Creating Local Growth through Public Private Partnerships

Creating Local Growth through Public Private Partnerships
[By: UNDP Pacific Centre]

How can a town council ensure that services like garbage collection, maintenance of town roads and public parks, among other things, are provided efficiently to everyone? How can they effectively provide institutional arrangements, technology and infrastructure that in turn create locally-led economic growth?

In developing countries, the decentralization of basic service delivery from national to local governments has put local governments under pressure to deliver. For local governments, providing basic services to the poor can be challenging as such services must be made available, accessible and affordable to local users, many of whom have limited incomes. Faced with limited public resources and a multitude of challenges, many local governments struggle to provide basic services with the efficiency, innovation and market-orientation that would sustain quality service delivery.

Parallel to this, without the support of technology and infrastructure, economic growth in communities often stagnates. The Pacific is no exception. Town and city councils need to develop strategic partnerships in order to efficiently deliver services and provide appropriate infrastructure.

In some developing countries, local governments or towns and city councils have worked in partnership with the private sector to provide services that have particularly helped people move out of poverty

The Upcoming Roundtable
In the Pacific, the capacity of most local governments is limited and the scope of private sector activities nascent. Moreover there are no formal structures for local governments to engage with the private sector to deliver services. Given the important role the private sector in the Pacific can play in delivering pro-poor services, in partnership with local governments, a regional meeting will be held next month to further discuss this topic.

The Regional Roundtable on Promoting Public Private Partnerships (PPP) for Local Economic Development in the Pacific will take place in Nadi, Fiji from April 2-4. It will be attended by local government representatives, officials from the ministries of Finance, Planning, Local Government and Tourism, members of the private sector as well as the civil society from eight Pacific Island countries: Fiji, Kiribati, Palau, Papua New Guinea, Samoa, Solomon Islands and Vanuatu.

The meeting is organized by the United Nations Development Programme (UNDP) through the Pacific Centre in partnership with the Commonwealth Local Government Forum, the Pacific Islands Private Sector Organisation (PIPSO) and the Pacific Leadership Programme.

It is expected to create a platform for dialogue between the private and public sectors to promote local economic development. It will also promote partnerships between local government, the private sector and other partners to facilitate more effective local service delivery and introduce pro-poor public private partnership (PPP) as a potential modality for local economic development (LED) and explore how it can be adopted to local contexts in the Pacific. The roundtable also aims to provide a common understanding about the type of enabling environment required for PPPs with clear national frameworks, policies and regulations for an effective LED as well as generate interest amongst Pacific private sector and non-state actors such as CSOs about potential investment opportunities in local economic development and service delivery sectors.

Service Delivery and the Achievement of the MDGs
Effective delivery of basic services, particularly to the poor, is a key achieving the Millennium Development Goals (MDG). These services include safe water supply, sanitation, energy, primary education and health care. Statistics show that women, youth and children are most affected by the lack of access to these services.

In most developing nations, decentralization has been transferring service delivery responsibilities from central to local governments but the local authorities have often not been able to deliver on their new responsibilities due to their limited human, institutional and financial capacities. Given this context, governments have been exploring partnerships with other non-state stakeholders to better address existing service delivery challenges.

UNDP supports developing countries in their efforts to create a conducive environment for pro-poor PPPs which increase access to basic services. By promoting inclusive partnerships between local government and various non- state actors including businesses, community groups, NGOs, Faith-Based Organizations, etc. these partnerships have proven to be empowering and effective in enhancing basic service delivery to the poor.

Partnerships between government and a broad range of non-state actors offer a complementary approach to traditional public delivery of services and also provide an alternative to full privatisation of public service provision. PPP combines the power, authority, social responsibility, and accountability of the public sector with the finance, technology know-how, managerial efficiency and entrepreneurial abilities of the private sector together with the informed voice, drive and oversight responsibilities of civil society, including the service users themselves.

Making Service Delivery Attractive to the Private Sector
PPP is not a panacea for all service delivery problems faced by local government. One size does not fit all and the “right” alliance is the one that best meets the needs of the partners based on the local context. PPP in service delivery requires that governments consider the profit motive of private sector and its impacts on tariffs, while maintaining affordability of services to all. Governments may consider subsidies to ensure affordability of services for poor users.

The civil society plays an important role as well in the monitoring of the delivery of basic services by the private sector. Since 2002, UNDP has supported more than 50 countries in developing and implementing PPPs.

At the Regional Roundtable on promoting Public Private Partnerships (PPP) for Local Economic Development in the Pacific that takes place in Nadi, Fiji, from April 2-4, experiences of local economic development led through PPP in a number of countries, including in Bhutan, Nepal and Philippines will be discussed A framework for the engagement of local governments and private sector is anticipated to be developed following the Roundtable. The roundtable will also examine the potential of pro-poor PPP wherein Pacific CSOs, NGOs which includes women and youth can provide service delivery to local governments.

ENDS

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