Private enterprise was responsible for turning Britain from a 19th century agrarian economy into a leader of the industrial revolution. Individuals invested in their ideas, developed businesses, employed others and paid taxes. The benefits spread through communities, enabling others to do the same and providing government with funds to invest in infrastructure, education and healthcare. This model was repeated across the Western world. It works. So why are we not now applying these proven methods in our attempts to help the developing world?
Nirj Deva, our Development Spokesman, is proposing that we do just that. In a report being presented to the European Parliament next week, he argues that traditional aid will never be sufficient to ensure that our sustainable development goals are met. Instead, the EU should work in partnership with local businesses to help them flourish and drive the economy.
Until now, the EU has not entered into public-private partnerships outside of infrastructure projects, but we are advocating a much broader approach while avoiding the kind of over-regulation that would exclude many small and medium-sized firms.
As countries grow wealthier, they become more attractive for private sector investors and a virtuous circle is created. It is not just about supporting individuals and businesses. Money should be used to create an environment in which private enterprise can flourish by developing markets and building up the financial sector.
The Private Sector and Development Report, which we hope will be backed by MEPs on Thursday, builds upon a report steered through the European Parliament by Nirj in 2014, which called for aid to be targeted at securing property rights in developing countries, where people traditionally have no legal claim to their house and land. Consequently, they cannot use them as security against loans, trapping them in poverty.
The underlying principle in both cases is one of enabling individuals, communities and countries to help themselves. Of course this is not a new idea, simply an application of the old adage that if you give a man a fish you feed him for a day, but buy him a rod and he can feed himself for life.
Ashley Fox is an MEP for South West England, and is the leader of Britain’s Conservative MEPs. He has kindly permitted this publication. You will find the original article at conservativehome.com.