Tbl Issue 3 Grain Drain

contents regulars 7 global briefs people - planet - profits

24 csr toolkit cross subsidy model

30 csr talk

intent - care & growth

37 social partnership toolkit csr and low-income housing

40 breather strategic humour

47 book in focus sustainable value

48 musings future food

features 10 grain drain elusive commodities, starving masses and ruthless spectulators

14 hunger-poverty nexus

Editor-in-Chief Zohare Ali Shariff Editorial Director Khadeeja Balkhi Managing Editor Rutaba Ahmed Research, Distribution & Development Raza Tahir Mehfooz Aleem Creatives Kamran Rauf Shireen Lotia Reprint In line with our mission, we encourage reproduction of material, provided tbl and content partners are given credit Publisher Asiatic Public Relations Network (Private) Limited Printed at Nikmat Printers, Karachi Disclaimer The views expressed in tbl are the authors’ and not necessarily shared by tbl and/or APR Declaration From the office of District Coordination Officer, City District Government Karachi NO.DCO/DDO/LAW/CDGK/109/2007, Karachi Dated May 22, 2007

the hunger opportunity

17 liberalspeak commodity crises: a liberal capitalist perspective

20 feed or fuel? the losing battle: fuel versus food

22 socialspeak world wheat whereabouts

25 food & beverage report the role of the food & beverage sector in expanding economic opportunity

28 corporate volunteerism a diary of a food volunteer

32 opportunity fortified

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triple bottom-line

Address: A-7, Street 1, Bath Island, Clifton, Karachi, Pakistan. Tel: (92-21)-5837674, 5823334 Fax: (92-21)-5867103 E-mail: [email protected] Web: www.triplebottomline.com.pk

malnutrition in pakistan: the hidden hunger

34 common sense common sense approaches to a ‘food secure’ pakistan

42 management spin csr for csr

44 cross-cultural observation pakistan’s csr mentality change

46 obs-inion the grains of truth in crises

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Subscribe to a full year of tbl (6 issues) at the special rate of Rs.1,000 and save the cost of an issue. If you wish to subscribe to tbl, or unsubscribe, please write to us at [email protected]

The term ‘Triple Bottom-Line’ (TBL), which translates into “People, Planet, Profits,” captures an expanded spectrum of values and criteria for measuring organisational (and societal) success - social, environmental and economic. Through our masthead we personify the term TBL. Essentially, our ‘bottom line’ is a grey bar with a burgundy border which runs through the masthead, at some points overlapping the letters and running under them at others. Here ‘t’ stands for triple and is represented through the three shades of the letter. The ‘b’ stands for bottom and it sits below our grey line with the line going through it - since this magazine is a below the line activity, the two gel in together. The ‘l’ stands for line and the letter sits comfortably on top of the grey ‘bottom’ line.

mr tbl

acknowledgement The tbl team expresses its profound gratitude to the companies whose names appear below, for their agreement to support this publication. Bringing out a knowledge-based publication like tbl involves considerable effort and costs. It may not have been possible to bring out tbl in its present format without the invaluable support and contribution of our Founder Sponsors. Through their support to tbl our Founder Sponsors have confirmed that they share our Mission of disseminating triple bottom-line knowledge to a diversified group including corporate, social development and general business groups. We believe that helping to spread awareness of true CSR is in itself an element of CSR. By becoming our sponsors, the following companies have taken that vital first step with us in our journey to facilitate awareness and understanding of true CSR in our country.

National Foods Limited Founder Sponsor

Mr. Tanveer B. Lone is indeed a busy man, laden with his struggle for the truth in the Sustainability industry. His first name, Tanveer, according to our wonderful Ferozsons Urdu-English dictionary means 'illuminating'. We feel he is sometimes the seeker of enlightenment, and at others, the seemingly lone bearer. Driven towards his destination – the true light of CSR – he sometimes feels like a lone voice buried amidst the complex factors he confronts on the way. Yet as he sets forth, oft-alone on this journey, he knows he will meet companions along the sub-paths his journey takes, merging at destinations common with him. There will be occasions where we can all relate to him. At times, though his capitalist-training-bred financial focus may fluster us and his understanding towards disseminating the true implications of the triple bottom-line. Watch out for Mr. TBL, as he shares his views and thoughts in articles and other features in this issue! Feel free to share ideas with Mr. TBL that might help clear the oft-murky waters he'll encounter in his expedition at [email protected]

English Biscuit Manufacturers (Private) Limited Founder Sponsor

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editor’s note

‘Please Sir, I want some more’

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gged on by his peers, the orphan boy Oliver Twist summons up the courage one day to politely ask for more gruel. In the global scheme of things, the 'orphaned' third world countries may not be equally polite in times to come, as shortages of staple food items spread across the planet. Already food riots have occurred in a number of countries and hunger based anger can almost certainly be vented beyond borders in the future. This third issue of TBL examines perhaps the most potent, albeit perhaps not fully appreciated, global crisis that is brewing up quite rapidly - the food crisis. One may well ask what the connection is between a corporate triple bottom line strategy and a global food crisis. The immediate and obvious answer is of course that a hungry world is an unhappy world and a hungry and unhappy populace will not be a consumer of the various goods and services that the corporate world churns out. But there are far deeper implications for the corporate sector than a slackening of demand fuelling an economic slowdown. The well-researched articles in this issue touch on different aspects and provide (no pun intended) food for thought for farsighted companies. While it may seem somewhat unfair to expect a CSR solution to every socio-economic issue that crops up, the fact remains that to be sustainable a CSR strategy needs to be dynamic; responding to change as time passes. Thus the pursuit of the triple bottom line and strategizing for CSR must continuously evolve, both in qualitative and quantitative terms. And so while the principal responsibility for countering a global food crisis must remain with international institutions like the UN and its affiliates and with governments, especially the governments of leading economic powers, the corporate sector too has a definite role to play. The toolkit in this issue will prove to be useful in this

regard, as it is designed to be functional. Indeed our previous issues also included toolkits on other aspects of CSR and we at TBL would very much appreciate if readers who have applied these toolkits could give us feedback on the progress and outcome. Our sworn mission is to be a catalyst for positive change and we need your support to fulfil the demands of this role. The interview in this issue is of Etsko Schuitema, Managing Member of Schuitema Associates, an established consultancy in South Africa that specializes in organizational transformation through people growth. His research of 2 decades has resulted in the Leadership - Care & Growth Model. Schuitema also currently teaches his unique approach at Cambridge University, U.K., and at a number of South African universities. We were fortunate enough to conduct this interview while Schuitema was in Pakistan very recently, as it fits in very well with our people-focus of the current issue of TBL. The global 'grain drain' is after all ultimately about people - the underfed Oliver Twists of this world; the Fagins and the Artful Dodgers who perpetuate and exacerbate food shortages and the Mr. Brownlows, the corporate leaders who attempt to put things right. Finally, do you know any one who would benefit from TBL? Please do send us particulars of all such persons and if they are not already in our database and receiving TBL, we shall now include them for future issues. Sincerely,

Zohare Ali Shariff Editor in Chief

This publication is being sent complimentary to 1500 decision-makers and opinion-formers in the corporate sector, the government, NGO sector, international institutions and academia. Recognising that your sphere of work has the potential to compliment and reinforce the essence of our mission, we have taken the liberty to present tbl to you. It is also available at selected outlets. We would love to hear from you. Please do contact us at [email protected] with your thoughts, feedback and input from your corporate or social practices. tbl strongly believes in knowledge dissemination and sharing. Please feel free to share tbl contents with your peers and teams - of course we know you’ll give tbl the credit when you share our work.

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letters to the editor

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he publication overall and the standard of content is impressive and very professional. You are a specialized group of people in this field and the publication covers a wide range of subjects on CSR and social sector development. I am a Business Management consultant by profession in the field of real estate, advisory, verification etc., and I am heavily involved in social sector development work. We share common goals and I believe that TBL is an excellent initiative for promoting a true understanding of CSR and creating awareness among the masses. M. Ali Rasheed Environmentalist Sewa Social Environmental Welfare Association Karachi

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WF Pakistan was pleased to receive the publication TBL, which encourages the corporate sector to recognise both its responsibility, and more important, the opportunity to help conserve Pakistan's environment. They can do this by initiating activities which both review the way they conduct business, and by directly supporting worthwhile initiatives. We wish TBL well, and hope that it will continue to inspire the corporate sector to make a greater contribution towards improving nature conservation in Pakistan. Ali Habib Director General WWF-Pakistan Lahore

I

t's a great addition and hopefully will go a long way in creating awareness over the total gambit of CSR. Congratulations and best wishes for future publications. Pervez Ghias Chief Executive Officer Indus Motor Company Karachi

I

t has excellent articles on CSR and about companies that integrate CSR in their core business. It would be interesting to read more articles about companies and the impact of their activities on the environment. What are the companies actually doing to minimize environmental impacts? Are they investing in what they might sow in the years to come? What is the future of CSR in Pakistan? I look forward to future issues of TBL. Mohammad Osama Assistant Manager Corporate Planning Indus Motor Company Karachi

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really liked the second edition of you magazine and thank you for letting GRI contribute.

Katherine Miles Hill Network Communications Coordinator Global Reporting Initiative Amsterdam

Dear Readers, Thank you for sharing with us your valuable feedback and views on TBL. Mr. Rasheed, we appreciate your compliments on the publication’s layout and the standard of content. Although we follow a theme for each issue of TBL, we publish material on various CSR subjects to cater to the interests of all our readers. Keeping in view your experience in social development and our shared goal of creating an awareness of CSR, we look forward to your continued feedback. Mr. Habib, thank you for your continued feedback on TBL. We believe that collaboration between the corporate sector and organizations such as WWF is indeed fundamental to creating and building valuable sustainable linkages and worthwhile initiatives. Mr. Osama, thank you for sharing your views and suggestions. The theme of the second issue of TBL was eco-efficiency, and included various articles on this subject. In future issues, we will continue to publish material that would be informative and insightful to our readers. Mr. Ghias and Ms. Miles, thank you for taking the time to write to us and for your encouragement and compliments on TBL. We hope that TBL will continue to serve as a platform for creating wider awareness and understanding of CSR through our readers’ active contribution and debate. Editorial Team

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welcome on board The tbl team is honoured to introduce our editorial advisory board. Comprised of diverse leaders and practitioners, our goal is that the board will steer our efforts to their highest potential. In each issue of tbl, we will highlight a member of our editorial advisory board.

Ayesha Tammy Haq Member

Anwar Rammal Chairperson

Anwar Rammal is the Chairman of Asiatic Public Relations (Private) Limited, internationally affiliated with Hill and Knowlton and concurrently the Chairman of JWT Pakistan, an international advertising agency. In 1963, Anwar launched the Asiatic Advertising Agency, in collaboration with a friend. Asiatic later entered into an affiliate relationship with JWT, and is now fully owned by it. He is the founder-member of Patients Behbood Society for the Aga Khan University Hospital, board member of National Academy of Performing Arts (NAPA) and a trustee of the Foundation for Museum of Modern Art. He is based in Karachi.

Corporate lawyer, legal and media consultant. Concurrently a freelance journalist and host of a weekly current affairs television programme. Based in Karachi.

Habiba Hamid Member

Founder of Saracen Consulting, a corporate governance and responsibility consulting firm. Currently articulating the Dubai Model of sustainable development. Based in Dubai.

Abrar Hasan Founder Sponsor Member

Chief Executive of National Foods Limited, Pakistan’s pioneering multi-category food company. Innovative businessman and industry leader. Based in Karachi.

Khadeeja Balkhi Executive Member

Sustainability and CSR consultant and internationally experienced business and gender journalist. Based in Karachi.

Vivian Lines Member

Khawar Masood Butt Founder Sponsor Member

Chairman and MD of English Biscuit Manufacturers (Pvt.) Limited, Pakistan’s leading biscuit company. Entrepreneur and business visionary with a firm commitment to CSR. Based in Karachi.

vision and mission 6

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President and Chief Operating Officer of Hill & Knowlton’s Asia Pacific Region and concurrently President and CEO Southern Asia. Based in Singapore.

Vision: To steadily facilitate the germination of sustainable visions for organisational growth, sharing specific triple bottom-line knowledge and tools Mission Statement: To disseminate triple bottom-line knowledge to a diversified group including corporate, social development and general business groups primarily through a specialised journal, expanding in accordance with organisational capacity and market readiness

global briefs

PEOPLE

of human rights is the absence of a shared vision and collective leadership. Governments must set a new paradigm for collective leadership based on the principles of the Universal Declaration of Human Rights.

Governments Must Take Collective Action: Amnesty International Human Rights Report 2008 Amnesty International (AI) recently released its 2008 State of the World's Human Rights Report. This report reveals that sixty years after the Universal Declaration of Human Rights was adopted by the United Nations, people are still tortured or ill-treated in at least 81 countries, face unfair trials in at least 54 countries and are not allowed to speak freely in at least 77 countries. Through its report, Amnesty International challenged world leaders to apologize for six decades of human rights failure and recommit themselves to deliver concrete improvements. "The human rights flashpoints in Darfur, Zimbabwe, Gaza, Iraq and Myanmar demand immediate action," said Irene Khan, Secretary General of Amnesty International, launching AI Report 2008: State of the World's Human Rights. "Injustice, inequality and impunity are the hallmarks of our world today. Governments must act now to close the yawning gap between promise and performance," Khan said. The results from Asia show that the challenge to match unbridled economic expansion with an increase in economic, social and cultural rights for the region's poor remains unmet. Asia also remains the only region in the world that does not have an overarching human rights instrument - although the ASEAN charter is in progress. One of the key trends emerging from the report was the evasion of corporate accountability for human rights abuses. Amnesty International cautioned that the biggest threat to the future

The AI Report states that human rights problems continue to grow worldwide, and leaders must recommit themselves to take action and improve the situation. Through this Report, AI asserts that year 2008 presents an "unprecedented opportunity" to world leaders and emerging countries to set a new direction and reject the policies& practices that have led to the deteriorating of human rights.

