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Åbningstale ved udviklingsministeren Danida Business Dag 5. april 2011

The spoken word counts

Distinguished presenters and colleagues from abroad, ladies and gentlemen,

Welcome to Danida Business Day. Today, this yearly event is record breaking in terms of the number of participants and interest. It is great to see so many people seeking to learn more about Danish development cooperation. I hope this interest reflects that you - the Danish business community - more than ever are eager to seek new business opportunities and interested in being part of the solution to the urgent problems, which the developing countries are facing.

During the past decades, development assistance has been seen as mainly an act of solidarity, a moral imperative and even an entitlement. This approach is over. Development assistance is an investment. It is about supporting our partners in creating tangible results, enabling ultimately developing countries to take care of themselves without development assistance.

Two weeks ago I visited Tunesia, the country where pro-democracy demonstrations began. The will for change has since then been sweeping through the Arab world. In fact it all began here with a young man setting fire at himself because he was deprived his sales wagon, and simply had had enough. This story says it all. People in developing countries, just like the rest of us, want their basic freedom to form their own lives. Freedom to make their voice heard and freedom to earn a living. In Zimbabwe, about a year ago on my first visit in office as minister for development cooperation, I was overwhelmed by a woman who desperately explained “Now we cannot even sell our tomatoes on the street”. She felt exactly the same frustration as the young Tunisian who sparked the demonstrations we now see in the Arab world.
Danish development policy takes its outset in a focus on political and economic freedom for the individual. It is my clear belief that the human being has an inherent will to overcome problems. Some only needs a helping hand. Like all of us here today, poor people want basic human rights, dignity, jobs and freedom to shape their own destiny.

About two years ago the Africa Commission presented recommendations with focus on the need to enhance private sector-led growth and employment for young Africans. The Africa Commission’s focus on the need for creating employment for the large youth cohorts in Africa and private sector led growth marked a shift in relation to the international agenda for official development assistance, and hit a nerve in the international debate. I see this in my collaboration with ministers for development cooperation in the EU. In my collaboration with African leaders. And growth and employment is also on the top of the agenda of the Obama administration.

This new development agenda is consolidated in the Danish Government’s strategy for development cooperation: ”Freedom from Poverty - Freedom to Change”, which I launched last year in May. It makes clear that Danish development assistance only shall be a sort of initial kick-start or helping hand. It shall push things forward. Create initiative, be demand-driven and be based on local ownership. The success criteria being that development assistance becomes superfluous. The recommendations of the Africa Commission have in particular influenced one of the strategy’s five priority areas, namely “Growth and Employment”. The tools and approaches we will utilize the coming years to transfer strategy into actual actions is further described in our new strategic framework for Growth and Employment, available in hard copy here today.

This strategic framework reflects that we more than ever have focus on supporting private sector led growth at various levels, where the primary engine is Danida’s business sector programme. For instance providing access to finance, strengthening dialogue between the public and private sector, supporting development of more effective tax systems to the benefit of the entire society, improving business license registrations or training activities for farmers.

In the coming years, business sector programmes in Ghana and Kenya will have increased focus on supporting value chain developments, innovation and green technology, while the Growth programme in Uganda focus on economic development in rural areas. This year we will introduce a new private sector programme in Mozambique, and furthermore we have ideas lined up for adjustment of agricultural programmes in Burkina Faso and Bangladesh to become more focused on supporting agro-business value chains.

Recently, on a visit to Kenya, I had the opportunity to visit the production site of a company managed by a young female entrepreneur, who exports to COOP Danmark and thus provide us Danes with sugar snaps. This visit strengthened my belief that we are moving in the right direction. Sector programme support has helped her improve production methods, quality standards and management of out growers making it possible to qualify for and manage exports to Europe. The view of numerous women working in a production facility as clean as a laboratory – I must in fact have looked ridiculous wearing hairnet! – cheerful, making profits and having improved the quality of life in their families made me happy.

Development assistance can of course not in itself generate sufficient economic growth and employment. Trade and commercial investments in developing countries are crucial to sustain and bring forward the positive developments that new growth economies past few years have experienced despite the financial crisis.

As a liberal politician, it will come as no surprise that I am a strong supporter of economic integration and free markets. Free markets create wealth by spurring competition and forcing the private sector to constantly be more innovative and effective. Some researchers question if trade liberalization and free markets are right for Africa. I would argue that they are not only right – they are a necessity if the private sector in Africa is to survive increased global competition.

The customs union already implemented in East Africa has shown that liberalisation works in Africa. Internal trade has increased tremendously and jobs have been created. Furthermore, a market of 133 million consumers is also much more interesting to foreign investors and traders – including Danish.

This brings me to focus on the role of Danish companies. You are the primary target of today’s conference and networking. We must in new ways include private companies and where possible in collaboration with civil society organizations and research institutions in our efforts to create growth and jobs in developing countries. Why? Because you possess knowledge, technology and experience – from knowledge about energy efficiency to requirements and standards within responsible business practices - that can help unleash the potential among young entrepreneurs. More than ever, Danida means business. Danida is focused on supporting local companies’ access to new technology and innovation and efforts to create value addition locally. And what is in it for you? New market opportunities and profitable business in the longer run.
Several participants here today have already contributed with technology transfer, investments and training of local companies and partners in developing countries. And have not least proven to implement responsible business behaviour to the benefit of local companies’ competitiveness, working environment and local communities. Concrete results with an impact both you and I can be proud of.

To strengthen experienced and new actors’ engagement and investments, we are in the process of modernizing our existing Danida business instruments. The framework for the new Danida Business will be described later today. Let me therefore just mention that key words for the modernization are: Simplification, flexibility, innovative approaches, regional projects and stronger focus on the commercial viability. Today is an excellent opportunity for me to encourage you – companies, investors, NGOs and research institutions – to soon make use of our modernized Danida Business Partnerships and Finance.

In line with my introductory argument about providing a “helping hand” to the individual in poor countries, the Danida Business instruments are similarly a “helping hand” to reduce initial risks and facilitate investments and partnerships. If companies are too dependent on the financial support from Danida, then we will not deliver long-term results. We must be able to demonstrate value for money, both to the receivers and the senders, the tax payers that is. If the potential is clear, I trust you are willing to take risks and invest in developing countries – the growth markets on the move.

We, Danida and our GoGlobal partners, stand ready to do our part in the push forward to realize this potential. By broadly engaging more Danish companies, NGOs, research institutions and organizations in the process of transforming strategy into action, we will be in a better position to fight poverty through inclusive economic growth and employment generation.

From a business perspective, this is the right time. Africa’s potential has never been greater. Sub-Saharan Africa has had faster economic growth than India over the past decade, and is projected to grow faster than Brazil between 2010 and 2015. And Africa is the region in the world that provides the largest returns on investments. Are all of you aware of these figures?!

I believe that Africa in 50 years from now will be a global economic super power. I trust that our distinguished guests from OECD and Dalberg in a moment will confirm in more detail that growth rates and potential on these new markets are unmistakable.

Thank you