Multi-Stakeholder Platforms: A Crucial Mechanism for Building an Enabling Business Environment

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Article at a glance

  • Addressing the challenges of poverty and marginalization through multi-stakeholder partnerships is key to building prosperous and inclusive societies.
  • Private sector engagement in shaping the post-2015 development agenda is needed to achieve this shared goal.
  • Public-private dialogue provides an important platform for businesses and governments to constructively engage in creating more participatory and sustainable economies.

This article is a transcription of a speech delivered on March 10, 2015 in Copenhagen, Denmark at the 8th Global Workshop on Public-Private Dialogue co-hosted by the World Bank Group, the Ministry of Foreign Affairs of Denmark, and the Confederation of Danish Industry.

The importance of public-private dialogue has been very evident to me in my nearly two decades of work in public policy engagement for economic transformation of my country and the region. Leading a policy think tank in the late 1990s seeking to influence the direction of economic transformation following years of one-party rule and centralized decision-making, it became clear that no one party had a monopoly of knowledge and expertise to guide the delicate process.

As I led efforts to strengthen parliament’s oversight of the executive in our country and in formulation of laws to harness a liberal economic framework, the necessity to draw on the analytical and other capabilities of the main economic actors was critical.

As I have led the equivalent of the Confederation of Danish Industry (DI) in Kenya – the Kenya Association of Manufacturers (KAM) – for more than 10 years, dialogue with government and all stakeholders has remained the pillar of our gains on behalf of our members. Thankfully these have been numerous and evident to our membership.

As our country goes through the transition brought about by the new constitution, public participation and dialogue have been entrenched. It is proving critical in ensuring and cementing gains of business and other stakeholders in devolved units.

Globally it is acknowledged that business is a critical actor in resolution of our generation’s most critical global challenges – extreme poverty and climate change.

Having had the honor to serve on the United Nations Secretary General’s High-Level Panel of Eminent Personalities on the Post-2015 Development Agenda in 2012/2013 and in the Danish Prime Minister’s Africa Commission in 2008, I had the opportunity to closely interact with so many entrepreneurs and managers who are actively engaged in the search for strategies that could create the conditions for their businesses to thrive in more inclusive, equitable, and sustainable economies and societies.

What I took out was a deep desire for change. Instinctively people recognize that the social, economic, and environmental challenges that we face demand a new kind of leadership, a new way of doing things.

Business, like governments, will have to be at the forefront of this change. No one can do it alone.

What we heard from these businesses was that economic growth and job creation were key to development. However, the work of development is too important to be left in the hands of governments alone. It is the responsibility of everyone. Especially the business community.

Recent years have seen significant interest in the development of such multi-stakeholder partnerships and processes that aim to address various developmental challenges. Some of them have led to significant development outcomes, especially in agriculture, water, health, energy, and education.

In such partnerships, the partners have a shared understanding that they play different roles and have different purposes, but that they can pursue collective goals through collaboration and common activities to achieve such goals.

These partnerships are voluntary, with participation driven by the perceived benefits they may see emerging from the process. They are developed to deliver mutual benefits for all who are engaged in the process on a long-term basis.

The core theme of multi-stakeholder platforms is joint value creation by all the participating members. The purpose is to pursue a shared vision, maintain a belief in favor of joint problem solving, and add value to the challenge under consideration beyond that which can be achieved through the efforts of individual initiatives. The main goal of a multi-stakeholder process is to see change in policy and implementation.

Partnerships are key to building an enabling business environment.

Governments are driven by a deep desire to expand employment of their people and creation of shared prosperity. Or at least they should.

Businesses are critical players in this quest. There is no known strategy for sustainable wealth creation and employment expansion that does not have successful and enduring enterprises as a main driver.

The innovation that drives entrepreneurship can contribute to finding novel ways to address societal problems that could help leap-frog the stages other economies had to go through in their past development paths.

The recognition of the role of the private sector in fostering growth, promoting innovation, and providing employment also means that business must have a seat at the table – globally, regionally, or nationally – where development policies are defined and which provides increased opportunities for advocacy on the conditions that facilitate entrepreneurial and market development.

Government policies create the environment through which businesses can thrive. In order to breed success, multi-stakeholder platforms that create an enabling business environment must therefore:

  • Identify specific issues that affect the business environment and economic progress and which need priority attention.
  • Carry out joint analysis and research which will better inform the policy formulation process and subsequent implementation.
  • Pool resources, talents, and other capabilities of a diverse range of stakeholders, thereby strengthening the capacity to effect change.
  • Share information on problems and solutions, and promote greater levels of understanding and trust between the various stakeholders.
  • Adopt change in policy and implementation of legislations and regulations.

