“In the next 15 years, we as a generation have the opportunity to be the people who eradicate poverty in a meaningful and sustainable way.” Paul Polman, CEO Unilever.
Business Perspective: Poverty & Disparity in Low Income Countries
In the past decades, we have seen rapid economic growth. Despite that, increasing disparities combined with extreme poverty are serious concerns in most low-income countries. From a business point of view this leads to unstable and constrained markets and an uncertain future.
Businesses need to include poor population and to involve them into the economic growth process. But how can corporations make that happen?
Corporate Responsibility & Opportunity
The best contribution a company can make, for economic development and for business opportunity is to adopt and promote CSR (corporate social responsibility) principles within the company and as deep through the supply chains as possible. Beyond that, sharing expertise and promoting inclusive, value based business are key ingredients for sustainable business in low income countries.
Pro-poor and inclusive business, are relatively new concepts, although many large family companies started that way, in their own communities. Inclusive businesses aim at employing poor local population and engaging local suppliers and service providers. As employees and suppliers, the low-income segments get new capacities and gain access to the formal economy; a stable income and access to finance. Companies can also target low income customers by providing new products and services that meet their needs in affordable ways.
Awareness & Support for Corporations
For economic development to be effective there must be a certain level of social development to build on. For this reason, it is important for national and multinational companies to be well informed about the social situation and trends in the countries in which they and their supply chains operate. This can guide decision making, CSR implementation and interaction with authorities. Some corporations are also partnering with each other, finding solutions to critical challenges and shared concerns.
Globally we have reached MDG 1, halving the 1990 poverty rate. This is a tremendous, historic achievement, but still, in 2014, 1 billion people live below the extreme poverty line (1,25 USD a day), half of them children caught in an inter-generational cycle of poverty. Unless these children get access to their basic rights to health and education they will lack the capacities to break from the cycle of poverty and to be able to participate fully in new labour, production and consumer markets.
There is a need for social as well as economic development. Corporations can contribute to both and in addition to that be strengthening their business position.
Rio Monte is one of few organizations that offers more than 20 years of successful experience in pro-poor, social and economic development. If you have any questions or comments or if you would like to set up a meeting to learn more about how Rio Monte can support your business and CSR objectives, please Contact Rio Monte.