Can business really tackle poverty?

This week, Wednesday 17th October marks the International Day for the Eradication of Poverty and the Aleevee8 Foundation has invited speakers to an event at the House of Commons which will raise awareness of efforts to engage business in sustainable development.

In 1996, our work on what we call People-Centered Economic Development began with an unexpected opportunity, to pitch at the top,  with a paper for the Committee to Re-Elect the President.  It was to challenge the notion that the responsibility of business was merely to shareholders, proposing a business model for social purpose. It began:

“At first glance, it might seem redundant to emphasize people as the central focus of economics. After all, isn’t the purpose of economics, as well as business, people? Aren’t people automatically the central focus of business and economic activities? Yes and no.

People certainly gain and benefit, but the rub is: which people? More than a billion children, women, and men on this planet suffer from hunger. It is a travesty that this is the case, a blight upon us all as a global social group. Perhaps an even greater travesty is that it does not have to be this way; the problems of human suffering on such a massive scale are not unsolvable. If a few businesses were conducted only slightly differently, much of the misery and suffering as we now know it could be eliminated. This is where the concept of a “people-centered” economics system comes in.”

It was the misfortune of the author, soon after, to become homeless, but in 1998 a crisis in Russia would literally sweep him up off the streets. He spent several months researching in Russia, returning to foward his recommendations for a development project to Clinton’s office.  The Tomsk Regional Initiave was the result. It would establish a community microfinance bank and help around 10,000 people create businesses.

It would be followed by a project proposal  for Crimea’s Tatars which drew attention to the need for prevention of terrorism in peaceful Islamic communities, referring to the recent experience of the Balkans and the 9/11 attacks on the USA.

“Just as the US now heavily uses smart bombs in warfare, it is becoming increasingly apparent that the equivalent is needed in aid efforts. It is not enough to spend, say, US$ 7 million dollars for five Tomahawk cruise missiles and then spend a fraction of that amount in building a peaceful community which does not merit targeting by missiles. Yet, that is what we have in this case.”

When introduced to the UK in 2004,  the focus of this social business model was again poverty, warning that leaving people in poverty would inevitably lead to uprisings.

Dealing with poverty is nothing new. The question became ‘how does poverty still exist in a world with sufficient resources for a decent quality of life for everyone?’ The answer was that we have yet to develop any economic system capable redistributing finite resources in a way that everyone has at minimum enough for a decent life: food, decent housing, transportation, clothing, health care, and education. The problem has not been lack of resources, but adequate distribution of resources. Capitalism is the most powerful economic engine ever devised, yet it came up short with its classical, inherent profit-motive as being presumed to be the driving force. Under that presumption, all is good in the name of profit became the prevailing winds of international economies — thereby giving carte blanche to the notion that greed is good because it is what has driven capitalism. The 1996 paper merely took exception with the assumption that personal profit, greed, and the desire to amass as much money and property on a personal level as possible are inherent and therefore necessary aspects of any capitalist endeavour. While it is in fact very normal for that to be the case, it simply does not follow that it must be the case.”

Later in 2004, focus returned to Ukraine where the Orange Revolution was beginning. It had been catalysed by the 2001 killing of journalist Giorgey Gongadze and in 2003, flames had been fanned by a social entrpteneur with an Op-Ed for Kyiv Post.

“A 10 year-old girl with an infant in her arms rang my doorbell. She was barely alive, unlike the 9 year-old boy who died, frozen, on another American’s doorstep in Kherson a few months ago. The little girl was blue in the face and starved. She asked only for a small amount of food, nothing else. My wife, Olga, raided the fridge and gave her everything we didn’t need. I later found Olga in tears, not because of the little girl at our front door, but because we both knew that this pitiful girl is only one of many such children throughout Ukraine. ”  

The story  Death Camps, For Children two years later drew attention to how unscrupulous business was maximising profit by minimising care of children with disabilities and they became the central focus of the ‘Marshall Plan’ setting out a broadly based  blueprint for microeconomic development and social enterprise.  It described the woeful situation:

“We see a staggering array of social problems arising directly from poverty, including but not limited to tens of thousands of children in orphanages or other state care; crime; disrespect for civil government because government cannot be felt or seen as civil for anyone left to suffer in poverty; young people prostituting themselves on the street; drug abuse to alleviate the aches and pains of the suffering that arises from poverty and misery; HIV/AIDS spreading like a plague amidst prostitution, unprotected sex, and drug abuse; more children being born into this mix and ending up in state care at further cost to the state; criminals coming from poverty backgrounds, ending up as bandits, returning to communities after prison, with few options except further criminal activity. These are all part and parcel of the vicious negative cycle of poverty, and this threatens to destroy Ukraine, if Ukraine is defined in terms of people rather than mere geographic boundaries. Overall, population is steadily declining; families have not sufficient confidence in tomorrow to reproduce more than 1.2 children on average per couple.   “

The propossed solution is bottup up and focussed on the neediest

“This is a long-term permanently sustainable program, the basis for “people-centered” economic development. Core focus is always on people and their needs, with neediest people having first priority – as contrasted with the eternal chase for financial profit and numbers where people, social benefit, and human well-being are often and routinely overlooked or ignored altogether. This is in keeping with the fundamental objectives of Marshall Plan: policy aimed at hunger, poverty, desperation and chaos. This is a bottom-up approach, starting with Ukraine’s poorest and most desperate citizens, rather than a “top-down” approach that might not ever benefit them. They cannot wait, particularly children. Impedance by anyone or any group of people constitutes precisely what the original Marshall Plan was dedicated to opposing. Those who suffer most, and those in greatest need, must be helped first — not secondarily, along the way or by the way.”

In 2008, I become aware of Business Fights Poverty and introduce our work. My tenure is brief, within days I I’m told that I shouldn’t talk about corruption and have been barred since from dscussion.

Taking the cause to a government who’d pledged to break down silos and promote a Global Development Commons, a committee staffed by the current incumbents of the Presidential office, returned a response which would demonstrate what a crock it all was.

In 2009, I’d introduced what we do to B Labs and Sir Richard Branson’s  foundation Virgin Unite, who both showed little interest.

it was also in 2009, in a conversation about building the social market where  founder Terry Hallman drew attention to the need for ethical participation saying:

“Is it acceptable to build projects with stolen property? What sort of results would that lead to? Can be build an ethical system based upon unethical behavior (such as violations of Intellectual Property Rights)?

If we invent such a system, is it anything new? Or is it just a twist on the old system?

One thing that can be collaborated openly is this: a Code of Ethics. But, whose ethics? What org(s) will enforce them, and how? Who decides who gets in, how, and why?”

If I didn’t believe that business can tackle poverty I wouldn’t still be trying to finish what we started in Ukraine. Bot is can’t be done by trying to skirt around  problems  like corrupt government and organised crime, it can’t be done with a “my brand only” mentality and it can’t be to done by stealing projects and pushing others out of the way.

As I’ve commented recently, the political leaders wo introduced social enterprise to the UK as government policy now visit Ukraine to support oligarchs rather than social enterprise. I refer to Tony Blair’s support for Viktor Pinchuk and Lord Mandleson’s advocacy for Rinat Akmetov, identified at the root cause of Ukraine’s social and economic catastrophe.

Business and government cannot run with the hare and hunt with the hounds on this. It has to decide whose side it it on.   If democracy has anything to do with it, that should mean the people and not corporations.

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