University of Washington to Establish Eco-College The University of Washington (UW) recently released plans to create the largest environmental college in the world. The College of the Environment would combine the University's current schools of forestry, fishery sciences, atmospheric sciences, earth and space sciences, marine affairs, and oceanography. It would create a new programme: Environment, Society and Culture. The new college, scheduled to open in fall 2009, would start with 97 faculty members, 1,135 students and a budget of more than $60 million. It would grant degrees at the undergraduate, graduate and postdoctoral levels. "Certainly, higher education in general has a responsibility to tackle challenges that threaten the wellbeing of the planet. The UW is strongly positioned to truly advance the contributions of academia to the very concrete problems of the world around us," according to a UW report released in May 2008. Jay Manning, director of the state Department of Ecology praised the idea as an outstanding one and said that, "The timing is perfect. I think the public is ready for this, and there's a generation of kids who are more interested in the environment than any generation has been since the 1970s." Furthermore, he said UW research - especially by the Climate Impacts Group - has had a profound effect on the climate

change debate both in Washington and elsewhere in the world. Other universities that have environmental colleges include Duke, Stanford and Yale. In Washington state, Western Washington University has been a pioneer, forming the Huxley College of the Environment nearly 40 years ago. However, according to the UW report, no existing environmental college would come close to the scope of its plans: "The UW is better positioned to meet these challenges than any other university in the country or the world." The UW report says the college would produce students who could significantly add to the science and practice of protecting the environment: “It will be a bold, creative, problem-oriented hotbed of ideas.”

City Residents Emit Less CO2: Brookings Institution Study, U.S. Residents of the 100 largest metropolitan areas in the United States emit less carbon dioxide pollution per capita than the U.S. average, according to a new study. The Brookings Institution analyzed data on household and transportation energy use and found that the average U.S. resident was responsible for about 2.87 tons of carbon pollution a year, but that residents of the U.S.'s 100 largest metro areas had footprints of just 2.47 tons a year on average. Among the 100 largest cities, Honolulu residents were responsible for the least per capita emissions: about 1.5 tons per person per year. Lexington, Ky., fared the worst among the ranked cities with about 3.81 tons of CO2 per person per year. Overall, West Coast cities fared better than Eastern ones due to warmer climates, more aggressive energyreduction policies, higher fuel and electricity costs, and a greater reliance on hydropower. To lower everyone's footprint, the study authors recommended increasing funding for mass transit and cleanenergy R&D, and passing federal legislation to put a price on carbon emissions. Shared by Grist, an online environmental news magazine

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PLANET Giant Space Food: China's Solution to Food Crises Governments all around are world are reacting to the global food shortage by growing more food. The Chinese, however are dealing with the food shortage by growing the same amount of food - just really, really big. The Chinese Academy of Sciences is coordinating this unique programme whereby food seeds get blasted to outer space and after they return, transform into enormous, exceptionally-sized foods. Picture 210-pound pumpkins, 2-pound tomatoes, and cucumbers that are over 2-feet long. This programme currently feeds families in 22 of China's provinces, which are taking part in this programme. Scientists have found no definitive explanation as to why "space seeds" mutate. Some speculate that it may be a result of cosmic radiation, micro-gravity, and magnetic fields. There is seemingly no reason that space seeds should be a miracle food, and environmentalists worry about the unknown danger to our health of space food. The China Academy of Sciences first started looking at the benefits of growing seeds in space in 1987. Two years ago, the Shijian-8, the first recoverable satellite designed solely to carry space seeds, was blasted into outer space on China's Long March rocket, with more than 2,000 seeds. Once the seeds are returned from space, they are cultivated and only fruit or vegetables that show improvements in size, taste or vitamin and mineral content are selected. Vast farms are being used to cultivate crops as space fruit and vegetables are put on dinner tables across China.

According to Chinese expert Lo Zhigang, "some of China's space seed products are already exported to Singapore, Thailand, Malaysia and Japan. These include breeds of cucumber, sweet pepper, tomatoes and broccoli." Chinese scientists claim some space fruit and vegetables are better than the original. The Vitamin C content in some vegetables is nearly three times higher and there is a marked increase in trace elements such as zinc. Yields of space rice are also 25 per cent higher. To date China has bred more than 50 new species of plants and has plans to produce more than 200 new species.

Recycling Sewage Water: Safer, More Efficient Option Cities in the U.S. are recycling wastewater for drinking, through a process called indirect potable use. This initiative is being called "toilet to tap" proposals by its opponents, due to the drinking-former-toiletwater gag factor and also the high cost involved. Cities across the U.S. have been using recycled wastewater since decades for nonpotable needs, like agriculture and landscaping. Thus, the technology already exists. In El Paso, Texas, indirect potable reuse, supplies 40 percent of the city's drinking water; in Fairfax, Va., it supplies 5 percent. Orange County, California established earlier this year, the largest and most high-tech water-recycling system in the world that churns out 70 million drinkable gallons of water a day from effluent. Los Angeles plans to recycle 4.9 billion gallons of wastewater by 2019.

efficient and safe option, especially when compared to sea water. Desalination of ocean water is economically and environmentally much more expensive than sewagewater recycling, according to a recent report by the Pacific Institute, California. Orange County water officials estimate desalinated water costs between $800 and $2,000 per acre-foot to produce, while its recycled water runs about $525 per acre-foot. Desalination also uses more energy (and thus produces more greenhouse gas emissions), kills tiny marine organisms that get sucked up into the processing plant, and produces a brine byproduct laced with chemicals that goes back into the ocean. According to experts, reverse osmosis coupled with ultraviolet light and hydrogen peroxide treats wastewater beyond what federal and state drinking standards require, they say. The Environmental Protection Agency (EPA) has conducted research in Denver and San Diego on the safety of direct potable reuse and found recycled water is often of better quality than existing drinking water.

Researchers Aim to Turn Animal Waste into Plastic

It is a three-step process: Sewer water that has already been treated by the county's sanitation district goes through a microfilter to remove solids and bacteria, and then undergoes a reverse-osmosis treatment. Finally, it is treated with ultraviolet light and hydrogen peroxide to get rid of contaminants that are left.

Researchers in New Zealand have developed a process to convert animal protein waste - that would be blood and feathers - into plastic. "The material we can produce has the strength of polyethylene, the plastic used in milk bottles and plastic supermarket bags, but it's fully biodegradable," says Dr. Johan Verbeek, adding, "Plant proteins have successfully been used to make bioplastics, but animal protein has always ended up gumming up the extruder." Mmm pass that milk bottle! The bioplastic would actually likely end up as agricultural sheeting, seedling trays, plant pots, and the like. Says Verbeek: "The aim is to stay away from any food packaging."

Recycling sewage water is a more

That's probably for the best. Shared by Grist, an online environmental news magazine

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PROFITS

expected to be extended after presidential elections next July.

Global Food Crisis: Philippines Rice Farming Suffers

Surge in Fuel Prices Hits Indonesia's Poor Indonesia, South-east Asia's largest oil producer, quit the Organization of Petroleum Exporting Countries (OPEC) this week as it is unable to meet domestic demand due to aging wells and declining investment. The country has for decades helped cushion the cost of fuel to protect the poor but slashed subsidies this week causing prices at the pump to jump nearly 30 percent overnight. To prevent massive street riots, the government is offering US$ 10 a month to the country's 19 million poorest families. Finance Minister Sri Mulyani has said "Although fuel prices have been raised by 28.7 percent, the government will have more in its budget for the poverty eradication programme". Days earlier, the government slashed fuel subsidies to avoid a budget blowout. Soaring oil prices are affecting countries around the globe, but Indonesia has for decades helped cushion the cost to protect the poor in the country of 235 million. Prices at the pump jumped nearly 30 percent overnight, as did the cost of cooking fuel. The fuel hikes have pushed up the cost of basic commodities such as rice, tofu and eggs. Residents living in ramshackle homes set up under an overpass in northern Jakarta were trying to find ways to make their meagre incomes stretch further. Some were cutting back on food, while others stockpiled wood for cooking or rode bikes to work instead of taking the bus. The US$ 1.5 million aid package is

Rice prices in Philippines have soared recently due to a global surge. Philippine's 2,000-year-old rice terraces in the Coridellera mountains, recognised by Unesco as a World Heritage site, are declining at an alarming rate and falling into disuse as farmers leave for more lucrative trades. According to Raymond Bahatan, head of Ifugao's agriculture office, productivity of these rice terraces has fallen to 2.5 tonnes per hectare, below an average 3.8-4.2 tonnes. The amount of land is fixed and yield increases are limited because it is difficult to harvest more than one crop per year in this highaltitude environment. Philippines is the world's biggest importer of rice. It expects to ship in 2.7m tonnes this year, almost 10 percent of the total needed to feed a population of 91 million that is growing annually by more than 2 percent, states Jonathan Watts in a recent report in The Guardian. According to the Manila-based Asian Development Bank, the 30 million people in Philippines who live on less than a dollar a day spend nearly 60 percent of their income on food. Due to a surge in rice and oil prices, inflation hit a three-year high of 8.3 percent in April. According to the bank, a 10 percent rise in food prices will push an additional 2.3 million into poverty. In Philippines, the pressures are demographic, according to Duncan Macintosh of the International Rice Research Institute. The Catholic Church, a powerful force in the Philippines, is predicting rice instability for at least three more years. Alarmed by the rice crises, the Philippine government has ordered a halt to the conversion of farmland to other uses. The government is promoting eco-

tourism tours and is also marketing the local 'tinawon' rice variety overseas. Family planning is important if Philippines is to become more self-sufficient in rice, says President Arroyo.

Rising Prices Threaten Starvation in Bangladesh Rising prices have triggered a food crisis in 36 countries and the threat of malnutrition worldwide is looming. FAO (Food and Agriculture Organization) has estimated prices are likely to remain high for at least 10 years. FAO has confirmed it is cutting food handout rations to some 73 million people in 78 countries. The price of rice, Asia's staple food, has increased to 74 percent in the past year. "Prices will keep going up as production fails to keep up with soaring demand," cautioned the International Rice Research Institute recently. The price of rice, Asia's staple food, went up by more than 10 percent in a single day in Bangladesh recently. Rice-importing countries Bangladesh, Vietnam and Afghanistan have been thumped hardest, as the world's biggest rice producers including China, India and Indochina are restricting exports to protect their stocks and limit inflation. The impact of high food prices has triggered unrest in dozens of countries, the latest in the Philippines, subsequent riots in Haiti and Egypt. Presently Bangladesh is facing its worst food shortages. Twice hit by severe flooding last year and devastating cyclone Sidr have left hundreds of families surviving on one meal a day after spending up to 80 percent of their income on food. Economists estimate 30 million out of the Bangladesh's total population of 150 million could go hungry if the present situation goes on. Compiled by Rutaba Ahmed

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grain drain

elusive commodities, starving masses and ruthless speculators by mariam katz for tbl

In recent months, the food crisis has increasingly been in the news. There have been riots in many different countries all over the world including Mexico, Egypt, India and Yemen due to the increase in food prices. Even though these riots have only happened recently, the increase in food prices has been building since 2005. Between 1974 and 2005, food prices actually dropped 75 percent and have since increased by 75 percent, according to Fritschel in an article published in Open Democracy. In the last year, wheat prices have increased by 130 percent, soy beans by 87 percent and rice by 74 percent, say McKir and Stewart in The Observer. April 2008. Prices for other staples such as sorghum and cassava have also risen considerably, greatly affecting developing countries. Many economists believe that prices will keep rising for the foreseeable future due to five main factors: high speculation in commodities markets, the lack of availability of cheap oil, rising meat consumption in developing countries, biofuels and lastly, climate change. 10

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Speculation in Commodities Markets Food prices have risen due to speculation, but it is extremely difficult to measure. Speculation means that many investors are putting money into commodities, creating a market that is likely to fluctuate - and remain in their control, skewing market forces. Many people believe that speculation is not happening because food reserves are at extremely low levels and speculation tends to promote hoarding of resources. According to the Food and Agriculture Organization (FAO), food reserves are at their lowest in 35 years. However, in spite of this, there is still evidence that speculation is increasing food prices. Investments in corn, soy, wheat and cattle have increased to $47 billion now from $10 billion in 2006, according to Hanim Adnan, news editor of StarBiz. Because of this, some countries, including India, are now prohibiting futures trading in food commodities. This action is thought to decrease food price inflation. However, this is but a temporary measure. In the short term, investors should stop chasing too few commodities and invest money in true TBL-based initiatives instead.

The Effects of High Oil Prices Food prices increasingly follow oil prices - which have skyrocketed in recent years. A barrel of oil now costs approximately $130; in January of this year, oil cost $100 per barrel. A Food Policy Report by the International Food Policy Research Institute (IFPRI) states that since 2000, oil and wheat prices have tracked each other. Both increased three times what they were before. Many scientists and economists believe that we have already reached peak oil, meaning that there will be a point at which oil production will start to decline and

prices will increase indefinitely due to this. In the last 145 years, the world has used between 2 and 2.5 trillion barrels of oil, which is approximately half of the supplies available; in the next 40 years, it is expected that the other half will be used because of the rise in consumption from countries such as India and China. In addition, 98 percent of the oil the world uses comes from just 45 countries and half of these have reached peak production, according to a report titled 'Peak Oil and Food Security: Fuelling a Food Crises' by the Pacific Ecologist. In the developed world, this has already started to be a problem for food prices, mainly due to the fact that much of the food bought there comes from supermarkets, which tend to use Heavy Goods Vehicles (HGV) that require a lot of gas. In addition, the type of industrial farming done in the developed world uses 50 times more energy than traditional farming, according to the report. This is due to increased use of pesticides and nitrogen fertilizers, the latter of which require 2 litres of diesel for every kilogram. In addition to increasing the food crisis, this has also led to a decrease in the quality of soil and a degrading in the quality of water. As oil depletes, the developed world should move toward farming with less fossil fuels.

