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Developing Countries: Private Sector

Volume 487: debated on Tuesday 3 February 2009

To ask the Secretary of State for International Development what discussions he has had with CDC on its role in private sector investment in developing countries during the global economic downturn; and if he will make a statement. (252400)

Officials at the Department for International Development (DFID) have had discussions on the financial crisis with CDC in the context of the company's new investment policy announced in November 2008. This policy will focus CDC further on poorer countries that still have substantial need for investment capital during the crisis. A copy of the policy has been placed in the Library of the House.

With access to private credit in developing countries reducing as a result of the economic downturn, capital flows from development finance institutions such as CDC must be maintained or increased. Access to these funds will encourage private sector investment and the jobs that that helps to protect and create.

CDC therefore has an important counter-cyclical role to play in continuing to make commitments to funds which focus on its target geographies in low income countries and sub-Saharan Africa in particular.

However, CDC on its own can have only a small impact. A coordinated response is necessary and we are also encouraging CDC to coordinate closely with other Development Finance Institutions such as the IFC which is preparing a package of facilities and initiatives in response to the global financial crisis.