On Tuesday last week the Secretary of State at DFID addressed an audience at LSE, where he signalled once again the Government’s firm belief that it is “business which holds the key to tackling global poverty.” Andrew Mitchell’s pitch was clear cut - “aid is a means to an end, not an end in itself” he claimed, “it is the private sector that creates the jobs, goods and services that the world’s poorest people so desperately need to lift themselves out of poverty. We will help them achieve this.” Announcing the launch of a new private sector department, the Secretary of State committed to new resources and for “DFID to learn from business.”
24 hours on from the LSE lecture and to City Hall where, with the help of an energetic Alastair Stewart chairing, CARE International UK hosted a prestigious panel of experts drawn from government, business, civil society and academia to examine Mitchell’s statement. The event was conceived to commemorate CARE’s 25th anniversary year of operating in the UK, a year during which our message has been focused on the ‘changing face of development’ over the last quarter of a century.
The role of the private sector in development has been given increasing attention by CARE UK itself since the mid 1990’s, and today our innovative partnerships with businesses in particular have ensured the organisation has evidenced experience of where the private sector can make a difference to poverty alleviation - both positively and negatively. As the recent round of MDG review meetings in New York confirmed, the case for engaging the private sector in development is now well made, but have DFID set out their new stall in such a way that will appropriately maximise the opportunities from a development perspective?
Last week’s panellists were sold on the argument, but perhaps the devil will be in the detail when it comes to Mitchell’s announcement that ‘wealth creation’ is an important driver for economic growth and prosperity. CARE Rwanda’s Assistant Country Director Josephine Ulimwengu made clear in her panel address that ‘wealth creation’ does not directly alleviate poverty on its own. In fact, economic growth that is not inclusive for those living in poverty will have the reverse effect, and do more harm than good.
International and national companies are morally, socially, environmentally and now commercially persuaded of the need to improve the responsibilities of their operations. The Panel offered examples of good practice in this area - microfinance schemes, supply chain initiatives, technical innovations - but also threw caution over a reliance on corporate responsibility being too much of a way out for many companies (green-washing in other words) rather than a genuine way in to addressing social issues, and their underlying causes.
These debates will continue and, at CARE UK, we are glad that the issues of corporate responsibility, economic growth and inclusive business models are under the microscope. The voices of many sectors were heard at our panel event, and let’s hope that more public involvement in this agenda is fostered from such gatherings. DFID have laid out their agenda, and it is one from which there is much to be gained in terms of development outcomes. An approach that encourages, enables and develops enterprise in developing countries should be welcomed, provided the private sector is also challenged on ensuring its responsibilities and its practices are consistent in providing positive social outcomes, and that business itself is in it for the long term.
CARE UK’s event confirmed from all quarters that profit motives are king when it comes to business ‘drivers’ for engaging in development. That is not up for debate, nor should it be - what is, is just how far business can go to ensure genuine commitment to a triple bottom line objective and to delivering on social returns on investment as well as financial ones. We know the two can be linked, and increasingly, they are.
Tim Bishop is Head of Private Sector Engagement at CARE International UK.