I would like to start with a quite depressing statement. It was made more than 2000 years ago, and that statement somehow always pops up in my mind when talking about these matters. It is a statement by Jesus, saying that “you will always have the poor among you”. So far, according to many reports, despite many attempts to eradicate poverty, he has been proven right. The question remains: will he be right for the upcoming decades? Are we able to beat poverty for once and ever? Businesses, but also governments, will have an important role to play. The question is who, and how.
Last week, a report was published by the Dutch Ministry of Foreign Affairson, titled “from education to obligation” [report is in Dutch], which discusses international corporate social responsibility. The conclusion is that companies, despite many voluntary regulations, are lagging behind in taking into account the detrimental circumstances of people in the value chains they are part of.
For a long time, general awareness has been raised regarding the situation of people in countries such as Bangladesh, Vietnam, Indonesia and so on, mainly producing for Western countries. The situation of these people is often characterized by being underpaid for both their labor and products, detrimental work and exchange circumstances, and as a consequence lacking opportunities to live a dignified and autonomous life. The incident in the clothing industry, the 2013 Rana Plaza-accident, resulted in more than 1000 deaths due to bad working conditions in the factory. These pictures are still vivid in my memory.
However, market actors in sectors such as cotton, coffee, tea, flowers, and you name it, seem to be unable or even unwilling to take responsibility. Particularly, I am talking about ensuring good prices, decent working and overall exchange conditions, and treating people with dignity and respect, recognizing them in them being human like us.
In this series of dialogues, we discuss how we can transition towards sustainable and just markets. We should take into account the way trade relationships are formed in non-Western markets, and how these affect lifestyles and consumption patterns in the West. That may even imply a radical reshape of our lives.
For example, a long-term rise in prices for coffee, tea, and my weekly bar of chocolate imply that I have to spend much more on food leaving less money for other luxuries such as a nice holiday. Or that I cannot always buy bananas or pineapples and just have to do with another boring Dutch apple.
In the past, we have seen many development policies from the West such as: focusing on building infrastructure, opening up local markets, setting up fair trade certification programs.
Still, we have the poor among us. What can we do about it now, with the learnt lessons? And who needs to take responsibility? In our globalizing market system, we can choose from: consumers, firms, but also national Western governments, the European Union, or local governments.
The report I mentioned earlier, suggests three main routes that, in my view are a good start:
- Businesses should start cooperating more. This will create more impact and result in knowledge spillovers all over the value chain. Responsibility will be shared.
- National governments should enforce firms to apply the principle of due diligence. Responsibility – also for the situation of the poor – will become obligatory, also for firms currently lagging behind – the free riders.
- Third, at the European level enforcement of due diligence can be strived for. That way, Europe can possibly make a real difference on the global scale.
Measures should also focus on for example ownership of natural resources, strengthening local governments and communities, and rethink the role of capital investors and banks.
The economists participating in today’s dialogue are both very experienced in the field, for example regarding micro credits, and the UN Sustainable Development Goals. I am very much looking forward to the conversation, especially on policy suggestions to shape markets in such a way that these will be beneficial to all.
I now want to turn back to Jesus. Not only will we always have the poor among us, he added: “you will not always have me with you”. Since indeed Jesus is no longer among us, I’m glad we at least still have visionary scholars in economics. Hopefully, you can offer a more encouraging perspective on the presence of the poor among us.