As I saw Dexter mentioned earlier, I can’t help but think about the importance of education in helping the poor and other outside the formal economy to gain access to economic opportunities. This makes me wonder how universities can play a role in helping this cause. As universities are private and public institutions and their ultimate goal is to help people achieve higher education, I would imagine them to be one of the leading advocates in promoting reforms of businesses and government here and abroad. I’m not sure exactly if they actually are, but I feel universities have just as much if not more responsibility in helping other economies develop. A possible idea that I can come up with off the top of my head would be for universities to maybe help start up subsidiary schools in poorer areas around the world. Obviously, people being more educated not only would help create many economic opportunites for people, but it can very well promote peace through the education itself. By this, I mean the basic concept of don’t let bad history repeat itself and to learn from mistakes that were made by societies in the past. In addition, it is critical people understand there is no need for war and fighting and that people can work together and not against one another. So, I guess my question is… do universities play a role currently in helping achieve economic development through promoting reform or their own actions of reform and if so, how are these worldwide universities(especially in the United States) doing this? Lastly, have they found success?
Natalie:
Thanks for your question. Your broad point about the role of large corporations in securing and preserving peace is quite valid. We often do not think of businesses in this way. Extractive industries (like oil in Sudan and copper in the DRC) require substantial upfront investment, which can only be recovered after a decade or more of profitable production. It therefore makes sense for them to be vested in peace processes. Unfortunately, past experience has seen many of these TNC investors being vested in sustaining regimes and not in comprehensive peace. You would recall that the Canadian firm (Talisman) was forced out of Sudan because their perceived negative effect on the peace process.
Although it is not documented, a number of TNC recognize the benefits and participate in peace talks. However, the downside is that some TNCs might be seen to gain unfair attention/access by participating in domestic politics. I know that both Shell and Chevron have been involved in peacebuilding efforts in Nigeria’s oil-producing regions — primarily at the community level.
I agree that governments definitely need to find ways in which to help entice business to invest in their countries, especially if their is a high risk of investment due to current or recent turmoil or unsatisfactory economic conditions. While tax breaks and other economic incentives are crucial to the success of foreign investment, governments must also look to establish a business and government environment that is sound, corruption free, and appealing to foreign investment. In many instances businesses see a large amount of potential in a country due to resources or an increasing desire by a country’s population for a particular good or service, however are pushed out of the country by economic constraints influenced and/or established by the leaders in high ranking positions.
Moreover I agree that tourism is a great way to boost the social and economic power of a country while increasing the quality of life and GDP/capita of a country. However, it is quite important at the same time to ensure that the local culture is not changed and whenever possible engrain the local culture in the tourism that is being marketed to foreigners (i.e. ecotourism, cultural learning, etc.).
I would agree w/David and Dexter about the importance of education for poverty reduction. Education opens so many more opportunities for people. Unfortunately, education opportunities themselves are few for poor families who may have to choose between sending a child to school or putting that child to work either at home or elsewhere. In a conflict context this becomes an even more pervasive problem as schooling becomes disrupted due to violence or there is an exodus of teachers along w/other educated folks. The inability to get even primary schooling has dire effects for a person’s life opportunities. I have spoken to employers in developing countries who said that if they had more local staff who even had a 5th or 6th grade level of education, they could train them for semi-skilled jobs that need to be filled. Research has also shown that a parent’s lack of education can also have negative impact on the educational attainments, not to mention well-being, of their children.
On the issue of universities, I agree w/David that there is an important role they can play. Over a period of 3-4 years I was able to work with a program w/Cornell University to build the capacity of economic research institutions in Africa - many affiliated or housed in universities. We invested in this program because of the importance of having properly trained researchers to influence policy, teach other generations, generate relevant research, etc. You can hear inverviews w/the Cornell research principals (including Ravi Kanbur and Chris Barrett) and read more about this program at either: www.povertyfrontiers.org or www.saga.cornell.edu
Borany Penh
No question, education is fundamental and economic research institutions play a vital role in informed policymaking.
I’d like to add that education must be developed with an eye toward the employability of graduates. There are many places where students with fairly high levels of education are not skilled in the areas that employers require. Students may be trained for public service work and lack the needed skills for private sector jobs. This of course leads to frustration. So one has to ask, how can private sector job creation be promoted, how can students be trained for private sector jobs, and how can youth be encouraged and prepared to become entrepreneurs?
I agree with what you have said about the need for eduction to eye employability of graduates. In otherwords education must be relevant to the needs of the community, country and the labour market to create the necessary impact on development and peace. Schools and Universities may have to develop comprehensive curricular to provide all round education. Introduce entreprenuership syllabuse in schools. Invest in technical schools to produce skilled manpower.
I wish to share an initiative in Uganda- one organisation the “Education Development Network” has introduced entrepreurship clubs in secondary schools, students engage in productive activities as extra curricular, they earn from whatever they produce. Teachers go through entreprenuership training, this is a crush programme approved by Ministry of Education to integrate entrepreneurship in the school curriculum.
Girls in secondary schools are mentored by experienced and successful business women as part of carrier guidance in schools. Some young girls are choosing self employment immediately after graduation.
