Statement by Ambassador Hamamoto
World Business Council for Sustainable Development (WBCSD) Panel Discussion
Montreux Music and Convention Center (2m2c)
Tuesday, April 12, 2016
– As Prepared for Delivery –
Thank you, Irge. And thank you to the World Business Council for Sustainable Development for inviting me to take part in this discussion. Irge talked about a “journey.” And in his remarks Nigel took us on a journey – the journey to Paris and an historic agreement to combat climate change. That journey is far from over.
The challenges we’re facing today are complex and interconnected. I think it’s safe to say that no one here believes there are quick and easy solutions. Today’s challenges require all of us – government, business, and civil society – to work together. When our aspirations are to end poverty, to end hunger, to achieve gender equality, combat climate change, promote peaceful and inclusive societies – to name just a few of our goals — then it is clear we need multi-stakeholder solutions.
You mentioned having momentum…the adoption of the Sustainable Development Goals and the Paris Agreement suggest that we’re making rapid strides in the right direction. There is momentum for a new global model of engagement. Many of you have been working hard to change the narrative…to dispel the common belief that we have to choose, for instance, between economic growth and mitigating the effects of global warming. Evidence suggests that contrary to popular belief, this isn’t the case. Our choice is not better growth versus better climate, and it’s certainly not government versus the private sector.
Which is why under President Obama’s Administration, public-private partnerships have become a priority across federal agencies. And it is why experts from all over the world gathered in Geneva just 10 days ago at UNECE’s International PPP Forum, to discuss the many ways PPPs will be utilized to achieve the SDGs. This shows how much we’ve moved from a rather narrow financial model for transferring project risk to the private sector, to a real holistic ‘development’ model involving government, business, and civil society.
It is easy to see that the US Government strongly believes that our broad objectives cannot be achieved without a vibrant and robust private sector. This isn’t new. USAID has partnered with the private sector since its founding in 1961, and the agency is currently aggressively pursuing a model of development that prioritizes partnerships and leverages the unique skills and capabilities of the business community – such as Feed the Future and Power Africa. And today, more than 90% of the financial flows from the United States to the developing world are from private sources, rather than official development assistance.
Governments have a very important role to play — establishing guidelines, policies and regulatory frameworks to create enabling environments, and providing accountability and enforcement mechanisms. But we look to the private sector to provide innovation, job growth, investment capital, management expertise, execution capacity and market-based solutions.
Of course, for these partnerships to work, we need strong contractual agreements and alignment between business interests and development objectives. And we need increased transparency, to show the world that when structured properly, these public-private partnerships are incredibly powerful tools for addressing today’s most intractable development challenges.
I would like to quickly give you a flavor of the types of public-private partnerships the US Government has entered into — PPPs which are critical mechanisms for enhancing the development work of the United States. I’ve broken them down into three categories: PPPs that disrupt, transform, and cut across markets.
Disruptive Public-Private Partnerships
Let me start with the first category: the disruptive public-private partnerships.
WBCSD Chairman, Paul Polman, said that “When the climate hurts, people and businesses also feel the pain.” We are already seeing this happening, and that’s why Mr. Polman teamed up with other global companies, governments, and civil society groups as members of the Tropical Forest Alliance 2020.
The U.S. Government launched this effort four years ago in conjunction with the Consumer Goods Forum, an association of over 400 consumer goods manufacturers and retailers with over $3 trillion in annual sales. Their goal is to eliminate deforestation by producers of palm oil and other key commodities – like soy, paper and pulp, and beef. And the clock is ticking: Every year, the world loses 15 million hectares of tropical forest to unsustainable logging, slash and burn subsistence farming, and clear-cutting for commercial agriculture.
This partnership is a disruptive market force, reimagining the relationship between agribusiness and forests. In Brazil, for example, partners are helping retailers and manufacturers work with commodity traders to source sustainably-produced soy. In Indonesia, the Alliance is working with smallholder farmers to help them meet new sustainability standards for palm oil production, while the government, palm oil companies, and civil society groups are working together to set aside intact forest and shift future commodity production to degraded lands.
Getting countries to put land use regulations in place that encourage this type of investing and ensuring businesses have the technical capacities to meet such sustainability standards can be challenging. But while all of this may be difficult, it is the only way forward to make real progress.
