Corporate social responsibility assumes a whole new meaning with the risk of instability rising in the absence of economic empowerment and sustainability.

The unkempt alleyways of Kalighat in the eastern Indian city of Kolkata remain dank and dark — even by day — like those in crowded metropolises across much of the Third World. For many a boy, girl, young man or woman in this teeming city, simply getting on with everyday life can be a murky affair too.

Kalighat is one of the oldest red light areas of Kolkata, housing minors vulnerable to exploitation from the city and the neighbouring districts. Destitute youngsters fight against the odds to get by each day, but are just as often defeated by the harsh reality of their environment. They do everything — including selling themselves — to earn a square meal or two.

This is happening in a country that is witnessing an economic boom with gross domestic product growing between seven and nine per cent every year.

The unfortunate people on the streets have no education, no life and no future. Poverty has bound them together in a darkened world with no hope and no light.

“This is where we started New Light, a not-for-profit organisation in 2000 — to give them education, empower them and bring light into their lives,” said Urmi Basu, founder and trustee of the group.

“It all started with $200 [Dh734] — and a single person. Today, we are supporting more than 200 young men and women, taking them out of destitute situations and prostitution.”

A secular charitable trust, New Light set up a creche-cum-night-shelter to protect and educate young girls, children and women who are at high risk.

The programme has been running for six years and provides a safe shelter, educational opportunities, recreational facilities, health care and legal aid for those who find themselves on the fringes of society.

Basu says that for a country of 1.2 billion people where poverty runs deep — from villages and towns to cities and megacities — her initiatives are like a “drop in the ocean”.

“I started small — because that’s how we wanted to start and develop the institution before spreading out. I started by giving shelter to a single person — that’s all that I could afford and manage, knowing that if I did it right, the numbers would multiply,” she said.

Raising awareness

She was addressing a small gathering of businessmen and corporate leaders of Dubai, reminding them of their social obligation to support those at the bottom of society’s wealth pyramid — the vast majority, especially destitute and vulnerable people.

Every year between 90,000 and 100,000 young men and women go missing in big cities in India. Many of them become victims of human trafficking, child labour, slavery or prostitution.

According to the World Bank, more than 215 million people live outside their countries of birth, and over 700 million migrate within their countries.

The United Nations estimates that between 700,000 and 4 million women and children are trafficked around the world for purposes of forced prostitution, labour and other forms of exploitation every year. Trafficking is estimated to be a $7-billion annual business.

An estimated 27 million people are held in slavery worldwide, meaning there are more slaves in the world now than were taken from Africa during 300 years of the trans-Atlantic slave trade.

After drug trafficking, human trafficking is tied with the illegal arms trade as the second largest criminal industry in the world, and it is the fastest growing. Approximately 800,000 to 900,000 people fall victim to traffickers annually across international borders.

“Issues of human trafficking and slavery could be tackled by economic empowerment of the people who are at the bottom of the pyramid,” Basu said.

However, poverty, slavery and prostitution are not confined to just a few countries.

“Around 250,000 women are trafficked in the Arab world every year. Arab countries belong to Tier II or Tier III countries that do their least to protect women,” said Dr Nasser Saeedi, chief economist of the Dubai International Financial Centre.

“Human trafficking is linked to poverty, lack of governance, education and inequality. Economic and social inequality plays a role in the social and economic transformations of a society.”

Calling the Arab Spring the “Arab Firestorm”, Dr Saeedi says it takes more time for a return to normality after violent transformations than those taking place through peaceful and democratic reforms.

Referring to the current situation in the Arab world, Dr Saeedi pointed out that 60 million — or a fourth of the Arab population — are poor, earning less than $2 per day.

“We have some of the richest countries, at the same time some of the poorest people in the region. With 60 per cent of the young population below the age of 29 looking for employment and opportunities, the situation is explosive, especially when 20 per cent of them remain unemployed in a society where there are no social safety nets,” he warned while explaining the political and social changes that are taking place in the Arab world.

When Mohammad Bu Azizi, the Tunisian street vendor, set himself on fire last year, who could have predicted that his tragic death would herald a whole new Middle East?

“Who would have foreseen that this act of desperation against a violation of human dignity would ignite a flame that would eventually illuminate the entire region, toppling governments and leading to mass awakening of social consciousness?” Christine Lagarde, managing director of the International Monetary Fund (IMF), said in a speech last week.

