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Business partnerships in the fight against poverty

by Curtis S. Chin

Whether in Tokyo or Osaka, the name Nabizan Begum is likely to be of little interest to Japan’s business and government leaders. That’s understandable since Begum — like tens of millions of other poor, rural women across Asia who have long struggled to survive off of day labor work and by growing small-scale crops — lives in a part of Bangladesh that is far from Japan’s centers of power.

That’s also unfortunate, for Begum’s story offers up a lesson for Japan’s policymakers and others in the region focused on how best to grow economies and address Asia’s persistent poverty. Increasingly business, including Japanese enterprises, can play a critical role in fighting poverty, and it can be done in a way that quite frankly is also good for business.

For nearly four years, I served as the U.S. ambassador to the Asian Development Bank after having stepped down from a leadership role at a major multinational company. As a member of the ADB Board of directors, I pushed to make that international financial institution more effective and more focused on results and its overarching mission of reducing poverty across the region.

As many have noted, the ADB is heavily influenced by Japan’s tradition-bound Ministry of Finance, and change can be hard to come by in what remains primarily a financier of infrastructure in China, India, Indonesia, Vietnam and the Philippines.

During my time in post, I also encouraged the bank’s leadership, management and staff to get out of their offices — critics might say their ivory towers — to see firsthand the face of those who the ADB was created to help, and to meet and engage with people from all walks of life — people like Nabizan Begum.

Whether my encouragement was a factor or not, I was pleased to see the ADB president, and now head of the Bank of Japan, Haruhiko Kuroda, finally make it to some of the region’s poorest nations, including Afghanistan, Nepal and Bangladesh, after so many other visits to attend international conferences or to meet with officials from the ADB’s largest shareholders.

Understanding the challenges of those most in need in Asia is particularly important, for despite the media images of modern skyscrapers and shimmering glass-clad office towers in Shanghai or the latest shopping malls in Jakarta and Bangkok, the reality remains that Asia and the Pacific is still home to two-thirds of the world’s poor. An estimated 1.7 billion people across the region live on less than two dollars per day.

Thanks, though, to innovative new partnerships that access the knowledge and resources of the private sector, people like Begun are slowly building better lives for themselves and their families. That at least was the message of Cherian Mathews, the Asia regional director of Oxfam GB, at a recently concluded conference on corporate social responsibility, the CSR Asia Summit 2013, held here in Bangkok.

Some three years ago, according to Mathews, Oxfam helped facilitate a supplier relationship between Bangladesh’s largest food-producing company, PRAN, and thousands of local chili producers. Begum and many other women like her then lived on less than one dollar per day in what is one of the poorest regions on earth.

Mathews says Begum was unable to send her children to school, and any chili that she produced was cut off from mainstream agricultural markets. Even in her own informal local market, Begum’s ability to build a better life was restricted by her lack of bargaining power due to low production volume and her lack of knowledge on prices and negotiating skills.

Fast-forward to today, and Begum is benefiting from a partnership between the chili growing community and the company PRAN, as well as other stakeholders including government agencies, banks and local civil society organizations. Each has played a role in the development of a new business model for the chili farmers. An association was created in the form of a social enterprise, which in turn negotiates better deals with buyers than any individual chilli producer would have been able to.

The results?

Greater confidence and stability for the big company and the small farmers alike. Mathews says PRAN has been able to introduce new farming and post-harvest technologies and skills, including a more flood-tolerant chili seed that contributes to greater productivity and quality of the chili.

He adds that Begum’s children are in school and that she is able to begin putting away some money for that next inevitable rainy day.

Time will tell if this and other efforts, even when supported by a range of development partners will be sustainable, particularly in the face of the many natural disasters that strike so much of Asia. Insurance, risk management and other learnings and practices from the private sector will also need to be adapted to here at the bottom of the economic pyramid.

During Begum’s lifetime, more cyclones and more flooding will hit Bangladesh, and history is likely to repeat itself with earthquakes and tsunamis impacting countries large and small across Asia, whether Indonesia, the Solomon Islands or Japan.

Perhaps, though, we will find that Begum and people like her are now a bit more resilient and self-sufficient than they once were thanks to public-private efforts to provide greater access to knowledge and capital.

One clear lesson from my time in both the corporate and diplomatic worlds is that the private sector must be a critical partner if we are to sustainably lift people out of poverty. Whether in Asia or the United States, it is small- and medium-size enterprises that consistently drive job creation and economic growth.

In my own focus on more responsible development — focused on people, the planet and partnership — I have found too often that bureaucracy, regulation, interventions by government and corruption get in the way.

This challenge of what I call the “little bric” may well be a longer-term constraint to growth and an impediment to building better lives for people such as Begum and her children. Still, there is reason to hope as business cases emerge for innovative partnerships.

At the recent summit focused on corporate social responsibility, Begum’s story was just one of many. Perhaps very few of the more than 400 business, government and civil society representatives who attended from across the region, including Japan, will recall her name. That again is understandable. But her story and other examples of a partnership for shared benefit are worth both remembering and emulating.

Curtis S. Chin served as U.S. ambassador to the Asian Development Bank under Presidents Barack Obama and George W. Bush (2007-2010). He is a managing director with advisory firm RiverPeak Group, LLC, and a board member of World Education Services and Community & Family Services International.