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The Role of the Private Sector

Until recently, little attention was paid to the role of the private sector in poverty alleviation. The Millennium development goals were originally developed without recognition of the role that the private sector could play. It was later that the social compact with the private sector was formulated by the then Secretary General of the United Nations, Mr. Kofi Annan. The pioneering work on this topic was done by a Blue Ribbon Commission organized by the United Nations Development Program on private sector and poverty. The report was issued in 2004.2 I had the privilege of serving on that commission. The United Nations Development Program is now fully engaged with the idea of the private sector’s contribution to poverty alleviation.3 Similarly, organizations such as the World Economic Forum have focused private sector groups in developing solutions to poverty—be it the Social Entrepreneurship Forum or the group of firms collaborating to fight global hunger. The acceptance of the role of the private sector in poverty alleviation by civil society is somewhat mixed. Some are willing to accept a role for the private sector and some, as should be, are more skeptical. However, increasingly, large private sector firms and civil society organizations are learning to work together in a collaborative fashion. There is growing recognition that marrying the local knowledge of the nongovernmental organization with global reach of the multinational firm can create unique and sustainable solutions. Needless to say, the private sector cannot solve all problems but can bring technical and financial resources, the disciplines of organization, accountability, and entrepreneurial drive to bear on the problems.4

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