Putting the heart back into the economy
Saturday, 15 May 2010
Nerun Yakub
A roundtable discussion on ' Social security and the non-formal sector' at the Press Club last Tuesday had the eminent economist Professor Muzaffar Ahmed pointing out that the situation of the labour movement in Bangladesh is particularly fragile at the moment due largely to the absence of a strong 'middle class' leadership to fight for the rights of the workers, including the huge numbers in the non-formal sector. The latter's contribution to the economy is by no means small and deserve to be recognized formally in the state's book of accounts as a vital part in the economy. Those who have their hearts and intellects in the right place in fact claim that it is this non-formal sector that could be credited with actually keeping Bangladesh's economy afloat ! And even insulating it against the turmoil of the global financial system !
The truth or otherwise of the above comment is for experts to judge but even non-experts would agree whole-heartedly with Professor Muzaffer Ahmed when he says we ought to think in terms of the broader 'human security' of non-formal labour rather than mere 'social security'; that more respect is due unto them than is normally granted; that the government should think of introducing rent-based basic facilities like public toilets and shelters which are accessible to them; that the government should introduce a system for awarding extraordinary workers …. etc, etc. All of this would certainly put us on the road to a more civilized and economically sensible interface between the 'working classes' and the 'others'( the state included) who benefit most from their toil.
Another of our economists, the most celebrated Dr Mohammad Yunus, also keeps talking about a more inclusive, more charitable approach to achieving economic security. And he has been showing the world that lending to the poor could be very profitable, 'social business'. In his view, charity, if genuine, should be employed to help have-nots run businesses sustainably enough to get them out of the poverty trap. Isn't that the same old teaching that every prophet ---- 'give a fishing line rather than fish' ---- of every clime has been credited with preaching ?
The Grameen guru's latest bestseller, 'Building Social Business ---- The new kind of Capitalism that serves Humanity's most pressing needs' runs in the same vein. It calls for an entirely new kind of mindset that would harness the poor and powerless ---- who deserve both credit and trust ---- to create business 'selflessly', without acquisitiveness, without the hunger for profit that has been taught by the flawed economic theories of old capitalism, so to say. Critics might consider all this a wee bit facile, but how else could one hope to protect the socio-economic and human security of the overwhelming masses when genuinely socialist-minded women and men have been disappearing fast from Bangladesh's firmament ?
Social business has in fact become the buzz word these days for many individuals and outfits. The Bangladesh Enterprise Institute( BEI) is said to be involved in independent research, under its Bangladesh Social Enterprises Project (BSEP), to identify 'the strengths and opportunities of companies doing business with the poor and to address the challenges and threats.' Such companies have been making their presence felt lately, but not without creating a stir in business circles. Those who struggle to build businesses with bank loans and equities are not happy at all. They are understandably piqued by what they see as unjustified indulgence given to the highly profitable yet tax-exempt, dole-supported enterprises of NGOs. Such bad feelings refuse to go away, even towards Bangladesh's Nobel laureate.
Bangladesh's people have often been dubbed the most exploitable resource for entrepreneurs who are clever enough to 'bank on the miseries of the poor.' Decades ago the World Bank in fact was given that very qualifying clause by The New Internationalist ! Faultfinders here have been blaming microcredit providers for turning the poor into unthinking consumers of unnecessary commodities, creating markets for foreign companies, etc etc. Indeed, despite much good work done by many no-nonsense, non-government organizations there is no dearth of critics showcasing the wrongdoing ones with a vengeance, to flog all NGOs.
As mentioned, giant, professionally-world-class NGOs are resented by tax-paying, loan-burdened entrepreneurs for their forays into business. What is often missed is that although these social businesses also have to profit in order to be viable, they have an essential core of social responsibilities that 'typical' businesses are not obliged to have, profit maximization being their sole purpose. As Dr Yunus explains, in social businesses, 'You can make profit, but you cannot take it'. Profit is ploughed back to improve services. This basic principle permits more money to be utilized for people's benefit, providing them affordable services, creating jobs as well as keeping the projects running.
Result-oriented, genuine social businesses could make a difference in the lives of the poor majority if investment to uplift them is targeted and sustained. There is in fact a great deal one could do if the will is there to do good in the long term. In recent years big businesses too have been trying to be fashionably conscientious in this regard. They have been creating special funds to spend on so-called corporate social responsibility (CSR) activities, most of which, however tend to be no more than exercises in company profile building and public relations, according to analysts. The idea that it would be better to set up a separate stock market on social businesses, in which companies could actively participate in poverty alleviation, health care services, job creation etc, whereby CSR charity efforts could be transformed into genuine investments, may seem far-fetched, but given the ingenuity of market makers who knows what more goldmines 'poverty' might yield in the future !
