Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697633240653.pdf (Australia)
The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific regionSubmission 93 - Supplementary Submission SUPPLIMENTARY SUBMISSION TO THE JOINT STANDING COMMITTEE ON FOREIGN AFFAIRS, DEFENCE AND TRADE SUPPLEMENTARY SUBMISSION TO THE INQUIRY INTO THE ROLE OF THE PRIVATE SECTOR IN PROMOTING ECONOMIC GROWTH AND REDUCING POVERTY IN THE INDO‐PACIFIC REGION, IN RESPONSE TO THE LAUNCH OF AUSTRALIA’S NEW DEVELOPMENT POLICY Introduction In June 2014, The Hon.
Julie Bishop MP, Minister for Foreign Affairs launched the Australian Government’s new development policy, 'Australian aid: promoting prosperity, reducing poverty, enhancing stability’.

Central to the launch of this policy has been an increased emphasis on the role of the private sector in delivering development outcomes.

As articulated by Minister Bishop in her address to the National Press Club, “the private sector is the primary driver of poverty reduction”.
More specifically, and as articulated by the new development policy, Australia’s aid program will focus on: two development outcomes: supporting private sector development and strengthening human development.

Our focus on private sector development reflects the fact that it is the private sector that is the engine of economic growth.

It recognises that people leave poverty when they have the opportunity to develop and use their skills more productively and get a job or a better paid job.
With nine out of 10 of these jobs created by the private sector….. To ensure our aid dollars are used as effectively as possible we will pursue innovative development solutions, including harnessing the capabilities of the private sector to support development1.
In response to the launch of the new aid policy, Business for Millennium Development (B4MD) has put forward this supplementary submission for consideration by the Joint Standing Committee on Foreign Affairs, Defence and Trade given the complementarity between the scope of the Committee’s Inquiry and the strategic private sector focus of the aid policy.
This supplementary submission builds on the recommendations provided in B4MD’s previous submission to the Inquiry and seeks to provide committee members with specific examples of how such policy could be implemented in a way that genuinely supports private sector development while also strengthening human development through the modality of inclusive business.
1 Australia’s new development policy and performance framework: a summary, Australian Government, Department of Foreign Affairs and Trade, 2014 Business for Millennium Development Page 1 of 5 The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific regionSubmission 93 - Supplementary Submission SUPPLIMENTARY SUBMISSION TO THE JOINT STANDING COMMITTEE ON FOREIGN AFFAIRS, DEFENCE AND TRADE Inclusive Outcomes “All new investments will explore innovative ways to promote private sector growth or engage the private sector in achieving development outcomes”.2.
A central element to the future success of Australia’s aid program that seeks to partner more deeply with the private sector is the implementation of inclusive business models that generate mutually beneficial outcomes for private sector actors to flourish, while simultaneously lifting communities out of poverty and ensuring that connections to global markets work in favour of the poor.
To encourage thinking in this regard, B4MD suggests that the committee consider the application of two inclusive business methodologies that have been specifically designed (and put into practice) by B4MD, to achieve these ends.

These methodologies are identified as: i. ii.

LINC (Long Term Inclusive Commercial Enterprise) Inclusive Business 10‐point Checklist The application of these methodologies is of direct relevance to one of the aid programs key investment priorities; agriculture3.
As it has been widely recognised, up to 70 percent of people living in extreme poverty are smallholder farmers and therefore, investing in agriculture is the most effective means to reducing poverty.

Moreover, with most of these farmers being women4, the prioritisation of agriculture and the related food and agribusiness sector provides a close point of alignment with one of the aid program’s high level targets which is to empower women and girls5.

1.
1.

LINC (Long Term Inclusive Commercial Enterprise) The LINC model capitalises on the shared interests of poor small holder farmers and food companies to increase yields, throughputs and incomes, while providing community ownership and voice to ensure human development outcomes.

The development of this unique LINC model has been driven by the market dynamic of growing demand for small holder produced commodities.
This has necessitated food companies engaging directly with poor farmers in the developing world to lift and secure their supply of critical ingredients while also creating sustainable income earning opportunities for these farming communities.

2 Australian aid: promoting prosperity, reducing poverty, enhancing sustainability, Australian Government, Department of Foreign Affairs and Trade 3 ibid.

page 14.
page 14.

4 Hiroyuki Konuma, FAO Regional Representative for Asia‐Pacific, http://www.fao.org/asiapacific/rap/home/about‐assistant‐director‐gen/speeches/detail/en/?speech id=422, 2013 5 Making Performance Count: enhancing the accountability and effectiveness of Australia aid.

Australian Government, Department of Foreign Affairs and Trade.
Page 9. Business for Millennium Development Page 2 of 5 The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific regionSubmission 93 - Supplementary Submission SUPPLIMENTARY SUBMISSION TO THE JOINT STANDING COMMITTEE ON FOREIGN AFFAIRS, DEFENCE AND TRADE On this basis, the LINC acts as the interface and linkage point between the food company and farming communities facilitating the objectives of both groups and ensuring that the needs of both are met.
That is, private sector development and human development.

As a commercial yet not for profit entity, the LINC:  Trains men and women farmers in association with the food company and in so doing addressing gender issues  Sells farm inputs to poor farmers at affordable prices in association with the food company and as a result increases productivity (in conjunction with farmer training).
 Purchases agricultural commodities from the farmers creating a sustainable income stream and thus ensuring the reduction of extreme poverty  Sells & ships agricultural commodities to the food company creating linkages to domestic and global markets.
This direct linkage with food companies through offtake agreements mitigates barriers to market as well as supports private sector development through new procurement opportunities  Reinvests profit into the community for social benefit strengthening human development.

Inherent to the success of the LINC as a not for profit entity is the shared voice that both the farmer and food company have.

For more information see attached LINC overview.
Business for Millennium Development Page 3 of 5 The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific regionSubmission 93 - Supplementary Submission The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific regionSubmission 93 - Supplementary Submission SUPPLIMENTARY SUBMISSION TO THE JOINT STANDING COMMITTEE ON FOREIGN AFFAIRS, DEFENCE AND TRADE How can DFAT foster inclusive agribusiness opportunities in line with the new aid policy?
In accordance with B4MD’s first submission to the Inquiry, B4MD maintains the position that as a government agency it is not DFAT’s role to start inclusive businesses.

Nevertheless the department can create an environment that is conducive to the formation of inclusive businesses.
In this regard, the department can prioritise how it will foster inclusive business opportunities as well as adopt a series of frameworks and methodologies that define the types of inclusive business initiatives that it will support in order to deliver on the objectives and priorities of the Government’s new aid policy.
‐ END ‐ Business for Millennium Development Page 5 of 5 The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific regionSubmission 93 - Supplementary Submission The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific regionSubmission 93 - Supplementary Submission The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific regionSubmission 93 - Supplementary Submission The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific regionSubmission 93 - Supplementary Submission The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific regionSubmission 93 - Supplementary Submission The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific regionSubmission 93 - Supplementary Submission The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific regionSubmission 93 - Supplementary Submission The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific regionSubmission 93 - Supplementary Submission The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific regionSubmission 93 - Supplementary Submission The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific regionSubmission 93 - Supplementary Submission The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific regionSubmission 93 - Supplementary Submission The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific regionSubmission 93 - Supplementary Submission The role of the private sector in promoting economic growth and reducing poverty in the Indo-Pacific regionSubmission 93 - Supplementary Submission