Paweł Bagiński, Economic Advisor, International Department, Narodowy Bank Polski Vilnius, 13 November 2013 Private sector’s involvement in development co-operation. The case of Poland.

Wider context: the role of the private sector in development co-operation. ■International context: The private sector is a key element of achieving the future Sustainable Development Goals. ■Reduced share of ODA in total development finance. ■New role of ODA. ■Potential new measure of development activities (reformed ODA + TOSD). ■Changes in business behaviour – CSR. ■National context – Polish Aid programme. ■Vibrant private sector being a main driver of economic transformation. ■Still limited funds for development assistance, 75 % of ODA delivered multilaterally. ■Bilateral MFA aid: mostly small scale technical assistance projects. ■New legal and strategic framework – revamped organisation of the Polish Aid programme. ■2013 OECD/DAC membership. 2

LDCs are more dependent on aid than MICs Source: OECD 3

Source: the MFA of Poland, OECD 4

Organisation of the Polish Aid Source: the MFA of Poland 5

Private sector’s involvement in the development co-operation in Poland Extremally limited number of projects: ■Private sector’s involvement in the Polish Aid programme. ■„Small economic grants”. ■Concessional loans by the Ministry of Finance (tied aid) to finance delivery of goods and services from Poland. ■Autonomous projects implemented by the Polish companies. 6

Examples of projects implmented by companies ■Partnership between a petrol company and one of the leading Polish humanitarian NGO: anyone who buys petrol can become a member of the loyalty programme and collect points that can be exchanged into gifts OR to pay a meal for a malnourished children. ■A distributor of mineral water decided to allocate a part (10-25%) of the income generated by selling this product to NGO’s activity (building wells in Sudan) ■A company specializing in supplying different kinds of products useful in humanitarian crisis, in refugee camps (purification kits, cooking sets, ecological fuel) Source: The role of the private sector in development assistance and aid effectiveness (Center for Economic Development, Sofia) 7

Key obstacles and challenges on the business side ■Low interest of companies in activities in favour of society in different forms (CSR, sponsoring). ■Limited knowledge and experience of doing business in developing and transition countries, including in ODA priority countries => Stereotypes about conflicts, instability, diseases, corruption + embassy far away… ■Lack of knowledge about development co-operation. ■Low interest in participation in international aid tenders due to: ■Limited knowledge about the application procedures within the EU and IFIs. ■Complicated procedures in the international organisations (high turnover and high contribution from its own funds needed). 8

Key obstacles and challenges on the official (Government) side ■Character of the Polish Aid programme: ■Focus on promoting democracy and human rights as well as sharing transition experience. ■Small scale technical co-operation projects (lack of infrastructural projects). ■Limited funds available for ODA. ■Legal framework: ■Difficulties in implementing multiannual projects. ■Private companies cannot apply for development projects in partnership with NGOs. ■Reduced diplomatic presence in some ODA priority countries. ■Limited trust between Government and business community. ■Working in silos with the private sector => fragmentation of Government approach 9

Ways of going forward (1): ■Active promotion of CSR, responbible business conduct and philantropy. ■Reforming business education in Poland - Development MBA? ■Building confidence between the private sector, CSOs and Government. ■Finding common language and ways of communication. ■Promoting mutual exchange of interns, exchanging best practices. ■Consequent and coherent promotion of doing business in developing and transition countries => integration of various strategies and programmes such as Go Africa, Go China). ■Strenghtenning diplomatic missions in strategically important partner countries + Sending business&development missions to ODA partner countries. 10

Ways of going forward (2): ■Reforming the Polish Aid programme: ■Efficient managing our multilateral contribution (EU, UN, IFIs). ■Economisation of Polish Aid – business as TC provider, establishing aid-for-trade programme, assistance to firms in applying for international aid tenders/calls. ■Shifting towards meeting some infrastructure needs of developing countries in new programming period ■Transition towards few long-term programmes elaborated and implemented jointly by the private sector and CSOs. ■Introducing financial special schemes for business (tenders for construction work, B2B for development projects with a local partner, trust funds in IFIs). ■Outreaching beyond aid: ■Engaging more partners (NBP, KUKE, BGK, business associations, IFIs delegations in Poland, private foundations) in view of working on permanent basis. ■Exploring new instruments to leverage more development funding (export credits, investment guarantees, PPPs, innovative development finance, remittances). ■Reflecting on risk sharing mechanisms, start-up funds, 11

Thank you very much for your attention Pawel Baginski