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Our Insights 3 May 2013

A Personal Journey Towards Rethinking Poverty Alleviation

By Livia Martini

Gulu, Uganda – Copyright (c) Livia Martini

My junior year of college I spent a year living between Northern Uganda and Rwanda. Like most twenty-something liberal arts school students who graduate from an international studies program, I was convinced I would change the world and that living abroad would show me how. I returned to the United States disheartened; ashamed at myself for being naïve enough to think I had the answers, and convinced that poverty was unsolvable. Three years and many life turns later, I’ve begun to rethink the issue of poverty alleviation.

Poverty is heartbreaking, numbing, maddening and nonsensical all at once, but poverty is not powerlessness and it is not the failure of an individual.
Poverty is the result of a failed system; a system that assigns worth based on purchasing power; a system that makes quality of life, health, and education equivalent to a person’s income; a system that replicates socio-economic situations for various generations. To address poverty, we need to change the system and stop accepting such paramount inequalities as an unfortunate side effect of capitalism.

No sector is better equipped to lead this change than the business sector. Businesses, unlike NGOs and governments, have the capacity to price and design products according to various socio-economic realities. What would our world look like if everyone could afford high-quality food, decent clothing, and the Internet? Not to mention, medicine and education? Think of the immeasurable divides we could bridge just by making certain products more accessible. And while this might sound like charity, it’s not; there is a business incentive and financial reward for companies willing to take this extra step. As economic uncertainty continues, consumerism is dwindling. Markets that were profitable are now saturating, and the financial securities companies enjoyed are now facets of the past. Pricing and developing products on a tiered system could incorporate close to 3 billion new consumers and give companies a leg-up in markets that were once thought impossible to reach.

Addressing poverty also mitigates certain risks in a company’s supply chain. It is an unfortunate reality that most supply chain catastrophes (Foxconn, factory fires and child labor to name a few) include impoverished populations. People should not be dependent on unsafe inhumane labor conditions for food and water. Removing this vulnerability will empower workers to demand basic human rights in their workplace and protect companies from possible supply chain embarrassments.

In addition to the business benefits of equitable and inclusive business models, trends suggest that poverty alleviation and economic equality are on their way to becoming prominent social demands. With the Millennium Development Goals set to expire in 2015, NGOs and organizations alike are calling for a refocus on the issue of inequality; the Chinese government announced plans to raise the minimum wage to 40% of average urban salaries by 2015; Unilever partnered with Oxfam to track its impact on poverty; poverty, once associated with certain regions of the world is now a concern for developed and developing countries alike. It is not farfetched to assume that society will soon turn to the business sector for answers and action.

What we cannot do is make the business sector our “savior.” By demanding too much from businesses we risk creating an equally unsustainable system; one that relieves governments of their responsibilities to their people, creates cultures of dependency, and assigns tasks that businesses are not equipped to deliver. What we can do is ask businesses to address poverty within their core capabilities and consider the impacts of the system they’ve helped create. Doing so will move us one step closer to a just, efficient, equitable and sustainable world.

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