Easing poverty can be good for business

At the World Economic Forum in Davos recently, a diminutive figure in a brightly coloured suit could be seen stalking the hallowed halls of business and finance, casting fear into the most imposing of corporate leaders, albeit with easy smiles and endless diplomatic charm.

Barbara Stocking, the first female director of Oxfam, is on a mission to persuade business to assist in the charity’s goal of improving the lives of the poor. “People want to see me for one of two reasons: they fear what Oxfam might do to them if they don’t [or], in the best case, they realise we have mutual interests on development and poverty and can really work together,” she says.

Ms Stocking believes that the private sector’s ultimate object of making money is aligned with improving the lives of people in poverty, and she says that there is a “major opportunity” for wealth creation. “Poor people are in trade. They are not in employment in big services, [but they] are selling their own produce. Once you understand that, you start seeing how the private sector can engage with poor people.”

For too long, non-governmental organisations (NGOs) did not talk to business, she says. Now, the charity is making an effort to speak the language of business. Ms Stocking, a former NHS official, says that she has learnt the meaning of “patient capital”.

She sees a big change away from the notion of corporate social responsibility, which she says is often treated as an add-on. Instead, companies are addressing how to carry out their core business in emerging markets. “It is fine and terrific building schools or putting in a health centre. But people have moved on,” she says.

The image she paints of the private sector’s charitable intentions verges at times on a pink-tinted version of corp-orate do-goodery. “We are seeing a lot of interest from companies wanting to understand the difference they can make in the world. More and more they are coming to us saying, ‘What is the right thing?’. ” She cites Unilever as an example. It approached the charity to map its “poverty footprint” in Indonesia, but in December it was found to be contributing to rainforest destruction by buying illegal palm oil there. “It is a mixed bag,” she concedes.

For all the talk of partnership with business, she has a steely message for corporations. “Even when people in Europe and America are behaving much better, you look at what they are doing in developing countries — they are a long way away and not seen so directly and it’s easier for things to happen.” She names Starbucks, which tried to block an application by Ethiopia to trademark the names of its coffee-producing regions because it clashed with its brands.

She is critical of the fossil fuels industry, for stalling on climate change, and mining companies. “The extractive industries have had the most problematic history with people in the poorest countries. Either they are not paying properly or money is going into a corrupt government and doesn’t get back to the community.”

Oxfam is part of a coalition promoting the Extractive Industries Transparency Initiative, aimed at making extractive companies reveal what they pay their workers.

Ms Stocking is an ardent campaigner. One audacious assault was the Robin Hood tax — a 0.05 per cent levy on financial transactions. “There is a serious need for new sources of finance to deal with the global problems of today,” she says. A film by Richard Curtis secured public support, but some in finance say that the tax is unworkable, would not raise much money and could even disrupt the wider economy. “They are rather nice excuses, aren’t they? We are talking tiny amounts [of tax].” She believes that there is a chance of the Robin Hood tax being passed by the International Monetary Fund at the G20 summit in June.

Oxfam has long pursued Western governments — and now businesses — to pursue its aims. Yet as long as corrupt governments are allowed to continue, it can be difficult for businesses to make a difference. Oxfam has received criticism for staying quiet in the face of corruption. Ms Stocking says that the charity treads a diplomatic tightrope. “I think you could argue that only in the very worst cases. In countries where we run huge humanitarian programmes in the middle of conflict, we are always facing a dilemma, not just about saying what’s going on, but to challenge what governments are doing.”

The risk is not imagined: Oxfam was providing water and sanitation for 750,000 people in Sudan, when it, along with 12 other aid agencies, was thrown out of the country last year; and last month Oxfam Hong Kong was forced to suspend a programme training graduates in mainland China.

Despite the challenges, Ms Stocking is convinced that business will shape the future of developing countries. “The consumer industries of the West are pretty saturated. If you want a market for the future, look to developing countries. It is in a company’s interest to be seen as treating people right.” The ultimate goal is to grow countries’ trade to replace aid, she says, but it will not happen for a long time. “The rules on trade are just not fair to the poorest countries.”

Author: Emily Ford

Source: Times Online

Date: March 5, 2010