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Public–Private Partnership for Development: Mechanisms and Benefits

May 29, 19:33 UTC+3
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Implementing Official Development Assistance (ODA) programmes and achieving Sustainable Development Goals (SDGs) requires private investments, and the global community is committed to engaging entrepreneurs to contribute. Russia is involved in responding to global challenges, but the lack of mechanisms for international cooperation among businesses and government authorities is limiting the interest from investors.

In September 2015, the 70th Session of the UN General Assembly approved a new agenda on sustainable development through 2030, laying out a staged scenario to address the key challenges of humanity by relying on the principles of global partnership and solidarity.

  • The 2030 Agenda contains 17 universal and indivisible Sustainable Development Goals (SDGs) and 169 targets, which came into effect on January 1, 2016.
  • Russia shares the priorities of the 2030 Agenda in contributing to the fight against diseases, sustainable industrial development, wider access of people to transport systems, education, healthcare, social protection, etc.

The success of sustainable development is directly linked to the level of funding, technology, innovations, and management potential that the private sector can contribute to the projects.

  • In July 2016, the UN said that the focus of cooperation between the public and private sectors should be on improving the quality of life in communities.
  • Public private partnerships must be evaluated according to a new set of criteria, which are defined as “accessibility”, “equity”, “efficiency”, “effectiveness”, “sustainability” and “replicability”.

According to the UN, so far PPPs have been mostly used as an alternative to traditional public procurement and have not been associated with major social and economic transformation. However, there are positive changes in this field. 

  • On May 17, 2017, the United Nations Economic Commission for Europe (UNECE) and Portugal started cooperation on people-first public private partnerships in the water and sanitation sectors.
  • The private sector aims to participate in the One Belt, One Road initiative, which is expected to connect China and Europe. A respective memorandum was signed by the UNECE and China in January 2016.

Russia is actively involved in addressing global challenges.

  • To support sustainable development, Russia has become part of an international partnership to fight diseases and provide debt relief to the most heavily-indebted countries.
  • Russia is among the leading nations by contributions to the UN budgets: its participation in funding UN peacekeeping operations for the current financial year totalled USD 320 million, or 4% of the total.
  • Russia provided financing to 21 trust funds of the International Development Association (IDA) that are focused on disease control, quality of education, social support, and eradication of social inequality.

While public private partnerships are on the rise in Russia, the involvement of Russian businesses in development assistance programmes has so far been very limited.  

  • In 2016, more than 80 people-first PPP projects were submitted to the UNECE, with only one project (Clear Don) coming from Russia.
  • Another Russian project that was not included on the UNECE list seeks to support health: Rusal opened an epidemiology centre in Guinea to fight the spread of the Ebola virus.

There are several reasons that dampen the interest of Russian businesses in the international ODA programmes:

  • The lack of PPP project practices in this field to date,
  • No clear understanding of government relations as part of ODA initiatives,
  • The lack of awareness-raising support, including information about benefits available to the private sector.

There are ways to make ODA more appealing to the Russian business community.

  • On the national level, investments in ODA projects can be incentivised by providing extra benefits and creating consultative bodies.
  • Globally,there must be efforts to develop standards for ODA-focused public private partnerships to ensure transparency and comprehensive understanding of risks for all the participants.
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