The Private Sector Foundation has a programme with Young graduates and undergraduates encouraging business innovations. Interested students particpate in business innovation competitions, they undergo intensive training and coaching. Winning entries are given awards in terms of start up capital for the business venture. Those are some of the ideas to encourge the youth to be job creators. Once these young men and women are busy building their enteprises they will have no time to engage in violent acts they are more interested in a peaceful environemt where they will thrive.
Hi Pete,
I wholeheartedly agree with you that businesses must try to combat poverty. I believe that businesses play a vital role in the larger society that they are a part of. You mentioned companies that companies like HP and Unilever are doing this through employees learning first-hand about the communities where Business funcions are operated. My concentration in the Business School at GW is Human Resources so I am very interested in this topic because I believe that Human Resources professionals play a vital role in this entire process. Here are a couple of questions that I have: Is there any concrete data showing that companies that combat poverty ultimately become more profitable? If not, do you still believe that there is truly an economic incentive for companies to tackle poverty in their regions? Would you favor a government mandate where companies had to allocate a percentage of their profits to trying to alleviate poverty in the regions they operate? Is there any role for government in this process in your opinion?
I think we all agree the education is the most important prerequisites for economic development that to maintain peace. With better education, people can obtain more opportunity and easy access to achieve better living standards. Normally one of the roots of cause of conflict is people’s basic needs for living can not being met or satisfied. With better education, people learned more skills and technologies that can help increase productivity and create more wealth. Therefore, along with the economic development, people’s basic needs for living being met and satisfied, then the society tends to sustain peace.
Additionally, I think openness is very important for a country’s economic development. Raymond talked about the example of tourism in his video, which I found very interesting. He mentioned the tourism not just deliver tourist, but also capital and other things to help raise living standard and built global partnership. I think tourism represents a society’s openness level. China applied ‘open policy’ in 70s, which cause its economic increase rapidly and indirectly helped built up better social and legal structures. All of these benefits brought by the openness help China to sustain peace.
This links to the third questions, the economic freedom and political freedom. I think the economic freedom definitely has the contribution to political freedom. Since the economic freedom, like free trade will let people achieve more wealth which can lead the change of social class structure. The minority groups can also has the power and ability to present their political views. This will forces the increase of political freedom. But I think political freedom not necessary brings economic freedom and development, and especially peace. Still use China as the example. the political freedom inside of China is low since the communist party has the absolute power, but the economic freedom level inside China is increase in the recent decades. Many of its economic policy are learned from western capital countries. But country like China owns huge population can hardly achieve political freedom and peace at the same time. So is the economic freedom and political freedom are absolute- needed to achieve peace and reduce poverty? Which one should be more important?
The main theme of the conference is empowering the economic infrastructure, as well as capitalizing and improving the local capital markets in the places of “conflict” by economy and trade.
The most significant presentation of this week’s theme is “Dynamic Capabilities and Pro-Poor Business Strategies” who is given by the speaker Pete Tashman, a PhD student from my university. He points out the importance of “Corporate Social Responsibility”. Furthermore, he indicates seeing social issues as an unmet market demand. I agree with his thoughts and comments on this subject.
The problem is mostly about constitutional changes, the economy should be modified in a way that more formal people can be involved in it. Elena Panaritis touches this subject by mentioning the property rights in her presentation, as well as Raymond Gilpin who talks about capital intensive nature of tourism.
The business is about bringing the peace but, ‘peace’ mentioned here is not about foreign capital taking over the economy, it’s more about the foreign capital making the collaboration with the local economy. Borany Penh brings out this subject in her presentation: “Economic Incentives for Peace: Contributions of Micro-finance and Livelihoods Support” by underlining the importance of addressing poverty reduction in conflict and places.
Finally, the last question; “How does economic freedom contribute to political freedom and peace?” is ideological which comes up to the issue of relationship between the political and economic freedom. Political freedom can’t be mentioned without economic freedom, and more on this; there is a good article posted by Efe Sevin, which I really liked. It’s a valuable source that provides substantial information on this subject. “Such a link between economic freedom and political freedom would certainly confirm certain theoretical insights in the literature."
Certainly there are some tradeoffs in development, but why do you think a country has to choose between economic and political freedom? The statistical evidence does not suggest a country must sacrifice political freedom for economic freedom or growth. I’m not saying growth and political freedom always go hand in hand automatically but there are key institutions, such as property rights, that tend to be associated with both. Over time, I don’t think most countries can progress too far along one dimension without reforms on the other. Also, I think if you look closer you will find significant differences between China and western capitalist countries. Consider institutions such as contract enforcement, the banking system, and the protection of intellectual property rights. It will be interesting to see how China’s institutions develop going forward.
Sorry about my delayed response. I agree. I think that Strategic CSR is not only a positive thing, but is the best kind of CSR, when a company is doing what it is best at to help address social issues. Some have a more philosophical view and think that businesses should engage in CSR for moral reasons primarily (to more firmly institutionalize morality in the institution of business), and so there is a bit of an ideological debate amongsts scholars about the best kind of CSR. My reasons for framing strategic CSR the way I did was only to sidestep any ideological debates in that answer. But, getting into that debate, I am firmly on your side of it.