PPPs have also been transforming markets. Take the Global Alliance for Trade Facilitation, an international public-private sector coalition whose goal is to streamline border management in developing countries through implementation of the new WTO Trade Facilitation Agreement.
This is the first new multilateral agreement in the 20-year history of the World Trade Organization, and there’s a lot at stake. According to the OECD, trade-restrictive border procedures raise total trade costs by up to 17.5 percent. Reducing these costs can deliver tremendous benefits. Estimates show that even a one percent reduction in global trade costs will increase worldwide income by more than $40 billion, most of which would accrue to developing countries, and 20 million jobs could be created by the implementation of the Agreement.
This agreement provides a unique opportunity to enable trade as a central driver of development, but it won’t happen unless the private sector is involved. It is the private sector that has deep understanding of local barriers, broad awareness of value-chain needs, and the incentive to master the details of effective reforms. That’s why USAID – with support from the Office of the U.S. Trade Representative – played a leading role in the formation of this Global Alliance. Our partners include Australia, Canada, Germany, and the UK, but also the ICC, the World Economic Forum, and the Center for International Private Enterprise.
This public-private partnership is a win-win alliance. A win for companies – in particular small and medium sized enterprises (SMEs) — which will gain better access to global markets, and a win for governments, which will benefit from economic growth, job creation, and increased revenue.
A Holistic Approach
The last type of public-private partnership I want to address today cuts across markets. These PPPs recognize that most of the challenges we’re facing today are interconnected, requiring a holistic approach, and Geneva is a natural place for these partnerships. Geneva will drive implementation of the 2030 Agenda for Sustainable Development. So when the U.S. and its partners created the Global Community Engagement and Resilience Fund almost three years ago, they of course decided it should be based in Geneva.
GCERF is the first global effort to harness the skills, capabilities, and resources of both the public and private sectors against violent extremist agendas. And it makes a lot of sense: Terrorism – and the violent extremism that underpins it – not only destroys innocent lives around the world, but it also affects businesses globally. It disrupts markets and supply chains that businesses depend on, and the communities that comprise the local labor market.
GCERF recognizes the critical role of local communities as part of a comprehensive, “whole-of-society” approach to countering violent extremism. As UN Director-General Michael Møller said last week, “Providing sustainable development opportunities, reducing inequalities, safeguarding human rights and providing a hub for mediation and peace negotiations, help to create a context and change realities on the ground that are better suited to resist extremism.”
[Changing realities on the ground is also the goal of the GSMA Connected Women Program, a PPP launched by USAID with the Global Association of Mobile Operators, Australian Aid, Visa, AT&T and others to increase female participation at all levels of the digital economy. In practice, this means providing 150 million underserved women access to cell phones. Information and communications technologies are enablers across all SDGs. Internet connectivity, for example, is as fundamental to economic development as roads, electricity, and other traditional infrastructure. And yet today, 60% of the world’s population doesn’t have internet access.
That’s why last September, Cathy Novelli, U.S. Under Secretary of State for Economic Growth, Energy, and the Environment launched Global Connect, an initiative to catalyze multi-stakeholder action to bring 1.5 billion additional people online by 2020. This is an extremely ambitious goal with profound economic and developmental implications for the world, and it can only be achieved if we work closely with global partners. We’re looking to businesses for great ideas and innovations to reach this goal.]
I started off by saying that that no one here is expecting quick and easy solutions, yet there is an increasing sense of urgency driving governments, business and civil society to act together. Whether they disrupt, transform, or cut across markets, public-private partnerships give us an opportunity to learn from each other, to leverage off each other’s strengths and to achieve results that would be impossible without such collaboration.
One last thing: The U.S. Government will host the IUCN World Conservation Congress in September in my home state of Hawaii, bringing together Heads of State, policy makers, CEOs, civil society leaders, along with thousands of stakeholders, to focus attention on the global conservation and sustainable development agenda. Business Leadership for the Environment will be one of this year’s priority themes. The conference will explore opportunities for large scale conservation investments through innovative financing mechanisms. It will emphasize the importance of natural capital and how business can understand their impacts and dependencies on nature. And it will showcase business commitments and successes, as well as highlight the barriers and challenges that must be addressed. I strongly encourage all WBCSD members to attend. This is an opportunity to move global agreements into action and – as for all the PPPs we discussed today – a chance to make the voice of business heard.
Thank you for your attention.