We believe that just as in the U.S. where small businesses serve as the economic engines of our communities, they too will serve as the accelerators of their developing economies. U.S. partnerships with private sector organizations should therefore extend beyond those with multinational corporations to local small and medium sized enterprises (SMEs). MFAN believes that many of the aid effectiveness priorities it endorses may be applied to supporting the growth of local and regional businesses in developing countries.
Especially at the points of early support for and seeding of new businesses, USAID can and must strengthen its partnership role. MFAN commends USAID leadership for creating a Private-Sector Engagement Policy (PSE) and more recently its implementation policy for this vision, PSE Modernize. We endorse systems change within USAID that foster the enabling environment for the creation of SMEs, including women and minority owned businesses, such as through USAID’s new Local Capacity Strengthening Policy and accountability mechanisms – transparency, monitoring, evaluation, and learning. USAID can accelerate this work with staff who bring business experience and entrepreneurial knowledge for direct engagement with USAID missions and local partners.
Along the development spectrum, other U.S. foreign assistance agencies including the Millennium Challenge Corporation (MCC) and the U.S. International Development Finance Corporation (DFC) will be able to provide additional capacity strengthening, infrastructure growth, and equity and investment financing. As these partners move along this spectrum with a growing and thriving local and regional private sector, we anticipate a more rapid acceleration out of poverty for their citizens and their engagement in new forms of partnerships with the U.S.