MNEmerge Newsletter July 2015

Public-private partnerships can play an important role in supporting sanitation

The MNEmerge research team at UNU-MERIT has carried out several sectoral studies on the impact of MNEs on Millennium Development Goals (MDGs) of eradicating extreme poverty and hunger, combatting HIV and ensuring environmental sustainability. One of the focus areas of UNU-MERIT’s research has been the improvement of sanitation in developing countries, in particular in India. Approximately one third of the world’s population still lacks access to improved sanitation facilities. In order to analyse private sector participation in achieving wider sanitation coverage, UNU-MERIT has studied the FINISH programme, a multi-stakeholder platform involving social enterprises engaged in improving sanitation coverage in India. Based on the analysis, the researchers suggest a blue print for a successful sanitation drive.

The UNU-MERIT’s research discovered that public-private partnership ventures, such as FINISH, can play an important role in supporting sanitation in a region. With the help of public-private partnerships, governments can increase the sanitation coverage without excessive financial burden. While generating business opportunities for private sector, public-private partnerships also involve risks, such as financial crisis and partner mishaps. However, involving private sector and its expertise in sanitation development allows governments to develop sanitation infrastructure with better quality and less costly services. Consequently, the FINISH programme’s relative success shows that it is important for India and other developing nations to encourage the involvement of the private side in the development of social infrastructure and services also in the future. In the long run this can also attract larger enterprises to join such ventures, leading to cohesive efforts to provide social services.

In addition to this sectoral study, the UNU-MERIT research team has also analysed the dynamics of knowledge creation and diffusion in the agricultural sector and the role of an MNE (Monsanto) and local firms in India. Furthermore, they have studied the impact of European MNEs and selected leading local firms to improve access to medicines in Brazil.

The impact of MNEs on local development in Ghana is multilevel and diverse

Fieldwork in GhanaThe research team at Oxford University has been exploring the roles and impact of MNEs from China and Europe on the Ghanaian economy. Researchers from Oxford University and CSIR-STEPRI have successfully conducted nearly 120 interviews among eight European and Chinese MNEs across different sectors, and the fieldwork in Ghana is now completed.

The research team has found a complex picture of MNE participation, which does not always conform to FDI pattern expectations. On the European side, it has been found that the development impact of MNEs as brought about by managerial practices reflects very closely the managerial practices and pitfalls found in the origin countries. Moreover, a much higher than expected involvement of local management was found even within the larger MNEs. Different patterns are observed for the Chinese counterparts, from the managerial practices to the transmission of knowledge to local actors. Impacts of MNEs on local development are diversified and multilevel.

The Oxford research team has also started a case study measuring the impact of sanitation on health and income generation capacity of rural citizens in India. The case study employs a sophisticated survey framework, and the primary data collection from 2000–2400 households from four Indian states has started in early June.

Contribution of pharmaceutical MNEs to access to medicines in India varies in different segments

The research team at the Public Health Foundation of India (PHFI) has evaluated the performance and contribution of pharmaceutical MNEs to access to medicines in India. The research team found the contribution of MNEs to Indian pharmaceutical market significant in terms of value as well as the number of formulations and brands marketed. Five out of the top ten firms in the year 2012 were MNEs, accounting for 22 percent of the total market. These MNEs include Abbott, Ranbaxy (was MNE in 2012), GSK, Pfizer and Sanofi.

The PHFI’s research discovered that the contribution of MNEs is considerably higher in certain therapeutic segments such as vaccines and hormones. On the other hand, the contribution to certain disease categories such as neglected tropical diseases is very limited. Moreover, MNEs’ contribution to therapeutic categories of tuberculosis, HIV and malaria, which are the focus of Millennium Development Goals, is also limited in terms of value. In addition, the research showed that MNEs’ contribution is significant in terms of bringing new chemical entities (NCE) to the Indian market.

Qualitative interviews indicated that MNEs contribute significantly to domestic pharmaceutical industry through positive spin-offs and spillovers as a result of foreign direct investments, both green field and brown field. Some of the areas of productive gains include faster adoption of new technologies, adoption of higher quality standards, new production methods and new management practices as well as increased access to international markets. However, MNEs’ contribution in terms of providing access to medicines especially for the products under patents is limited. Overall, MNEs’ contribution to India’s public health needs is not as spectacular as compared to their contribution to trade and investment leading to pharmaceutical industrial development.

A case study of the impact of the Light for All programme in Brazil proceeding

In Brazil, the MNEmerge project aims to evaluate the impact of the Light for All public social programme on poverty reduction and sustainable development. The research team at INESC P&D Brazil has gathered data for the case study by conducting interviews with energy companies and by a policy questionnaire from the Santa Catarina State Government in Brazil. Research on technical solutions used in the Light for All programme is also underway. These solutions include, for instance, producing energy from renewable sources to local population living without electrical light.

Upcoming events

MNEmerge will organise several regional stakeholder meetings and policy workshops during the latter half of the 2015, in which the findings of the project will be discussed with the relevant regional stakeholders. In India, a one-day regional stakeholder meeting is planned for the 21st of August and a large scale dissemination conference for November. In Brazil, a workshop is planned to be organised in December in order to create an opportunity for both policy-makers and MNEs to be involved in the project. A similar kind of workshop is also planned to be organized in Ghana during the autumn 2015. Furthermore, a meeting for the project’s advisory board will be organized in October in conjunction with the MNEmerge partner meeting in Oxford, the UK.

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