Poverty is not an inevitability in Yemen, Ethiopia or Britain

clock • 5 min read

But business needs to think more carefully about their operations to drive real change, argues Oxfam's Matthew Spencer

What image do you have in your head when you think of poverty? An emaciated child in Yemen, an Ethiopian woman fetching water in a denuded landscape, or a young man sleeping in a doorway in a British city centre? The first of the global goals agreed by world leaders reflects all of these faces of suffering because it commits us to ending poverty in all its forms everywhere. We haven't just promised to eradicate extreme poverty by 2030, but to halve relative poverty according to national definitions. Of all the global goals the first is the most profound, since it goes to the heart of what it means to leave no one behind and can only be achieved if we make good progress on the others.

For business to understand the part it can play in achieving SDG1 it is necessary to understand two key poverty trends:

1. Extreme poverty is declining rapidly at a global scale whilst increasing in some countries in sub-saharan Africa

Extreme poverty has been halved in the last fifteen years because many East Asian and Latin American governments grew their economies in a relatively inclusive way, using the additional resources to raise standards of education, health and social protection for their populations. However, there are still nearly a billion women and men living on less than $2 a day and the World Bank predicts that - without further action - five per cent of the world will remain trapped at this level by 2030. The vast majority will be in Africa, and most will live in fragile states where a combination of dysfunctional government, climate change and conflict means there are no simple solutions. Countries like Malawi are struggling to generate the tax base needed to provide basic public services, others like Nigeria have inequality is extreme that poverty is increasing despite strong economic growth, and there are those like South Sudan where conflict stops meaningful economic development. The opportunities for international business to have a direct impact on poverty in these contexts are likely to be limited because their populations are often outside the reach of international supply chains.

2. More than half of the world's population live in poverty, and growing economic inequality makes it harder to tackle

There are nearly four billion people living on less than $8 a day today. At this second tier of 'moderate' but very real poverty, you might get to sleep on a mattress instead of the ground, ride a bicycle rather than walk everywhere, and cook using a gas cylinder rather than using firewood, but you and your family are unlikely to be full participants in society. You may be forced back into extreme poverty by a medical bill, or be unable to afford to send your children to secondary school. You are more likely to be a woman, because poverty reinforces sexist norms like women providing most of the unpaid care for children and elderly relatives, or low paid insecure jobs being 'women's work'.

Most citizens living at this level of poverty will be connected to international supply chains, which means that business already has a direct effect on the conditions in which they live. Despite the appalling exploitation that led to the collapse of Rana Plaza factory and the death of over a thousand factory workers there is evidence that the international garments trade has allowed many Bangladeshi women to raise their relative economic power, and contributed to Bangladesh having the lowest gender pay gap in the world. The evidence from the food sector is less encouraging - recent Oxfam research suggests that many small farmers and workers who produce food for UK supermarkets are going hungry because of poverty wages.

So how do we end poverty?

Being poor is not just about financial deprivation. It is about being left behind, it is a lack of freedom 'to be and to do'. Which is why economic growth is never enough to solve poverty unless it is combined with a rights-based approach to development. The woman collecting water in Ethiopia and the man sleeping rough in Britain are not passive recipients of low or no income, but citizens with rights who can be supported to take action individually and collectively to fight poverty, and whose governments have a duty to protect their rights to freedom and equality. The responsibility of business, laid out in the UN guiding principles on Business and Human Rights, is to respect those rights and address adverse human rights impacts with which they are involved.

Which is why at Oxfam our advice to business is to focus on how the fundamentals of your business model affect the issues highlighted by the global goals, rather than reporting what you are already doing against the SDG indicators. In the case of SDG1 we'd ask you to consider whether there more that you could do to share value with the people at the bottom of your supply chain? Do you understand how to enhance women's role in society through your employment practise or that of your suppliers?  How can you ensure that everyone that supplies you has a decent income?  

We encourage all business to look at wage, labour and tax practises to understand their contribution to inclusive growth. To get a feel for what this means for a  particular sector its worth looking at why Oxfam is campaigning for Aldi to raise its game on workers' rights in food supply chains, and how it compares to other better performing UK supermarkets.

Companies that put human rights at the heart of their business models will play a big part in changing the economic norms that drive inequality and poverty. Poverty is not an inevitability in Yemen, Ethiopia or Britain, but a wretched by-product of the way we organise ourselves, and we can change that.

Matthew Spencer is director of campaigns and policy at Oxfam GB. He tweets at @Spencerthink

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