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PROMOTING SUSTAINABLE SOCIAL AND ECONOMIC DEVELOPMENT IN BRAZIL THROUGH INNOVATIVE MECHANISMS Jennifer Adams USAID/Brazil Mission Director Salvador, BA April 2008 USAID – U.S. Agency for International Development Independent U.S.G. agency, created in 1961 Implements humanitarian assistance, and sustainable social and economic development programs Works in partnership with NGOs, public and private sector In Brazil, USAID addresses global impact issues in the areas of: Energy, Environment, Health, Youth Employment, Trafficking in Persons, Micro and Small Enterprises, and Corporate Social Responsibility Works to strengthen the strategic relation Brazil-U.S. by forging partnerships; sharing good practices; and developing sustainable and innovative mechanisms Global Development Alliance - GDA Mechanism for creating strategic alliances Align public and private sectors interests with USAID’s strategic development objectives Combines the strengths, capabilities, skills and resources from each partner to create sustainable solutions Example of a GDA project in Latin America Entra 21 Entra 21 is a $ 25 million public-private alliance among USAID, the Inter- American Development Bank's Multilateral Investment Fund, the International Youth Foundation and several technology companies including Cisco Systems, Lucent Technologies and Microsoft. This alliance is co-financing 40 locally conceived and executed projects to train 12,000 youth, from 20 countries in Latin America, in skills related to information and communication technology. Example of a GDA project in Brazil Responsible Sourcing Partnership Project USAID partnered TransFair USA, Café Bom Dia, and Wal-Mart in a three-year, $1.9 million public-private agreement to promote sustainable economic growth in Brazil by supporting farmers producing Fair Trade and Organic Certified coffee and cooperatives with technical and trade-related training, and infrastructure investment. Development Credit Authority – DCA Credit Guarantee mechanism How it works: Improves access to local private capital Risk is shared to encourage lending - cover up to 50% of a lender’s risk in providing financing Uses credit for the development of sustainable and profitable social economic activities Resources are maximized - Resources can leverage up to 25 times the per-dollar-impact Example of a DCA project in Peru USAID has set up loan portfolio guarantees with three financial institutions to improve access to credit for Peru’s smaller enterprises, especially those focused on alternative development. The guarantees are intended to diminish the risk financial institutions perceive in lending to agribusinesses and promote longer-term lending to microenterprises. In total, the three guarantees cover up to US$7 million, encouraging the financial institutions to lend in targeted geographic areas and to improve lending in rural areas - especially for the agro-industrial sector. Nearly 1,000 loans have already been made, supporting local microenterprises. The Corporate Social Responsibility Initiative Launched by U.S. Ambassador Sobel in October 2006 Partnership among U.S. Mission in Brazil (Embassy + USAID), the American Chamber of Commerce and 30 U.S. companies (group has expanded over 60 companies) Objectives: - Improve visibility - Promote partnerships - Share good practices Mission Statement and Group Identity “Strengthen public and private alliances to optimize and enhance US CSR investments in Brazil towards sustainably achieving the Millennium Development Goals.” Results Several partnerships established – U.S. Brazil Higher Education Partnership (Ford and Microsoft) – CSR Challenge Fund (Microsoft, Dow, Fedex and Accenture interested) – Responsible Sourcing (Wal-Mart/Sam’s Club and Café Bom Dia) – Education (IBM, Intel, Microsoft, and Sun Microsystems) – Youth Ambassadors Program Results Increased visibility Group identity (+Unidos roughly translated as “more united”) – CSR workshops (Jeffrey Sachs and Ray Chambers) – Volunteer week October 1-5, 2007 (Theme: environment) – CSR website launched (www.embaixada-americana.org.br/csr- index.php) Results Good practices 1st Social Partnership Workshop of the +Unidos - May 2008 CSR Report – being prepared by GIFE - The study is collecting and analyzing information on the private social investments made in 2006 and 2007 by 48 U.S. companies that participate in the U.S. Embassy CSR Initiative - Objectives - Systemize opportunities and challenges - Exchange information and knowledge - Point out trends - To be released on August 2008 CSR Report Preliminary findings U.S. CSR investments cover a vast area within the country (urban and rural areas) Investments are concentrated in the areas of education, health, environment, and community development There are several opportunities for joint cooperation on similar projects – Cummins/Wal-Mart/Whirlpool are already cooperating as an outcome of the report Companies’ efforts to promote social transformation shall be boosted and multiplied after the release of the report THANK YOU !