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ECONOMY AND POVERTY: PEOPLE FIRST Bernardo Kliksberg GLOBAL ALUMNI IE June 21st, 2010.

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Presentation on theme: "ECONOMY AND POVERTY: PEOPLE FIRST Bernardo Kliksberg GLOBAL ALUMNI IE June 21st, 2010."— Presentation transcript:

1 ECONOMY AND POVERTY: PEOPLE FIRST Bernardo Kliksberg GLOBAL ALUMNI IE June 21st, 2010

2 AGENDA I. The magnitude of the crisis II. The critical agenda of problems III. The main causes of the crisis are ethical IV. The revision of MBAs V. What is corporate social responsibility? VI. Evolution of CSR VII. The CSR work VIII. Win-win with CSR IX. Social responsibility in spiritual wisdom

3 EXTENDED BIBLIOGRAPHY Amartya Sen - Bernardo Kliksberg PEOPLE FIRST, A look from the ethics of development to the major problems of the globalized world (Editions Planeta/DEUSTO, 7th edition, 2010)

4 I.THE MAGNITUDE OF THE CRISIS The U.S. GDP fell 2.5% in 2009, and the Euro area 3.9%. USA produces 28% of global GDP. Unemployment jumped in US from 4.9% in late 2007 to 9.7% in April There are 15 million unemployed. Adding the involuntary underemployed and discouraged the total is 30 million. In youth the rate is 25%. One of every five americans men aged 25 to 54 do not hold a job. For each job there are six candidates.

5 I.THE MAGNITUDE OF THE CRISIS The European Youth unemployment: increased from 2007 to 2009 up to 4 million. Went from 13.2 to 18.4%. In many countries it exceeds 25%. In Latin America: 7 million young unemployed. 20% of young people outside the labor market and the educational system.

6 II. THE CRITICAL AGENDA OF PROBLEMS The crisis is exacerbating the serious problems of poverty and inequality in the world. Among them: 1.Unexplainable Hunger -In 2009 the effect of the crisis and the rising price of food made the number of hungry people rose by 100 million. There are 1020 million people starving. -1 in 6 people on this planet are hungry, when technological revolutions can feed a much larger population than today. In 2008 the world had the largest crop in its history. But 5 million children died from starvation.

7 II. THE CRITICAL AGENDA OF PROBLEMS 1.Unexplainable Hunger (cont.) -If a child does not eat well in the early years, inter-neuronal connections in their brains are not set and he will grow with severe delays for life. -Latin America produces food for three times its population, but has, however, 16% of malnourished children. 2.Water supply and sanitation facilities -A human being needs 20 liters of clean water per day. Europeans use 200 liters per day and the Americans million have no safe drinking water and consume contaminated water billion lack of sanitations facilities million children a year die from these shortcomings.

8 II. THE CRITICAL AGENDA OF PROBLEMS 2.Water supply and sanitation facilities(cont.) -Half the world's hospital beds are occupied by those suffering from diseases linked to contaminated water. More people die from it than for all the forms of violence including wars. -17% of the world's population lacks toilets and latrines. -Latin America has 50 million without drinking water, and 119 million without healthcare. 3.Child labor - 1 in 6 children worldwide are exploited through child labor. - There are children working in 122 products in 58 countries million children work in Latin America.

9 II. THE CRITICAL AGENDA OF PROBLEMS 4.Deficits in education, the key to XXI st century With significant progress: -121 million children not attending school. -In the developing world, only 43% of girls go to high school. -In Latin America: 6 million young people did not finish primary school. In some countries more than 50% did not finish high school. -The quality in key areas such as science education is low.

10 II. THE CRITICAL AGENDA OF PROBLEMS 5.Climate change The rate of vulnerability of the poor is 80 times higher. In rich countries, only 1 in 1500 people were affected, in developing countries 1 in 19. It is causing 300,000 deaths annually. 50 million people were forced to migrate. 6.The sharp inequalities According to the UN University, the richest 10% has 85% of global capital, the poorest 50% only 1%.

