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MDGs: Business plays essential role in fight against poverty

23 September 2010

Today’s post is contributed by Dutch Foreign Affairs Minister Maxime Verhagen  and the Dutch business leaders listed below, as part of our coverage of the Millennium Development Goals Summit taking place in New York. Click on the logo to go to the Summit website.

Today in New York the World Business and Development Awards are being presented. Whoever is honoured, the very existence of these awards highlights the crucial role of the business community in poverty reduction. That message still needs to be heard. Only too often, poverty reduction is viewed as the exclusive responsibility of international organisations, NGOs and governments. However, in order to improve the lives of the poorest people in developing countries, innovative contributions by business are indispensable.

Celebrated economist William Easterly once wrote, “The rich have markets, the poor have bureaucrats.” This is a tragedy, especially when we bear in mind that 80% of poverty reduction worldwide is the result of economic growth. Research shows that when per capita income goes up, the poorest 20% of the population benefit – if the poor can participate in growth. The engine of sustainable economic growth are businesses. Businesses are the source of goods, jobs and tax revenues.

Investing in developing countries is not easy. In striking a balance between profits and development, between risk management and result assessment, NGOs, governments and international organisations play a pivotal role. This is why the Netherlands chooses to work through partnerships. The Dutch Ministry of Foreign Affairs, which brings different players together, has already helped to form 75 partnerships.  For example, the 70 companies and 24 civil society organisations taking part in the Sustainable Trade Initiative are working with partners in developing countries to make the production and sale of products such as timber and cacao more humane, eco-friendly and profitable. Other examples are the Health Insurance Fund and the Investment Fund for Health in Africa, through which insurance companies and NGOs are cooperating to provide basic health coverage for African farmers.

Government, NGOs, trade unions and companies are spending over two billion euros on such partnerships between 2003 and 2012. The business community’s poverty reduction efforts are a response to public sentiment. According to a recent survey, no less than 85% of the Dutch public thinks it is important or very important that companies work in a way that is good for people, the environment and society. In other words, the traditional division of roles between government and business is an anachronism.

Awards are being presented in New York today; even more important, high-level talks are being held on the Millennium Development Goals (MDGs). Achieving the MDGs would mean among other things the elimination of hunger and the reduction of maternal mortality. But success by 2015 is far from assured. Progress is being made, but in many cases not enough progress. In sub-Saharan Africa, one of the world’s poorest regions, there is even a risk that not a single MDG will be attained. These disturbing facts make it more urgent than ever that all forces be joined in the fight against poverty. Especially when we remember that there are still a billion people living on less than $1.25 a day.   

Dutch Prime Minister Jan Peter Balkenende will convey the message you can see in this webcast in New York. In addition, the Dutch government has drafted a joint declaration with countries like Germany, the UK and the US, stressing the business community’s role in achieving the MDGs. In addition, the CEOs of 16 Dutch multinationals have co-signed a letter from the Minister of Foreign Affairs to the UN, which is responsible for the MDGs, highlighting the importance of partnerships. Co-operation, they write, is a win-win-win proposition: good for business, good for the public sector, and good for society in both developed and developing countries. This Dutch message needs to come through loud and clear in New York.

Maxime Verhagen (Minister of Foreign Affairs, The Netherlands), Feike Sijbesma (CEO DSM), Nanno Kleiterp (CEO FMO), Jean-François van Boxmeer (CEO Heineken), Sjoerd van Keulen (voorzitter Holland Financial Centre), Gerard Kleisterlee (CEO Philips), Piet Moerland (CEO Rabobank), Peter Bakker (CEO TNT), Peter Blom (CEO Triodos Bank), Paul Polman (CEO Unilever), Rik van Terwisga (CEO Vitens)

Useful links

OECD work on the Millennium Development Goals

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