The UNDP Round Tables and the private Sector: an issue Paper

This document investigates the possibility of using "Round Tables" to encourage external private flows and to promote the development of the local private sector.

The main findings are as follows:

• LDCs have not benefited as much as other developing countries in the dramatic increase in private flows that took place during the last decade
• LDCs in general, and Round Table countries in particular, will remain dependent mostly on aid funds for their external resources in the foreseeable future
• Private sector representatives in Europe confirm that the economic policy of a developing country, and its policy vis-à-vis the private sector, will be for them a major determinant in deciding whether to invest. They indicate that the policies that will encourage foreign capital to come in are not in fact different from those that will promote the indigenous private sector
• UNDPs experience in using the Round Table process to develop private flows and promote the private sector has been limited and unsystematic, but reasonably positive so far. It shows, however, that this mechanism can be successfully used for this purpose. Nonetheless, one should not expect any immediate increase in foreign investments from this process

• The co-ordination and mobilisation of public aid should remain at the centre of the Round Table process
• While keeping the Round Table process centred on policy dialogue and the mobilisation of aid funds, active steps should be taken to also use this instrument to encourage private sector development and foreign private investment
• UNDP should organise a short meeting on and for the private sector to try to link investors with key officials
• All meetings must be thoroughly and accurately documented
• A follow up meeting should be arranged in the country in question with the same investors and officials involved
• The preparation of the documentation for all these meetings should be done in consultation with the private sector
• In using the Round Table process to encourage foreign capital flows, UNDP should not focus exclusively, or too narrowly, on expatriate firms. The policies that will attract, or discourage, foreign capital are the same that will influence the development of the local private sector.
• To assist the recipient governments in preparing their policies and documentation for the promotion of the private sector, UNDP should develop a pool of competence. This would include specialised agencies and consultants. The expertise required concerns the preparation of policies - and not the identification and preparation of projects, an approach that has not led to satisfactory results. The role of these experts should go beyond the preparation of documents for a Round Table meeting, and include policy advice and capacity building in the government.