Profit Environment Helps Developing Nations Eliminate Poverty
April 27, 2012 – Retired Army Gen. Wesley Clark and the U.S. Agency for International Development’s Rajiv Shah told a Georgetown audience today that cultivating an environment of profitability in developing countries will help them emerge from poverty.
“The ability to reach out to help other people and develop economies is a key part of U.S. national security, but more than that, it’s a key part of how we relate to the world,” said Clark during the second day of the Global Impact Economy Forum sponsored by Georgetown and the State Department April 26-27.
Clark, an advisor for Vital Capital & Impact Strategies, works with the private firm on its investments in the housing and agriculture businesses in Africa and other parts of the world.
The retired general says it’s important for the public and private sectors to not only help developing nations with resources, but also to provide ways for people who live in those countries to sustain opportunities for economic growth.
“It has to be profit-motive based to have any traction,” he says. “It’s not about giving bags of fertilizer. It’s about entrepreneurs who for their own self-interest and their own family’s self-interest can work and create a system of development.”
With that mission come challenges, Clark told students and faculty from Georgetown’s McDonough School of Business and professionals in the global development and social enterprise arenas.
Cold War vs. Globalization
Some of those challenges, he says, include working with countries that don’t “play by the same rules” as the United States, America’s waning status on the global education ladder and having to work with or around wealthy elites in the poorest of countries.
“During the Cold War, our government used business as a weapon of war,” he explains. “It was an ideological weapon. You could send General Motors into South Africa and they would spread Americanism.”
Globalization and other factors have changed that corporate strategy. After the Cold War, corporations began to compete globally and are now judged more harshly, Clark said.
Answering Basic Needs
Shah said some corporations that are making a significant difference in developing nations.
He said PepsiCo, for example, helped boost the income of small chickpea farms by selling a hummus product and producing a chick-pea-based paste to fight child malnutrition in Ethiopia.
Coca Cola does something similar, Shah said.
That company runs bottling companies worldwide, but has plans to provide at least 2 million Africans with clean water and sanitation by 2015.
“USAID and other partners can help to extend the reach of their business platform so they may touch more communities and bring clean drinking water to more remote environments,” Shah said.
Georgetown business professor Bill Novelli said he established Georgetown’s Global Social Enterprise Initiative and worked with the State Department to create the forum.
“We intend to support the … ongoing effort resulting from this event to boost the work of innovators who are developing and deploying cutting-edge business and other models that can generate financial returns and positive social and environmental impact,” Novelli said.
Novelli also announced the Social Enterprise and Development Graduate Fellows program, which will launch next academic year. The program is a collaboration between the School of Foreign Service’s new master’s in global human development and the Global Social Enterprise Initiative.
“Graduates of this program will gain thorough understanding of the role of social enterprise and entrepreneurship – promoting sustainable development,” he says.