Hi Derrick,
I am not sure whether there is hard data in the form of a large sample statistical analysis. There is of course anecdotal evidence on a case by case basis that businesses can improve profits by addressing specific poverty issues in the communities in which they are embedded. There is also some evidence that businesses are unlocking wholly new market places by engaging in poverty alleviation issues and succeeding in the long term. But, many “pro-poor” ventures are failing as well. What the qualitative (and perhaps not concrete) data are showing is that businesses that 1) develop specific capabilities (superior stakeholder management skills, managers empowered to take chances, understanding of how to leverage informal community networks for things like marketing, distribution, supply chain development, etc…), 2) correctly idenfity institutional constraints and figure out how to address them can be succesful. I do believe there are at least two economic incentives for addressing conditions of poverty; 1) lack of education blunts the potential of a workforce 2) lack of healthcare, drinking water, food, public safety do as well 3) there are many institutionalize practices that facilitate trusting business transactions in the developing world that can be taught to the poor in a way that is congruent with their cultural norms, that will create much need social capital 4) there are numerous technologies and practices that can be given to the poor who operate in business value chains that would be great investments because they would improve the value of these value chains 6) the poor in the aggregate are the best market opportunity globally that is yet to be integrated in the global economy.
I am not a public policy expert, but government mandates I think are likely idealistic in developing nations where the governments lack authority, resources, legitimacy, skills and/or in some cases the desire to help their poor citizens. Forcing companies to allocate a percentage to some aid based goal is likely to create the same kind of results as foreign aid. I believe that public-private-civil sector partnerships are one good way to engage the public sector at a more bureacratic level, where, for example corruption and red tape have a tremendous impact on economic development. Cheers
I agree with Raymond Gilpin that tourism has a positive impact on developing countries and would help such countries increase capital and economic development. Tourism would also raise global awareness because people from all over the world are visiting these countries which would contribute to increased development. Economic freedom is related to political freedom and peace because if the government creates more jobs for the poor it would definitely contribute to peace because it would create more equality. It would allow a country to develop economically if more people are working and contributing to, for example, tourism which would help in the increase of capital for that country.
I think the idea of alleviating poverty through securing property rights is something that should be paid more attention to. The current economic situation in the U.S. is a perfect example of how much of a country’s wealth and stability is vested in private property; the subprime mortgage crisis literally crippled the country’s growth. I agree with Elena that private property is one of the best ways to create meaningful wealth because it not only increases an individual’s net worth substantially, but it also gives them a necessary asset for acquiring additional financing. In this way, the value of stronger property systems is really two fold!
I think Mr. Gilpin makes some very strong points for how Businesses through tourism can promote economic development and peace. One interesting point he makes though is the safety of the tourists. It seems like it could be a problem that could be hard to find out where to start with: tourism can help promote development and peace, but without some development and peace it will be hard for tourists to feel safe enough to visit. It would be interesting to see if some large tourism companies would see this as an opportunity, while a risky one, to cash in on some great locations, while helping develop these locations and promote peace there. If large, well known companies are offering tourism packages, tourists will feel more comfortable visiting these countries, because they have the security of the well known company names, rather than the unfamiliarity of a local tourism company.
I found Ms. Panaritis’s ideals on property rights very interesting. I just don’t understand how the wealth of the property can be objectified without upsetting the less fortunate who seem to be marginalized. In most American urban areas, this happens as gentrification, where the property value goes up and the more affluent move in, pushing out the less fortunate when they can’t afford to live there anymore. How can we make sure that in these developing countries in the Middle East and South America that this doesn’t happen to them? What makes fair?
Thanks,
Kenny Brown
I agree with Mr. Brown, there are definitely two sides to this argument. While we want to develop these areas it is key that those who are the original residents benefit from the development and not the wealthy who buy in early and sell when the property value goes up. There needs to be a way to develop these areas while those original property owners still have the rights to their land. That way, when the value goes up it can be there choice, either stay in the area now that it is nicer, or sell the land for profit and move to another area of their choosing.
I really like the idea of promoting economic development through tourism. While risky like you said, it is a very efficient way to jump start the economy. Safety is a big issue, however it has been successful in other areas where tourism companies made a resort where the guests would be completely safe. If this is done properly I can only guess that their will be great success and a real kick start to the development of these poorer countries.
The role of NGO is very important ,because it can drive to the right way as to the wrong way .
I am a catholic and the experience of the Catholic Church in Madagascar has been very important in the coup made the 17th march 2009 .
Because the catholic church has option for the poor this is why I think the catholic church in Madagascar was against the Madagascar Action Plan (MAP) promoted by the Malagasy President Ravalomanana .
The MAP is linked on “Trade but not Aid” ;but I think the Catholic Church in Madagascar is oriented on “Aid but not Trade”.
The partner between Church State and Private ,is important ,and i think the Church can suport the private in this partnership between Public Private Partnership ,mainly when the locale people are not sized or fit to partner with the Public administration
But if the Church is linked on Charity businness ,then it becomes really dangerous ,because the Church will try to make a coup instead of fighting against poverty .