Meat Consumption As the developing world has grown stronger economically, demand for meat and other luxury items has also grown. In China, meat consumption has risen 150 percent since 1980, state McKie and Stewart. In the last 15 years, meat consumption in India has risen 40 percent. Because cattle are mainly fed grain, more grain has been fed to cattle instead of humans, creating a shortage. In addition, as meat consumption rises, so do prices. Since May 2007, meat prices have

risen 12 percent. It is important to note that the production of meat is a big contributor to climate change. According to the New Scientist, "a kilogram of beef is responsible for more greenhouse gas emissions and other pollution than driving for 3 hours while leaving all the lights on back home." Thus, if meat consumption continues unabated, both food prices and the climate will suffer. The developed world should set an example and start eating less meat. In fact, if just oneseventh of calories in the U.S were shifted from red meat to chicken, fish and vegetables, more greenhouse gas emissions would be saved than if all food was bought from local sources. So much for food miles calculations.

Biofuels: Fuelling Cars, not People Biofuels were once viewed as a way to decrease emissions and increase energy independence for the developed world; however, it has become clear in recent months that biofuels are in fact a contributor to high food prices. Some organizations such as the International Food Policy Research Institute believe that biofuels account for as much as 25 to 33 percent of food price inflation; however, the FAO believes that it may only account for 10 to 15 percent. The main reason why biofuels have contributed so much toward food price inflation is because the U.S is the world's largest exporter of corn and much of the corn harvest in recent months has gone towards biofuels. In 2007, when the U.S experienced a record corn harvest, one-third of the crop was diverted to biofuels, according to the Financial Post.. Since then, the price of corn has risen 44 percent. However, this has been very beneficial for farmers who have begun growing corn for biofuels not food. In addition, even if 20 percent of

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the corn in the U.S was diverted for biofuels, it would only be enough for 2 percent of U.S car use, according to The Guardian, UK. Biofuels are also affecting other parts of the world such as Indonesia. The European Union (EU) has a mandate that by 2020, biofuels will contribute 10 percent of transport fuel. Much of the EU biofuel will come from palm oil, which is being grown in Indonesia and other tropical countries. Unfortunately, the best place to grow these palm trees is in cleared rainforest, which contributes to greenhouse gas emissions. Partly due to palm, Indonesia's rainforest will be 98 percent gone by 2022. Many farmers' lands have also been confiscated by palm oil companies, contributing to poverty.

Climate Change In recent years, the changing climate has affected crops all over the world. In Australia, an ongoing drought has decreased the rice harvest by a staggering 98 percent. This is an unfortunate situation because much of the rice grown today grows very close to sea level and these fields may become flooded as a result of rising sea levels. Already, floods in China have destroyed many rice as well as corn crops. In addition to rice, many other crops will be affected by higher temperatures. By 2020, it is expected that agricultural yields in the developing world will drop by 20 percent, according to the World Situation Report by the International Food Policy Research Institute, December 2007.

Next Steps? The food crisis clearly has many causes. It is not enough to just tackle one area, but there are some short term steps that can be taken. Firstly, developed countries have to contribute more money towards emergency food needed for the World Food Programme, which is now asking for $755 million because of rising food prices, according to a United Nations press

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statement made in April 2008. Although many countries such as the U.S. and Canada prefer to give food instead of money, money is a better asset in this case because it can be used to purchase food grown locally, which decreases greenhouse gas emissions. Some countries including Vietnam and India, have begun to ban exports. However, some countries that are even poorer import much of their food such as Haiti, Liberia and Zimbabwe which import 40 percent of their food, states Fritschel. If exports continue to be banned, poor countries will suffer. In the long term, diets will have to change. As the developing world becomes richer, their lifestyles are often modeled on the developed world, which consumes a large amount of red meat. In the U.S., the average person consumes 41.8 kilograms of beef per year while the Chinese only eat 5.4 kilograms and India just 1.3, according to Lloyd Alter in treehugger, May 2008. The consumption of beef has many implications; firstly, it increases greenhouse gas emissions, which the planet cannot afford. It also increases the price of corn, which people in developing countries cannot afford. If increasing amounts of corn are diverted toward biofuels and for feeding cattle, there will be hardly any left for growing populations in the developing world. And of course, red meat is very high in cholesterol, and contributes to ever growing rates of heart disease. The food crisis is now having an impact on many countries all over the world, both developed and developing. The corporate sector has a large role to play because many large multinational corporations are reaping the profits of this devastating impact. Archer Daniels Midland, which processes soy, corn and wheat, has reported a 42 percent increase in earnings in just 2008 alone. This

money should be fed back to developing countries that are struggling with food supply. Many policies in the developed world such as subsidies for biofuels must end as well so that families can feed themselves first, and cars second. As the food crisis becomes ever more evident, countries must work together to find solutions.

References 1. Heidi Fritschel "The Price of Food: Ingredients of a Food Crisis" http://www.opendemocracy.net/article/globalisation/ the_price_of_food_ingredients_of_a_global_cr isis 2. Robin McKie and Heather Stewart "Hunger. Strikes. Riots. The Food Crisis Bites" http://www.guardian.co.uk/environment/2008/a pr/13/food.climatechange 3. Hanim Adnan "Speculation wreaking havoc on food prices" http://biz.thestar.com.my/news/story.asp?file=/ 2008/5/22/business/21321147&sec=business 4. BBC News "Oil hits $100 barrel" 5. Joachim von Braun "The World Food Situation: New Driving Forces and Required Actions" http://www.ifpri.org/pubs/fpr/pr18.pdf 6. Caroline Lucas, Andy Jones and Colin Hines "Peak oil and Food Security: Fuelling a Food Crisis" http://www.pacificecologist.org/archive/14/peak -oil-part-one.pdf 7. Alia McMullen "Forget Oil, the New Global Crisis is Food" http://www.financialpost.com/story.html?id=213 343 8. Lloyd Alter "Why do Americans Think they Deserve to Eat More than Indians?"

about the writer Miriam Katz is a freelance writer based in London. She currently writes for the Environmental Peace Review. Her areas of interest include environmental issues, renewable energy, biofuels and climate change. She holds a Bachelors in Arts in Political Science and Environmental Studies from the University of Toronto. She can be reached at [email protected]

hunger-poverty nexus

the hunger opportunity by fouzia ishaque for tbl

The World Bank estimates that, as of 2008 (2004 statistics), there are about 982 million poor people in developing countries who live on US$ 1 a day or less (World Bank, Understanding Poverty, Chen 2004). The most recent United Nations Food and Agriculture Organization (FAO) estimate states that 854 million people worldwide are undernourished. This is 12.6 percent of the estimated world population of 6.6 billion. Most of the undernourished -820 million- are in developing countries. Undernutrition plays a role in at least half of all child deaths each year, worldwide. A fundamental question that needs to be asked is, why is it important for the corporate sector to be concerned about the startling facts on poverty and hunger.

Hunger and its Implications The Food and Agriculture Organization of the United Nations in its report 'The State of Food Insecurity in the World' states: "In economic terms the case is more complex but no less cogent. Every child whose physical and mental development is stunted by hunger and malnutrition stands to lose 5 to 10 percent in lifetime earnings. On a global scale, every year that hunger persists at current levels causes deaths and disability that will cost developing countries future productivity with a present discounted value of US 500 billion, or more." Hunger and malnutrition inflict heavy costs on individuals, communities and nations. 'The State of Food Insecurity in the World' report also identified that deficiencies and the lack of essential vitamins and minerals cost more than 5 million children their lives each year. It costs households in the developing world more than 220

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million years of productive life from family members whose lives are cut short or impaired by disabilities due to malnutrition. The far-arching implications of hunger cost developing countries billions of dollars in lost productivity.

“

Every child whose physical and mental development is stunted by hunger and malnutrition stands to lose 5 to 10 percent in lifetime earnings

”

Manifestations of the poverty virus are not just limited to the immediate effecters but the overall economy of the country and the business sector can never separate itself from such a stark reality.

Why Businesses Must Take Action One might argue that "the business of business is business" - but then this is precisely what gives corporations the capability and credibility to expand their economic opportunity. According to the Corporate Watch survey, out of the world's 100 largest economies, 51 are now global corporations. Only 49 are countries. Ironically, instead of creating uniformity of access, opportunity and choice, the top 200 corporations are creating what some might call a global economic apartheid - and not a global village. The biggest national and multinational banks vow in their TV commercials of easy access loans, 24/7 service and fuss free processes. Yet, these banks only serve the documented and bankable population of Pakistan where for a small investor getting a loan from the bank is nothing short of winning a battle. Even if we look

at the statistics provided by the government, based on Pakistan's current population of an estimated 160 million, 24 percent translates into more than 38 million people living below the poverty line. However, independent analysts, claim that the poverty level has not decreased and that the number of people living below the poverty line is still about 34 percent, according to a recent news story in The News.

Agriculture Percentage in Real GDP

Looking at these statistics and Pakistan's profile as a predominantly agrarian economy, it follows that agriculture should be the focus of the economic policy makers. Regrettably, agriculture has had a zigzag history in our real GDP contributions.

As can be seen in the graph below, Pakistan's population growth rate, according to the Federal Bureau of Statistics, Planning and Development Division, is 1.8 percent and in comparison, the production of wheat and rice has grown 1 percent or less since 2002. With this scale of the problem, the need is to adopt meaningful commensurate strategies. Otherwise, reducing food insecurity will run the risk of becoming mere tokenism, with only a few showpiece projects to show for the effort. The World Hunger Series report by the United Nations World Food Programme establishes the relationship between hunger and learning in shaping economic

Agriculture 8

6.5

6

Agriculture 5

4.3

4 2.3

2 0

2002-03

2003-04

1.6

2004-05

2005-06

2006-07

Fiscal Years

In a country of Pakistan's size where population growth has maintained a steady upward stream, feeding people is an uphill task - especially analyzing the government's economic policy, geared towards bringing quick money into the market.

growth. Research by the UN in this report shows that improved nutrition leads to a more productive workforce with higher levels of talent and skills leading to economic development. Nevertheless, it is important to realize that the government,

2008 167,762,040 180,000,000

1998 130,580,000

Population

160,000,000 140,000,000 120,000,000

1972 65,321,000

100,000,000 80,000,000 60,000,000

1951 33,816,000

1981 84,254,000

1961 42,978,000

without the support of the private sector and citizens, can at best be only a policy-making authority. The need is to address the requirements of small-scale farmers, by increasing their access to land and natural resources. Also, for the corporate sector, especially the food, beverage, fertilizers and pharmaceutical sectors, the issue of food insecurity, poverty and hunger can actually serve as an untapped market. Innovation technology usage and a 'pro-poor' approach can increase their productivity and sales, while accelerating economic growth in the country, particularly at the bottom of the income pyramid.

The Business Case of Hunger: Expanding Sustainable Opportunities Large firms and their partners can play an important role in expanding economic opportunity in multiple forms. The emerging Indian retail giant, Reliance, is a working example of a successful business model based on triple bottom line (TBL) value creation. Reliance is tapping into the country's own rural agricultural supply chain to provide quality food for its stores. Reliance has built an inclusive business model that creates a close link with the supply chain of poor farmers, and it procures produce directly from thousands of farmers in villages within a 15-kilometre radius of their collection centres. Reliance trains farmers to produce goods according to certain standards and requirements, reduce loss and spoilage and guarantees purchase of all produce delivered. Access to information and fair price has improved farmers' yield and reduced wastage. The polarization of profit and notfor-profit has been much of a

40,000,000 20,000,000 0

Population growth over the years

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handicap, leading us to conveniently overlook business opportunities through collaborative initiatives. Fortunately, however it is now being better understood by both the sides that multi-pronged partnerships create a win-win situation, for all parties.

The Famous Pakistani Example The United Nations Development Programme (UNDP) gender support initiative known as Community Empowerment through Livestock Development & Credit (CELDAC) is a prime example in Pakistan of collaboration across Government, Aid Agency and Corporate sectors. Nestlé and Engro Foods, a local Pakistani company, serve as implementation partners in Punjab and Sindh respectively for the CELDAC project.

How and Why It Works Since farm animals are mostly cared for by women, who often lack training in livestock management, together, these two competitors established the country's largest milk collection network. In collaboration with the University of Veterinary Sciences, they have developed a one month, hands-on training curriculum and certification programme on basic animal health. They have trained over 800 women, of which 70 percent of the graduates are independent entrepreneurs delivering animal health services in their villages and have added an additional Rs. 2,000 - 3,000 to their family incomes. The increased capacity of the human workforce with the corporate sector's management skills has linked rural development in the affected villages to market mechanisms, which makes the supply and demand of milk less volatile and of good quality. The Acumen Fund has also been working in developing and underdeveloped countries to

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change the ad-hoc models of dependence to market-driven, sustainable entrepreneurial approaches. Their investment in a MicroDrip project for instance is creating a new market for poor farmers to leverage technical innovation and add to the development of their region. They have successfully applied their entrepreneurial fund-based investments to create 'Khuda ki Basti' models that provide housing and infrastructure for the slum dwellers through investment in Mr. Tasneem Siddiqui's social enterprise, Saiban.

“

In order to be sustainable it is critical that targeted interventions are made in the area of nutrition by food and pharmaceutical companies and cycles of good nutrition are created through involvement of the communities Lessons Learned

”

Many successful case studies are useful for us to take lessons from, replicate and improvise to achieve developmental objectives. It is critical that children are provided food as early as possible because undernourishment is most damaging at that age. In order to be sustainable it is critical that targeted interventions are made in the area of nutrition by food and pharmaceutical companies and cycles of good nutrition are created through involvement of the communities.

