The missing link

When dealing with development, the resources of domestic private sector – their funds, technical skills, core competencies, products and physical assets - are yet to be fully unleashed. The focus is almost always on multinationals. The United Nations’ Global Compact is subscribed mainly by multinationals, and, in June 2005, the UN Global Compact Office declared that it will focus on companies operating transnationally. Other efforts too mainly focus on international businesses including One World Trust’s Global Accountability Framework, Global Reporting Initiatives and International Business Leaders Forum. In most developing countries, the private sector is made up mainly of small businesses. The majority of investments in developing countries are from domestic sources[1]. The domestic private sector too is concerned about the state of education, health system, human rights, good infrastructure, security, national stability and good governance in their own countries. Well-educated and healthy employees working and living in a safe community are necessary for any businesses to operate, let alone to prosper. Nevertheless, very little is done specifically to look at how the domestic private sector can strategically assist in development. Effective dialogues between businesses and civil society rarely take place at grassroot levels although that is the level where most work takes place. There is no long-term, focused effort to ensure private sector and civil society on the ground share a platform to discuss important matters of common concern, especially social development and citizen empowerment. It has been explained above that private sector’s potentials are yet to be fully unleashed. However, since development and social works are traditionally the domains of the civil society, constructive engagement between the two sectors is imperative. In Malaysia, owners of small and medium sized companies cite government officials as the main culprit. Almost everything is politicized. If Company A wants to work with NGO B, Company A must firstly ensure NGO B is not “black-listed” by any government departments. Otherwise, Company A may not get any government contracts anymore. There is another problem that must also be mentioned. Yes, maybe there are officials who abuse their positions. But businesses’ dependence on government contracts is also an issue. As long as the private sector does not become a proper “private” sector, they will always be at the mercy of corrupt officials. It is the businesses who must firstly free themselves. Being entrepreneurial is a good first step. The next step is to break their dependence on the state. Then only the private sector will be free to work with whomever they wish. [1] DFID and the Private Sector: working with the private sector to eliminate poverty. British Department for International Development. December 2005.