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Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

Asiaweek Time Asia Now Asiaweek story

Not Just Charity

Social betterment projects are good for business too

Elkyn Chaparro, the author of this essay, is Senior Adviser to the Vice President for Finance and Private Sector Development at the World Bank

BANKERS TRUST WORKS TO uplift the poorest neighborhoods of Manila with the largest private business association in the Philippines. BankBoston creates Travessia, an organization working with homeless youth in So Paulo, Brazil. The World Bank launches a Corporate Citizenship Program to make partners of governments and captains of industry in improving education, health care and other vital building blocks in developing countries. Citibank and Bank Handlowy forge a partnership with the Polish Children and Youth Foundation to make young Poles more business-literate.

These are just some examples of the new "corporate citizens" -- companies that are striking up partnerships with national governments and community leaders to strengthen the neighborhoods in which they do business. But pure philanthropy it is not. Rather, in a world obsessed with maximizing returns and expanding market share, businesses realize that investing in the well-being of their host communities is more and more a strategic interest. Benefits a corporation may gain by participating in community-development projects include:

• Enhancing the long-term sustainability of an investment: In the fields of natural resources and infrastructure, companies make long-term investments -- they plan on exploiting an oil field for more than 20 years, on providing electricity for 15 years. To make these activities sustainable, it is essential to show the host communities that the company is committed to playing an active role and to supporting them in developing local projects.

Take the example of MinAmerica, which is Panama's largest mining exploration and development group. From the beginning, it has invested in social projects -- building facilities to deliver safe drinking water, for example -- to benefit those rural and isolated communities affected by the group's mining activities. The purpose of these programs is to build positive relationships with the communities around its mining areas and to educate the country on the benefits and costs of the industry.

• Building the brand: Marketing studies in the industrialized world show that consumers, who have a choice between identical products with the same price, will select the product from the "most responsible" corporation. This type of competitive advantage -- brought about by strategic investment in the local community -- has been well understood by companies that rely heavily on their brand image. Everybody in the U.S., for example, has heard of the Ronald McDonald Houses for families of sick children in hospital. Coca-Cola is another corporation that builds its brand in transition economies by relying heavily on local suppliers and by developing community-support programs. Despite all the criticisms usually directed at the garment industry, Levi Strauss has built up a reputation of corporate responsibility not only by setting out guidelines for production and outsourcing but also by supporting projects to assist HIV/AIDS prevention wherever it has its factories.

• Developing human resources in the company and in the community: Since knowledge has become the key factor of competitiveness, companies are investing more in the development of their employees. One way to do so is to involve them directly in social or community activities, which build teamwork skills, improve employee morale and bring employees closer to the needs and realities of their customers.

Some corporations go even further, choosing to invest in the education of the population at large. In South Africa, the National Business Initiative, which groups more than 140 corporations, develops educational and training programs. As a 1992 symposium on education concluded, "an ill-educated child becomes an ill-trained worker and a poorly paid consumer . . . An ill-educated child costs corporations hundreds of millions of dollars in training and literacy programs and lost productivity."

• Helping create a stable society: Companies prize politically and economically stable societies as places to do business. While usually not large enough to singlehandedly influence a country's political or social situation, corporations can individually or in groups have an impact on the stability of their communities.

Consider the case of Bankers Trust in Asia. In the words of Page Chapman, president of BT Foundation, "massive migrations to the cities of Asia have resulted in economic, social and environmental problems that can only undermine the progress the region has achieved." Therefore, Bankers Trust "community development activities in Asia have focused on improving opportunities for disadvantaged families in both urban areas and rural villages."

In the 21st century, the most successful societies will be those that embrace solidarity -- where private corporations, local communities, and governments join together to build a better world for all. That is why the World Bank has put its shoulder behind "corporate citizenship" -- to forge key partnerships with companies and communities alike in its founding quest to banish poverty and improve the lives of millions of the world's poor.

This edition's table of contents | Asiaweek home



U.S. secretary of state says China should be 'tolerant'

Philippine government denies Estrada's claim to presidency

Faith, madness, magic mix at sacred Hindu festival

Land mine explosion kills 11 Sri Lankan soldiers

Japan claims StarLink found in U.S. corn sample

Thai party announces first coalition partner


COVER: President Joseph Estrada gives in to the chanting crowds on the streets of Manila and agrees to make room for his Vice President

THAILAND: Twin teenage warriors turn themselves in to Bangkok officials

CHINA: Despite official vilification, hip Chinese dig Lamaist culture

PHOTO ESSAY: Estrada Calls Snap Election

WEB-ONLY INTERVIEW: Jimmy Lai on feeling lucky -- and why he's committed to the island state


COVER: The DoCoMo generation - Japan's leading mobile phone company goes global

Bandwidth Boom: Racing to wire - how underseas cable systems may yet fall short

TAIWAN: Party intrigues add to Chen Shui-bian's woes

JAPAN: Japan's ruling party crushes a rebel at a cost

SINGAPORE: Singaporeans need to have more babies. But success breeds selfishness

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