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Minister for Development Cooperation: Speech at Public Debate on Entrepreneurship, Growth and Development

Copenhagen Business School 7 September 2010

Distinguished researchers, practitioners and entrepreneurs from abroad,

 

Ladies and Gentlemen,

I am very pleased to welcome all of you to this public debate on Growth and Employment in developing countries, which is a priority theme in our new strategy for Denmark’s development cooperation called “Freedom from poverty – freedom to change”. With several guests from Africa here today this is also an excellent occasion to present the Progress Report of the Africa Commission. The report documents that the visions and recommendations launched a year ago have resulted in concrete international initiatives. These initiatives are large scale ventures to enhance and strengthen competitiveness, entrepreneurship, training and access to finance and sustainable energy in Africa. I have brought the Commission’s Progress Report with me today, and I invite you to take a copy with you.

The Africa Commission’s focus on youth employment and private sector led growth has contributed to a shift on the international development agenda, and it has indeed highly influenced the visions and priorities outlined in the new Danish strategy.

Despite a positive development in many developing countries, there is still a great need to unleash the potential which remains untapped. Here, we as donors can assist the countries and their private sector to flourish. We can support the potential in the poor countries with several means which can help reduce barriers for the local entrepreneurs and boost their opportunities to create growth and jobs in a decent and sustainable way. Examples could be to reduce corruption, secure the individual property right, educate young entrepreneurs, provide access to finance and include the informal sector. In other words, provide poor people with the freedom to change their current life situation to the better.

During the next couple of hours I hope we will have a fruitful debate. We will listen carefully to your sound advice and suggestions on how to transform our visions into concrete actions the coming years.
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Many of you probably saw the signs among Ghana’s spectators during the World Cup in football in South Africa this summer saying:
“Feel it – Ghana is here!”
To me it was extremely refreshing to experience this passion, self-confidence and hope among the Africans. This was so much in contrast to the many disheartening stories we often receive from developing countries all over the world. And Ghana almost made it to the semi-finals. Afterwards no one in the world could have missed the point: Ghana was most certainly there – and Africa as well as other developing regions are most certainly here when it comes to potential for growth and development.
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Africa’s large youth population constitutes an obvious opportunity and a key competitive advantage in the global economy. However, this also entails a risk if jobs are not created. Unemployment, social unrest and migration are some of the consequences that might prevent Africa from progressing. We must ensure that the size of Africa’s youth becomes an advantage. Here, the private sector plays a crucial part.

Obviously, we must be realistic regarding Africa’s future. What Africa needs from us are not promises and ceremonial speeches. Africa needs action, investments, technology and cooperation to ensure that the jobs created are proper and productive, and that the growth benefits the majority instead of being isolated in a few sectors or poles without links to the majority of the people. I truly believe that our increased focus on supporting private sector led development is the right way forward to assist the African people in their process towards freedom from poverty and liberation to create their own success stories.
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Therefore, I would like to highlight a few success stories which have made a significant impression on me personally:
During one of my first visits as minister, I visited Bangladesh. Bangladesh is a country which is mostly in international media when flooding time and again hits the country and its sorely tested people. In spite of this, I experienced firsthand the dynamism and vibrancy that emanated from the meetings I had with business people and entrepreneurs in Bangladesh. They radiated an unmistakable optimism and faith in the future. They were confident that great opportunities lay ahead, and they were encouraged by the important strides that Bangladesh had taken over the past decade. To me this was inspiring, and gave me confidence that to a large degree we are forming our own destiny, and that nothing is inevitable.
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Another example which underlined the will to survive and to be innovative was during my visit to Tanzania. Here I visited the Shambani dairy. A dairy founded by two graduates who have an entrepreneurial spirit just after my heart. The students had noticed that the Masai women in the area could not store nor preserve the milk when they had milked. Therefore, the excess milk was just wasted every day. The two entrepreneurs created a system where the collection of the milk was made in accordance with the milking cycle of the Masai women. The dairy has created 20 jobs in itself and has 200 active suppliers who are mainly Masai women in the rural area. I wish all of you could have the pleasure of experiencing these women. While I was talking with them, they were dressed up in traditional Masai clothing and at the same time they carried cell phones around their neck in order to coordinate the day’s milk collection. I was very much impressed by this and my hope is to see more of these success stories created by entrepreneurial, young people in developing countries unleashing their potential.
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Successful business cases are just part of the growth and employment agenda – not the sole solution. Nevertheless, a thriving private sector is the best enabling environment for young people to find employment or start their own business. Sustainable development and durable poverty reduction cannot be achieved without free and well functioning markets. And a thriving private sector also benefits the whole society by creating the economic growth which is a prerequisite for increasing the tax base and thus the revenue to be used for crucial social services needed to achieve sustainable progress on the MDGs in developing countries.

To sum up, as a result of the new development strategy, Denmark will work to increase free trade and market access. We will do our best to encourage the establishment of appropriate frameworks for market-based economic growth with a view to creating employment. We will seek to enhance access to new technology and innovation and increase focus on making production and processing more diversified and income generating within developing economies. Finally, we will focus on strengthening the tax systems that on the longer term will enable partner countries to finance their own social services and development needs.
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In practical terms, many questions arise when having to turn strategy into actions. For instance, what kind of policy and support is needed from donors in relation to strengthening entrepreneurship and innovation? How do we ensure that support to value chain developments also is to the benefit of survivalist or the very poorest in the informal sector? How do we best include the Danish resource base in actions to enhance green growth in developing countries? Well good people, this is where you come into the picture; today so many knowledgeable and engaged people are gathered here. Please take this opportunity and tell us how you believe we can optimize our cooperation with the developing countries when it comes to strengthening private sector led growth and employment.

Of course, we have several ideas within Danida on how we can tackle future challenges and transform strategy into concrete action. But, we would appreciate deliberate inspiration from you before decisions are made. Your advices on how we may adjust our actions and existing instruments – or develop new instruments - have been anticipated since we planned this public debate.
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You could set up more negative scenarios for the African future and for other poor regions. But I am optimistic by nature. For that reason, I choose the optimistic stories – and the optimistic approach. And I do not only believe, but also know for sure that there is potential and will among the young people of Bangladesh, Tanzania, Ghana – and all the other developing countries – to experience freedom from poverty.

Ghana’s football team was unlucky during the World Cup by hitting the crossbar of the goal in the last minute of the match against Uruguay. And the African nations might be hitting the bar again and again during the coming years before finally making the essential goal, metaphorically speaking. However, making it to the quarter finals is not bad at all – in fact, it is half-way. It might take some years before an African country becomes world champion – both in football and in the global economy. But watch out: From Dakar to Djibouti – (and) From Casablanca to Cape Town. You can already feel it – Africa is here.

Thank you very much.