how can the existing private sector be engaged in meeting that challenge?” These questions derived from the fact that international development institutions have worked towards increasing direct investment flows into developing countries and improving their foreign trade opportunities. But relatively little emphasis has been placed to date in international development policy on expert assistance and regulatory reforms aimed at the smaller-scale indigenous enterprises. In most countries, those are the primary engine of job creation and domestic commerce.

In this regard, the Commission integrated the extensive work that had already been carried out by all parts of the development coalition—major development agencies, private foundations, academic institutions, business, civil society and labour organizations—into the framework it presents in the five chapters of the Report.

The Report focuses on the domestic private sector in developing nations for three reasons:

- First, domestic resources are much larger than actual or potential external resources. Domestic private investment averaged 10–12% of GDP in the 1990s, compared with 7% for domestic public investment and 2–5% for foreign direct investment (FDI).

- Second, when informal resources are examined, such as potential land value, the domestic assets that can be tapped are much larger than cumulative FDI or private portfolio flows.

- Third, unleashing the domestic resources in an economy—both financial and entrepreneurial—is likely to create a more stable and sustainable pattern of growth.

UNDP has made Private Sector Development one of its practice areas and a pillar of poverty reduction strategies. It is a strong supporter of the UN Commission on Private Sector and Development.

For more information, please contact Nelson Xavier, UNDP Public Information Officer.

• Mobile phone: + 258 82 314060
• Office + 258 01 481438
• E-mail: nelson.xavier@undp.org

UNDP is the UN’s global development network, advocating for change and connecting countries to knowledge, experience and resources to help people build a better life. We are on the ground in 166 countries, working with them on their own solutions to global and national development challenges. As they develop local capacity, they draw on the people of UNDP and our wide range of partners.