BUSINESS IS THE PRIMARY engine of the economy. Despite its many imperfections, business is also the most efficient distributor of wealth in the context of the free enterprise system. A country is developed or underdeveloped, and its people are rich or poor, depending on how well business in the country has flourished.
The Philippines is underdeveloped and many Filipinos are poor because business has failed or seems unable to prosper, nay does not even exist, in many areas in the countryside. Seventy percent of poor people in the Philippines are in the rural areas with 74 percent of the rural poor in Bicol, Visayas and Mindanao. This most important fact appears taken for granted in efforts to alleviate, reduce or eradicate poverty in this country.
Poverty fight
Broadly speaking, the fight against poverty is waged on two fronts. The first addresses life-threatening needs here and now. The hungry are fed, the naked are clothed and the homeless are sheltered. This is primarily the work of public and private charitable organizations. The second practice wields the promise of development. Examples are education, healthcare, environment, microfinance and similar developmental endeavors, the major thrust of corporate social responsibility.
?Must give back?
On both fronts, business is called upon to contribute manpower and resources. No one can quarrel with that but is there a better, though perhaps a less celebrated, way for business to make a difference?
Ironically, an often cited starting point seems to be an underlying assumption that business ?must give back? to the community as if it has unfairly taken something away from the people. To be sure, there are bad business people, just as there are bad government officials, bad lawyers, bad doctors, bad priests, bad teachers, etc. ad infinitum.
But there is no evidence that the business profession is less moral than others. On the other hand, there surely is ample evidence that expansion to and proliferation of business in the countryside represent the country?s best hope not only for genuine economic progress but also global competitiveness.
Business, however, will not expand to nor proliferate in the countryside unless there is money to be made. We go through life following our natural instincts, quite often not even knowing why. That is the way we have been created. To cite the most basic example, we enjoy eating without necessarily reflecting on self-preservation. Business is not much different. It has its own inherent purpose and, to help insure the achievement of that purpose, business people are endowed with a gratifying instinct-to make and maximize profit.
Because we have a free will, we can always choose to ignore the inherent purpose of things. God in His wisdom, however, provided us with natural instincts so that more often than not the inherent purposes of His creation will be served regardless of our own intentions.
The late Milton Friedman was probably not completely wrong when he said, ?There is one and only one social responsibility of business?to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.?
Business? duty
Critics jumped all over Friedman without giving due course to the second part of his statement, which emphasizes moral behavior. Given that stipulation, why should it be wrong to focus on increasing profits that can be used to invest in more enterprises and create more wealth for more people?
More than any other organized human activity, business creates wealth for nearly everyone it touches, most importantly, including the lowest in the totem pole. In the words of Pope Leo XIII, ?every individual has a natural right to procure what is required to live, and the poor can procure that in no other way than by what they can earn through their work.?
Clearly, even from the perspective of the world?s champion of Christian charity, gainful employment or livelihood (created mainly by business) is the real solution to poverty and not anything that falls short of that.
In his commencement address at Harvard last year, Bill Gates, the famous founder of Microsoft declared: ?If we can find approaches that meet the needs of the poor in ways that generate profits for business and votes for politicians, we will have found a sustainable way to reduce inequity in the world.?
He was talking about harnessing the power of people?s natural instincts. Said in a figurative way, let the dog wag its tail. Business need not wear a visible halo over its head.
The question remains nevertheless as to how money can be made in the countryside. Figaro Coffee in Cavite, La Frutera in Maguindanao, Del Monte Philippines and the tuna industries in Mindanao are showing the way. Mining also appears to be making some headway.
Power and water supply is vital to countryside infrastructure. The biggest deterrent to rural investment, in fact, is lack of infrastructure, the building of which is itself a major employment opportunity for poor workers. With appropriate infrastructure in place, agriculture, agribusiness and the transport industries will synergistically flourish.
Most Philippine businesses, including new investments, are urban centered and generally require an educational level of workers far above the poor?s highest attainment. In their desire to be globally competitive, Philippine firms also have a tendency to want to invest in 21st century technology and equipment. The needs of the countryside are more primitive.
The challenge for organizations like the Management Association of the Philippines, Makati Business Club, Philippine Chamber of Commerce and Industry and the foreign business chambers is (1) to unite and pursue countryside development as the top priority and the common good of the Philippines; (2) to pool their resources in an action plan that leans heavily on government to build countryside infrastructure; and (3) to develop and propose public policy and incentives for countryside investments in synergistic industries, for which the poor have already demonstrated work aptitude and qualification.
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(The article reflects the personal opinion of the author and not the official stand of the Management Association of the Philippines. An ExCom member of the MAP National Competitiveness Committee, the author is a retired Procter & Gamble executive. Feedback at map@globelines.com.ph. For previous articles, please visit map.org.ph.)
