Poverty Alleviation and Inclusive Development: Rethinking the Role of Private Sector

The study argues that private firms play a vital role in enhancing inclusive growth prospects as investors, employers and creators of new and upgraded productive potential. Private sector activity matters for growth as well as its quality, sustainability and inclusiveness. Similarly, it is evidenced that Islamic approach to private sector development emphasises the need for balanced development, which covers both physical and spiritual development. Islamic finance for instance, which is based on risk-sharing help mobilize resources from a large spectrum of the population, substantially increase the share of equity in business, and advance profit and loss sharing (PLS) in entrepreneurial activities. The analysis suggests that private firms have the capacity to enhance inclusive growth prospects given their ability to create new and higher value productive capacity. The capability of firms to launch new export products and raise product quality generates higher profitability and productive potential with spill over benefits to other firms and industries. However, private sector activity per se does not automatically result in equality of opportunity across individuals and firms. It has been very thoughtful to many countries to facilitate various actors to come together in public-private collaboration to build ‘Inclusive Business Models’ based on inclusive markets.