[DEBATE] : (Fwd) Weissman on global poverty
pbond at mail.ngo.za
Fri May 9 07:41:05 BST 2008
(Anglo & DeBeers are Business Call to Action hucksters.)
Extensive links and forum to comment on this and other columns at:
Global Poverty: More Big Business is Not the Solution
By Robert Weissman
May 8, 2008
By most accounts, UK Prime Minister Gordon Brown is genuinely passionate
about reducing global poverty.
But he is not willing to challenge the structures of the global economy
that generate poverty, or the corporations that build, benefit from and
maintain those structures.
Nor, apparently, is he immune to gimmicky notions of corporate
leadership to support development, or the lure of high-profile summits
to shed light on new plans to do -- very little.
Thus, earlier this week the UK was treated to the spectacle of the
Business Call to Action summit, which Brown's office co-sponsored with
the UN Development Program. More than 80 CEOs of large companies
gathered with Brown and other luminaries to discuss how they could help
meet the Millennium Development Goals, which aspire to reduce global
poverty by half by 2015. Roughly two dozen of these CEOs -- from Anglo
American, Bechtel, Citigroup, Coca-Cola, De Beers, Diageo, FedEx,
Goldman Sachs, GE, Merck, Microsoft, SAB Miller, Wal-Mart and others --
have signed the Business Call to Action, which states, "as leaders from
the private sector, we declare our commitment to meet this development
The premise of the event, as Gordon Brown said, was to advance "a new
approach -- moving beyond minimum standards, beyond philanthropy and
beyond traditional corporate social responsibility -- important though
they are -- to develop long-term business initiatives that mobilize the
resources and talents that are the central strengths of global business."
The mantra of the event was for corporations to "explore new business
opportunities that use their core business expertise" and that also help
Taken at its face value, this was, um, not exactly inspiring. Says Peter
Hardstaff of the UK-based World Development Movement, the CEOs "have all
agreed -- to do more business."
But the problem goes way beyond the fact that business as usual -- or
even a little bit of new business initiative with a
development-conscious orientation -- is not going to do much to reduce
global poverty. The real problem is that business as usual is a central
part the problem.
"Instead of holding these companies to account for their actions," says
John Hilary, executive director of War on Want, a UK-based anti-poverty
group. "Gordon Brown has allowed them to portray themselves as allies in
the fight against poverty. The prime minister should be working to
address the poverty and human rights problems caused by business, not
giving the companies a free ride.”
War on Want focused attention on the harmful development impacts of many
of the corporations signing the Business Call to Action. The group has
campaigned against mining giant Anglo American. It has documented how
Anglo American has benefited from human rights abuses associated with
civil wars in Colombia and the Democratic Republic of Congo (DRC). Local
mining communities in Ghana and Mali have seen little economic benefit
from Anglo American's operations (or the spike in the price of gold);
instead, says War on Want, the company's mines harm their environment,
health and livelihoods.
Other corporate signatories to the Business Call to Action have directly
hurt poor people through their "core business" more than can be offset
by development-tinged ventures (even assuming such ventures succeed).
Wal-Mart contracts with sweatshops. Bechtel tried to price-gouge and
rip-off Bolivian consumers and the Bolivian state through control of the
country's privatized water system. Merck refuses to license life-saving
medicines for cheap generic production.
Simultaneous with Brown's business summit, Action Aid UK pointed to a
major systemic abuse by multinational corporations that undermines
development: They don't pay their taxes. The group released a report
looking at tax payments of 14 corporate signers of the Business Call to
Action. It found that these companies combined are underpaying taxes by
more than $6 billion a year, as compared to what they would pay if they
paid at the statutory rate in the United States and UK. The group did
not suggest any illegal activities by the companies -- there are plenty
enough legal tax avoidance strategies.
Money lost to developing countries through capital flight and tax
avoidance is many times greater than aid flows into poor countries, says
Jesse Griffith, the lead author of the Action Aid UK report.
Tax avoidance is a key issue because it strips money from national
treasuries that would otherwise be available for social investment, and
because it reflects structural problems that could and should be cured
without any need for global philanthropy or aid.
But tax avoidance is only one of many ways that corporations exploit and
perpetuate economic policies and institutional arrangements that
contribute to poverty or inhibit authentic development.
The World Development Movement issued a 10-point challenge to
corporations that claim an interest in promoting global development. It
called on companies to stop using their political influence to promote
policies that undermine development. It urged companies to: stop
lobbying to open up developing country markets, and let developing
countries "use the same trade policy tools industrialized countries used
to get rich;" stop demanding rich country-style patent rules for the
poor; support radical government action, starting in rich countries, to
address climate change; support binding codes of conduct for
multinationals, including respect for labor rights; end support for
privatization and deregulation, including particularly financial
deregulation; stop lobbying for and exploiting tax loopholes; and other
This is not exactly an agenda that global business leaders are likely to
take up soon.
On the other hand, it's not exactly likely that global business leaders
are going to lead the way to end global poverty.
Among other things, that's going to take a global movement, led from the
Global South, to implement the policies implicit in the World
Development Movement call.
Robert Weissman is editor of the Washington, D.C.-based Multinational
Monitor, <http://www.multinationalmonitor.org> and director of Essential
(c) Robert Weissman
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