The Danone-Grameen partnership in Bangladesh has developed a network of local rural micro dairy farmers to produce and market yoghurt in poor communities which is then distributed door to door by the 'Grameen Ladies'. Another set of companies have created small sachets of fortified foods which are within the purchasing power of the poor. In a nutshell, creating business delivery models that are physically and economically accessible; investments that are continuous in their approach to providing adequate food or means to its acquisition; and visionary leaders who recognize that returns come over a long period, are the key to sustainable development. The time to act, is now. Or rather was yesterday - everyday 900 people die of poverty-related causes in Pakistan, according to Mr. Siddique Sheikh, Chairperson of Federation of Pakistani Chambers of Commerce and Industry's Standing Committee on CSR. Everyday that we delay, we are nine hundred lives too late.

about the writer Fouzia Ishaque works as Project Manager at Habib Bank Limited (HBL) in HR International & OD. She has participated in crucial change initiatives of the bank. She began her career at an international software company Clarus Technologies, gave it a new brand identity and strengthened strategic alliances. Fouzia holds a BCS in Software Engineering and an MBA in Finance from SZABIST.

liberalspeak

commodity crises: a liberal capitalist perspective by ali salman for tbl

I

n 1997, Vietnam, a predominantly agricultural country where 80 percent of the population is rural, lifted the internal and external trade restrictions on rice: its main staple. 95 percent of urban households are net buyers of rice and a NorthSouth divide exists in terms of rice production. The incidence of poverty in the rural areas, 45 percent, is much higher than that in the urban areas: 10-15 percent. The proportion of income spent on food items for poor households is 63 percent. Real prices rose after the removal of trade restrictions for all the households.

household welfare and trade reforms by the World Bank shows that the trade reforms were "broadbased and pro-poor" (Aylin IsikDikmelik 2006). The study concluded that the trade reforms benefited all households whether they were net buyers or sellers. Vietnam recorded drastic reduction in poverty incidence following these trade reforms.

However, a recent study linking

In Pakistan, again, primarily an

What path does Pakistan, sharing many characteristics with Vietnam, need to follow, while struggling to confront the wheat crisis? This forms the sole objective of this article.

agricultural economy, economic liberalism has been accepted as the 'bible' of all economic decisions. Except in the case of agriculture itself. In manufacturing, we embraced the post-quota world many years ago. In services such as banking, telecom, insurance or wholesale trade the free market rides. In recent years, economic growth has been mostly propelled by the services industry, where the free market forces have been allowed to work relatively independently. Why we continue to religiously control the agriculture sector is both a political and economic question.

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Market-based Equation Dynamics The economic equation is fairly simple, at least in its classical tone. When the price of any commodity rises, the profit margins of producers rise and in an open economy, it attracts new producers. In our case - that would mean more farmers planting wheat. The entry of new producers increases the supply. Which in turn ultimately brings down the prices as well as the profit margins. Thus, the market reaches a classical equilibrium point. Obviously, this does not work as neatly in the real world. Claiming 'market failure' as their excuse, the government intervenes. Apparently, this state intervention leads to a worse failure, due to 'rent seekers'. The bureaucrats are not simply trained or well-informed for making business decisions and they tend to give leeway to cronies. Therefore, mafias and cartels emerge, which monopolize sources of production and this leads to a concentration of wealth.

Equation Policy Lag Shrunken Economic liberalism, argued for in this article, demands for the removal of entry and exit barriers from trade and argues that given a fair chance, the market is a far more efficient and just mechanism for resource allocation. Economic Liberalists argue that the removal of trade restrictions in the wheat market -both internal and external- is more beneficial for all the sections of the economy in the long run. Particularly because, in the case of the wheat market unlike capital intensive development- the policy lag would be fairly short. The reason is simple: the farmers, once they get the right price signal,

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would cultivate more wheat - and a decision by the farmers to switch their cultivation - would normally take six months to a year. Thus, potentially within a year even, we will be able to produce more wheat, which will offset the demand. Consequently prices will come down.

Land Prices Shoot Higher Still The United Nations International Fund for Agriculture and Development (IFAD) has reported that rising food prices are already stimulating a supply response. In Ghana for example, the corporate sector is reacting quickly, especially in the maize sector. In many parts of the developing world this is reflected as an increasing demand for land, particularly from large scale investors. In Senegal, the demand is particularly high for irrigated land. In Egypt, both the purchase and rental prices for land are soaring. We should expect to have a similar response in Pakistan to an increase in the prices, provided we allow the market to work. If the price of the land increases, the owner of the land is likely to become wealthier. If the price of a product increases, the producer is likely to benefit. Theoretically, of course.

The Real Cause: Inflation or Production Consider inflation and its effect on the low-income household budget, a large chunk of which comprises food. In 2006, the Pakistan Institute of Development Economics (PIDE), run by the government, published a joint study on Wheat Pricing policy, which was conducted by a team drawn from the World Bank and Pakistan Agriculture Price Commission. This study concluded that: "analysis of price multipliers

indicates that increases in wheat procurement prices (one means of promoting domestic procurement) have relatively small effects on overall price levels”. It also concluded that “market forces play a dominant role in price determination in Pakistan, and that policies that promote the private sector wheat trade can both increase price stability and reduce fiscal costs". Conclusively the study held that "fluctuations in production, rather than market manipulation, are plausible explanations for price increases in recent years". The current wheat crisis is driven by a production shortfall, as concluded in the PIDE study. When wheat is imported to offset the production shortfall, we end up supporting a wheat grower somewhere in Australia or the United States. Would it not be better to pay our own grower an international price? Given that the price signal is the only effective way (in my humble, liberal opinion) to enhance the production and hence stabilize the price. The acuteness of our production shortfall in the coming crop can be gauged from the simple fact that the usage of the main input, phosphate, was 50 percent less than in the previous year. If the growers of wheat are given appropriate price signals, who would knowingly reduce the cultivation of wheat?

Facades of State Intervention The government intervention in purchasing and storage through PASCO (Pakistan Agricultural Storage and Services Corporation) has also taken an nasty turn. A recent article in Dawn revealed that a staggering 2 million to 4 million tons are 'missing' from the market. The farmers would not like to be coerced by government functionaries and they instead tie

knots with private investors - the infamous middleman - who promises to pay them more than the market. In practice, that is exactly what is happening. If you visit an average village in Punjab and talk to a wheat grower, he will readily tell you how he does not care about the support price of the government. The market effectively controls the price movements but the state continues to masquerade its delusion of control. As a matter of fact, when the government takes matters, like fixing a quota for flour mills, in its own hands, the issue of nepotism and rent seeking surfaces rapidly. How can we trust our government officials to be well-informed, transparent and fair while determining the quota for thousands of flour mills? Instead we should admit that the flour processing market is a near perfect market in the sense that no single player -or a cartel- is in a position to influence the market. If we can trust the 'invisible hand' for a moment, it is highly likely to create a win-win scenario.

Opponents of the free market in the wheat market erroneously argue that the benefit of a higher price would be largely taken by land lords and small to medium wheat growers would not benefit much. To determine the credibility of such a statement, we must know the composition of ownership of agriculture farms. The Pakistan Agriculture Census 2000 reports that wheat is grown on 75 percent of privately owned farms. 94 percent of Pakistan's wheat cultivated area is owned by farms of less than 25 acres in size, which suggests that wheat

production, just like the SME phenomenon in manufacturing, is largely characterized by small to medium farm owners. In fact only 10 percent of farms are equal to or less than 1 acre, and their produce is only for self-sufficiency and does not reach the market. We argue that the great majority of this price hike -to be fair, we mean trade freedom- would belong to the rural poor and lower middle class. We now show an estimate of the wheat tradable surplus and its implications for our fiscal policy, provided market prices prevail.

Wheat Tradable Surplus Total Production

22,000,000

Kept for Rural Households Consumption

10,098,000

Kept for Seeds

8,000,000

Available for Trade

3,902,000

Sale Price (Per Maund) Sale Volume (Rs.) Tax @ 10%

1,200 117,060,000,000 11,706,000,000

The free market principle should, theoretically, come full circle. Once the agricultural market is free of state intervention, either via state subsidized inputs or by support price, then,, agricultural income should be taxed. If a tax rate of 10 percent - like Ushr - is levied, then it is likely to generate tax revenues close to Rs. 11.70 billion. If need be, it is this wheat generated income, which should be utilized to provide the wheat-flour to the poor, whether urban or rural, in a market friendly fashion. Even for this, we argue that privately managed utility stores are a much better option than food coupons or cash grants, which are more likely to be mismanaged or misused. Studies have shown time and again how cash grants are always misused and the food coupons issued in the late nineties proved ineffective.

Advocating the free market principle in the agricultural market with the backdrop of raging poverty and endless queues for Atta (wheat flour) indeed sounds dismal and against egalitarian principles. However, who likes getting an injection or undergoing surgery?I It is always painful. But, who amongst us would not consider bearing that temporary pain, which is critical for our own well-being in the long-term? Economic liberalism proposes a bitter pill, but believes in it as a panacea for the illnesses of our economy. And so it must be swallowed - and the sooner, the better.

about the writer Ali Salman currently works as a senior partner at Development Pool - a consulting firm - and teaches Economics. Ali specializes in economic analysis, entrepreneurship, policy formulation and business models. He has worked in the private, public and development sectors of Pakistan for over ten years. Besides various publications, the book 'Alternative Youth Policy' is to his credit. He engaged in good governance reforms, citizens-government liaison and policy research during a two-year period at Planning Commission, Government of Pakistan. Ali did his Masters in Economics from Boston University; his MA in Development Studies as Royal Netherlands Fellow; and an MBA from Quaid-i-Azam University, Islamabad.

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feed or fuel?

the losing battle: fuel versus food by jia en teo for tbl

I

n the environment of rising oil prices and issues of climate change looming large, rich countries needed to wean themselves off dependence on fossil fuels. Biofuels seemed like a sure winner - firstly, because supporting biofuels meant supporting domestic agricultural industries. Secondly, because biofuels were thought to be greener than fossil fuels since the amount of greenhouse gases that are emitted during combustion is equivalent to the amount it absorbs in its lifetime. As such, many countries rushed to provide generous policies to encourage the production and use of biofuels. While well intended, these acrossthe-board policies have had major implications on the world's food supply as our food needs become increasingly tied to our energy needs.

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Commodity War: Food or Fuel? Biofuels come from various sources - ethanol from corn, sugar beets or sugarcane, oils from seeds and grains such as the oil palm, rapeseed or soybean. These feedstocks can be burned to yield energy in our cars and factories. But, more importantly, these feedstocks are also sources of food for the world. The increased demand for biofuel feedstocks in the western world has led to direct competition for these commodities as food versus fuel. Additionally, as some crops, such as corn become more profitable to grow because of biofuel subsidies, farmers switch to planting them and reduce their plantings of other types of crops. This lowers the market supply of the other crops and drives up overall prices. Clay Ogg, an agricultural economist with the U.S. government explains the relationship between US biofuel policy and food prices, "Reductions in U.S. exports of corn and other crops lead to higher, world commodity prices. In the U.S., it is easy to plant less soybeans and

more corn when the price of corn doubles, as occurred recently. This raises the world price of soybean oil... so we are a major contributor to the increase in vegetable oil and palm oil prices." In Europe, sunflower oil and rapeseed oil that were previously produced for consumption are now being used as biofuels to generate "green" energy. Increased demand for vegetable oils to meet this new energy need, along with increased demand from population growth, continues to drive up prices. The growth of the biofuel industry has triggered increases not only in the prices of corn, oilseeds, and other grains but also in the prices of seemingly unrelated crops and products. The use of land to grow corn for ethanol is reducing the acreage devoted to other crops. Food processors who use crops such as peas and sweet corn have been forced to pay higher prices to keep their supplies secure and these additional costs are eventually passed on to consumers. The price of livestock and poultry has also gone up since animal feed, which is largely grain-based, is now more costly.

Fuel-friendly Policies over Food Security A Goldman Sachs report says that forty-one countries are currently pursuing policies to promote the use of biofuels over the next decade. If implemented in full, these policies would increase global biofuel demand from 10 billion gallons per year in 2005 to 25 billion gallons per year by 2010, a 20 percent annualized growth rate. Although this demand comprises a relatively small portion of total crop demand, about 5.5 percent, the report adds that biofuel production will remain a key driver of strong agriculture demand growth in the coming years, primarily owing to government policies for biofuel usage. Most of the countries with biofuel production and usage policies are in the northern hemisphere while the most efficient crops for production are in the southern hemisphere. For example, sugarcane, which is the most efficient ethanol crop, grows abundantly in the tropics but not in the north, while jatropha, the most efficient non-food biodiesel crop, grows in southern Asia and Africa. Sunflower oil and rapeseed oil, which are grown in the northern hemisphere, are far less efficient as biofuels. However, rather than promote the use of the most efficient food crops as biofuels, the primary motivation for these blanket policies in the western world is typically to secure the supply of energy and increase self-sufficiency. This forces the industry to operate on the availability of feedstock or indigenous food crop rather than be determined by the 'natural' economics of the market. As a result, these policies generate a much greater strain on resources than would otherwise occur if there were no barriers to trade. "Many of these subsidies are poorly coordinated and targeted," says Simon Upton, director of the Global Subsidies Initiative, regarding such across-the-board biofuel policies in the western world. "All indications

are that subsidies are being piled on top of one another without policy makers having a clear idea of their potential impact on the environment and the economy. Yet the potential for waste on a grand scale and some spectacularly perverse environmental outcomes is large." To highlight Upton's point - under existing policies, the biofuels industry will, in aggregate, receive support worth over $92 billion within the 2006-2012 time frame. However, the benefits of the policies are limited. A literature review from the Congressional Resource Service concluded that using corn ethanol cuts net greenhouse gas emissions by only about 20 percent because it requires heavy use of fertilizers and pesticides, which are energyintensive and cause water pollution.

Biofuels: Even More Greenhouse Gases and Still Not Enough Fuel? Furthermore, even if the entire corn crop in the United States were used to make ethanol, that fuel would replace only 12 percent of current U.S. gasoline use. Recent research published in Science magazine also suggests that when land-use changes are taken into account, production of corn-based ethanol actually leads to a net increase in greenhouse gas emissions because farmers are starting to plant on land that had previously been protected under a land conservation programme. Similarly, the diversion of cropland from food to fuel will lead to even more grasslands and forests being cleared to meet both the growing demand for biofuel and food. One study estimates that, over a thirtyyear horizon and taking into account these land-use changes, corn-based ethanol doubles the level of greenhouse gas emissions relative to gasoline. In the European Union, similar concerns have prompted a shift in biodiesel policy because it was found to be contributing to the destruction of Indonesian rainforests to produce palm oil for biodiesel.

