Increasing Public-Private Cooperation

By Frank-Jürgen Richter

April 13, 2023

The post-pandemic era will be crucial as economies, businesses and individuals rebuild their lives. It will be very important to ensure that the recovery is fueled keeping people and sustainability at the heart of it. The pandemic has put the spotlight on the need to invest in development that is good for the society, economy and the environment.

This will need a lot of financing, knowledge, cooperation and collaboration with the right stakeholders. A resilient growth will need a collaborative and holistic approach that factors in all, even the disadvantaged and forgotten communities within a society. No one should be left behind when drawing the next development plan.

Achieving this herculean task will require support, both financing and guidance. And no one party or stakeholder has the capacity or the expertise to push an overall post-pandemic recovery.

This is where public-private cooperation comes into the picture. It has been a fruitful mechanism in driving change and development in low-income and emerging economies across the world. Gavi, The Vaccine Alliance comes as an immediate example. The alliance works on a public-private business model with the aim to immunize 300 million children globally with routine vaccines, helping avert 7-8 million deaths. Amid the pandemic the alliance partnered with several countries and private healthcare players in providing access to COVID-19 vaccines to millions around the world. 

Although agendas of governments and private companies are vastly different, increasing global pressures such as healthcare incidents coupled with climate change, we must acknowledge that overcoming 21st century risks will need public-private cooperation.

Climate Change Partnership

Public-private partnerships (PPPs) are allowing governments to harness the support of private players in both financing and expertise to address pressing global issues, particularly meeting climate change targets. 

Climate Investment Funds, a PPP founded in 2008 in the United States is a partnership between developed and developing countries, multilateral development banks and private sector investors. The fund has pledged US$8.3 billion to support more than 300 projects in 72 developing and middle- income countries in helping them manage their climate change preparedness and reduce their greenhouse gas (GHG) emissions. 

Finance is just one side of the coin. Governments will also need to be open and receptive to the knowledge and administrative expertise that private players bring onboard. Addressing rising GHG emissions will require strategic reforms in emission standards; energy production and supply; and use of emerging technologies and innovation. This is where the role of private players will be crucial as private companies boast of a robust R&D ecosystem coupled with strategic human talent and intelligence – a crucial tool in the fight against climate change.

Other reasons why PPPs are a must is the need for increased transparency and streamlining of the entire value chain across every sector to drive climate change policies to reduce emissions. A single platform that allows policymakers access to which sectors are producing the most emissions along the value chain need to be updated to align with ESG norms. This is where an equivocal participation of private players can help realize national net-emission goals.

Win-Win Proposition

A greater private involvement in PPPs can only be possible if there is increased viability seen in it. Governments and policymakers should focus on developing PPPs that address socioeconomic and environmental needs. Private investors and companies are taking active interest in financing projects that cater to rising demands of meeting climate change and societal needs, along with being profitable.

World Bank, the global financial institution that has been a partner to several successful PPPs around the world suggests three institutional pillars that are needed to increase the profitability of PPP:

  • Certain economies are still hesitant to the idea of private participation in development efforts. In such a context, companies looking to enter a new PPP market will need strong support from the government. Political will to allow private players to participate in national development programs need to be strong.
  • Availability of transparent system in bidding and contracting, followed by a robust governance is crucial to attract international investors into national development programs. Governments interested in leveraging the benefits that PPP bring, need to invest in developing and streamlining its regulatory, permit, procurement and financial systems.
  • The government should also ensure that they have a strong team that comprises experts in providing advisory services regarding financial, legal and technical matters to interested private companies and investors. These are pre-emptive measures that are effective in avoiding any risks or disruptions to PPPs.

Public-private participation will be crucial for the future, particularly in the area of achieving sustainable development goals (SDGs) and fighting against climate change. By working together governments and companies can bring about positive change in the society and address issues around poverty, education, gender equality, global peace, biodiversity, clean energy, and food and water security.

PPPs are essential and will be critical for building a more resilient, equitable, and sustainable future.