“Only Private-Sector Investment Can End Extreme Poverty” — Raj Shah Tells CGD

USAID Administrator Raj Shah has called for “massive private and commercial-sector investment” in development as imperative to ending extreme poverty. Dr. Shah, whose five year leadership of America’s international development agency ends next week, urged the development community to do more to bring forth large sums of private capital for much-needed infrastructure projects in developing countries.

Speaking to me in a CGD podcast, Shah pointed to major initiatives such as Power Africa and Feed the Future, implemented under his stewardship, as successful examples of mobilizing private-sector money for public development gains. Shah described the increased use of public-private partnerships as a new model for development that had been one of the key successes of his time at USAID.

But new and more public-private partnerships, he stressed, were essential to the future of global development. “We need private-sector partners making investments, for commercial return, but real investment. And we need governments, like the United States government, and institutions like USAID being the conveners that brings people together to get the job done,” said Shah. Without public-private partnerships, he warned, it is “hard to see how we mobilize lots of additional resources for the things most critical to create inclusive growth around the world.”

Here at CGD, we are focused on this summer’s Financing for Development Conference in Addis Ababa, Ethiopia, as a key moment to galvanize private-sector resources. In our podcast, Shah would not reveal if the United States plans to make any specific proposals at the event, but he said it would be a chance for the country to be “much more effective and aggressive” at increasing private-sector investment in development projects. Watch what Shah says about the Addis event here; below you’ll find links to the full podcast, available both as video or audio only.

Before I sat down with Shah I asked you for suggested areas of questioning. Thanks to those who responded — I incorporated some of your thoughts when I asked about local ownership versus centralized control, and when I asked about things that have not gone so well. In particular, I wanted to know what lessons he’d learned from the Global Health Initiative, a potentially huge project that has fizzled. I’d love to hear your reactions when you hear how Shah answered that question!

Shah leaves his job next week after five high profile years at the helm of USAID. He gave few clues about what lies in his future — but obscurity certainly does not. Click these links to listen to the podcast or watch the full video.