How to achieve sustainable communities with decent work and economic growth without negative environmental impact, is at the heart of the United Nations Sustainable Development Goals and a top priority of many governments around the world. This article critically explores the role of government intervention for achieving sustainable local prosperity in frontier markets of developing countries, where such advancement is especially crucial. More specifically, we explore by an in-depth case study how multiple stakeholders cooperate to enhance local development and export from firms in the leather and leather products industry in Ethiopia. From a multistakeholder engagement perspective, including representatives of local businesses, United Nations, Ministry of Trade and Industry, and other development partners, we analyze how government interventions have resulted in unintended outcomes despite their good intention. We contribute with a new understanding of why development initiatives in frontier markets struggle with stakeholder integration, caused by power asymmetry and lack of institutional trust which prevents the achievements of sustainable development goals. Contextualized implications for firms, government, and non-governmental actors on how to improve collaboration are provided, and policy implications are proposed.