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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.

SocialFunds.com -- 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.

Please support
our sponsorsAlmost 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%.

The World 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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