Public-private partnerships: lessons on tackling socio-economic challenges in Central America Public-private partnerships: lessons on tackling socio-economic challenges in Central America

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Jonathan Fantini-Porter, Executive Director and CEO , Partnership for Central America (PCA), Isabella Blosser, Senior Advisor , Partnership for Central America

• Public-private partnerships in emerging economies have the potential to address transnational challenges such as migration, climate change and conflict.
• The Partnership for Central America can serve as a case study for best practices.
• The organization has channeled $3.2 billion in investments with the goal of creating one million jobs and economically enable 20 million individuals.

When done right, public-private partnerships can overcome structural barriers in frontier and emerging economies and take on systemic challenges such as migration, climate change and supply chain disruptions. The Partnership for Central America (PCA) is a case study of one such effort with lessons for similar economic growth efforts globally.

Launched in 2021 with US Vice President Kamala Harris and private sector partners, including the World Economic Forum, PCA is working to promote investment and advance economic opportunities and environmental resilience in northern Central America in order to address the root causes of migration.

With a coalition of more than 100 leading private and public entities, PCA has mobilized $3.2 billion in investments with a 10-year goal to create one million jobs and economically enable 20 million individuals.

Our mission is grounded in a clear set of challenges. As much as 30% of the population of the region lives in extreme poverty, homicide and femicide rates are among the world’s highest and climate disasters have decimated as much as 80% of some of the region’s crops in recent years.

At the same time, the region also has clear trade, geographic and human capital advantages. It is 2-5 days shipping time from ports in the US compared to an average of nine days among peers; 50% of the labor force is below 39 years old; and existing free trade agreements create favorable trade conditions for business partners in the US, Europe and elsewhere.

In this context, PCA has shaped a set of public-private partnerships that cut across climate disaster risk, regenerative agriculture, gender parity, and digital and financial inclusion to support job creation and the enabling factors for long-term growth. While the full impact of these investments will be realized over time, we have already seen progress.

More than 450,000 individuals have been financially included by Mastercard, Davivienda, Visa and Bancolombia; over two million have been reached with new broadband access by Microsoft, Millicom and other critical partners; and we’ve seen new procurement and jobs from programs that include Nespresso sourcing their first coffee from Honduras through a new $150 million commitment to the region.

In just one illustration of the impact of these programs, Microsoft’s new programs have delivered internet access to children in a rural indigenous community of roughly 4,000 near Comayagua, Honduras, which connects families there to the global economy and creates immeasurable potential in their lives.

Best practices for public-private partnerships

From this work, we have gleaned four best practices for operating public-private partnerships that can be replicated to improve the likelihood of success in similar frontier and emerging economies:

Establish an independent entity to coordinate partners as a shared services provider

Shortly after launching the public-private partnership’s goals, PCA was established as an independent 501c3 non-profit organization to mobilize investments and coordinate partners to scale their impact. In structuring the entity, the Partnership leveraged best practices from project management offices by shaping an intentionally lean, outcome-oriented entity with an independent strategy and clear accountability standards for our programs and operations.

Our strategic plan was guided by a Board of Directors with extensive global business experience that brought rigorous principles to our work plan and programmatic mission. Similarly, PCA’s operating model was designed with agile principles to leverage the collective strength of our partners and avoid duplication. Our core management team operates as an aggregator and coordinator with cross-functional steering committees or “consortiums” composed of leads from our member organizations.

“

The private sector has a central role in this – generating employment, driving economic growth, and driving innovation. But the success of public-private partnerships depends on governments, companies, and institutions working together.”— Jonathan Fantini-Porter and Isabella Blosser, Partnership for Central America

Through this model, PCA delivers five core functions in a secretariat model: partner and investment mobilization; convening and cross-sectoral program coordination; deal facilitation; communications and program amplification; and accountability and programmatic metrics tracking.

While PCA partners create jobs, support farmers, provide financial and digital access, and develop the workforce, PCA drives investments to the region and then coordinates programs to ensure their impact is targeted and scaled.

Formalize stakeholder buy-in from day 1

With more than 100 small, medium, and multinational partners across the US, Mexico, Colombia, El Salvador, Guatemala, Honduras, Brazil, Switzerland and Japan–alignment on shared values and mutual understanding is essential.

From day 1, PCA established a big tent approach to strategic planning with working groups that included a cross-section of partners to collaborate on program shaping and goal-setting. The working groups–representing business, indigenous and vulnerable populations, civil society, and public sector perspectives–meet on a monthly basis and include structured agendas and informal dialogue to ensure all voices are heard.

