Theme 2: On the Ground - Current Practices of Involving Business

Hi Jessica,

The world is a big place, with many diverse phenomena, and it is difficult to make generalizations for which there are not exceptions. Clearly there are contexts in which everything that you say happens to apply, and there are other contexts in which perhaps only some elements may be relevant.

But I would hope that we could agree that there:

  1. There is no good reason for it to be significantly more difficult to start a legal business in the developing world than it is in the developed world.

  2. That poor nations with many jobs being created by successful small businesses led by local entrepreneurs would be a better world than poor nations where most of the jobs are either with multinational corporations or government.

For me, it is far more than a coincidence that there are extraordinary obstacles to starting and running a business throughout the developing world, and the fact that most of the developing world is characterized by unemployment, a large informal sector, and mass poverty.

Will legalizing small business solve all problems in the developing world? Not at all; in some cases there will be very urgent environmental issues that must be resolved, in other cases there may be conflicts over resources, in other cases long-standing ethnic battles, etc.

That said, while we are all working simultaneously on these other issues, in our different ways, I’m hoping that we can all agree to support a world in which it is no more difficult to start a business in poor nations than in rich nations, in which every nation on earth is at the current level of, say, Denmark, on the Doing Business Index.

You might think that this request is of only modest impact in terms of creating global peace, and that your concerns are more important. No problem, I have no interest in convincing you otherwise. But I happen to believe that the positive impact of improving business climates around the world is profound for peace.

Peace,

Michael

I totally agree with your idea. I think the process and implementation of the Thunderbird and Goldman Sachs’ 10,000 Women program should be a role model for other businesses or oganizations’ CSR initiation. What I really appreciate about the Thunderbird and Goldman Sach is that before they implement their program, they reasearched how their educating program would influence the participants.

As the Golden Rule says, “Do unto others as you would have them do unto you.” We should think in the recipients perspective and how the action will affect them. In addition, even though the initiative might sound great, but if we don’t think about the results or the fits with the plan and the recipients, it will bring unfavorable outcome. Therefore, we should act with prudence.

I am very much aligned with Kellie on all of this.

In addition to Kellie’s excellent program at Thunderbird, there are numerous other programs that help small, local SME businesses in conflict or post-conflict zones to succeed. See, for example, BPeace,

http://www.bpeace.org/

SuRevolution,

http://www.surevolution.com/

and The Amber Chand Collection,

http://www.amberchand.com/

I see these kinds of initiatives as among the most important Peace through Commerce social entrepreneurship initiatives out there, even though the latter two are structured as for profit companies.

What business ideas can we identify that could help create more peace?

I think that one business idea that should be considered to help create peace is the idea that businesses when supporting community efforts should try to include all aspects of the society. By including all aspect of society, you promote inclusion within society and thus promote an environment where persons fell apart of society, dialogue, and perhaps grow in understanding the differences that exist between various conglomerations in a society.

John Mackey’s “Conscious Capitalism,”

http://www.flowidealism.org/2007/Downloads/Conscious-Capitalism_JM.pdf

Explicitly promotes the idea that businesses should look after the interests of all stakeholders, including customers, employees, suppliers, shareholders, the community, and the environment. The Whole Planet Foundation, the non-profit associated with Whole Foods Market, finances microfinance projects in many of the countries in which Whole Foods sources its food.

There are many other species of positive capitalism being developed, including the For Benefit Corporation, or B-Corporation, Good Capital, Slow Capital, Creative Capitalism, as well as the older Corporate Social Responsibility (CSR) movement.

What we don’t yet have is public support for companies that promote peace. If the peace movement supported businesses that did good in conflict-prone areas as passionately as the green movement supports businesses that do good for the environment, then we would see a much larger, far more effective, contingent of pro-peace businesses.

Dear Anthony
I agree with you, a new business idea must address the needs of the community, produce a product that will be consumed by the community, provide employment, provide a market for what they produce, get involved in development projects, be responsible. In Uganda one company that have registered success is the Mukwano group of companies. atahey produce soap, washing powder, cooking oil, ordinary items whic every household uses on a daily basis. The company employee a large number of people, it gives each employee monthly ration of the items they produce.it has partnered with rural producers to produce raw materials. It employees agents to buy the crop in rural areas, each of the agents is provided with a bicycle, labelled with Mukwano. The name of the company itself means ‘Friendship’

The outreach of the company is wide…Distributors are appointed in each district of Uganda therefore the Mukwano outreach is far and wide. The company has enjoyed stability for along time. Such a company has touched and benfited many families. It is a local company. The company collects saw dust from the city which is turned int renewable energy thus helps the samll carpentry workshops to dispose of waste at no cost and contributes to keeping the environemt clean.This is a good module
Pauline

In regards to promoting small businesses in underdeveloped countries, it may be a good idea to use tax policy to promote small business development. For example, if a large business owner has a business for sale, and they sell it to a disadvantaged/impoverished groups. The large business owner would get a tax reduction of up to 30% or 100% tax exemption if they reinvest in that same business market. Here the disadvantaged buyer would get to buy the business for less than the market price, because the seller would be getting the tax break. The overall benefit of this is model would generate more diversity and equity in a particular market, buy providing opportunities to disadvantaged/impoverished groups.

Anthony C. Blount Jr.

Thanks for sharing Pauline. Where can we learn more about this?

Anthony C. Blount Jr.

Anthony,

This company is in Kampala, Uganda. I will find out if it is listed on the Uganda Manufacturers Association Website and let you have the address.
Pauline

There are some misunderstandings of the Israel/Palestine conflict in some of the threads. I broadly agree with Stephen’s comments on this. The conflict is not due to the economic situation of Palestinians, nor is it due to a lack of integration with Israeli businessmen. These factors do not help, but they have been introduced deliberately by Israel. (We could debate the justification, but it is irrelevant to this point). The significant protests from Israeli businessmen who sourced products from Gaza had no impact on the decision to blockade exports from the Strip. It is a political conflict with - at present - no possible economic contribution to a solution unless you include sanctions by third parties, including MNCs, on Israel or on businesses that support the occupation. The current manifestation of occupation does not permit economic growth. It has to some extent in the past, but this has had no demonstrable impact on peace, and it is arguable that it promoted conflict.

I won’t suggest this is a related issue, but I would be very interested to see any thoughts on any possible role of white or black owned South African SMEs in ‘peace building’ during apartheid. Business always has a role in political conflicts, and the impact on peace could be made more positive, or less negative; but exactly how will depend wholly on the context. Businesses are political and not just economic actors. It is probable that their political role will be more important in resolving political conflicts.

Like you explain, China has achieved a great amount of growth without a strong showing of many of the ingredients for development that have been discussed, such as education, democracy, etc. What I wanted to ask is that like China, India has been prospering economically however, the poverty level is still at a standstill. How is it that this country is growing tremendously but the impoverished areas of India are not affected by this growth? What I mean to say is that (and I may be wrong, I have not been following up on major improvements in India) but how is it that we are suggesting commerce reduces poverty - but in this case there is an increase in business and commerce yet there are no improvements in the poverty level?