Private sector as partner in SDGs

For meeting SDGs, the sector can be facilitated via institutional platforms

ISLAMABAD:

Public-private partnerships (PPPs) are essential for achieving Sustainable Development Goals (SDGs) but do we really have functional and effective PPPs in Pakistan.

Probably not. The private sector is often on the receiving end, rather than the giving end, when it comes to relationship with the public sector. Private sector lobbies work mostly towards increasing tax breaks, subsidies and other fiscal incentives, thus reducing even their mandatory contributions.

It is quite rare to find concerted efforts from the private sector, except for some Corporate Social Responsibility (CSR) actions that they have to take in any case for polishing their annual reports. It is certainly true that the primary responsibility for policies and related actions towards economic growth and development rests with the state and the government, but it does not mean that the private sector and businesses should stay free of any obligations.

The notion of sustainable development includes economic, social and environmental aspects of development, for which it is essential to involve a wide variety of stakeholders, in addition to the public sector.

Some of the big companies, in Pakistan, are quite conscious of their contribution towards sustainable development but it stays mostly as individual company actions rather than an industry-level effort or transforming such contribution through institutional mechanisms.

Apart from some of the multinational and big companies, it is hard to find any private sector initiatives contributing towards sustainable development in Pakistan. For many of the businesses, it might not be even possible to conceptualise and internalise the concept of contributing towards sustainable development and the SDGs, in partnership with the public sector. For them, the interaction with the public sector agencies is only to negotiate tax incentives and navigate through relevant regulatory systems.

There is, however, some level of willingness among the private sector actors to contribute towards sustainable development of Pakistan. They could be facilitated through the establishment of enabling institutional platforms and regulatory frameworks. To start with, the government of Pakistan could establish institutional dialogue between the public and private sectors, through the Planning Commission’s unit on SDG support.

This multi-stakeholder dialogue should be held regularly and chalk out the practical way forward, including the policies and concrete actions to involve the private sector in achieving the SDGs. A high-level political ownership of this dialogue would be quite helpful.

The second step could be to establish the Pakistan Sustainable Development Fund (PSDF) as a longterm financing solution for achieving the SDGs. This should be a separate funding mechanism than the existing financing streams by the development partners. It should be exclusively financed by the private sector of Pakistan, with complementary support (for example 80:20) by the government.

As a matter of fact, there is little discussion at the policy level in Pakistan on the “Means of Implementation” and the Addis Ababa Action Agenda, in the context of Agenda 2030 and the SDGs. PSDF could also adopt innovative financing models such as the Social Impact Bonds (SIB). These bonds may be issued for five and 10-year terms, in order to finance sustainable development-related projects and interventions. In order to encourage and secure investment by the private sector in these bonds, the government would serve as an underwriter.

PSDF may introduce a few sectorspecific “development funds” such as healthcare, infrastructure, education, food security, women empowerment, energy, etc. The private sector participating in these funds could be granted different fiscal incentives.

For the private sector, this may be more than just meeting the CSR actions. It may not be justified to blame only the private sector for not coming forward as a partner in sustainable development in Pakistan. Public sector agencies are equally responsible for not being able to come up with enabling platforms, mechanisms and incentive systems to bring the private sector onboard.

If the private sector is interested only in negotiating taxes and regulatory barriers, the public sector is also often busy in extracting taxes and imposing regulatory mechanisms. The need of the hour is to take a fresh start where public and private sectors play equal and equitable role, in their respective domains and capacities, towards achieving the SDGs but more importantly establishing a pathway for sustainable development that goes beyond just the SDGs.

The private sector should come forward to play a true “partner” role in the sustainable development of Pakistan. In order to transform our country, we need transformative partnerships.

THE WRITER IS AN INTERNATIONAL ECONOMIST