New Food Prices: Fueling Food Insecurity The International Food Policy Research Institute, in Washington, D.C., has estimated that the increase in global biofuel production will push global corn prices up by 20 percent by 2010 and 41 percent by 2020. The prices of oilseeds, including soybeans, rapeseeds, and sunflower seeds, are projected to rise by 26 percent by 2010 and 76 percent by 2020, and wheat prices by 11 percent by 2010 and 3 by 2020. In the poorest parts of sub-Saharan Africa, Asia, and Latin America, where cassava is a staple, its price is expected to increase by 33 percent by 2010 and 135 percent by 2020.

What Now? To mitigate these price increases, the right incentives must be put in place. Instead of promoting more mandates, tax breaks, and subsidies for biofuels, governments should make a major commitment to substantially increasing energy efficiency in vehicles, homes, and factories; promoting alternative sources of energy, such as solar and wind power; investing in research to improve agricultural yields and working to increase the commercial viability of fuels derived from cellulose. Until then, high food prices are likely to be here to stay.

about the writer Jia En Teo is an online entrepreneur and writer who currently resides in New York City. Aside from her online ventures, she has great interest in issues related to social entrepreneurship, corporate social responsibility and the environment. She graduated from the University of Michigan with a Bachelors in Political Science and Economics.

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socialspeak

world wheat whereabouts by ahsan ali mangi for tbl

P

akistan is the world's sixth largest producer of wheat, according to the Ministry of Food and Agriculture, with an annual production of over 21 million metric tonnes (MT). The US Department of Agriculture estimates Pakistan's rice consumption to be over 2.5 million MT. With exports of about the same quantity, Pakistan is capable of feeding its own population. Faced with such positive facts, we all wonder about the exact reasons for the prevailing wheat crises, which has existed in varied degrees for over a year now.

The Pakistan Government Wheat Policy Before delving into the crisis, it is important to present an overview of the prevailing Government wheat policy (also known as Food Security policy). The Government is obliged under the constitution of the Islamic Republic of Pakistan for the provision of essential food at affordable prices to the population throughout the country (please hold back that snicker and eye-roll). To fulfill this responsibility, provincial governments have setup food departments for the purchase and storing of wheat stocks at government silos, which are then released to flourmills so as to keep wheat and wheat flour available at an affordable price throughout the year. Procurement and storage of wheat by the Government is necessitated due to the peculiar nature of agriculture produce: wheat is harvested once a year during AprilMay. Thus, there is a glut of wheat inherent within the system. In the commodity markets every 22

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cultivator is anxious to sell his produce and clear liabilities (such as fertilizers, seeds) and take any well-deserved profit back home.

in operation with relative success for the last 25 years except for the times when the wheat crop in Pakistan has failed.

However, arrival of the crop creates disequilibrium in the market benefiting the purchaser who tries to bring the prices down. The notorious middlemen enter here. Thus the government also enters the market with an announced minimum price and ready to buy all the wheat being offered. This sets a floor price for wheat in the time of plenty and curtails possible exploitation of the farmer, thus influencing cultivator's decision to grow wheat again, since it is profitable. Wheat storage is a costly business in terms of the opportunity cost of investment, storage, fumigation and transportation charges.

Why the Crises?

Thus, as months pass, overheads on wheat stocks result in an increase in prices and the private sector brings its wheat in the market based on their comparative holding power. Moreover, the government also sets its own release price for wheat, which only partially offsets overhead costs on storage. This price serves as the ceiling price in the wheat market and private traders clear off their stocks before this limit is reached. This policy is

Another version blames the Government for failure in assessing changes in the local and international situation; increased wheat requirements as poultry feed (due to corn crop failure) rising to 1500,000 MT as per estimates of experts.

Why has there been a crisis in the supply of wheat and a spike in prices since last July, when in fact Pakistan produced wheat comparable to its requirements and imported 1.8 millions MT of wheat during December 2007? Different quarters have given different alibis including misrepresentation of crop size by Government to boost GDP growth figures and concurrent permission to export wheat (700,000 MT was exported in May-June 2007) which later adversely affected market sentiments causing panic buying by public and hoarding by traders.

Another postulates that people are switching to wheat as rice prices sky rocketed due to extensive export of the commodity.

A fourth proposed reason is the increase in international wheat prices peaking at an unprecedented $550/MT, according to the Chicago Board of Trade. Unrealistic agriculture-related public policy also came under criticism. An increase in the cost of production, due to the doubling of fertilizer costs and increased petroleum prices, also played a role in disrupting the tested Government wheat policy as purchase prices set by the government did not cover the cost of production, thus incentivising the growers to: either retain their crops or try selling them at higher prices to private traders if possible.

World Wheat Whereabouts While all the above arguments hold, we are still at a loss to explain fully the current happenings in the local wheat sector. The world wheat situation has improved this year. World net wheat production is estimated to be 8 percent higher this year than last year. Estimated in 2008 by the U.S. Department of Agriculture, at a record 656 million MT for 2008-09 against total consumption of 642 million MT world wheat stocks grew from 110 million MT to 124 million. MT. There has been record production in Canada, EU, U.S. and Russia. Australian produce is estimated to double (from 12 to 24 million MT) after consecutive crop failures in the last two years. India, with 76 million MT of home-grown wheat, has made it clear that it will not import wheat this year. Apart from Pakistan, which has announced its intention to import 2.5 million MT of wheat during 2008-2009, there is no nontraditional buyer in international markets for wheat to pump wheat prices up. All factors point at easing of international wheat prices in the coming months. Thus, the present wheat situation in Pakistan is not due to the global wheat scene as is

oft-attributed by seemingly guilty quarters.

Current Wheat Situation in Pakistan The Pakistan Government increased the minimum price for procurement of wheat by almost 38 percent in 2008. The aim was to offset price escalations in agricultural inputs and increase returns for the growers. This is the single largest increase the Government has initiated in the minimum procurement price of wheat in the past twenty five years. Despite reservations shown by several growers' organizations, experts are of the opinion that increase in the procurement has benefited the growers by increasing the returns on their produce. However, in light of the prevailing situation, private traders are buying wheat at rates much higher than those set by the government. Flourmills are finding it difficult to buy wheat from open markets immediately after harvesting season. Field evidence suggests that bigger growers are also retaining (read: hoarding) their produce in the criminal hope of better prices in the future. The situation is an aberration to normal market dynamics and it is evidence that the government's efforts and its policy on wheat are not effective. The world wheat situation has negligible bearing, if any. This change, where open market wheat prices do not correspond to the arrival of new harvests, has been witnessed since 2007. The government picks up 30 percent of the country's total marketable wheat (that is, 50 percent of total crop as per APCOMS estimate). For 2008-2009 this comes to Rs. 102 billion at a fixed purchase price of Rs. 15,630 per MT. Until May 20, 2008, total credit received by private traders from the banking system for wheat purchases in only Rs. 210 million.

Food Departments of two provinces (Sindh and Punjab) complain of hoarding of wheat by big farmers and traders who, according to them, until a few years back, could not retain big quantities of wheat even for a couple of months. This shift in the market situation points to the fact that new or non-traditional players have entered wheat market with huge funds at their disposal which they can park for a much longer time, for larger gains. While it is quite difficult to estimate actual amounts belonging to local investors which have left Pakistan bourses since February 2008, it is a substantive amount (KSE 100 has lost more than 3000 points since mid- April). With no substantive increases in the call and time accounts of our banking sector, it is quite plausible that this money has found better avenues and high returns in commodities sector (of which wheat is the biggest). Wheat, with its highly inelastic demand makes it a very suitable target for highest gains in the shortest time period, especially when the structural constraint of the wheat crop size, which is just enough to fulfill the national demands, lacks any cushion to ward off speculative trading in wheat. The bottomline: regulatory bodies must shape up and step up. Commodity trading has a very real, direct human element and questionable business practices must be curbed to avoid myopic monetary gains at the cost of massscale manipulation and suffering of who it all boils down to: real people.

about the writer Ahsan Ali Mangi is currently Director Planning (Education) at Earthquake Reconstruction and Rehabilitation Authority (ERRA) and former Director Food, Sindh. His research interests include causes of inequality between and within nations and its impact on human wellbeing and the political economy of Food. He holds a Bachelors in Electrical Engineering and a Masters in International Development from the UK.

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csr toolkit

the structure of a cross subsidy model: making food aid a reality for corporations by salman abedin for tbl

First of all, let's settle one point about this model: Even though many companies may be attracted to the idea, it would remain within the realm of corporate philanthropy and not CSR for companies that are not in the food business per se.

Brass Tacks What is the Product? It's an almost ready-to-eat meal that can sustain a large number of the population. It comes in a box, so it can be easily transported over long distances. It is culturally sensitive so it does not smell of "western imperialism" a common problem when food aid is distributed. Of course, it must be nutritionally and calorically-sound, and verified to be so for its intended 'consumers'.

Pricing? In terms of whether it should be free or it should be subsidized, I tend to lean on the side of subsidy, unless there is such a wide-scale famine that emergency measures are needed. However, the pricing needs to be realistic keeping in view that the poorest of the poor are often working in subsistence situations where they may actually only have barter options available to them.

Distribution There are two target areas for this product:

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DO NAT BO ION X

Those who are living in extremely far-flung areas, engaged in some form of subsistence agriculture, exposed to weather shocks and are thus food insecure. Those living in urban slums whose children may be malnourished due to poverty or neglect.

Marketing A franchise system needs to be developed for 'kiryana'/village stores or a new brand of store needs to be created in order to distribute the product. This may be tied into a system of ration cards or lists that have the backing of grass roots organizations. Frankly, this system of distribution at the last mile will make or break this model.

N TIO NA DO BOX

Additional Benefit for The Food Organisations Whoever develops this product will find a ready market in international food NGOs who are always looking at cost-effective and easy-to-execute products for international food crises. Praise be to Allah Who feeds us, and Whose blessings we seek in our prayers when we reach out to those in need.

The Cross Subsidy Model More affluent consumers, for instance those who are dining out are asked to either donate an amount via collection boxes or they are charged an amount on their bills directly through a foundation to which restaurants are signed up. These amounts are used as a catalyst fund to create involvement of the affluent classes in the model. The money is then used to crosssubsidize the boxed meal.

Food aid by United States Agency for International Development (USAID) being sold in the open market. We don't want this to happen to our efforts.

about the writer Salman Abedin is currently Executive Director at Contract Advertising. He welcomes input and discussion on the model briefly inserted for TBL readership and can be reached at [email protected].

food & beverage report

the role of the food & beverage sector in expanding economic opportunity written by marc pfitzer and ramya krishnaswamy

This report by Harvard University John Kennedy School's CSR Initiative and FSG Social Impact Advisors reveals that the food & beverage industry plays a unique role in expanding economic opportunity because of its universality to human life and health. The industry operates at multiple levels of society where billions of people grow, transform, and sell food, particularly in developing countries where agriculture dominates all other economic sectors. Harvard University and FSG conducted

reprinted with the permission of Marc Pfitzer and Ramya Krishnaswamy, FSG and KSG

telephone interviews with 19 experts representing large multinational or national corporations, and carried out a review of relevant reports, studies, and articles from a range of sources. The report provides an overview of the business case for engagement in expanding economic opportunity in developing countries. It focuses on the motivation for intervention at global or local levels, and outlines key lessons for the industry in engaging in expanding economic opportunity.

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The Advantage of Large Firms By tackling specific barriers in a few locations around the world, large companies are demonstrating that progress can be made: people can turn their work into incremental gains in income and improved standards of living. Unsurprisingly, companies' interventions reflect their own business models and span agricultural production of raw materials, food processing, and distribution and marketing activities. By changing the conditions in this "field to mouth" value chain, large companies help provide stability and opportunity to thousands of people. Such changes target the critical preconditions to economic opportunity. They create inclusive business models with emphasis on global or local markets, build the human and physical capital of the poor to participate effectively in food & beverage value chains, and work to overcome the adverse institutional and policy factors, among others, that prevent food & beverage value chains from fulfilling their promise of value distribution.

Expanding Economic Opportunity The role of large firms and of their partners in expanding economic opportunity can take a variety of forms. Whether the long-term vision is about developing local markets or global supply chains, the different scenarios all have one thing in common: they focus on the ability of poor communities to create and capture more of the value from their labour.

Business Case for Engagement - The Need for Sustainable Food & Beverage Production Major firms in the industry are concerned about maintaining access to quality foodstuffs despite potential - often man-made disruptions to their supply chains. These include population growth

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encroaching on agricultural lands, increasing water scarcity and pollution, climate change resulting in increased frequency and severity of droughts and floods, and the spread of infectious diseases affecting plants, pollinating insects, and human beings. In the context of degrading environments, the poor are particularly affected as they possess fewer resources with which to react or adapt to changing conditions. Global consumers, in turn, are increasingly willing to pay premiums for safe, organic, and sustainable products that address their health concerns, as well as their interests in preserving the environment and fighting poverty. In this equation, lies the opportunity for large companies to anticipate the needs of consumers, improve lives, and mitigate the environmental footprint of their industry.

Improving Global Supply Chains Food & beverage companies are naturally turning their attention to the state of agricultural supply chains, particularly around crops in high demand internationally, originating from poorer countries, based on highly fragmented production, with farmers struggling to keep up with rising standards of production in terms of both farming practices and product quality. For example, crops such as premium coffee that can be grown under forest cover rather than through slash-and-burn practices, and new, biodiversity-friendly native crops developed as better alternatives to existing raw materials. Such initiatives empower farming communities to raise production standards while offering different levels of guarantee on product uptake. They allow participating companies to count on access to highly traceable food materials at needed quality, quantity, and price levels, and to be sure that they are not associated with environmental degradation.

Meeting Demand for Sustainable Products

between growers and food manufacturers are also promoting sustainable agricultural practices. One incentive is to avoid disintermediation by global companies creating direct linkages with the poor in order to offer a "responsible" value proposition to consumers. ECOM, one such trading company, is helping hundreds of coffee producers in Honduras achieve certification for responsible coffee production and sourcing, resulting in both economic gains and wider quality of life improvements in grower communities. In some cases, companies are taking the responsible or sustainable value proposition all the way to consumers to achieve a "values premium" that goes beyond quality or safety guarantees. This includes additional efforts by lead companies and partners to gain exclusive access to crops, and to brand products on the basis of their benefits to communities and to nature.