Important lessons

“We all learned some important lessons from the Arab Spring. While the top-line economic numbers — on growth, for example — often looked good, too many people were being left out,” Lagarde said.

“While we certainly warned about the ticking time bomb of high youth unemployment in the region, we did not fully anticipate the consequences of unequal access to opportunities. Let me be frank: we were not paying enough attention to how the fruits of economic growth were being shared.”

It is now much clearer that more equal societies are associated with greater economic stability and more sustained growth.

“While each country in the region must find its own path to change, the over-arching economic goals of the Arab Spring remain clear — higher growth, growth that creates more jobs, and growth that is shared equitably among all strands of society,” she said.

“So across the region, governments need to move towards better and more sustainable fiscal policies. In particular, more targeted social protection systems would help free up funds for spending on areas like infrastructure, education, and health while laying the foundations for inclusive growth,” Lagarde said.

“This would be a break from the past when generalised subsidies were used to appease the population while allowing the privileged to benefit from unfair practices,” she said.

Dr Saeedi underscored the risks of ignoring this message. If policymakers and businesses do not engage with people and invest in empowering them they will bring down those remaining at the top.

Economists and business leaders are warning too that big gaps in income and inequality could destabilise the social status quo.

That’s why businesses that have been focusing only on delivering profits and dividends to shareholders can no longer shy away from social obligations.

This is where corporate social responsibility (CSR) must be given serious thought.

“[Corporates] are the critical link between the policymakers and people and lobbyists. We could create the link between the right thing to do and the best thing to do,” said Rajeev Kakar, chief executive of Dunia Finance, a personal finance provider.

“We are good at delivering financial returns. The challenge is: how do we give good financial returns and do good at the same time?” he asked.

For many years, the two were never mentioned in the same breath. “However, we need to make that link now,” he said.

CSR is not a set of activities. “It’s living it. It’s about enduring life, empowering people — to make a difference in life,” he said.

“Weave some social issues into your businesses and profitability. You can no longer ignore those living at the bottom of the pyramid because with growing inequality, they could destablise the power of the few.”

Rising social inequality could lead to violent transformation. Nature tends to limit things that go out of control.

“If things go wrong, each of us will lose more than we stand to gain,” Kakar said. “People at the base are important and it is critical that we take care of them.

“It’s not about giving people money. It’s empowering them with skills. We could make a difference by empowering them.”

However, he said, the agents of change will have to be the individuals. “Corporates can only help. But it’s the people, the individuals, who can make things happen,” he said.

For example, as part of its income-generation schemes, New Light has launched a training programme both for the women of the Dalit (underprivileged) community and women engaged in the sex trade.

Approximately three times a week these women get together and learn how to make quilts and blankets from old saris. Each blanket comprises five or six layers of old sarees of different colours and patterns, resulting in a beautiful handmade, one-of-a-kind product.

Part of the money earned from the sale of blankets goes back into the training programmes and to purchase additional materials while the rest goes directly to the women as their income.

Economic independence

The women, for the first time in their lives, have an entirely independent, sustainable and dignified livelihood that is based on skills and earning, away from the sex trade and its associated stigma.

Organisations such as New Light that are supporting entrepreneurship through micro-credit facilities and income-generating programmes for these once “hopeless” people, could do much more and enlighten the lives of millions more with the support of large corporate.

Instead of investing in toxic assets, corporates could invest in people and help empower them to make a difference in societies. This will create a win-win situation for all.

However, companies in the Gulf that measure their success by the amount they make every year need to engage people, their customers, and start investing in the environment and society, as no one can stay aloof from events taking place around the world.

Dr Christian Koch, director of the Gulf Research Centre Foundation, said: “The Middle East as a whole is going through an unprecedented period with events that will undoubtedly change the political landscape of the region for decades to come and have-far reaching implications beyond its immediate borders. As has been argued before, no one in the Middle East is immune to the current wave of change.

“The difference between protecting the status quo on the one hand and promoting stability on the other is an important one. Recent developments, in fact, support the contention that the GCC states are not necessarily against reform.”

  • 60m: People in the Arab world — or a fourth of the population — earn less than $2 per day.
  • 40%: of wealth and 35 per cent of income in the United States held by one per cent of the rich
  • $7b: global spin-off from human trafficking annually