Thinking (social) business

THIS WEEK’S WINNER

MANILA, Philippines - Madelline Romero holds a degree in Broadcast Communication from the University of the Philippines. She works for a development organization that operates in Mindanao.

Inspiration. It is what one feels is lacking when daily activities have become a grind, and life a routine, the motions of which one forces himself to trudge through.

Inspiration. It is what those in so-called crisis-riddled phases — quarter-life, midlife — cannot see through their depression-shrouded cocoons.

Inspiration. It is what is being sought — or rather re-discovered — by a development worker who has began to seriously question whether the articles that she writes or videos that she produces make a dent at all in the poverty incidence in the Philippines.

Inspiration. It is precisely what I found after reading the story of how Professor Muhammad Yunus, the “banker to the poor” who made microfinance a buzzword in the development world, and his team had endured countless rejections by big banks, and how, using personal resources, they started the micro-loan business with a few women in a rural village in Bangladesh as its first clients.

In Creating a World Without Poverty: Social Business and the Future of Capitalism, Prof. Yunus, by citing the experience of Grameen (village) Bank, makes a case for social business as the new agent of capitalism which, unlike its current profit-maximizing form, he is convinced will finally lift millions of people out of poverty. Designed and operated as a regular business enterprise (with products, services, customers, markets, expenses and revenues), a social business differs from the traditional business in that rather than seeking to amass the highest possible level of financial profit to be enjoyed by the investors, the social business seeks to achieve a social objective.

For me and many other aid workers who work in Mindanao, a top favorite development aid destination, several of Yunus’ points are bound to resonate.

In a speech delivered upon his acceptance of the Nobel Peace Prize in 2006 for his and the Grameen’s Bank work, Yunus remarked that while terrorism, something that his country Bangladesh has had many experiences on, must be condemned in the strongest language, he believes that “terrorism cannot be defeated by military action.” He believes that for conflict to be stamped out once and for all, its root — poverty —must be addressed.  Putting resources into lifting people out of poverty is a more effective strategy than spending on guns, he maintains, because poverty is inextricably linked to peace, and is in fact the biggest threat to peace.

As I read those lines I keep thinking of the gun-toting bags of bones dressed in loose shabby rags that I’d come across in my travels to the mountains of Central Mindanao, and who, I’d been told, were members of the MILF. Do they really understand what they’re supposedly fighting for? Or is the petty banditry occasionally witnessed in the waters of Sulu and Basilan an indication of what their fight has degenerated into — a battle for mere survival? Would they not gladly exchange that gun for productive work, three square meals a day, education for their children, and health benefits for their ailing mother? I bet they would.

Yunus calls into question the ability of our current systems and institutions to end global poverty. He brings our attention to concepts that are “too narrow — our concept of business which makes profit the only viable human motive, our concept of credit-worthiness which automatically eliminates the poor, our concept of entrepreneurship which ignores the creativity of the majority of people, and our concept of employment which relegates humans to passive receptacles rather than active creators — and institutions that are “half-complete at best” like our banking and economic systems which ignore half the world. Poverty exists, he says, because of these intellectual failures rather than because of any lack of capability on the part of people.

The first and foremost task of development, according to Yunus, is to turn on the engine of creativity inside each person. Any program that merely meets the physical needs of a poor person is not a true development program unless it leads to the unfolding of his or her creative energy.

I have seen a lot of people in Mindanao and elsewhere in the country who, with a little assistance, have managed to turn their lives around. And it is true. All they need is a little push to nudge them into finally stepping across the poverty line. And it is their business ideas that have always carried them over that dreaded line. A community-based association in a mountain village in Sultan Kudarat, having successfully operated and maintained a micro-hydro power system installed in their village by an NGO seven years ago, has transformed itself into a micro-loan provider to many of the village members, who in turn use the money for their own development. Up in the mountains, this time in Zamboanga del Sur, a village association is being groomed by a regional multipurpose cooperative to be the middle man, the cooperative’s business partner that will enable the cooperative’s agriculture and solar photovoltaic business to reach more villages in the hinterland.

The challenge is not only for development organizations to implement programs that will lead to the unveiling of creativity of the intended beneficiaries. Nor is it only for assistance beneficiaries to use their creative energies to lift themselves out of poverty. Nor is it only for the current economic and capitalist system to accommodate a kind of business different from its current profit-maximizing model.

The challenge is for everyone (although I feel that the challenge is thrown specifically at me), and it begins with a question: How do you want to make use of your creative talent? Yunus goes on, “Do you want to focus exclusively on making money? If you must, go ahead; but when you develop profit-maximizing businesses, be sure that they also produce positive impacts in people’s lives and steadfastly avoid negative impacts. On the other hand, you may prefer to use some or all of your talent to change the world by harnessing it to address human and social needs. If so, you can devote yourself exclusively or partially to social business. There is certainly no conflict between the responsible pursuit of profit and the service of social goals, and I hope you’ll consider the possibility of combining both in your career. The choice is yours.”

The choice is mine, indeed.