This significant increase in private investment comes at a good time. The cost of addressing the world’s most urgent development challenges outlined last year in the 2030 Agenda for Sustainable Development is in the trillions of dollars. Compare that to the estimated USD135 billion per year in total global aid flows.
Development finance institutions like the U.S.-based Overseas Private Investment Corporation (OPIC) were built on the understanding that the challenges the world faces are greater than any government can address on its own. They also reflect the conviction that business can serve as a force for good in development. OPIC works to mobilise private capital to support entrepreneurship and expand access to housing, education, financial services, energy and more.
Among the many measures of success — from the health clinics that serve people in remote African villages, to the financial services that support entrepreneurs in the Middle East, to the mortgage loans that have helped low-income families build affordable houses around the world — the creation of good jobs in the developing world, including in some of the world’s poorest countries, is catalytic. The new projects OPIC supported just last year are projected to create almost 20,000 permanent jobs and an additional 37,000 temporary jobs in Latin America, the Middle East, Africa and Asia. These jobs respect internationally recognised workers’ rights. They typically pay more than the local standard, and they provide significant opportunities for highly skilled labor as well as unskilled labor entry into the formal work force.
Supporting major infrastructure projects, such as airports, hospitals and power plants, creates construction jobs that come with strong occupational health and safety standards. We also support projects that provide financing to entrepreneurs and small businesses. When businesses can access capital, they can grow. And when businesses grow, they create jobs.
In addition to the projects OPIC supports directly, we provide support for emerging market private equity funds, which in turn invest in local businesses. Over the last decade, for example, the companies of OPIC-supported investment funds have created almost 25,000 new jobs.
All this is not without challenges. In creating these jobs, businesses can sometimes face obstacles in striving to achieve high environmental and social standards in regions that may not have a strong regulatory foundation and rule of law. In addition, some of these jobs may call for specific skills that can require businesses to provide additional training in order to bring the local workforce up-to-speed.
Nonetheless, at a time when about half the world’s population lives on the equivalent of USD2 a day, the critical role that jobs play in advancing development cannot be overstated. For a country, jobs bring economic and ultimately political stability. For an individual, a job means more than an income. A job brings self-respect, independence and choices. A job brings family stability. And a job brings empowerment, especially for women and young people.
In agreeing to the 2030 Agenda for Sustainable Development last year, the global community recognised the importance of jobs when it included “full and productive employment and decent work for all” among the 17 Sustainable Development Goals. In reality, jobs are key to achieving many of the development goals, from eliminating hunger and poverty to advancing gender equality. OPIC’s work with the private sector underscores that business can be a force for good promoting opportunity in the developing world through job creation.