A roundtable discussion on ' Social security and the non-formal sector' at the Press Club last Tuesday had the eminent economist Professor Muzaffar Ahmed pointing out that the situation of the labour movement in Bangladesh is particularly fragile at the moment due largely to the absence of a strong 'middle class' leadership to fight for the rights of the workers, including the huge numbers in the non-formal sector. The latter's contribution to the economy is by no means small and deserve to be recognized formally in the state's book of accounts as a vital part in the economy. Those who have their hearts and intellects in the right place in fact claim that it is this non-formal sector that could be credited with actually keeping Bangladesh's economy afloat ! And even insulating it against the turmoil of the global financial system !
The truth or otherwise of the above comment is for experts to judge but even non-experts would agree whole-heartedly with Professor Muzaffer Ahmed when he says we ought to think in terms of the broader 'human security' of non-formal labour rather than mere 'social security'; that more respect is due unto them than is normally granted; that the government should think of introducing rent-based basic facilities like public toilets and shelters which are accessible to them; that the government should introduce a system for awarding extraordinary workers …. etc, etc. All of this would certainly put us on the road to a more civilized and economically sensible interface between the 'working classes' and the 'others'( the state included) who benefit most from their toil.
Another of our economists, the most celebrated Dr Mohammad Yunus, also keeps talking about a more inclusive, more charitable approach to achieving economic security. And he has been showing the world that lending to the poor could be very profitable, 'social business'. In his view, charity, if genuine, should be employed to help have-nots run businesses sustainably enough to get them out of the poverty trap. Isn't that the same old teaching that every prophet ---- 'give a fishing line rather than fish' ---- of every clime has been credited with preaching ?
The Grameen guru's latest bestseller, 'Building Social Business ---- The new kind of Capitalism that serves Humanity's most pressing needs' runs in the same vein. It calls for an entirely new kind of mindset that would harness the poor and powerless ---- who deserve both credit and trust ---- to create business 'selflessly', without acquisitiveness, without the hunger for profit that has been taught by the flawed economic theories of old capitalism, so to say. Critics might consider all this a wee bit facile, but how else could one hope to protect the socio-economic and human security of the overwhelming masses when genuinely socialist-minded women and men have been disappearing fast from Bangladesh's firmament ?
Social business has in fact become the buzz word these days for many individuals and outfits. The Bangladesh Enterprise Institute( BEI) is said to be involved in independent research, under its Bangladesh Social Enterprises Project (BSEP), to identify 'the strengths and opportunities of companies doing business with the poor and to address the challenges and threats.' Such companies have been making their presence felt lately, but not without creating a stir in business circles. Those who struggle to build businesses with bank loans and equities are not happy at all. They are understandably piqued by what they see as unjustified indulgence given to the highly profitable yet tax-exempt, dole-supported enterprises of NGOs. Such bad feelings refuse to go away, even towards Bangladesh's Nobel laureate.
Bangladesh's people have often been dubbed the most exploitable resource for entrepreneurs who are clever enough to 'bank on the miseries of the poor.' Decades ago the World Bank in fact was given that very qualifying clause by The New Internationalist ! Faultfinders here have been blaming microcredit providers for turning the poor into unthinking consumers of unnecessary commodities, creating markets for foreign companies, etc etc. Indeed, despite much good work done by many no-nonsense, non-government organizations there is no dearth of critics showcasing the wrongdoing ones with a vengeance, to flog all NGOs.
As mentioned, giant, professionally-world-class NGOs are resented by tax-paying, loan-burdened entrepreneurs for their forays into business. What is often missed is that although these social businesses also have to profit in order to be viable, they have an essential core of social responsibilities that 'typical' businesses are not obliged to have, profit maximization being their sole purpose. As Dr Yunus explains, in social businesses, 'You can make profit, but you cannot take it'. Profit is ploughed back to improve services. This basic principle permits more money to be utilized for people's benefit, providing them affordable services, creating jobs as well as keeping the projects running.
Result-oriented, genuine social businesses could make a difference in the lives of the poor majority if investment to uplift them is targeted and sustained. There is in fact a great deal one could do if the will is there to do good in the long term. In recent years big businesses too have been trying to be fashionably conscientious in this regard. They have been creating special funds to spend on so-called corporate social responsibility (CSR) activities, most of which, however tend to be no more than exercises in company profile building and public relations, according to analysts. The idea that it would be better to set up a separate stock market on social businesses, in which companies could actively participate in poverty alleviation, health care services, job creation etc, whereby CSR charity efforts could be transformed into genuine investments, may seem far-fetched, but given the ingenuity of market makers who knows what more goldmines 'poverty' might yield in the future !