Lord Mark Malloch-Brown, the UK Minister for Asia, Africa and the United Nations, yesterday called on the private equity industry in emerging markets to work more closely with governments to eradicate poverty.
Speaking at Private Equity International’s third annual emerging markets forum, Malloch-Brown said enlightened governments with support from developed nations could alongside profit-seeking investors create a “rising tide” to lift millions out of poverty.
He told delegates at the event, co-hosted by PEO’s sister publication and the Emerging Markets Private Equity Association, China’s free market initiatives had enjoyed a greater absolute success than all the aid programmes together.
Malloch-Brown warned however such success could increase inequality if the newly enriched leave the poor behind. He also said fast growing economies could lead to environmental catastrophe. He said private equity managers in emerging markets should take advantage of the opportunity, but they should embrace “public policy to deal with consequences of growth”.
He said the industry’s contribution to “the growth of stable prosperous societies would add value to the investments” themselves. He said prosperity and opportunity for the global poor was a “reinforcing process creating the next generation of consumers and producers.”
Private equity-backed businesses could also “make a difference” by trickling wealth down through local supply chains.
Delegates at the conference welcomed Malloch-Brown’s support, but most investors and managers said the minister’s social mission was a secondary priority in their investments ranking behind returns.