November 26, 2008
Business Can Take Leading Role in Alleviating Poverty
by Robert Kropp
Report by WBCSD notes increasing reliance on business as a partner with government and NGOs in
sustainable development in developing countries.
World population is expected to level off at nine billion within the next fifty years or so. By
2050, 85% of the population will live in what are now considered developing countries.
Almost half of the world’s population survives on the
equivalent of less than $2 a day. And the gap between rich and poor countries continues to widen;
the richest 20% of the world’s population control three-quarters of the world’s wealth, while the
poorest 20% control just 2%.
Business Council for Sustainable Development (WBCSD), a global association of 200 companies
dealing exclusively with business and sustainable development, has produced a report that sees in
such dire statistics an opportunity to do business in new ways. The report, developed by the WBCSD
Development Focus Area and entitled "Doing Business with
the World--The New Role of Corporate Leadership in Global Development", finds that "companies
can contribute to global sustainable development through their core businesses in a way that is
profitable for the companies and good for development."
The key to alleviation of poverty
is the creation of wealth, the report concludes, and business is a necessary part of the equation.
By engaging with low-income segments of developing countries through direct employment and sourcing
from low-income suppliers, companies can tap into a market that despite its poverty represents an
estimated collective purchasing power of $5 trillion.
The report finds that for
sustainable investors and other private providers of finance, investment in new markets with
significant growth potential will help developing countries generate capital rather than simply use
investment funds to service debt repayments.
While business can contribute much to the
cause of poverty alleviation in developing countries, it cannot succeed without an effective
regulatory framework, which only governments can provide. Through policies and legislation that
encourage investment and engagement on the part of large corporations, governments can provide that
framework, the report concludes.
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