THE key to poverty reduction, or not

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Does having a good business environment help reduce poverty? The Donor Committee for Enterprise Development - a group of aid agencies which support private sector development - recently hosted a debate in Bangkok on the motion: "Business Environment Reform is the Key Element in the Reduction of Poverty". There were around 200 participants from donor agencies, Asian governments, the private sector, and civil society.

Strong views were expressed on both sides, with the Doing Business report indicators being used as shorthand to refer to business environment reform. It was agreed that the DB report had put the issue of the business environment on the political agenda. It was agreed that business environment reform facilitates private sector growth - and that there are opportunities for donor agencies to support such reforms. However, some questioned whether the experience of accelerated growth in say, China or India, had been the result of business environment reforms. There were also questions about the extent to which a reformed business environment would assist the poorest.

A show of hands at the end of the debate showed a consensus against the motion. The sense was that "the key element" was just too much. All of the presentations from the Bangkok Conference can be found online.

Authors

Laurence Carter

Senior Director, Public-Private Partnerships Group

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