Developing Local Food & Beverage Markets While global companies might first focus on export-based opportunities, a number of companies also emphasize efforts to build local food & beverage value chain and are addressing immediate or anticipated constraints to growing domestic versions of their business models. Such initiatives may focus upstream on supply conditions and food processing or include distribution and consumer marketing. For example, SABMiller and Cargill are focused upstream with their initiative in Rajasthan in India to improve barley production and satisfy domestic brewing needs. A key incentive is to raise local standards sufficiently to lower the companies' dependence on international supplies of quality barley for malt production. The programme is currently working in 150 villages spread through three districts of Rajasthan.

Trading companies positioned reprinted with the permission of Marc Pfitzer and Ramya Krishnaswamy, FSG and KSG

Business Strategies for Expanding Economic Opportunity Collaborative action across sectors is often necessary, as no company or partner organization possesses all the capabilities need to overcome all barriers. The research found different levels of interventions, gien in the table below, which in turn help to overcome a variety of barriers to expanding economic opportunity along food & beverage value chains. These barriers include the poor's lack of appropriate skills, technologies, and finance, as well as their inexperience in designing and growing businesses, and lack of awareness of the economic and business opportunities. From this perspective, a number of patterns emerge: First, initiatives are truly collaborative: they all mobilize cross-sector partners, particularly to address community development needs. Second, interventions for creating economic opportunity do not come as single thrusts: all initiatives employ at least two of these interventions simultaneously. Indeed, creating businesses requires empowered people and supportive environments.

Key Lessons A fundamental question remains, however, when considering the vast number of people living in poverty and the rate at which humanity is consuming natural resources: how quickly can success stories be scaled up across regions and industries?

The report offers five ingredients which can be considered:

1. The "Must" of Collaboration The need for parallel interventions to design and grow businesses, build communities' assets and capabilities, and improve enabling environments suggests that collaborative approaches are in fact optimal.

2. Patient Capital. The ability of governments and foundations to provide patient capital (not seeking competitive market returns in the short term or at all), directly or as providers of credit to local businesses, plays a central role in a number of cases. This funding allows for the progressive scale-up of business models which may only yield competitive returns to participating companies in the long term. Because the food & beverage sector can address both economic development and environmental agendas, their initiatives can tap into a range of budgets among public and private donors.

3. Planning for Sustainability First, economic gains can be made more sustainable. Second, because the food & beverage sector is so deeply connected to the state of natural resources, expanding economic opportunity goes hand in hand with environmental sustainability. These two agendas are increasingly interrelated in terms of scaling

up food production and achieving good "values" prices in international markets.

4. The Choice Between Global and Local Approaches There are two distinct ways of creating new value for poor communities. The first is to raise the quantity and quality of food products for sale in markets with high purchasing power. The second is to build local value chains within rural and low-income communities themselves. Especially if combined with a unique branding strategy around "propoor" produce, significant premiums can be paid via the first strategy to poor producers, which can invest the additional income in business growth and diversification. When local models are developed, more jobs might be supported, but only in the context of local prices and wages which leaves little room for income redistribution along the value chain.

5. Designing for Scale and Replication. It is essential that initiatives should reach vast numbers of people with their asset-and capacity-building interventions. In replication lies a vital ingredient to create economic opportunity on a vast scale, and one that should resonate with large companies' traditional approaches to testing what works in one market and then sharing the learning on a global scale. Written by Pfitzer, Marc and Ramya Krishnaswamy, 2007. The Role of the Food & Beverage Sector in Expanding Economic Opportunity. Corporate Social Responsibility Initiative Report No. 20.Cambridge, MA: Kennedy School of Government,Harvard University.

Four key strategies companies can use to expand economic opportunity.

reprinted with the permission of Marc Pfitzer and Ramya Krishnaswamy, FSG and KSG

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corporate volunteerism

a diary of a food volunteer by salman abedin for tbl

M

ay 14, 2000. A bus load of volunteers and myself head to the Thar desert. We set up a relief collection point in Indus Valley School, and plan to participate in the distribution of the relief goods. Our leaders in this campaign are the Raasta Development Consultants' people. We are met by the staff of the Thardeep Rural Development programme and we attend the food distribution. We see some dead animals on the way. On our return, we set up a multimedia kiosk at the school and have an expanded collection point in operation. We make it a point to accept no cash, only oil tins and 'aata' (wheat flour). The people of Karachi are galvanized through this word of mouth campaign and the volunteers at Raasta are encouraged to expand the scope of their work to other areas of Sindh and Baluchistan as well. May 28, 2000. I am on the way to Dadu district for another round of food distribution. At this point I start to wonder about the nature of the 'famine' since there has been a bumper harvest of wheat in that area. We return to Karachi with a feeling that food aid can be a dangerous business, because at the end of the day a bag of wheat is a commodity. June 17, 2000. Onwards to District Naushki located at the edge of Baluchistan. We arrive from Peshawar and set up a camp at a government rest house. We start distribution the next day in the dry heat of the desert, and it is here that we actually meet the homeless people living in extreme poverty. The driver of one of the pickups that we are using reminds me that God is the provider for all, and our efforts are mostly in vain. He says to me: "How many meals have you brought? For how long will these meals last?" This makes me realize that it is the effort that matters and

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activity in food distribution is cathartic. In Naushki, I remember one of the old women in a makeshift camp next to the main road saying that she was glad for the famine, because this was the first time she had left her village. Any developmental theory is thrown out of the window with such comments! Lessons Learnt from this Exercise: It is useless doing this alone and collaboration is more effective. The success of the exercise hinged on the linkages that Raasta had with other NGOs in each of the areas that we operated. It is better to work with the government so that security is provided at each place. People would rather give goods than cash.

Fast Forward to 2006 I have fond memories of the times we spent with the Raasta crew in 2000, and want to start something on a regular basis. The plan is to start some food distribution exercise with the meat from Qurbani at Eid-ul-Azha. We distribute raw meat as a tradition, but it is better if we provide cooked meat to the poor so they can have a decent meal. By some coincidence of fate, I get in touch with the Concern for Children (CFC) NGO, which serves the Machar colony in Karachi. We agree to work with them to provide meals to the shrimp peelers, who are landless immigrants of Bangladeshi descent. They work in appalling conditions and have no recourse to law since they are not citizens of Pakistan. January 7, 2007. 9:00 am. The haleem is almost ready. It's time to leave the kitchen where the 700 odd

Haleem in plastic reusable containers.

meals were cooked. The CFC team has done well to set up a distribution point at their clinic in Machar colony. We quickly get through the meals, and don't have to deploy the plain clothes police men on duty. A very satisfying day indeed. January 12, 2008. We have to decide whether the situation will allow us to operate in the tension-filled areas this year, but the clouds clear and we proceed with the distribution of our projected number of meals amid chaos. There is chaos because the coupons had been distributed a month ago, and the chaos in the city results in delays in the distribution. We take assistance from the uniformed police for this distribution something that we wanted to avoid at all costs, but the situation does not allow us to do so. Lessons Learnt from this Exercise: Regular charity is the best charity. Food aid needs organization, and primarily it needs security. In a nation where crime is common, you need to protect yourself and your volunteers first. There needs to be clear command systems in aid exercises and volunteers cannot be allowed to make whimsical decisions.

csr talk

etsko schuitema: intent - care & growth by ramla akhtar for tbl

At the core of the crises humanity is facing is the spectacular failure of controls and policies - be that in food management, financial sectors, international relations, governance systems, or even inter-personal relationships. In a world that is becoming fragmented and franchised, more controls are impossible to implement. Yet there is a need of collective decision-making by people: an engaged citizenry. Etsko Schuitema, a transformation consultant, is the managing member of Schuitema - a consultancy about business transformation through business growth, based in South Africa and Pakistan. In his work, Etsko has explored Intent as the core of being human, and developed the Care & Growth Model of Leadership - derived from his research in the African mining sector.

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1. Why do people matter? People are the bottom line. An organization is built to serve its chosen customers by adding value; as long as it genuinely does that, it survives. Organizational leaders care for and grow the employees. If the organization does not concern itself with the benefit of people, it will not prosper as people grow wary of the relationship.

2. Yet, "people" are not the priority on most organizations' plans. That happens. There are two opposite models of leadership: The Pharaoh Model, and The Moses Model. In the first model, the leader is the end, and people are the means. The society's efforts are harnessed to glorify the leader and build grand structures of no value to the society. Pharaohs enslaved people to build pyramids. The way of Moses is the complete opposite. People are the end, and the leader is the means to serve their best interest - which of course could sometimes require hard but fair measures by the leader. A true leader sacrifices to achieve the society's fair aspirations.

The first kind of leadership does not thrive because it is not based on contribution to the society. It takes, it does not give. Only that which is generous, survives.

3. But all organizations serve customers. Where is the difference? The issue is of where attention is given first. Is customer the primary concern, or profit? Profit follows happy customers. It's not the other way round. Then, who is the actual customer? In a school, for instance, it's the students - not the parents, the management, or the society. The purpose of a school is to serve the students' best interest. If that fails, everything else fails.

4. What is the essence of your Care & Growth Model of Organizational Leadership? That an employer is a leader by virtue of empowering the people by caring for and growing them; not by virtue of being able to 'buy labour'. Transactions occur between two equals. The legitimate power structure is only where the leader provides unconditional care and fair and honest growth. The result of it is that employees are loyal to the leader. Care refers to the 'soft' element: such as listening, empathy, genuine concern in the welfare of the employee, making provisions. Growth is the "hard" or control element: it means fairness and honesty, establishing accountability. Together, they serve the best interest of the people.

5. How does empowerment work? People and things are not defined

by boundaries, but by transcending their boundaries. True leaders concern themselves with removing limitations to the realization of people's potential. This is achieved by giving employees the means and the ability to perform their jobs, without which they are not truly accountable. Over time, the leader removes controls and creates conditions for growth, much like a gardener does not "grow" the plants, but creates the right environment. Ultimately, leadership is about gradually surrendering control. But for this, the leader needs to have the big picture in mind.

6. What is the surrender of control? Organizations are like living organisms, composed of structures and systems. First, this means the flow of work and addition of value from input to output. Secondly, it entails the policies and procedures that govern the flow. Living organisms change, so must organizations. The process of change is a gentle, incremental suspension of control. In little bites, the structure flattens over time. And the system shortens as it shifts from procedure-driven to policy-driven.

7. How does intent function? How does it transform the organization's relationship with the society? Intent is a process of maturation it's a shift of attention from "I am here to get" to "I get to give/ I give to get" to finally "I am here to give." From malevolent intent to benevolent. The first stage of this maturation journey is an infantile attention; it's selfish and based on own needs. Its primary concern is greed. The second is the adolescent

concern with fear; which leads to hostility and aggression. Its organizational equivalent is a focus on competitiveness. In later adolescence there is a shift towards bargaining: service is conditional on getting back. The third intention is mature. Organizations at this stage are concerned with generosity, which means good (corporate) citizenship. The focus is on leaving something to the community and social engagement. This journey of maturation is not necessarily bound by specific time, but it occurs over these stages. Intent defines the framework and seeps down to the operational level. It's not enough to have benevolent intent; the best organization measures itself by it.

8. How do organizations ensure sustainability? Sustainability by extending more controls is not achievable - it should not even be the goal. Death is the most certain of all things, and we all die alone. Showing courage in the face of death is the measure of one's preparedness. Organizations don't die like people do, by age, but they do if they don't concern themselves with generosity and ultimately courage. What courage means is that there comes a stage where there are issues larger than the collective - the interests of society. Groups mean the individual participant has to surrender some value at some point to the collective. Courage is to walk the path alone. To look beyond one's interest, and even the demands of the society. To do the right and the appropriate, even if no one approves.

about the writer Ramla Akhtar is a social designer, futurist, writer. She enjoys creating intradisciplinary, technology-neutral designs for the realization of innate human potential through her consultancy, "NEXT>".

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opportunity fortified

malnutrition in pakistan: the hidden hunger by muhammad aslam & ronald inayat for tbl

P

akistan has an alarmingly high level of malnutrition; 24 percent of the population is undernourished. The most recent estimates by the United Nations Food and Agriculture Organization (FAO) state that 37.5 million people in Pakistan are not receiving proper nourishment. The issue is complex and widespread, with deficiencies ranging from protein to iodine, along with other health problems due to insufficient intake of these essential nutrients. But, what are the implications of these nutrient deficiencies for economic growth and development? Using household level estimates, the graph below shows that the macroeconomic costs are considerable in terms of year-in, year-out gross domestic product (GDP) foregone. For example, just three types of malnutrition are responsible for 3-4 percent of GDP loss in Pakistan in any given year, according to the United Nations Standing Committee on Nutrition (SCN) fifth report on the world nutrition situation. Malnutrition in Pakistan is usually associated with poverty and the main causative factors include low consumption of food and foods with low nutritional value. The most common and significant nutrient deficiencies are given below:

Iodine Deficiency This is a major public health problem in Pakistan and is a threat to the social and economic development of the country. The main factor responsible for iodine deficiency is a low dietary supply of iodine. When iodine requirements are not met, thyroid hormone

synthesis is impaired, resulting in hypothyroidism and a series of functional and developmental abnormalities, known as “Iodine Deficiency Disorders” (IDD). Goiter is the most visible manifestation of IDD. Endemic goiter results from increased thyroid stimulation by thyroid stimulating hormone (TSH) to maximize the utilization of available iodine and thus represents maladaption to iodine deficiency. However, the most damaging disorders induced by iodine deficiency are irreversible mental retardation and cretinism. If iodine deficiency occurs during the most critical period of brain development (from the fetal stage up to the third month after birth), the resulting thyroid failure will lead to irreversible alterations in brain function. While cretinism is the most extreme manifestation, of considerably greater significance are the more subtle degrees of mental impairment leading to poor school performance, reduced intellectual ability and impaired work capacity. The recommended strategy for IDD control is based on correcting the deficiency by increasing iodine intake through supplementation or food fortification. A WHO survey (1993-1994) on iodine status worldwide lists Pakistan as having "severe iodine deficiency" with 135 million people having insufficient iodine intake. Unfortunately, iodized salt consumption in Pakistan is at only 17 percent, according to the National Nutrition Survey, 2001-2002.

