In the wake of natural disasters, the scale of human suffering defies comprehension. If we had trouble imagining the multiple lives and livelihoods that were wrecked by the Asian Tsunami and Hurricane Katrina, we will be even more hard-pressed now, when the full extent of the sufferings caused by Cyclone Nargis in Burma is shrouded by the military’s tight grip on the media.

When our visual imaginations fail us, our moral imagination needs to kick in. We see this in the rapid and vigorous response of governments, relief agencies, NGOs and faith groups to Burma’s unfolding tragedy. But there is another sphere of life that is allowing the moral imagination to play a role in its response to human need, though this is generally ignored or denied by the rest of civil society.

As the news of Nargis’ devastation was still breaking, leaders of the world’s largest multinational corporations (MNCs) were holding a consultation in London to showcase how the commercial activities of their enterprises are helping to alleviate global poverty. The purpose was chiefly to inspire each other through the sharing of best practice.

Although the development community is becoming more willing to affirm the positive potential of business, this tends to include only micro-credit and fair trade. When it comes to big business, the focus, if not entirely negative, is generally restricted to corporate philanthropy and Corporate Social Responsibility (CSR).

Micro-enterprise can indeed help poor people achieve subsistence, provide for their families and secure them against abject poverty. Fair trade can bring benefits to certain groups, and philanthropic and CSR initiatives can help MNCs increase their pro-poor impact.

But of much greater long-term significance are the core activities of MNCs, not least in facilitating the conditions needed for small and medium-sized enterprises (SMEs) to flourish. SMEs are the world’s foremost creators of new jobs, wealth and opportunity, accounting for around 90 percent of gross domestic product in many developing economies.

Significant development potential also rests in the fact that the poor represent sizeable markets to large companies that can use efficiencies of scale to supply goods and services that are within the purchasing power of those at the bottom of the economic pyramid. Three quarters of Vodafone’s new customers, for example, are in low-income countries.

It is not only the moral imagination, therefore, that is shaping business’ response to poverty. It is also self-interest and the spirit of enterprise. All three are powerful drivers of human behaviour. When they converge, the results are an important part of what the poor recognize as good news.

Peter Heslam

Dr Peter Heslam is a research associate of LICC and Director of Transforming Business, Cambridge University (www.transformingbusiness.net).

Links

The consultation in London was organized by a group of leading corporations called Business Call to Action. This group was formed in the wake of the Call to Action., a global effort launched in July 2007 by Prime Minister Gordon Brown to accelerate progress on achieving the Millennium Development Goals.

An edition of the journal Faith in Business Quarterly (vol 9.2) is devoted to the issue of fair trade and can be ordered here.

For a critical perspective on fair trade from the Jubilee Centre in Cambridge, see its blog here. It has unleashed a lot of debate – see the comments below the blog entry and there are more here.

For a recent article by Peter Heslam on Muhammad Yunus, the world’s most famous micro-enterprise entrepreneur, see ‘Banking on the Poor: The Banker who is Changing the World, One Micro Loan at a Time’, published in Faith in Business Quarterly, vol.10.3, which can be ordered here.

The above article appeared soon after the announcement that Yunus had won the Nobel Peace Prize. Yunus’ latest book is Creating a World Without Poverty: Social Business and the Future of Capitalism (Public Affairs, 2008), available here.

Initiatives and networks in the area of enterprise solutions to poverty include: Transforming Business ; Business Action for Africa; Inspiris; The Shell Foundation; Enterprise Africa!; Bulembu; Blessing Basket; The Integra Venture; Transformational Business Network; International Business Leaders’ Forum; The Legatum Group