The number of South Africans slipping into relative poverty between 1996 and 2007 increased substantially, according to figures released by the Institute for Race Relations. Only a few people are benefiting from the market.
“Without intervention, the poor are unable to enter the market, not because they don’t have the skills, but because they don’t have access. Our markets are too open and only big business can compete at a competitive level,” says Cameron Jacobs, senior researcher for economic and social rights at the South African Human Rights Commission.
“Corporates are going to be corporates; their bottom line is to create wealth,” says Jacobs, who believes the government should be directing social responsibility. “Government needs to intervene or we are in danger of human rights becoming transactional.”
Business access for the poor goes beyond handouts, says Tagbo Agbazue, coordinator of the Human Rights and Business Project. “We need to be asking what the products and services are that provide a leverage point for the poor to sustain themselves.”
Agbazue says it’s about creating an enabling environment: “We need to come up with ideas and innovation that unlock and open up a market environment that supports the poor.”
There are examples of how this has materialised elsewhere. Faced with a crippling electricity shortage in Uganda, Motorola launched their Motopower project. The project allows people to charge their phones for free through solar panels. The company identified 50 previously unemployed local women to run their kiosks.
Besides being a clever marketing ploy, the project not only provided business training and seed capital for the women, but also gave them access to a stable energy source to run a stable business.
Locally, Visa International launched their financial literacy programme. The industrial theatre project set out to educate the unbanked in their own vernacular and provide access to banking. The roadshow travelled across the country to a number of rural areas and gave basic education about banking, fraud and card security.
Although industry may be making headway in some areas, particularly in telecommunications, banking, pharmaceuticals and agribusiness, legislation and the regulatory environment may hamper such progress. “How can someone living in a township open a bank account when they can’t provide a street address or utility bill?” Agbazue asks.
“Currently the market is predominantly anti-poor, it doesn’t work for poor people at a micro or macro level. Just throwing money at the issue of poverty is not enough,” says Pat Pillai, founder and CEO of Life College, an organisation that offers life skills to teens and their families.
“To make markets truly sustainable, so that we can start to eat away at this monster called poverty, we need macroeconomic policy, government, big business, communities, individuals and families to tie into building an abundance mentality,” says Pillai.
“More and more companies are looking at their external suppliers,” says Valerie Geen, director of the National Business Initiative. “They are looking at ways to engage constructively with the communities in which they operate.”
Successful partnerships between the formal and non-formal sectors can be more purposeful: “Companies have realised, it’s not just about focusing on charters, but about building sustainable business. It’s not about giving money, but actively engaging with that sector and sharing knowledge and skills,” she says.
“There is a fundamental point of departure from the way we usually think about the role of business in communities,” says Paul Kapelus, former CEO of the African Institute of Corporate Citizenship and a consultant with Synergy Global.
“Business needs to learn how to listen to the poor, how to engage with the poor. They need to understand the world in which the poor operate, they need to be asking how they can add value.”