Iron Deficiency It is well-documented that iron deficiency leads to

Percentage loss in GDP from reduced adult productivity due to malnutrition

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foods. Using a bit of ingenuity, this can be achieved with low additional costs to the company and a longterm product investment with guaranteed gains.

The National Foods Limited Example National Foods Limited (NFL) is a company which leverages triple bottom line (TBL) principles to create a successful business model. A pioneer in the Pakistani food industry, ISO:9001 & HACCP certified NFL has been providing consumers with pure food products since 1970 and is the market leader in branded refined salt, with about a 90 percent share. In response to the iodine deficiency issue, NFL launched iodized salt in 1991. Then several years were spent in collaboration with UNICEF to promote the use of iodized salt across Pakistan. Result is that today half of the sales volume of NFL's refined salt is taken up by the iodized variant.

impaired cognitive development and poor performance in school. Iron deficiency is one of the most prevalent nutritional disorders and has a large impact on economic productivity. Recent estimates of income foregone as a percentage of GDP are 5.2 percent for Pakistan, according to the UN report on world nutrition situation. This depends on the extent of deficiency and the returns to educational attainment in the labour market.

Protein-Energy Malnutrition This is also very common in Pakistan and leads to a condition called kwashiorkor. Lack of protein can cause growth failure, loss of muscle mass, decreased immunity, and weakening of the heart and respiratory system. A survey by the World Health Organization (WHO) shows that the number of underweight preschool children (0-5 years of age) in Pakistan is 40 percent. Such children often remain weak and undernourished throughout life.

Role of The Food Industry The malnutrition issue in Pakistan is a major CSR opportunity for food companies since the possible solution lies in widespread availability of essential nutrients in low cost food products. Food companies can utilize their existing resource and development capabilities to develop low-to-moderate-cost nutritional

NFL has also conducted a series of seminars on nutrition at various educational institutions across Pakistan. Future plans include in-house development of low-cost nutritional meal solutions and improvement in the supply of raw ingredients at the crop-growing stage. With over 250 products in its portfolio and sales in 35 countries, NFL is dedicated to improving the well-being of society through continuous development of innovative food products. Reference United Nations Standing Committee on Nutrition (SCN). Fifth Report on the World Nutrition Situation: Nutrition for Improved Development Outcomes, March 2004.

about the writers Dr. Muhammad Aslam is currently Technology & Industrial Consultant at National Foods Limited. He is a Fellow of several scientific societies. His career in research spans more than 50 years and he has 34 research papers and 30 patents to his credit. He holds a B.E. from California University, a B.Sc. in Chemistry and Physics and an M.Sc. in Organic Chemistry from Bombay University, and a Diploma in Plastics Technology from West Coast University. Ronald Inayat is currently a PR practitioner at Asiatic Public Relations. He has a Masters degree in Microbiology and spent the last several years handling Brand PR and technical regulatory affairs at Procter & Gamble Pakistan.

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common sense

common sense approaches to a 'food secure' pakistan by majid sheikh for tbl

An interesting advertisement appeared in the national press in mid-May 2008, seeking tenders for food supply in various prisons in Sindh. The benchmark was three meals of 150 grams wheat flour each on an average. Immediately one thought of the wheat crisis, as well as the food crisis, and the mind began to calculate.

Extrapolating Prison Nutritional Standards By prison regulation standards, an adult male consumes 450 grams of wheat flour a day, as well as other accompanying foods. A research carried out by a Lahore-based NGO estimates that the average Pakistani household consumes 250 grams per person per day, which teeters precariously on the borders of mere subsistence. By the World Health Organization's standards, on the other hand, the nutritional needs justify a minimum of 350 grams plus per person to be consumed daily. Even

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if we estimate by the lowest prisonrequired figure of 250 grams per person, Pakistan would need 91.25 kilograms of wheat per person every year, or 15.06 million tonnes of the commodity. By prison regulation standards, presuming women and children eat less, we would need at least 27.11 million tonnes. The use of this simple calculation shows that Pakistan, in the year 2008, is short of wheat by almost 3.5 million tonnes, the official version not withstanding.

Efficiency or Starvation But to cut a long story short, food will consume an increasingly greater portion of a Pakistani family's budget in the years to come. This is a fact that propels one to look into the future. What should Pakistan do? We are an endowed land, with good soil, enough water if we use it sensibly, human skills to produce any food we need, and a population whose size ensures that the demand for such produce interests farmers to grow more food. If we assume that we have no new lands to plough, then there is an immediate need to increase the yield per acre. For the same inputs, a quantum jump is the 'one and only' solution. A 'Quality Green Revolution' is needed. But as simple as this assertion might seem, in order to actually achieve such a state calls for immense effort, and will-power. We need to examine our agricultural practices and stop deluding ourselves into believing that we are efficient. United Nations' figures rate us as among the least efficient. Even if we can match the result that the Indian Punjab manages - with the same soil, people, water, etc.,- we are destined to improve our lot. If we do not, we will starve. It is as simple as that.

The Solution Quadrangle The solution lies in four mutuallyaimed directions: to learn better agricultural practices; to tackle the prices of agricultural inputs; to put into place a first rate food distribution system; and to work exceptionally creatively on ensuring that the supply of water reaches all farmers, and on time.

“

A 'Quality Green Revolution' is needed. But as simple as this assertion might seem, in order to actually achieve such a state calls for immense effort, and will-power

”

Quad Direction 1: Agripractice Improvement There is no doubt that the average Pakistani farmer is keen to adopt any new methodologies that increase his, or as is often the case, her output per acre. But with the crumbling agriculture extension services of the provincial governments, practically no assistance, guidance, or even advice is available. Such assistance played a major role in the 1960s when the so-called 'green revolution' unfolded in Pakistan. It would not be asking for too much if with better agricultural practices, outputs could be increased by at least 50 percent assuming that the acreage under cultivation remains the same. By merely ensuring proper weeding, it is a known fact that outputs rise dramatically. But then

the changing social ethos has prevented women from undertaking this task. In Punjab, if one was to observe the fields of different tribes such as the 'Meo' family to that of a 'Jat', both standing next to one another, it is a known fact that the Meo family's output is almost 50 percent more than the 'Jat' family's. The reason is simple. Meo women work hard all year round to weed the fields and ensure that the crop makes full use of the nutrients in the soil. They are just simply better farmers. To further explain this point, the reader is welcome to visit the Pakistan-India border fence and observe the wheat crop on both sides of the border. The average Pakistani yield is 22.475 maunds of wheat per acre, according to a survey of Pakistan in 2005, while the Indian official average wheat yield is 41.235 maunds per acre, as stated in the Indian Institute of Agriculture Sciences publication (June, 2007).

No Solution Without our True Centres of Learning The Indian agricultural scientist has to spend a number of years in the field, living and working with farmers, teaching him skills and understanding his problems. In Pakistan, a Ph.D. in agriculture normally means a cushy, ivory tower job with no fieldwork. This assertion may be a bit off the mark, but broadly this is the state of Pakistani agricultural sciences. But there is still hope. Take, for example, the Centre for Excellence in Molecular Sciences at the Punjab University. This organization has the ability to teach and set up centres to produce virus-free plants using tissue culture technology, in every district of Punjab. Almost twenty years ago, the Indians adopted this route with considerable assistance for Israel. To any pragmatist it makes sense for Pakistan to seek the assistance of these two countries, hostile as they

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may seem to our national security. But then the age of such dispensation is over, hopefully forever, and the poor of this country will be better fed if we just 'stooped to learn' from their experiences.

12,000 tonnes to take care of everyone for three months. A standard silo to store 25,000 tonnes will mean food for everyone for half the year. This can be achieved easily.

Passively Awaiting the Green Revolution?

The fact is that a similar system already exists and the provincial governments claim to run it, but with very corrupt officials.

Like the 'broiler' revolution in chicken meat, Pakistan awaits the greenhouse revolution. The possibilities in this learning game are endless. Greenhouses, for instance, mean that even desert-like lands can produce ten times as much as our current per plant produce. But if we stick to simple matters like better outputs from the existing inputs with better agricultural practices, Pakistan can easily be a 'food secure' country.

Quad Direction 2: Agri-Inputs The second action needed is to ensure that all the inputs like seeds, water, transportation and fertilisers are supplied at the correct price and on time. For this the government must take considerable responsibility and not leave everything to the open market. It is the only real onus, and the 'social responsibility' of the government to work on ways, without resorting to heavy subsidies, to supply farmers with quality inputs. This is critical to the future of Pakistani agriculture, for only with the correct mix of measures will adequate food be available to its people.

Quad Direction 3: Distribution! The third, and probably the most important factor, is to tackle, on a war footing, the distribution of agricultural produce. This is where the public sector must rise again. If one modern storage silo caters for a population of 500,000 persons, this means that each storage silo will need only 125 tonnes to feed the entire population every day, or

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“

Like the 'broiler' revolution in chicken meat, Pakistan awaits the greenhouse revolution. The possibilities in this learning game are endless

”

We know from the immensely important research of the Nobel Prize winner, Dr. A. Sen, that famines have always been the result of bad distribution. So it makes sense to tackle this problem. Supply has to be graduated and on a daily basis, its selling outlets contained within a given area, and its selling price has to be controlled through the retail system. That is why rationing seems to be the preferred option. But when the entire country needs just 330 storage facilities, it makes sense for the private sector to invest in these silos, as well as the milling facilities. Monitoring outflows from 330 facilities is possible, and this will definitely prevent any famine coming to this country. There is just no reason Pakistan should have famine-like conditions, save for bad governance.

Quad Direction 4: Water, Water Everywhere… Lastly, there is the problem of the supply of water. Pakistan has an

excellent canal system. Besides these, there is a need for more and more reservoirs. Consider, for example, the River Ravi, dry that it is. Its 'bunds' on both sides could store water, and this would make the underground water level rise. All along rivers and besides them, reservoirs are needed. This is not a high-technology undertaking, and it will also not run into problems with provincial water disputes. Surely even remote parts of Balouchistan can have reservoirs using storm water and other such flows. All these are simple steps - but require robust governance. With better agricultural practices, agriculture technologies, better storage and distribution of crops, better water supply and cheaper, reliable and timely inputs, Pakistan can indeed has full potential to be a 'food secure' country.

about the writer Majid Sheikh has been working as a journalist since 1971, in major newspapers in Pakistan and England. He is also a management consultant and Marketing Research specialist. His first book 'Lahore: Tales Without End' is a collection of his pieces that are published in the Daily Dawn.

social partnership toolkit

csr and low-income housing: a plausible framework by jawad aslam for tbl

Currently, Pakistan has an overall housing backlog exceeding 6 million units with an annual addition of 300,000 units - based upon conservative estimates from the Population Census of 1998 and the National Housing Policy of 2001. Roughly 30-40 percent of the demand is addressed by mainstream developers who cater to the high-end market. The remaining units fall under the category of the low-income segment. The government has made repeated attempts to address this segment through various initiatives - seldom succeeding. The current low income housing deficit within Pakistan is 3 million units with an addition of 150,000 units per annum. In addition to these alarming rates, within the urban context, there is a disturbing pattern. Of those that do own homes, there is a clear pattern of constructing additional rooms as opposed to constructing new homes. This leads to an increase in

the density of homes, thus further exacerbating the housing problem. With most homes having been constructed over twenty years ago (58 percent), over 50 percent of the population under the age of 25 , and no solutions in sight, demand in the lower income segments is expected to explode in the next decade.

Context In order to truly comprehend this problem, one must put him/ herself in the shoes (or bare-soles) of the average citizen of Pakistan. An individual is earning between US$ 135-185/month (working in the public/private sector or selfemployed) and is responsible for maintaining his/her nuclear family as well as members of the extended family. The average citizen lives with a level of uncertainty on a daily basis, and is constantly faced with a multitude of potential issues to handle relating to running of his/her household and providing for the family.

For those living in rental units (30 percent of the population), their average monthly income is US$ 165 and their monthly saving, after all expenses relating to rent, food, utilities, transportation and miscellaneous are deducted, under ideal circumstances, is US$ 15. With the average person saving US$ 15/month and the average 80 square yard plot costing US$ 7,000, it would take nearly forty years before one could afford such a plot. The result, is the current housing crisis Pakistan is faced with.

Policy, Poverty and Housing Historically, low-cost housing in Pakistan has either been the realm of NGOs, the government, or the informal sector. Due to the heavy capital requirements, as well as the level of skill involved in scaling up in the

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housing sector, NGOs have not gained much ground. The government has been very successful in the actual building of low-income housing developments, but has failed in all subsequent aspects such as effectively targeting the BOP (bottom of the income pyramid) and building healthy and sustainable communities. Traditionally, government models have been based on a lottery system that is generally rigged in favour of the investor community who then exploit the BOP through renting those same units. With those units intended for homeowners, but occupied by renters, there is no ownership within the community. This inevitably spirals into becoming another slum where drugs, prostitution, and crime thrive. The informal sector meanwhile is riddled with problems such as lack of legal tenure, crime, no masterplanning, and little or no infrastructure. With poverty rates nearing 50 percent, and population in the major urban centers expected to double in the next fifteen years, Pakistan is in the midst of a massive housing deficit. With housing policies favouring the elite, the development and supply of affordable housing presents itself as both a great challenge and a greater opportunity.

