Exploring the Links Between International Business and Poverty Reduction
Foreign direct investment is recognised to be important for economic development, in terms of wealth creation, employment, skills development, and technology transfer. But there is an on-going debate about the extent to which these contributions translate into real benefits for people living in poverty. In an attempt to evaluate the impacts of international business on people living in poverty, two organisations with very different aims and perspectives - Unilever (a major company operating in some of the poorest countries in the world) and Oxfam (an international development and humanitarian organisation) - collaborated on an ambitious research project. The research considered the impacts of Unilever Indonesia across the entire business value chain, from producers and suppliers, through the company's core business operations, to its distributors, retailers, and consumers. This report presents the findings of the research. It is a contribution to the debates among the wider business community, governments, civil-society organisations, and academics who seek to understand how the wealth, employment, and products that a large company creates could bring increased benefits to people living in poverty.
Table of Contents
Acroynyms and abbreviations
Why Oxfam and Unilever began this project
What is this research about?
The context of the research project
Assessing the impact of Unilever Indonesia
2 The impacts of Unilever Indonesia at the macro-economic level
Setting the context: the 1997-98 financial crisis
Unilever's organisation and recent performance in Indonesia
UI's response to the financial crisis
3 The employment impacts of Unilever Indonesia
Employment in Indonesia
UI's employment impacts
4 The value chain from supply to distribution
Producers of raw materials
Kecap Bango Sweet Soy Sauce: from farm to fork
The distribution chain
Supporting employment and value generation in UI's value chain
5 Low-income consumers in the marketplace
The fast-moving consumer-goods (FMCG) market in Indonesia
What exactly does UI sell?
Who buys UI products?
Access to UI products
Why do people buy UI products? The concept of brands
The role of promotion and advertising
Meeting or creating needs?
6 UI's wider impact in the community
Corporate community involvement
UI's influence on the business sector and government
Content: lessons learned from the research project
Process and partnership: lessons learned from working together
Feedback from external reference group
The way forward
References and sources
This report will be at the vanguard of partnership and learning between a compnay and an NGO. Oxfam and Unilever are still different - and these differences are not negative: action learning is not necessarily about agreeing. The point of learning is understanding differences, and there is no progress without learning. Gilbert Lenssen, President, European Academy of Business in Society.
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