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Exploring the Links Between International Business and Poverty Reduction: The Coca-Cola/SABMiller value chain impacts in Zambia and El Salvador
September 23, 2011
Over the past 30 years, the private sector has been a primary driver of economic growth and has contributed significantly to poverty reduction. Businesses provide vital jobs and services and pay taxes, which help fund public services. The positive and negative impacts of business in developing countries continue to be debated, but increasingly the development community has recognized the significant contribution the private sector can make when business and social benefits align and when leading global businesses promote high social and environmental standards throughout their value chains.
At the same time, as companies gain a deeper understanding of their impact on poverty reduction, they recognize that their own success is often directly linked to the success of the communities in which they operate. This recognition has driven some companies to take a more strategic approach to development. Many are investigating how to transfer knowledge and skills to low-income people along their value chains in a more inclusive manner.
Furthermore, businesses are increasingly working in partnership with governments and civil society organizations to find multi-stakeholder solutions to common challenges. Economic growth requires an enabling environment including good governance, robust regulation and enforcement practices, and clear accountability mechanisms. Together these elements provide a framework for governments to lead on poverty reduction in partnership with business and civil society. This study aims to bolster that sort of collective problem-solving.