Hipsher The Private Sector's Role in Poverty Reduction in Asia

1. Auflage 2013
ISBN: 978-0-85709-449-0
Verlag: Elsevier Science & Techn.
Format: EPUB
Kopierschutz: 6 - ePub Watermark

E-Book, Englisch, 352 Seiten

Reihe: Chandos Asian Studies Series

The private sector has an important role in poverty reduction in Asia. The Private Sector's Role in Poverty Reduction in Asia argues that the best way to create sustainable projects is to create win-win situations where both private companies and individuals working their way out of poverty can benefit. The book provides a practical guide for managers and individuals working in the private sector in the least developed areas of Asia to help make a difference to the lives of others. The book's opening chapter considers the private sector's role in poverty reduction in Asia and following chapters discuss the variable nature of development, developing economy environments in Asia and business practices and strategies in these economies. A number of Asian economies are considered in turn, including: China; Vietnam; Thailand; Cambodia; Laos PDR; Southeast Asian countries; South Asian countries; Central Asian countries; and the Himalayas. The final chapter looks at creating sustainable win-win situations. - Focuses on practical advice for acting managers - Uses primary research carried out in developing economies, with interviews and ideas from local managers and business owners - Covers a variety of academic theories, empirical evidence and personal experiences of individuals working in the region

Scott A. Hipsher has extensive experience living, working and researching in developing economies in Asia. He is currently working in Henan Province. His published works include Business Practices in Southeast Asia: An Interdisciplinary Analysis of Theravada Buddhist Countries, various book chapters, academic journal articles, newspaper and magazine articles, as well as a number of blogs and internet articles.

Autoren/Hrsg.

