A NEW report titled 'Our Shared Opportunity: A Vision for Global Prosperity' has proposed that US foreign aid policy to reorient itself around the private sector and economic growth.
In a report that may see private investments grow in Tanzania, the document by Centre for Strategic and International Studies, asks the US to make "broadbased economic growth" its organizing principle.
"Private-sector-led, broadbased economic growth is the transformational force in development," says the report. Among the more specific recommendations are for the United States to shift the 350 million US dollars in development aid to economic growth activities and devote 25 per cent of development funding to partnerships that involve core business interests.
The council also calls for the consolidation of the approximately 20 agencies involved in US foreign assistance. Some of these aid agencies operate in various sectors in Tanzania.
Speaking to 'Daily News' yesterday, University of Dar es salaam economist Dr Lenny Kasonga said that while the US government has historically played a vital role in development, that role needs to change because the world has moved, with publicprivate partnerships becoming a necessity. The report does not call for the privatization of foreign aid, but for changes in priorities.
"In light of the fact that approximately 87 per cent of capital flows to developing world are private, public-sector players need to focus more into private-sector investment strategies rather than on how to get private-sector organizations into their programmes,"said the CEO of the Overseas Private Investment Corp Robert Mosbacher Jr.
By bringing foreign policy into alignment with the new reality, the report argues, the United States could "make foreign aid as we know it today obsolete in 25 years." The council's report focuses its recommendations on three areas: reorganizing foreign aid policy around economic growth; aligning US development instruments with private sector interests; and promoting trade and investment using "existing but underutilized tools."
In the report, business leaders on the council argue multinational corporations are ready to embrace a new level of global responsibility.