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Between economic aspirations and social responsibility Economics Conference Commitment to Africa Initiative on 9-11 December 2012 Berlin, Germany.
Presentation by Zitto Kabwe
Development cooperation needs to be configured to ensure it takes place within a framework of partnership while involving as much of the population as possible.
What is CSR?
The methods mainly based on financial engineering worked until the actors in the market started changing their ethics, their models and their own aspirations. Businesses had to become creative and innovative, and had to analyse the context, then adapt to the new changes. In the late 60s and early 70s businesses became increasingly aware of the fact that their activities had positive and negative impacts not only on the shareholder, but to a group of people, and that compliance with fair rules that benefited the stakeholders had a positive impact on their financial performances (aspirations).
Pay tax
Amongst many responsible CSR examples, training their employees in new technologies of production and keeping their health and safety records positive, business save money and increase their performance. CSR hence isnt a specific action done to avoid reputation damage or sanctions, but is part of the business model to maximize profits for all stakeholders. By paying their taxes to governments companies enable governments to pursue their mandate properly. By denouncing corruption they participate in sustaining a healthy environment for business etc.
Robbing Africa
Africa is being robbed of its resources through tax avoidance done by multinationals. From 2000-2010 more than USD 844bn was flown out of developing countries yearly through capital flight and 69% of this was from Africa (Global Financial Integrity Report 2011). The global FDI inflow in 2011 was 1.5 trillion USD (UNCTAD 2012) while capital flight from developing countries is averaged at 0.84 trillion USD per year and 0.58trn USD of this money is from Sub-Saharan Africa. The total FDI to Africa was a mere 37 billion USD - 2011 almost same figure to total foreign flows to Sub Sahara Africa. So while a total amount of 538 billions of USD leaves Africa illicitly as proceeds of bribery, theft, kickbacks and tax evasion and avoidance, only around 80bn USD flow into Africa as FDI and aid combined. For every 1 USD coming to Africa, 7 USD illicitly leaves Africa! This is unacceptable and henceforth must be mainstreamed into the development cooperation agenda.
[A] man is developing himself when he grows, or earns, enough to provide decent conditions for himself and his family; he is not being developed if someone gives him these things.
Julius Kambarage Nyerere, from his book Uhuru na Maendeleo (Freedom and Development), 1973.
Thank You!
Zitto Zuberi Kabwe