Trade vs. Corporate Social Responsibility: Trade Wins!


Locals increasingly see Western humanitarian interventions abroad as "intrusive and disempowering," according to a World Disasters Report released last week by the International Federation of Red Cross and Red Crescent Societies. Many companies that do business abroad couldn't agree more, which is one reason they're worrying less about corporate social responsibility and instead focusing on working with locals, the report notes.

Even aid evangelists consider much Western corporate do-gooderism to be little more than a thick coat of (RED)-washing or P.R. Instead of focusing on charming their Western patrons, some international companies are turning to would-be aid recipients, seeing them as able people who make successful business partners.

The report highlights a few examples, including a joint yogurt-making venture between the microfinance group Grameen Bank and French food company Groupe Danone. Another example involves smallholder farmers becoming part of a global supply chain:

[British charity] Oxfam argues that the long-held belief that smallholder farmers do not respond to market opportunities is unfounded. Although the main priority for many poor farmers is feeding their families, they remain motivated to produce and market surplus crops. Oxfam has a successful history of working with the private sector to bring smallholders into markets. One example is collaboration with a Sri Lankan company, Plenty Foods, which is integrating 1,500 farmers into its supply chain. The company estimates that sourcing supplies from smallholders has been a key factor in its annual growth of 30 percent for the past four years. At the same time, the farmers have better access to land, credit and technical support—as well as markets—and their incomes have increased accordingly.

Reason's Jesse Walker has highlighted the importance of local knowledge in aid work, and Zambian economist Dambisa Moyo has talked to Reason about the failure of aid to Africa.