In its more than 56 years of existence, the Kenya Association of Manufacturers has partnered with the government in Kenya to create an environment through which enterprise could thrive. After independence, the Association partnered with government in its efforts to create a domestic industry and spur job creation. This led to the growth of various import-substituting industries. This was further cemented in the 1970s with government reaction to the oil crisis.

This led to other challenges – with great consumption of public resources in enterprise serving a social good. The reforms of the 1980s and 1990s to create a more liberal framework and outward orientation of the economy and export promotion required partnership and collaboration between industry and government. Industry was a critical partner to government in the development of positions and negotiations that led to our regional integration efforts in East Africa and in the Common Market for Eastern and Southern Africa (COMESA) region.

The results? Slowly the economy started to recover in the early 2000s, with the greatest growth of 7 percent realised in 2007.

The political crisis following the disputed outcome of the elections in 2007, and the violence that followed, provided another opportunity for Kenyan business and the Association to work with other stakeholders in supporting the peace efforts and dialogue which eventually led to settlement of the conflict.

Business was also instrumental in drafting and passage of the new constitution which we gave ourselves in 2010 and continues to play a critical role in its implementation.

Having had the privilege of participating in these transformations of my country in those last 20 years, or enjoying close relationships and friendships with others who drove the processes before my time, I can confirm that such partnerships have several benefits.

Though only 18 percent of the economy, industry consisting of manufacturing, mining, and construction contributes nearly 30 percent of formal employment in Kenya (equal measure in informal employment) and more than 40 percent of the country’s merchandise exports.

The challenges of the future, demand greater partnerships. Locally, nationally, and globally.

Business, however, must realize that its partnership and central seat in policymaking is under great scrutiny and accusations by other partners that it serves selfish and narrow interests at the expense of society. Such an accusation is not without basis.

It is time for business to set higher standards for its operations and move beyond the current understanding of corporate social responsibility into a new socially and environmentally sensitive business model.

This requires action at various levels: the rethinking of corporate reporting standards, the fine tuning of global and national regulations, the strengthening of consumers’ education and association, and the nurturing of stronger business ethics at all levels. Rather than taking the back seat and waiting for these changes to unfold, the private sector should lead its own transformation in active dialogue with government and civil society. Doing so will also help a great deal in addressing the confidence challenge raised by many watchdogs and civil society networks with regards to the deeper engagement of the private sector with the development policy agenda.

Business increasingly realizes that its long term prosperity is at stake if the challenges of poverty and marginalization are not properly confronted and economic development patterns do not provide for greater inclusiveness and increased equity of opportunities and outcomes.

The front line involvement by so many companies and business associations in the shaping of the post-2015 development agenda shows that the private sector is definitely stepping up to co-lead the transformations that are required for these challenges to be tackled and prosperity to thrive.

The critical engagement of the private sector and a new responsible way of doing business are essential for the pursuit of sustainable and equitable development. Long-term business strategies outline that it is not only the right thing to do but it is first and foremost the good thing to do for business itself.

Let us commit ourselves to greater and fruitful partnerships.

This article is a transcription of a speech delivered at the 8th Global Workshop on Public- Private Dialogue in Copenhagen, Denmark. To access the workshop’s resources, visit: http://www.publicprivatedialogue.org/.

Maina is the Chief Executive Officer of the Kenya Association of Manufacturers (KAM), one of Kenya’s leading business associations with over 800 members and a long-time CIPE partner. Previously, she served in a similar position at the Institute of Economic Affairs. She was appointed by the United Nations Secretary General on July 31, 2012 to a High-Level Panel to advise on the global development agenda beyond 2015, the target date for the Millenium Development Goals. In 2008-2009, she was among the eminent African personalities serving on the Danish Prime Minister’s Africa Commission, a Danish platform for effective development cooperation with Africa. Betty Maina’s career spans nearly 20 years in public policy research and advocacy and has included engagements with various international organizations such as the Centre for Public Integrity in Washington, Swedish International Development Cooperation Agency (SIDA), United Nations Development Programme, Africa Futures, Kenya Leadership Institute, as well as the World Bank, among others.

The views expressed by the speaker are her own and do not necessarily represent the views of the Center for International Private Enterprise (CIPE).

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