Volume 17 Number 5
Businesses Urged to Close the World's Poverty Gaps
01 October 2004

‘There is a palpable crisis of governance in many developing countries,’ said Prabhat Kumar, the Director of an independent Centre for Governance in India and former Governor of Jharkand State

India and China have achieved enviable rates of economic growth over the past two decades, said Prabhat Kumar, the Director of an independent Centre for Governance in India and former Governor of Jharkand State, but ‘there is a palpable crisis of governance in many developing countries’. Kumar served for three years as Cabinet Secretary to the Government of India and was addressing the 32nd annual Caux Conference for Business and Industry.

The ‘gap in good governance’ was a global challenge, at a time when over 1.2 billion people were surviving on an income of under a dollar a day. In some Indian states nine out of 100 babies died in infancy, because their parents were too poor to get to hospital, he said.

Kumar urged businesses and civil society to put into practice models for good governance. ‘Governance is too serious a matter to be left to governments,’ he said. The turnover of the world’s leading 200 multinational corporations was greater than the GDP of all developing countries. Yet none was coming up with the low-cost appropriate technology needed for water management, power systems, housing and transport for poor rural communities. ‘There is not a single technology developed by the multinationals for the villages of the poor countries,’ he believed.

The Centre for Governance, which was launched by Initiatives of Change last year, was working with an Indian institute of management to research ways of ‘closing the development divide’ between states within India, Kumar said. ‘We shall consider our mission accomplished if we can make a small dent in the better governance of India.’

British Member of Parliament Tony Colman welcomed the recent commitment by Britain’s Chancellor of the Exchequer to work towards an aid budget of 0.7 per cent of GDP. But it was also vital that poor countries were enabled to trade equitably, he said.

Prior to his political career, Colman had launched retail businesses in East and West Africa before becoming a board member of the Burton retail group in the UK, where he founded the TopShop chain of fashion shops.

Business had a role in closing the gap between rich and poor, he said. The businesses which would make a difference in this field would be ‘sustainable, equitable, which bring together labour and management, and which look to the long term’. Legislation could help encourage these qualities. Bribery, for instance, is now an offence for British citizens anywhere in the world, thanks to his 2002 Private Member’s Bill on the subject. And the all-party committee on socially responsible investment, which he chairs, has forced pension funds to account for the social, environmental and ethical basis of their investments.

Gabriel Minder, founder of two IT consultancies in Geneva, has launched a series of initiatives in the developing world. One has provided 250,000 people with low-cost wheelchairs. Another is enabling 120,000 to receive cataract surgery.

Minder is an advisor to the Prince of Wales’ Youth Business International (YBI), which is a product of developing teamwork between industry, international organizations and NGOs, particularly Rotary Clubs worldwide. It has enabled 4,000 disadvantaged young people to launch their own business enterprises, and YBI aims to increase this number to 250,000 people. It has active programmes in 23 countries, and is in discussion in 37 more. The Chinese Government has just invited YBI to help launch a large number of pilot projects in China.
Michael Smith and John Bond

‘YOU CAN change a government in a night, and laws in the life of a parliament, but a change of mentality is vitally important, and is very hard to bring about,’ Lech Walesa, President of Poland from 1990 to 1995, told the conference. The former Gdansk shipyard worker, a Nobel Peace laureate and a founder of the Solidarity trade union movement in Poland, spoke of the change from a world of blocs and nation states to one of globalized information, intellect and technology. He called for everyone to be active agents of change, instead of just complaining. ‘Your children and your grandchildren will ask you what you did, and why you did not do enough.’

Poland’s historical experience was rooted in its geography, he said, noting wryly that her two great neighbours, Russia and Germany, were ‘tourist’ nations who had discovered that the shortest route to the other lay through Poland. As leader of Solidarity, which helped overthrow Poland’s Communist regime, he had seen a fight that needed to be fought, and it had been worth it. Now, there were struggles for others to fight.

BERNARD CASSEN (above), Director General of Le Monde Diplomatique, architect of the Porto Alegre World Social Forums and founder of the ATTAC movement for economic justice, described ‘liberal globalization as a social failure that accentuates inequalities’, and maintained that such bodies as the IMF, the World Bank, the WTO and the OECD recognized that it was not working.
‘What we have been experiencing is a disconnection between the world of politics and the world of economics and finance,’ Cassen said. Citizens could vote in elections but had no say in global economic matters. ‘You can vote for anything you like, except for the world’s economic and financial structures.’ Here there was no democratic tradition. Politicians, in his perception, had surrendered power to the financial markets. ‘The market rules and not the electorate.’

It was no wonder, he said, that people stopped voting when the French Prime Minister could say there was nothing he could do when a company closed down because it could only achieve a profit of eight per cent instead of the ‘normal’ return of 15 per cent. Only 20 per cent of the electorate of the new member states of the European Union had voted in the recent European elections, just two months after the expansion of the EU.

The ATTAC movement had a role as ‘an awakener of conscience’, he said. ‘We are for another kind of globalization’. The World Social Forums were a ‘participatory democracy’. Individual action was important, such as consumer boycotts, but ‘it is only collective action that can really change things’.