Beyond this, we also established formal agreements with institutional partners to ensure clear program alignment. PCA formalized a Memorandum of Understanding (MOU) with the US Government through the US Department of State and US Agency for International Development; we established formal relationships with the ministers of economy, development, and finance from Honduras, Guatemala, and El Salvador; and formalized partnerships with multilateral development banks, including the World Bank Group and the Inter-American Development Bank.

Through such a model, PCA is able to maintain its independent coordinating role while serving as a facilitator to mobilize investment and form new partnerships that support programmatic development and implementation in the region.

“

From day 1, PCA established a broad-tent approach to strategic planning with working groups that included a cross-section of partners to collaborate on program shaping and goal setting.
”— Jonathan Fantini-Porter and Isabella Blosser, Partnership for Central America

Leverage data and advanced analytics to inform strategic planning

Essential to PCA’s model is the integration of a data-informed approach to programmatic development and implementation. Through our partners, PCA coordinates a set of AI and machine-learning platforms to support a commitment to accountability, transparency, and efficacy.

For example, PCA partnered with Diversio, an AI-informed platform, to use globally recognized standards for diversity, equity and inclusion objectives that measure supply chains through our partner organizations and assess targeted solutions to diversity gaps. We also established a formal relationship with the Harvard T.H. Chan School of Public Health as our primary academic partner. Through the partnership, Harvard developed a comprehensive customized data dashboard, which provides insight into the economic and demographic trends and challenges in northern Central America. This allows PCA and our partners to shape programs and target interventions with the highest likelihood to benefit the local population.

Focus on women to scale your impact and invest in communities

When women have access to economic opportunities in this region, they invest 90% of their income back into their families and communities. However, women in Central America participate in the labor force at far lower rates than men (44% vs. 78%) and suffer from some of the highest rates of violence against women and femicide in the world.

Acknowledging the unlimited potential that comes from empowering women in communities across the region, PCA launched In Her Hands, a women’s economic empowerment initiative aimed to bring a gender lens to investment in the region by connecting 5 million women and girls to the formal economy and training 500,000 in high-tech skills. Through investments in capacity-building and public-private partnerships, we are striving to create opportunities for women through investments in financial inclusion, digital access, technical skilling, and jobs.

As one tangible example, the Mastercard Center for Inclusive Growth is now working with Accion and Fundación Génesis Empresarial (Génesis) to bring financial inclusion to one million people across the region – targeting women as the primary beneficiaries. In all, PCA’s programs and practices have a single aim – to support a future in which families and communities in Guatemala, Honduras, and El Salvador live safely and have access to opportunities. Basic needs – jobs, education, digital and financial access, and infrastructure – are met, and individuals have hope for a better life in their own homeland.

Discover

What’s the World Economic Forum doing about the gender gap?

The World Economic Forum has been measuring gender gaps since 2006 in the annual Global Gender Gap Report.

The Global Gender Gap Report tracks progress towards closing gender gaps on a national level. To turn these insights into concrete action and national progress, we have developed the Gender Parity Accelerator model for public private collaboration.

These accelerators have been convened in twelve countries across three regions. Accelerators are established in Argentina, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Mexico and Panama in partnership with the Inter-American Development Bank in Latin America and the Caribbean, Egypt and Jordan in the Middle East and North Africa, and Japan and Kazakhstan in Asia.

All Country Accelerators, along with Knowledge Partner countries demonstrating global leadership in closing gender gaps, are part of a wider ecosystem, the Global Learning Network, that facilitates exchange of insights and experiences through the Forum’s platform.

In these countries CEOs and ministers are working together in a three-year time frame on policies that help to further close the economic gender gaps in their countries. This includes extended parental leave, subsidized childcare and making recruitment, retention and promotion practices more gender inclusive.

If you are a business in one of the Gender Parity Accelerator countries you can join the local membership base.

If you are a business or government in a country where we currently do not have a Gender Parity Accelerator you can reach out to us to explore opportunities for setting one up.

The principles gleaned from this effort are not unique to this region or this organization. The challenges can be tackled and opportunities leveraged with a systemic approach that brings the public, private and social sector to the table.

The private sector has a central role in this partnership – generating employment, driving economic growth and driving innovation. However, the success of public-private partnerships in frontier and emerging markets depends on governments, companies and institutions working together around a focused set of practical solutions that combine investments with a coordinated socio-economic mission.