11 The New York Times editorialized: "Let's be clear, the crisis caused by the irresponsibility of the banks cost the country over 120 billion. Any calculation must also include the most severe recession since the 30s and the loss of 7 million jobs. The Financial Times states: "The crisis arose from the lack of leadership and corporate responsibility." The President of the Commission established by the U.S. Congress to investigate the crisis, Phil Angelides talks about the need for examining greed, stupidity and pride in the financial sector. III.THE MAIN CAUSES OF THE CRISIS ARE ETHICAL

12 Central causes of the crisis : The abandonment of the protection of the collective interest of public policy Allan Greenspan: I'm in a stupor. We believed that financial institutions were self-regulate to protect their interests, and shareholders, and they didnt... the whole intellectual edifice we were building has collapsed. Failures in corporate ethics Angel Gurria (Secretary General of the OECD): "We are facing a systemic failure. The global crisis was not caused by an external shock like a terrorist attack or manipulation of oil prices by a group of countries. It was created by the same system, the system we have created, and by a toxic combination of unethical business behavior, and faults in the regulation and supervision of their activities. III.THE MAIN CAUSES OF THE CRISIS ARE ETHICAL

13 Central causes of the crisis (cont.): The crisis has left a heavy burden on corporate reputation. According to the Edelman Trust Barometer 2009, 62% of respondents in 20 countries, say that they rely on corporations less than a year ago." Senior executives think the same thing. The McKinsey Quarterly (March 2009) shows that 85% believe that confidence in business has deteriorated. The split between ethics and economics Adam Smiths message: Core values for markets : Prudence Humanity Justice Generosity Public spirit III.THE MAIN CAUSES OF THE CRISIS ARE ETHICAL

14 Criticism of the MBA New York Times: The New York Times raises (Holland, 15/03/2009) "Is not it time to re- train the schools that make up the MBA's?". Wall Street Journal: Many have accused the business education to create minds to manipulating the financial system Cabrera (Dean, MBA, USA): Something big has failed. We can not look away and say it is not our fault when there is a widespread systematic failure of leadership. Ellis (Dean, Southern California University) We have taught our students to look for cracks in the economy, and we have prepared them to exploit this. IV.THE REVISION OF MBAs

15 Khurana (Harvard Business School) A kind of market fundamentalism took possession of entrepreneurship education. The new logic of the primacy of shareholder management absolved of any responsibility for any other area, other than financial performance. " Piper (Harvard) In the curricula of MBA's emphasis is on "quantification, formal models, and formulas and minimizes the application of trials and the debate about values..., students assume it does not matter." Samuelsons Directions for Aspen Institute: The old message of the business school was that ethics and values are in addition... is the antithesis of what we need now, and new deans should understand " IV.THE REVISION OF MBAs

16 New politics in Harvard The President of Harvard Drew Faust Business education is at a turning point... The crisis shook the confidence of society in business, management and education. " "Students are very concerned about corporate image and its place in American life and in the world..." IV.THE REVISION OF MBAs

17 Good personnel policies Fairness to consumers Corporate Reform Environment Community Commitment V. WHAT IS SOCIAL RESPONSIBILITY?

18 The "narcissistic" company Philanthropic practices The CSR - A PricewaterhouseCoopers survey to more than 650 presidents of boards of directors in 16 European countries showed that 98% felt that business ethics is key in business, and 80% believe that companies cannot have a restrictive view of their responsibilities anymore. And 60% of respondents believe that due to its relevance, it must be handled by the highest level of the company, the Board of Directors VI.EVOLUTION OF CSR

