Copenhagen, 6 November
The COVID-19 crisis has dramatically exposed the challenges in public procurement practices and supply chains. As countries around the world scrambled to procure supplies, from personal protective equipment, to test kits and clinical care equipment, time was not on anyone’s side, supplies were low and demand was extremely high.
And the race went beyond medical supplies: from food items and makeshift hospitals, to everything that ensured essential public services can continue, such as digital technology.
The immediate challenges were aplenty: Ever-changing logistical and transportation restrictions, national export limits, and manufacturers facing their own struggle to remain operational during lockdowns were a part of the problem. Slow, outdated and non-transparent procurement systems, coupled with low capacity and a lack of data exacerbated this and hindered response efforts. Moreover, a highly volatile market and high demand meant increased risks of potential fraud and misconduct, such as low quality supplies or price gouging.
In short, COVID-19 highlighted the need for governments to rethink what they buy, how they buy and who they buy from.
This is important to ensure resilient supply chains in the face of future crises, but also because the sheer size of public spending makes it a powerful tool for positive change.
As COVID-19 continues to wreak havoc around the world, threatening lives and livelihoods and knocking an estimated $9 trillion off the global economy, countries need to do more with less.
Public spending accounts for 15–30 percent of GDP in most countries. Improved public spending offers a unique opportunity for countries to recover from the socio-economic impact of the pandemic, accelerate the shift to low-carbon economies and progress towards the Sustainable Development Goals.
Improved public spending can drive gender equality. By one estimate, only a dismal 1 percent of government procurement tenders go to female entrepreneurs. In the US, women-owned businesses reportedly get less than 5 percent of federal contracts, while in Canada, only 10 percent of the government’s Small and Medium Enterprise (SME) suppliers are women. And the numbers are similarly low elsewhere too. This is a serious loss: both because achieving gender equality is “the greatest human rights challenge in our world” to quote the UN’s Secretary General António Guterres, but also because gender parity is hugely economically beneficial.
And governments have an excellent opportunity to change this, through a variety of measures, including better outreach, policies that remove barriers to women’s participation, and introducing procurement targets.
Similarly, making supply chains more resilient through smarter procurement approaches can be coupled with sustainability benefits. Expanding a supplier base would ensure greater access to essential goods and services in times of increased demand, while creating more business opportunities for women, young people, people with disabilities and ethnic minorities. This needs the right vision and the right policies to underpin it. We need procurement to be transformational, not transactional.
Ultimately, better public spending is about good governance. It is about making the right spending decisions, and implementing them in a way that benefits our societies, now and in the future. More resilient procurement models can help governments respond to future needs and shocks. They can also strengthen supply chains, enhance transparency and fight corruption.
The organization that I lead — UNOPS — supports governments in this crucial task.
With a mandate in procurement and infrastructure, we work in over 80 countries to support our partners to respond to humanitarian needs, and achieve peace and sustainable development.
We know the added value that better public spending can bring to countries in their development efforts. And we support governments to make public procurement more efficient and effective, so that it frees up resources for other national development needs. Importantly, we aim to build the capacity of public procurement institutions, so that countries continue to reap the benefits in the longer term.
For example, in Mexico, we have just set out on a ground-breaking partnership with the government and WHO to support the national procurement of medicines.
By procuring billions of dollars worth of medicines and medical supplies, and building local capacity, we support the government not just to respond to medicine shortages, but importantly also to improve transparency and value for money.
This pandemic will end, but it won’t be the last one. As we recover from its devastating consequences, we need to create resilient systems that can cope with future challenges. Better public spending offers an effective way of moving us closer to a more sustainable, peaceful and resilient world.
By Under-Secretary-General and Executive Director, UNOPS, Grete Faremo. Views expressed in this publication are the author’s and do not necessarily reflect the views of the Paris Peace Forum.