With the G7 finance and international development ministers set to meet this week in British Columbia, Canada aims to establish ways on how to woo private sector players to invest in developing countries.
In a report for the Canadian Press, the federal international development minister Marie-Claude Bibeau expressed hopes that the meeting would be able to help Canada devise a better strategy to attract private capital as a way to boost the inadequate levels of foreign aid.
G7 members including the United States and the United Kingdom have long started working on strategies to attract more private capital into developing nations. Canada, on the other hand, was the last G7 country to establish a development finance institution to operate alongside its government-run foreign aid program.
Bibeau said new and innovative ideas on how to get support from the private sector would be beneficial to ensure that the international community will be able to meet its overall targets on eradicating poverty.
She said investments from donor countries will have to be between $5 and $7tn in order to achieve the planet’s sustainable development goals by 2030. Last year, only $147bn was raised.
“We have to go from billions to trillions, so we know that if we only count on those donor countries, such as Canada and the G7 countries, we will never end poverty. So, we really have to think differently and bring new partners on board,” Bibeau said.
However, some argued that it would not be easy to lure private players to allocate some of their capital into developing countries.
For Memorial University of Newfoundland development expert Liam Swiss, while the government’s intentions to encourage private sector investors to get involved is admirable, it would be difficult to see whether players will be interested. Swiss said firms’ main goals remain focused on where they can generate profit.
“They’re profit-driven, so you can have a good corporate social responsibility, but at the end of the day, the things that matter most is what their shareholders can yield in profits,” Swiss said.
He added: “In terms of new and innovative ways to bring that about, I’m a bit at a loss in terms of what the G7 could offer to firms to encourage their partnership and their investments in these ways that haven’t been tried before.”