How Reforming Public Sectors Can Tap into Power of PPPs

Posted By Nellie Mayshak on Jan 17, 2018 | 0 comments

Can Public/Private Partnerships (PPPs) help struggling nations pick up the pieces after conflicts or natural or economic disasters or just plain economies in the process of developing?

In an ideal world, sure. The private sector can be a valuable resource for public sectors that haven’t yet reformed to the level that they can deliver good services, whether for lack of money, skills or the right people to deliver them.

Unfortunately, the world is rarely ideal.

In developing countries alone (never mind those that are recovering from wars or other sorts of calamities), the annual infrastructure investment needs amount to $2 trillion to $3 trillion. Yet the cumulative investment between 1990 and 2016 has only been been $1.7 trillion – truly, a drop in the bucket of need.

The problem is that there’s a vicious circle at work that keeps public sectors in recovering and emerging economies from attracting the kind of private investment that can accelerate the reform process.

As much as systems and structure, for example, public sector reform requires a philosophy that’s grounded in inclusiveness, transparency and accountability. That’s something many governments struggle with. But it’s instrumental to restoring the public confidence that ensures a stable base – the kind of base that gives the private sector the confidence that investment is worth the risk.

Another challenge is that countries that have undergone cycle after cycle of economic regression and conflict often have made private sector suppression part of the pattern. Even if the business and investment community hasn’t been actively suppressed, there is a tendency in less developed nations to keep the private and public sectors rigidly segregated. That discourages opportunities to explore public/private partnerships or even to bring parties to the table to discuss the benefits.

What post-conflict government leaders need to do is create more overlap between the public and private spheres. A likely starting point is with stronger policy-making, which requires decision-makers to broaden their perspectives even as they learn best practices from other countries.

Among other things, this leads to the realization that business, and particularly entrepreneurs and innovators, is integral to a society is more than surviving – it’s thriving. It takes more than government jobs to grow an economy and create wealth, as I’ve helped officials in countries like Liberia and Sudan understand.

Moreover, the partnerships that are possible don’t all have to look like mega dollar, multi-year projects to fund bridges and highways. In fact, some economies may well get more bang from short-term and market responsive initiatives.

One World Bank analyst, for example, suggests that reform efforts among post-conflict countries could be designed to support small scale, private sector solutions through legal and regulatory structures and seed funding.

What would these look like? Communities might fund mini-grids for electricity or link them to large off-takers, something that’s being done in Cambodia. Another route could be community water models. In Tanzania, these approaches empower communities to negotiate with private companies that provide boreholes, pumps and pipes.

Whatever form PPPs take, we have to get creative in how these are viewed by and supported by governments that are reforming and rebuilding after periods of strife. Because the need, if anything, is just growing.

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