“Poverty is unnecesary. People are able to get themselves out of poverty. All they need is opportunity. They are not expecting charity or instructions. Charity is good, but it´s not enough. If you turn it into a business proposal, then it is very powerful as it can work by itself”.
Muhamad Yunus. Founder of the Grameen Bank and Nobel Peace Laureate.
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Picture by Knuetzler
“Inclusive business” is a hype expression used to define a new concept of economic activities that go beyond fair trade. It is about carrying out new profitable business projects, which foster ecological and social responsibility and, at the same time, uses the mechanisms of the market to improve the standard of living of low-income people.
The “Inclusive Bussiness.org” has originated from the alliance between the World Business Council for Sustainable Development (WBCSD) and SNV Netherlands Development Organization. Inclusive Business.org aims to spread news and promote cases that show this trend.
According to a brochure published by this organization, the low-income segments of the society participate in inclusive business in two ways:
1. Members of the production chain: as suppliers of raw materials, distributors and parts of the workforce.
2. Consumers: in those initiatives that make goods and services affordable for low-income communities.
The good news is that, first and foremost, inclusive business represents a great opportunity for many social actors. Our own experiences in our consulting firm with the project “I don’t use plastic bags poverty, creating their own opportunities to work in a decent “, in which cooperative La Alameda takes part, and our alliance with the cooperative El Ceibo to recycle, have showed us the value in this kind of organizations. They consist of people with a vision, that have madeofenvironment.
Conversely, the other form that inclusive business has taken reveals some aspects that stir some controversy. It holds the belief that the poor of Latin America and other emergent markets should become consumers. This is actually an old idea, first promoted by Henry Ford at the beginning of the XX century. In more recent years, we have witnessed the negative results of this economic model, which has proved to be ecologically unsustainable. Tackling poverty in our century involves more profound changes in the ways we produce and consume.
Another issue that deserves serious consideration is what we really mean in terms of goods and services when we discuss the possibility of including the low-income segments of the society in the market as consumers. I became aware of this on reading an article in The Guardian :“Latin America’s poor provide rich pickings”, which was quoted in the web site of Inclusivebusiness.org. The article cites the case of Ignia, a mexican company that sells health care to poor people in that country as a “best practice”. Something similar happens in my country. Since public hospitals are overcrowded and people must wait weeks to get a medical appointment, they end up paying for private doctors.
Taking advantage of this problem, companies that offer pre-pay clinic service at affordable prices have appeared. They are quite profitable but they represent only a patch. The actual fact is that the state is neglecting one of its basic obligations.
The appearance of these private companies that profit from the skinny pockets of the poorest (also called business at the bottom of the pyramid), making them pay for something they should by law receive for free is anything but good news. The society, the companies and the social entrepreneurs owe themselves a profound debate on which course of action ought to be taken to tackle poverty and define the roles of the private and the public sectors to achieve this.
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