SUBMISSION TO THE INTERNATIONAL DEVELOPMENT COMMITTEE INQUIRY: THE IMPACT OF CORONAVIRUSON DEVELOPING COUNTRIES
The role of the private sector in the COVID-19 emergency in the developing world
Dear Committee Clerk
I wanted to make a contribution to the inquiry on one aspect, the potential role of the UK based private sector to protect developing and fragile countries in the COVID-19 emergency. I appreciate that this is a fast moving picture and there may be Government/DFID actions in the pipeline which make these comments redundant. As a strong supporter of DFID’s work, I hope so.
I retired from the FCO in 2018. I was British Ambassador to Morocco and Mauritania, Government Sahel Coordinator, Head of Mission in Democratic Republic of Congo, and Ambassador to South Sudan. For my last year I was Senior Trade Advisor on Africa based in the FCO. I spent much of my earlier career on trade and investment promotion and so am familiar with the challenges of communication between Government and business, and of business views on working with Government. I have worked extensively with DFID and am a strong supporter of their and the Government’s leadership on the international response to the COVID-19 outbreak.
The argument for UK assistance to developing countries in the crisis is overwhelming from botha a moral point of view and on the basis that the UK is a major donor to developing countries. Government agancies working with business is alos directly in line with the UK’s commitment to United Nations Sustainable Development Goal 17 which refers to– partnership with the private sector.
I would wish to draw the Committee’s attention to one particular challenge. If the UK is fully to mobilise nationally in helping developing countries defend themselves against the virus, it will need to deploy rapid and effective coordination with private sector actors. The speed of the crisis and the urgency of the need are likely significantly to test the current methods of communication between Government and business, which are tenuous. There will also be real capacity challenges in the private sector.
What is likely to happen
There has of course been a significant global international reaction to the crisis. Emergency planning in the UN and WHO has been running for several weeks as it has in Government and donor agencies. Significant funding decisions on vaccines, countermeasures and debt relief are already in place. What we in the private sector assume is happening in Government and multilaterals (though we don not know in detail) is the design of a set of sub-strategies to protect regions and countries, especially in the developing world. Obvious priorities are the provision of kits, PPE, ventilators and medicines. We must also assume that there will be major programmes for emergency hospitals, reception centres and morgues. I focus on this last category – concrete projects which need well organized and speedy organization..
According to normal humanitarian and donor behaviours, donors will either directly contract these projects out, or possibly in some cases directly undertake actions, for example using military assets. There will be significant capacity issues, not least given that both donors and contractors will be dealing with the crisis in their own countries, though we might hope we will soon be able to spare more physical resource for developing countries, assuming of course the politics allow it.
There are also significant (and to be calculated) capacity shortfalls at all levels of the private sector response. There are simply not enough globally operating contractors, engineering companies and providers of materials, or sufficient quantity of equipment.
There will need to be strict coordination and prioritization to produce an effective response, which in all likelihood will be imperfect.
What is the problem?
The UK, not least given its excellent relationship with OCHA is well placed to lead at the top donor level, but there are real challenges in identifying private sector players for concrete projects. DFID normally only has private sector links with companies with a development vocation. This crisis needs a far wider effort in locationg suppliers of a whole range of skills and kit, in construction, hospital equipment and specialist consultancy. Existing links with approved DFID suppliers such as major consultants will assist but will be inadequate in this task.
There is therefore a high risk that there will be an inadequate international response in providing developing countries with physical defences in the fight against COVID-19; and a considerable risk that HMG will not be able to identify and approach key UK based suppliers at speed.
Part of the problem and challenges stems from the UK’s international and quite diverse business base. UK based consultants are international. There are very few contractors of size. And much of the supply chain companies are very global but are not culturally drawn to the supply of multilaterals (e.g. many are not registered with the UN or EU). Nor do many feel much affinity for dealing with HMG or in particular DFID. The same does not apply to most major international partners (France, Germany, Netherlands, US etc) who have more easily identifiable players and stronger institutional and personal connections with Government..
Suggested actions
There should be a simple official structure, a team with a mandate to recruit actively, stripped down bureaucracy, and a business facing culture..
DFID has best in class world reputation. There should be no difficulty in getting business interest in participating in an emergency group or supply chain, provided it is fast and responsive. A team should ideally be staffed by those such as DIT advisers who come from the private sector and are capable of aggressive cold calling. There should be a 100% rate of response to emails.
There may be an argument for a cross Whitehall group, or this work being subcontracted to another Department. DIT is the obvious one. The bottom lines should be speed and focus.
There should be no reason to hesitate on the basis that these actions favour UK companies in contravention of OECD rules. Companies approached in the UK would in many cases be foreign owned and there is no reason not to choose the best global systems and subsystems. There may be the need to look at the UK Export Finance 20% UK content rule in providing cover but this should be exceptional.
Conclusion
The likely serious damage caused to developing countries from the coronavirus will stretch global supply as it will local capacity. Major capacity difficulties leading to high loss of life is virtually inevttable. But for the UK to mobilise the private sector to the best of its abilities, there needs to be an urgent and extensive push to identify suppliers of the whole range of products and services needed. Those Government- business links are currently sketchy. They need to be built quickly.
Tim Morris
Tim Morris Consulting Limited
Tel: 0744 447 3687
22 April 2020