One year ago, we launched the Private Sector Partners Coalition for the Future of Latin America and the Caribbean, a historic alliance of leading private companies. The Coalition represented the Bank’s ambitious approach to tackle an expansive new work model for partnering with the international private sector to advance development goals. It demonstrated our conviction that corporate innovation, risk-taking and leadership will be essential to the post-COVID-19 recovery and future growth of Latin America and the Caribbean. In one year, our Coalition has quadrupled in size, from 40 of the world’s agenda-setting corporations to more than 160 – from “multilatinas” like Mercado Libre to Google and Telefónica, and from Microsoft to Salesforce, Amazon and PepsiCo.
It builds on the belief that private-sector resources are critical to fill the region’s development financing gap; indeed, by some estimates, there is more than $35 trillion in private capital waiting for the right ESG investment opportunities. It is also a testament to our belief that partnerships are the best vehicle for engaging these companies as drivers of the sustainable development we are working to achieve.
As part of our efforts to ensure momentum for the Coalition, participating firms are active across four working groups focused on: value chains and nearshoring, digital transformation, women’s empowerment, and climate change and sustainability. And over the course of these 12 months, we have learned a great deal about how to strengthen ties with partners, how to attract new allies, and how to work together more effectively and creatively. President Claver-Carone described these efforts, specifically in regard to our goal of advancing digitalization, during a recent event with our partners at the Atlantic Council.
Here are three key lessons from the experience so far:
- Vision is everything.
The Coalition is centered around the Bank’s five pillars of Vision 2025, the areas our experts identified as the most catalytic drivers of sustainable, inclusive growth: regional integration, digitalization, small and medium-sized enterprises (SMEs), gender and diversity, and climate change. This strategic focushas enabled us to communicate our agenda clearly and consistently to our stakeholders. And it operationalizes the fact that, in a time of limited resources and competing needs, the IDB has the insight to prioritize what has the greatest impact. By emphasizing these five pillars, our partners know where we stand, what we believe is most critical to recovery, and the concrete opportunities they can support in the region to make a difference.
This model has helped us generate exciting new collaborations. For example, we expanded our partnership with Microsoft to add a new “red flags” feature to our InvestmentMap initiative, a platform that brings transparency to public spending. The feature helps alert government teams about potential fraud issues. In addition, in 2021, a new partnership with Citi Innovation Labs deployed blockchain technology to facilitate cross-border payments from the United States to the Latin America and Caribbean region. And throughout the year, we worked closely with companies like AB InBev, PepsiCo and others to empower the region’s tiendas de barrio,or “mom-and-pop shops,”with digital technologies that can help them survive and prosper.
2. Diversity in partnerships brings diversity in solutions.
The Coalition has taught us that not all partnerships are created equal in size, scope or nature. Not all partners have the same ways of working, the same bandwidth for engaging in collaborations, or the same plan for their role in supporting the region’s recovery. Yet these differences are what bring diversity to our partnership network and enrich our interventions in exciting ways.
Consider our work with Google. We worked with the company to support an effort led by the Jamaican government to integrate people lacking physical addresses into the country’s new national identity registry. The partnership is leveraging Google Maps’ unique reach and technology to foster inclusion in a way a financial contribution could not. In areas like digitalization – where closing the connectivity gap between our region and more advanced economies could boost GDP by 7.7% – tapping into the non-financial strengths of the corporate sector can help us make significant progress toward improving lives.
3. The private sector is an eager agent of change. We should empower them as such.
Finally, the Coalition has revealed the extent to which the private sector has evolved. Businesses have recognized the importance of looking beyond profit and instead operating as corporate citizens that create jobs, generate revenue, and leave behind a positive social and environmental footprint everywhere they operate. The Coalition, and the more than 160 companies that have joined, are living proof of this evolution and evidence that the private sector can be an eager agent of change, while working alongside us to make their own work more sustainable.
Indeed, in the last year, the IDB and its private-sector arm, IDB Invest, have mobilized record levels of support from our private-sector collaborators, devised some of the most innovative private-sector partnerships in the IDB’s history, significantly grown our network of private-sector allies and deepened ties with key partners like never before. This is, in part, because the Coalition has inspired private entities to take action. But it is also because the Coalition has tapped into the private sector’s desire to support our region in this critical time and the innate sense of responsibility companies feel for investing in our communities and planting the seeds for inclusive prosperity.
The IDB and Mastercard have worked together for many years, in areas including sustainable urban development, migration and SMEs. But the Coalition provided a platform for strengthening the company’s engagement with teams from across the Bank and for capturing Mastercard’s insights on the priority areas of our Vision 2025.
Oracle is a new ally for the IDB. Inspired by our goal to double down on digital transformation as a conduit for public-sector efficiency and economic growth, the company chose to partner with us through the Coalition to explore exciting new opportunities together.
With this lesson in mind, development institutions should take all possible steps to empower private actors as agents of change. This includes providing them with flexible partnership and financial instruments that easily enable them to support the region, understanding and adapting to their unique ways of working, guiding them toward investment and partnership opportunities that can generate the greatest impact, and bringing them to the table as allies as we brainstorm solutions for improving lives.