Hipsher, Scott

Leseproben

1 Private sector’s role in poverty reduction
Abstract:
Poverty reduction is one of the world’s most important challenges, and it is proposed the private sector has an important role to play in creating the economic growth, employment and purchasing options needed for significant poverty reduction. Poverty is highly correlated with many negative measurable aspects of standards of living and therefore reducing poverty can have a positive impact on the lives of millions of people around the world. There is much to learn about poverty reduction through examining examples in Asia, as it is the region of the world which has both the most people currently living in poverty and has had the most success in reducing poverty. Key words poverty reduction wealth creation GDP private sector LDCs globalization privativization Asia Poverty reduction
Words matter and how an issue or problem is framed will influence the steps taken to fix the problem or change the situation. Poverty has been a scourge of mankind throughout history and therefore poverty reduction has become a widespread goal throughout most societies in the world. The word ‘poverty’, while having a negative connotation, is often associated with victimhood. ‘A victim of poverty’ is a common phrase used to refer to individuals living in dire economic circumstances. And ‘victims’ are often thought of as needing the assistance of outsiders, heroes, to come to the rescue. But is having outsiders coming to the rescue the most effective way to combat this enemy of mankind? Or is poverty reduction more likely to come due to the efforts of the individuals in poverty themselves? Has the trillions of dollars spent as foreign aid and in charities in an effort to directly reduce poverty been highly effective in achieving the goal of reducing poverty in the world? The opposite of poverty is wealth, while the opposite of reducing is increasing. Therefore, the term ‘increasing wealth’ might be able to be used synonymously with the term ‘reducing poverty’. Reducing poverty implies the increasing of the wealth of individuals currently in poverty. However, the term ‘wealth’ is often associated with elitism and selfishness, and therefore the positive term ‘increasing wealth’ does not usually produce the same feelings of warmth and charity that the negative term ‘poverty reduction’ does. However, looking at the creation of wealth in areas where poverty is present as an approach to poverty reduction might produce a different perspective with which to examine and tackle the problem. A wealth creation approach lessens the sense of victimization found in many approaches to poverty reduction. Wealth creation does not require outside heroes to come to the rescue, it can be created by individuals themselves, but it does require creating opportunities. Can we assume extremely few people will willingly choose to live in poverty, if other alternatives are available, and therefore will lift themselves out of poverty if provided the opportunity? Can a shift from thinking the outside world can create solutions to reduce poverty to a focus on creating opportunities which allows individuals to increase their own wealth and therefore lift themselves out of poverty increase the amount of poverty reduction seen around the world? While it may be true that money cannot buy happiness, severe poverty is normally accompanied by suffering, high rates of infant mortality and relatively short average life-spans, all of which limit the quality of a human’s life. Poverty doesn’t only condemn humans to lives of difficulty and unhappiness; it can expose them to life threatening dangers. Because poverty denies people any semblance of control over their destiny, it is the ultimate denial of human rights. When freedom of speech or religion is violated in this country or that, global protests are often mobilized in response. Yet when poverty violates the human rights of half the world’s population, most of us turn our heads away and get on with our lives. (Yunus and Weber, 2007: 104–5) There are many economists, development specialists, intergovernmental agencies, and politicians working tirelessly to lessen the impact of poverty. However, it is proposed the private sector and business educators and researchers also have important roles to play in the global struggle against poverty. Yet for the most part, business researchers and large businesses have ignored the ‘bottom-of-the-pyramid’ markets which consist of the majority of the planet’s citizens (Ricart et al., 2004: 194; Habib and Zurawicki, 2010). While the need for further research on business conditions in areas where poverty is widespread has been heartily acknowledged (London and Hart, 2004; Meyer, 2004; Ramamurti, 2004; Choi et al., 2010), there remain many opportunities for further increasing knowledge by business researchers and the use of this knowledge by the private sector operating in the bottom-of-the-pyramid (BOP) markets. These efforts could have the effect of increasing the wealth of those most in need which could lessen the negative impact poverty has on the lives of millions of individuals. There has been considerable discussion about how private-sector businesses can impact poverty reduction by engaging in for-profit business activities in the BOP markets (e.g., Prahalad and Hart, 2002; London and Hart, 2004; Ramamurti, 2004; Ricart et al., 2004; Prahalad, 2005). C.K. Prahalad has been at the forefront of academic researchers in the drive to increase the private sector’s role in poverty reduction and his vision of how private enterprises bring benefits to the poorest in the world is to bring the market’s discipline and innovation to the less and least developed countries (LDCs). He believes the market creates additional choices for consumers and employees while respecting the decisions made by the world’s poor (Gouillart, 2008). Choice is the key feature in Prahalad’s vision. In an interview with Wooten et al. (2005:170) he shared the following thoughts: The most important thing for me—you should not play God or be elitist. A lot of development people decide what poor people should or should not have. We simply have no right to tell poor people what they should have. Give them the same choice you want given to you. Let them decide. Will they make some bad decisions? Yes. So we make bad decisions? Yes. So the rich have as much liberty to make bad decisions as the poor. But give them the information; don’t decide for them. Serving the BOP markets creates a number of challenges. Operating in the BOP markets, and more specifically servicing individuals living in rural areas of LDCs as consumers, can be costly as infrastructure in LDCs is poor and transportation costs are high. Also as individuals living in poverty generally spend the majority of their income on food for subsistence, most have very limited amounts of discretionary income. This lack of discretionary spending ability makes these BOP markets unattractive to many businesses, especially those which produce items that are not considered necessities. In addition, there are many marketing challenges in creating awareness of products and designing products so they are affordable to BOP consumers. Furthermore, creating jobs in the BOP sectors of developing economies requires overcoming challenges due to most of the workforce living in these areas having a lack of access to education and skill development opportunties (Anderson and Billou, 2007; Habib and Zurawicki, 2010). Moreover, there are critics of this view that free markets and free choice will lead the poor out of poverty. For example, Karnani (2010) feels much of the BOP literature portrays a romantic image of the poor while the author feels in reality the poor are generally not capable of making the best decisions for themselves and need support from governments, NGOs and international organizations to bring a positive change in their circumstances. Karnani expresses the opinion the emphasis on markets and free enterprises providing additional employment and purchasing choices deemphasizes the role of the state and other actors in poverty reduction. In addition, there have been concerns expressed over ethical issues encountered by international companies when serving BOP markets. BOP markets generally operate in environments with relatively less formal legal systems and more relationship-based business deals. These features can create conflicts with complying with the ethical standards expected of multinational companies which are used to operating in developed economies with stronger legal systems and more developed market-based economies (Choi et al., 2010). Davidson (2009) raised concerns over the ethical decisions a company faces in the BOP markets when designing products, selecting prices and in ensuring honesty in advertising, as consumers in these markets may lack the sophistication to understand the nuances and biases found in a modern marketing campaign. Operating businesses ethically and profitably in areas of the world where poverty is widespread is a challenge, yet...