What is the extent of the Public and private sector partnerships to attracting domestic and foreign investment, and encouraging private financial flows, to promote investment by their private sectors in Developing countries.
Well, the extent is hard to determine based on no real information of the partnership but one thing that is widely spread is that partnerships tend to be more profitable, productive and contributive. Its not the rule but chances for investments are higher. After all it depends on the parties involved.
Public–private partnership (PPP) is now the new trend of implementing public programmes. Th
Public–private partnerships (PPPs) has the the potential of enabling countries to mobilize foreign investment for development. In the past , governments were charged with this responsibility . The private sector is seen as more efficient and effective in supporting government effort in this regard. . However , corruption has hampered this efforts. Selfish interests vs Public interests?
I agree with Jasmin that it depends on he parties involved. Easily corruptible governments have rendered PPPs ineffective and unprofitable .
consistent on government policy, incentive for private sectors and effective law and security in investment. Any private sector never come without any confidence to have profit and partnership with government so mentioned conditions should be effective tools to attract on PPPs
Public-private partnerships are forms of cooperation between the public and private sectors, respectively, in order to build infrastructures or services, through which they are expected to optimize the experiences of the two entities. Trends and manifestations of PPPs evolve in the context of the regulations and practices of each country and depend on their historical, economic, political and social circumstances. The consequences of the penetration of foreign capital into the economy can be appreciated from two perspectives: - favorable, with positive effects to boost resource utilization, increase industrial output, stimulate exports and create jobs; - unfavorable, due to the negative effects created by the intensive exploitation of the underground and natural resources and the realization of large profits, the tendency being to repatriate them.
PPPs can be considered as one of the possibilities of reducing gaps in infrastructure, increasing the efficiency and quality of infrastructure and service delivery. The stake in the good development of the partnership process is the compatibility of partners interests, the coordination of actions, and the ability of the two parties to contribute resources to the desired objective. PPPs are a form of beneficial cooperation but should not be exaggerated. Apart from the fact that PPPs are difficult to manage, they also have a number of disadvantages: - hiring long-term contracts under a running technology at the time removes the supplier's constraint to adapt to new technologies (involving additional costs) to increase competitiveness; - PPP transaction costs (related to bidding, negotiation and contract management) may be higher than those of traditional government purchases. - the possibility of difficulties in the administration of contracts caused by a faulty cooperation of the parties, the elements of difficulty can also be determined by the involvement of several actors in the contract; the situation involves the need to manage possible conflicts of interest between the participants through dialogue and negotiations leading to their overcoming; - obtaining the expected profit, from the realization of the project, varies with the volume of the assumed risks, the complexity of the project, the competitiveness of the developers; - the government may encounter difficulties in assessing proposed costs for situations where the private entity has a share of knowledge and experience in project implementation.
One of the many possible definitions for a Public Private Partnership is: A long-term contractual arrangement between a government entity and one or more private entities, whereby the resources, capabilities and core competencies of each party are combined with the aim of designing, financing, building and operating a facility for the use of the general public. PPPs are a means for governments to lighten their balance-sheet by obtaining funding from the private sector while deriving benefit from the latter’s technical knowledge and experience. Compared with traditional public procurement, PPPs entail a greater role for the private sector, which bears some of the project risk but also expects a correspondingly higher profit margin based on performance.
Public Private Partnerships are increasingly becoming a widespread method for financing diverse infrastructure projects globally. The contractual arrangements in a PPP structure allow governments to develop public sector assets, while avoiding large, upfront capital spending, by means of off-balance sheet financing. In recent years, a common trend has been for governments to implement, integrate or amend their PPP legislation so as to create environments where foreign direct investment would thrive. Long-term and stable revenues derived from PPP arrangements with sovereign bodies and have proven to be very appealing to large investors as well as to small and medium-sized financiers pooling funds into syndicated lending. Furthermore, well-structured PPP projects serve the purpose of creating new jobs and fostering sustainable economic growth, while aiding FDI companies to establish a foothold in the domestic economy, thus granting them the opportunity to seek more contracts and expand.
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