A Report from GlobeScan Salon, Addressing Extreme Poverty

Reducing World Poverty: Companies and NGOs Expected to Collaborate—Page 3

October 2008


	The business approach also focuses on the problem of scale. “Poverty is about scale, not about 50 people. And scale is the strength of business”, said West. “The logic of scale is needed to support informal businesses in countries like Uganda. Informal businesses need to be commercialized and freed from dependency on aid.” Leach agreed with this view, adding that sustainability was also important. “Business can do scale, but how to make it sustainable?” Discussion then turned to efficiency and impact. West asserted the business approach brought efficiency because it required more accountability, “setting targets, making it transparent, and treating subsidies like gold dust with metrics.” Leach said efficiency was often determined by government, which sets conditions for what and how much can be done. He referred to a Caucasus microfinance programme that was inhibited from working by government. But would global companies accept a political or “activist” role in reducing poverty? Salon participants said they should; they largely agreed (84%) that businesses needed to ‘push for political and social change, not just create wealth’.
	Willing to collaborate, no agenda A will appears to exist for further collaboration among businesses, NGOs, and governments to reduce poverty. Salon participants, for example, affirmed their interest in further collaboration: slightly more participants urged that poverty reduction should be the main focus for such collaboration among the three sectors (44%), and another group urged equal focus on poverty reduction and combating climate change (34%). But what is the shared poverty reduction agenda? As Trivedy asked, “How do we build stronger cooperation and alliances to effectively address poverty reduction in the future?” Three broad options appeared to emerge from the discussions: Focus on MDGs: The MDGs could provide the most useful framework for collaboration on poverty reduction. Leach observed that MDGs are seen as a useful agenda for businesses. “The MDGs galvanized collective action; though they may be an inadequate measure of poverty, but without them the world would be poorer,” said Trivedy. Active Citizenship Approach: The approach appears to bring together overarching poverty reduction lessons. Green presented the agenda of redistributing power, opportunities and assets as one that all ‘active citizens’ could take part in. He did not specify whether multinational companies could be active citizens, but his presence at the Salon suggested they had a role. It is not clear whether businesses would accept such a politically active role. Business Approach: Companies, NGOs and governments currently carry out some collaborative projects that seek to transfer business skills to assist people affected by poverty. Business appears to accept the need for a collaborative approach with NGOs and governments. But would NGOs collaborate with businesses to reduce poverty; and how would experiences be shared in this regard? If global companies, NGOs and governments collaborate further to reduce poverty, it will require consideration of the following questions: Do the MDGs provide a useful framework for bringing their efforts together to effectively reduce global poverty? Will business accept an agenda of political activism and strengthening the state? Will NGOs work with businesses on business-led projects to reduce poverty, and will they share learning? There appears to be an opportunity for leading global corporations to take on poverty reduction. Collaboration needs leadership, and in the words of Leach, “Sustained political leadership is now more necessary than ever.” Especially so as government-funded poverty reduction work could be “squeezed” in the period ahead. “Addressing chronic poverty and the next part of the MDGs is a massive challenge for us all,” said Trivedy, warning about the potential erosion of public support. According to one survey cited, 57% citizens in the UK believe “all aid is wasted.”

	Contact Andrew Lawday, Senior Research Associate GlobeScan Incorporated, London email: andrew.lawday@GlobeScan.com tel: +44 20 7253 1450
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