Public Private Dialogue PPD

1
Public Private Dialogue (PPD)

• International Lessons of Experience
• John Speakman

2
Key Messages

• Public Private Dialogue is a key foundation for
  growth and its time has come
• This is about Win Win
• Private sector wins because it grows and makes
  money
• Public sector wins because growth strengthens its
  fiscal situation and jobs are created
• Success breeds Success
• BUT implementation is key its better to do
  nothing than promise policies and not deliver
  them

3
What is PPD

• Its a positive enhancement to the growth process
• Indias National Competitiveness Council has
  identified the involvement of industry in the
  process and formulation and implementation of
  their industrial policy as a key policy for
  achieving spectacular manufacturing sector growth
  IT IS RECOMMENDATION NUMBER ONE!
• Its not PPP as applied in India
• Its a process of dialogue that identifies
  possible complementarities between public action
  and private sector objectives, and thereby
  maximising the effectiveness of public policy for
  business development.

4
Context The sad case of UPs manufacturing sector
5
Some PPD observations

• Its nothing new
• its been happening since civilization began and
  its always been tricky
• The East Asian miracle
• the tigers is often attributed to very
  effective PPD the state, academia (think tanks)
  and the private sector worked very well together
• Its found in one form or another in most
  countries it already exists in UP
• It has struck me as someone who has worked in 30
  countries the rich industrialized countries,
  middle income countries and the poor as a huge
  gap in India and a lost opportunity

6
Examples of Policy Success
7
Why do the best performing states want to get
better?

• Mexico the case of Aguascalentes
• The private sector and public sector sat down and
  agreed
• to focus efforts on improving competitiveness
• to consult when new taxes and levies are
  introduced
• to measure progress (through Doing Business
  Indicators)

8
How is it that Bangladesh is seriously looking at
becoming a middle income country in the next
decade?

• An evolving process of strengthened dialogue
• It began informally a joint working group with
  three dedicated work groups
• Regulatory reform
• Special economic zones provision of serviced
  appropriately located industrial land
• Capacity building
• Now the dialogue is institutionalized in the
  Bangladesh Better Business Forum
• "We will not allow this forum to become a talking
  shop. We shall rather emphasize result-oriented
  decisions and output. Elaborate mechanisms will
  be put in place to monitor the implementation of
  our decisions." -Chief Adviser

9
Key BBBF activities include

• Promoting an effective public-private dialogue to
  improve the business enabling environment.
• Removing barriers impeding business operations.
• Providing feedback on various Government
  policies, laws, and regulations affecting the
  private sector.
• Promoting consistent enforcement and
  non-discretionary interpretation of laws and
  regulations.

10
The path to sustainability
11
Requirements for effective PPD

• A strong public sector combined with political
  will and leadership
• A well organized and led private sector, which
  does not fear retribution from government when
  speaking out
• A highly visible champion that can attract the
  attention of participants and media
• Instruments to make it happen seed funding,
  logistical and personnel support

12
(No Transcript)
13
Bosnia Herzegovina A case study
14
(No Transcript)
15
(No Transcript)
16
In UP many of the conditions needed for serious
and effective dialogue are in place.

• The Government bureaucracy is strong by
  developing country standards and is led by a
  cadre of high caliber IAS civil servants.
• The private sector is represented by a number of
  well organized Business Membership Organizations
  (BMOs) who are also active in the high growth
  states, e.g. Indian Industries Association,
  Confederation of Indian Industries, PHD Chamber
  of Commerce and Industry
• The new Government is already championing some
  significant private investments. It would be
  consistent for them to champion this effort.
• There is a strong willingness to support such an
  endeavor from the private sector side, and the
  donor community will also support the initiative
  with seed funds.

17
UPs initial conditions for investment are sound.

• UP in itself is a huge market. It is the bread
  basket of India.
• UP is a large state, indeed if it were a country
  on its own with its population of 170 million it
  would be the 5th largest country in the world.
• Because of its size and history it has some
  powerful facets that can be incorporated in the
  dialogue the IIM in Lucknow, the IT in Kanpur
  and a plethora of biotechnology institutions.
• It has one of the Worlds leading tourist
  attractions, the Taj Mahal, the center of one of
  the Worlds leading religions, Varanasi.
• There is close proximity to Delhi and so on.

18
Why hasnt PPD developed in India?

• The relationship is often perceived as Principal
  Agent the private sector does what the planners
  say
• Lack of trust
• the private sector are a bunch of .
• the Government doesnt care about the private
  sector
• Rent seeking
• NOW as India professionalizes and modernizes this
  concept has a chance and can make the difference
  at the state level
• Some formal and informal dialogue at the federal
  level which has been effective

19
Some core challenges / success factors -
IMPLEMENTATION

• Credibility commitments need to be followed
  through on build trust
• Good policies without implementation are worse
  than no policy at all
• Sustainability Keep it going
• Focus on the long term agenda
• Some quick wins wouldnt hurt
• Keep it positive this is not about hand outs or
  venting space
• do not just complain but suggest solutions
  Vietnam
• Tailor it to your own circumstances your own
  strengths
• Use your academic endowments academics can play
  the role of honest brokers

20
Risk Mitigation strategies for PPD
21
Benefits of PPD

• SENDS a strong message of predictability to
  investors.
• Government credibility with business is more than
  other political variables, a statistically strong
  measure of economic performance
• MAXIMIZES the impact of Government policies to
  support the private sector,
• because the private sector will be included and
  will therefore be less cautious and less likely
  to evade their impact.
• LEADS to better policies, policies that are
  relevant and well designed.

22
Some follow up resources

• http//www.publicprivatedialogue.org/
• http// www.nmcc.nic.in
• http//www.rru.org
• http//www.bbbf.org.bd
• jspeakman_at_worldbank.org
• dpurkyastha_at_worldbank.org
• pdasgupta_at_ifc.org