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Centre of African Studies

ABG Reports and Presentations

Gavin McGillivray', "DFID's Private Sector Work & Plans", 20 October 2011

Is Bad Investment Better Than None?

Gavin McGillivray spoke with great clarity and enthusiasm about DFID's new private sector department. The talk was extremely informative - it gave the audience a sense of DFID's interests in facilitating major infrastructure investment deals, in reducing risks for investors, and indeed in stimulating the provision of services by private sector actors, for example in contexts where state provision has continued to fall far short of needs. Gavin's talk provoked a range of questions and some debate. For example, some questioned whether supporting provision of mobile phones was a sensible use of resources when the poorest often cannot afford mobile phone payment plans. Some suggested more resources should go to strengthening state capacities for service provision, though Gavin replied that DFID both continues to do this and at the same time aims to address the interests of those who have poor, or no, access to services and that this may be achieved through whichever means is most efficient and effective. Most people, though, did seem to agree with the fundamental emphasis on reducing poverty through supporting the expansion of economic activities and investments that create jobs. Where there was discussion was over the sense - which some in the audience had - that DFID sees the private sector as an alternative to the state, while the record of economic development history has been one of a relationship between state and private sectors (in Korea, in China, and so on). There was also concern that the useful focus on stimulating employment as the source of poverty reduction should not ignore the issue of the quality of jobs and the role for support for the rights and 'voice' of workers. Gavin agreed with this but - in the sharp phrasing that brought the discussion to a close - argued that African poor countries have suffered more from the lack of investment than from bad investment. [Prof. Chris Cramer]