19 The 2009 Sustainability Report Natura was developed based on a participatory approach in which the company was co-creating the report with its stakeholders. Thus generated such innovative ideas and discuss the implementation of "gross happiness index", which highlights "incorporates elements now considered intangible but are aligned with our essence." GLAXO, leader in rate of access to medicines (The New York Times). Its CEO Andrew Witty said "I want to be very successful but not leaving the people of Africa behind." He promised that Glaxo prices in poor countries would not be greater than 25% of those charged in rich countries, and to donate 20% of all profits in poor countries for their health systems. Young executives are being offered to work for the governments of poor countries. He stressed that if the vaccine against malaria the Gates Foundation is working on, with GLAXOs cooperation, pases clinical trials, they would charge only a 5% increase on the cost, not including the heavy expense of research. PRONIÑO programme of Telefonica, Spain - Is helping to rescue from child labor more than 200,000 children in 14 countries in Latin America. Applies advanced technology. - It is implemented through NGOs of excellence. VII.THE CSR ON WORK

20 ACE Award 2009 from the Secretary of State, United States Hillary Clinton was given to "Toms Shoes". Its young creator Blake Mycoskie created a shoe company based on the idea that for every pair purchased by buyers, we provide one for a child in need. In less than three years has delivered pairs of shoes in USA, Argentina, Ethiopia, and South Africa. This year it expects to reach 300,000. Why shoes?. Because Mycoskie explains: "Many of the diseases of the foot causing destruction to lives that are salvageable with shoes and basic hygiene." In Ethiopia is working to eradicate podoconiosis, deformatoria foot disease, caused by walking barefoot on soil rich in silica. The Toms Shoes now sold more than 500 stores in the U.S. and internationally, including major chains Nordstrom and Whole Foods. Is entering Austria, Japan, Canada, Spain and France. Fortune says that is an example of how "the Wall Street crisis may lead young people to leave traditional firms and work in companies, which points strongly to do good." A few days ago was delivering Mycoskie pairs in Haiti. VII.THE CSR ON WORK

21 The Gates Foundation Launched a completely innovative vaccination campaign. It will invest U.S. $ 10,000 million in the next 10 years, on vaccines for AIDS, tuberculosis, rotavirus and pneumococcal. It can prevent the deaths of 7.6 million children under 5 years between They would add 1.1 million since 2014 by the introduction of the vaccine against malaria. The Director of the World Health Organization Margaret Chan believes that it is an unprecedented initiative and called on governments and private donors to join it. VII.THE CSR ON WORK

22 The Company: -More competitivity -More productivity per person -Better marketing positioning -More attractive for best candidates -More Confidence for investors -More sustainable The Community The Business leader: The one that help others, also helps himself (Bible) VIII. WIN-WIN WITH CSR

23 ISAIAS Learn to do well; seek justice, relieve the oppressed, uphold the rights of the fatherless, plead for the widow. (1:15-17) PROVERBS He who oppresses the poor offends the Lord; but he who is compassionate honors Him, (24, 1-2) SANTO TOMAS DE AQUINO The bread which you withhold belong to the hungry: the clothing you shut away, to the naked: and the money you bury in the earth is the redemption and freedom of the penniless IX. SOCIAL RESPONSIBILITY IN SPIRITUAL WISDOM

24 BUDDA Set your heart on doing good. Do it over and over again, and you will be filled with joy Mencius (Main Disciple of Confucius) (visit the count of King Hui of Liang) There are people dying from famine on the roads, and you do not issue the stores of your granaries for them. When people die, you say, it is not owing to me; it is owing to the year. In what does this differ from stabbing a man and killing him, and then saying it was not I, it was the weapon? JESUS God will save those who have fed the hungry, given drink to the thirsty and clothed the naked IX. SOCIAL RESPONSIBILITY IN SPIRITUAL WISDOM

25 A RECENT SURVEY The wisdom of the ancients still holds. A survey of 30,000 American households found that those who gave to charity were 43 percent more likely to say that they were very happy about their lives than those who did not give, and the figure was very similar for those who did voluntary work for charities as compared with those who did not.


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