The Ansaar Management Company To meet this challenge, a group of professionals from various disciplines have come together to create the Ansaar Management Company (AMC). AMC is driven by a mission to provide high quality and affordable housing solutions to the average citizen of Pakistan. The company targets households earning US$ 85-300 per month and specializes in a

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health, education, and community development;

community-based approach to development. AMC focuses on nationwide scalability and sustainability through its integrated for-profit, low-cost approach. AMC's initial projects focus on ten selected cities of Pakistan. AMC's model, based on a thorough analysis of the issue, effectively improves on what the government has been doing right, and works towards the institution of systems within areas that the government has not paid due attention to. The following features set the AMC model apart from others. All residents must move on site within 60 days; All residents must reside on site for 5 years (they cannot sell, rent, or leave the plot/home empty); Only one plot per family. No bachelors allowed; Active community development is essential for the first five years, utilizing a unique system of resident mobilization requiring residents to live physically live on-site; Various NGOs and organizations are invited to establish initiatives in areas of

A financially sustainable model that offers 70 percent of the plots at cost, while offering the remaining in the open market.

Why AMC is a Social Enterprise Carved from AMC's on-ground experience, the table below indicates how, compared to a typical informal scheme, AMC offers a vastly superior product in terms of utilities, amenities, and living environment - while remaining competitive price-wise. AMC develops roughly 500-2500 residential and 25-125 commercial plots for sale for a given project and charges a project management fee to manage all aspects of the project, including but not limited to, civil works, home construction, marketing and sales and community development: Unlike informal developers, AMC provides all plots in the project with electricity, a water-supply, underground sewerage lines and disposal, as well as roads during the tenure of the project. Doing so ensures that residents do not face the hardships faced in urban slums and squatter settlements. Since

Typical Informal Scheme

AMC Project

Location

Periphery of city

Periphery of city

Scheme Layout

None. Narrow lanes, no space for a park and other public amenities

Wide lanes, space for parks and public amenities

Plot Sizes

75-125 square yards

100 square yards

Price

Rs. 80,000 - 120,000

Rs. 70,000

Legal Housing

No

Yes

Utilities

Electricity

Electricity, water, sanitation

Amenities

Minimal

Schools, clinics

Environmental Conditions

Very poor - Serious sewerage and solid waste problems

High - Strong emphasis on sewerage and solid waste management

AMC's approach to housing is holistic, it also facilitates essential social and economic services of education, healthcare, and microcredit through a network of NGO partners to further enhance the living quality of its residents.

have demonstrated commitment to the organization via predetermined metrics) in strict adherence to the AMC policies (moving in with the family within 60 days);

Additionally, AMC arranges mortgage financing for standardized one bedroom, two bedroom and three bedroom housing units to facilitate clients.

Mortgages are offered to the residents/employees on a 70:30 debt: equity basis, where the organization can opt to subsidize the equity portion or simply serve as the facilitator during the entire transaction. (This method would allow a labourer to move into a basic housing unit with as little as PKR 25,000);

A CSR-Framework for Low-Income Housing The unskilled/skilled labour force the average citizen - who earns Rs. 3,000-10000/month, is one of the most neglected segments of society. The government does not cater to their needs, nor does the private sector. The labour class tends to be a sincere group of people, but dire circumstances force them to behave irrationally - to cheat, steal, become violent, and, in the worst circumstances, even kill. The only way to transform the dynamics of this segment is to minimize the occurrence of dire circumstances. As organizations begin to explore various options to carry out their commitment to CSR, AMC offers a financially viable option that achieves high social and environmental impact. With a plethora of textile mills throughout the country, and a constant struggle to retain good talent at all levels, the AMC model is a mutual solution for the labour force and the organizations that employ them. The AMC proposal consists of the following principles: Owners or associations of industrial units, independently or jointly-with AMC investors, purchase raw land in close proximity to their industrial estates; Plots or built-up units be offered to qualifying laborers/employees (those that

AMC manages the entire process from land acquisition to post five year community management, including engaging partners (investors, NGOs, etc) to build schools, hospitals, community centers, commercial areas, etc within the community; With a thriving community of 3000-10000 members (depending on the size of the development), the organization can now sell the remaining 30 percent of the plots (prime, as well as commercial) to the open market, for profit. Incorporating the key elements mentioned below, AMC designs and implements all of housing projects on socially and ecologically sound and sustainable principles that also serve as metrics for investor/donors: Affordability; Simple procedure with rapid delivery; Effectively target the poor; Healthy physical environment; Legal housing with security of tenure;

Financial viability; Sustainability.

Estimated Quantitative Social Impact The key to alleviating poverty in Pakistan is to provide the poor with assets. If this asset comes in the form of a house, the value becomes manifold. AMC provides this valuable asset. It not only saves the poor from continuous rental payments, it also provides them with collateral as well as peace of mind, thus contributing to more productive work. AMC focuses on selected indicators for quantifying the social impact of its projects. These indicators include: Creation of assets; Savings on rental payments; Value addition by new employment generation due to new construction; Health-related benefits accruing due to environmentally friendly practices. Based on the above, AMC anticipates a social return of US$ 2.36 on each dollar spent by one household. When annualized, this number progressively swells to over US$ 13 million for all households involved in a standard project of 2500 units.

about the writer Jawad Aslam, currently an Acumen Fund Fellow, has been working in the low-income housing sector of Pakistan for the past three years. He has recently launched AMC, a forprofit spin-off of the world-renowned incremental housing model of Khuda Ki Basti. Jawad was born and raised in the USA, and currently resides in Islamabad with his family.

Socio-economic opportunities;

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breather

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management spin

csr for csr by shadab fariduddin for tbl

B

usinesses are increasingly expected to solve social problems with the efficiency technically inherent in business processes. This expectation, coupled with the downsides of a short-term, profit maximizing motive, gave birth to the concept of Corporate Social Responsibility (CSR). CSR has caught the fancy of business leaders across the world. In order to live or (show) responsible citizenry and meet customer expectations, business leaders are increasingly adopting a CSR strategy. Some equate 'charity' with CSR, some copy or blindly follow other companies, many want to genuinely address social issues but don't know how to. Some go for

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the cut-and-paste approach: cut from companies that seem to the public to responsible citizens and paste for their own. Any strategy is as good as its execution. Execution hinges on how well the idea has diffused into the operation. Diffusion requires conscious efforts by management to put in place systems and skills, and then make them run. And finally, measure their effectiveness. Only then will a CSR programme come to life - assuming that there is a strategy at all - which seemingly, there often isn't. Presented here is a conceptual framework for CSR activation in any company. It should provide an answer to the vital "how to"

question many organizations face. The proposed CSR activation framework has three vital components: C, S, R - Capacity Structure, Relevance. Not necessarily in this order, but it sounds catchier this way.

C is for Capacity Does your organization have the capacity to handle the additional workload or intellectual input that comes with CSR implementation? Organizations perform as good as the people they have. In other words, organizational performance hinges on the knowledge, skills and motivation of its people. The bandwidth of people to execute related tasks must be increased in order for a CSR strategy to be implemented. CSR strategies bring

about change and it is a known management reality that people resist change. Effective change management requires capacity building. Candid communications between top management and all employees coupled with a solid commitment to human resource development are crucial to strategy implementation. So, when contemplating CSR, organizations must be committed to the effective capacity building of their employees. There are two categories of people organisations must focus on: those who actually carry out the implementation of the CSR strategy and those who will provide support for the implementation. While conceptual orientation may suffice for support function staff, CSR implementers require more intensive capacity building. They would need to learn tools, frameworks, and best practices of effective CSR implementation. The company's human resource development manager should devise the appropriate needs assessment mechanism and separate capacity building interventions for these two groups. Once skills have been built, organisations must address the next series of vital questions related to systems capacity: How do CSR processes interact with other organizational procedures? What are the key performance indicators for the CSR function and CSR implementers? How and when do you measure effectiveness of the CSR strategy? Answers to these questions should help organisations identify process interfaces and system design requirements for effective CSR strategy implementation.

S is for Structure A CSR strategy will be as effective as the organizational structure that supports it. The importance the CEO attaches to CSR will be

determined and communicated by the places the CSR function occupies in the organogram. The hierarchal position assigned to the CSR function will limit its authority and mandate. In many oil exploration companies for instance, the CSR function merely exists to comply with regulatory requirements. CSR in the form of community development is a necessary cost of doing business. CSR is a low-profile function with no or little career prospects, except perhaps for the treehugger or NGO types meandering in corporate careers in search of meaning. One large and reputable local food company was faced with this difficult question. Top management placed high priority on CSR. Various options were floated for "placing" the CSR function - this revealed inter-functional tensions and desires to control or subdue the upcoming proposed CSR position. You may face similar dilemmas: Should CSR be a part of Research and Development because of their common proclivity towards innovative solutions? Should CSR fit into marketing because of its apparent affinity? Should CSR be a part of human resources so that it can begin its change management journey surely footed? Should CSR be part of field operations as in large industrial operations, such as the oil sector? Should CSR be an independent function headed by a senior professional equal in status to other functional heads such as finance, marketing and human resource? Should CSR be part of CEO secretariat and run as a special assignment?

R is for Relevance The CSR idea that the organisation wants to pursue must be relevant to its values, organizational culture and market positioning. Just like any new business initiative it must either fit the existing portfolio, address an unmet need or revolutionize the system itself. The CSR strategy must be geared towards achieving a fit between the organisation and its societal context. An organisation can create relevance by owning a social cause or need. The cause itself is also an unmet social need, a business opportunity for the organisation to gain an unassailable 'positioning' as it would be seen as 'doing good' for a higher cause. The question of establishing 'relevance', must be answered at the outset of the CSR strategy formulation. The issues of capacity development and organizational structure are thus subordinate to CSR strategy relevance. It should also be relevant to the personal values of employees. When they believe, and can relate to the reason behind the organisation's CSR strategy, they will be motivated in investing their time and efforts, even voluntarily. They will see their efforts to be contributing not just to 'profits' but also to the 'people' around them the community-, and the planet they live on; hence, they will be committed to integration of the organisation's sustainable objectives with a true 'triple bottom-line' approach. In a nutshell, CSR activation rests on three pillars: R for strategy Relevance, S for Structure and C for capacity.

about the writer Shadab Fariduddin is a management consultant and a partner in the Four Corners Group.

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cross-cultural observation

pakistan's csr mentality change by andrew webster for tbl

Observations from the UK CSR Experience As a frame of reference, let's consider some observations from my understanding of CSR in the UK.

S

ince arriving in Karachi nine months ago, I have heard widespread criticism of CSR in Pakistan for being focused on philanthropy as opposed to sustainable business practices. Such criticism results in calls for a change in mindset in relation to CSR. However, on their own these calls will have little effect. In reflecting on my previous experience of CSR in the UK, it is clear to me that companies embedding more sustainable business practices into their business strategy is largely a result of the social pressures that persist within UK society. These societal pressures are unique to the UK and countries with similar social realities - and differ from the societal pressures within countries like Pakistan. Therefore, if it is a change in mindset that we want in Pakistan, we must look at how best that change can be brought about in the context of Pakistan's culture and social reality.

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Over the years I watched social pressure act as the catalyst for change in the CSR mindset. As a result, companies are increasingly defining CSR in line with the triple bottom line approach as they go through a three-step process.

1. Consumer Pressure Companies have been forced to react to the concerns of consumers as the world has become more interconnected. People are now basing their consumer decisions on more than price and brand alone as they seek to tackle global problems through individual action. This stance is perfectly exemplified by the 72 percent increase in revenue generated by Fairtrade products in 2007 alone, as stated in the Fairtrade Foundation communications. At the same time, further pressure is being created through demands from graduates that their future employers be socially responsible. In a recent survey titled 'Employable Graduates for Responsible Employers' by 'Student Force for Sustainability', 86 percent of graduates said they often or always considered the ethics of

a company when applying for jobs.

2. Public Relations Strategy This pressure has forced companies to not only embed more sustainable practices into their business model but to also start utilising these practices in order to attract consumers and future employees. People are now employed to work on CSR and the resulting communication strategy in order to build the image of a responsible corporate citizen.

3. Feeling the Benefit These PR strategies lead to increased business success. Furthermore, companies start to see the benefit of embedding more sustainable practices into their business model, so they continue to do so. More ethical waste management, for instance, is not only better for the environment; it also proves to be more cost-effective. However, working in Pakistan has demonstrated to me that the same pressures and resulting reactions are not as visible here.

The Pakistan Context What I believe this comes down to is the differing social context and culture of Pakistan compared to a country like the UK. Pakistan has a set of social pressures that force companies to act in a much more philanthropic and price-driven manner, thus resulting in a less

than 50 percent compliance rate with basic CSR principles and objectives.

Philanthropy and Community In Pakistan, the ethics of a company are judged in relation to philanthropy. This is because philanthropy and community values are highly valued in Pakistan's culture. It is expected that the more fortunate help the less fortunate, usually through donations. Companies are therefore under pressure to act in the same philanthropic way and, as a result, many do so. In contrast to the UK, however, there is little pressure on companies to consider the economic, social and environmental impact their operation has on its stakeholders.

Inward Mentality One reason for this lack of pressure on sustainable business practice is the seemingly small amount of awareness within Pakistan about the challenges facing the world. This is primarily because less people have access to the platforms that would provide them the information to engage with these issues. For instance, only 3.3 percent of the country's population has access to the internet, states Romail Kenneth in a recent Daily Times article . But even within the seemingly few people that are aware of the issues, there is little individual action. Measures like recycling and energy conservation are rare even when the problems associated with these measures are adversely affecting people's livelihoods. If the majority of people are not concerned with these issues, for whatever reason, it cannot be expected of companies to be concerned with them either.

Finally, Pakistani consumers are not consciously pressurising change through their consumer decisions which is exemplified by the price-driven nature of the economy.

needs to be focused on making them both socially responsible and business savvy. CSR should be incorporated into the curricula of business degrees and courses, especially at leading business institutes such as LUMS or IBA.

Although I enjoy bargaining for the best price for what I want to buy, it does show that brands and social reputation have little significance in consumer choice, for the majority.

Also, the media needs to play a more active watchdog role in analysing and educating consumers on the business practices of companies.

Price-driven Economy

This is reflected in the business culture too. Marketing, branding and reputation building are new concepts for Pakistani companies and are not always valued highly. This also means that even when companies do contribute to society, they see little benefit in publicising this.

Creating the Change It is clear then that companies are already reacting to the social pressure within Pakistan by producing low-cost goods and exhibiting philanthropic qualities. However, if we want to expand the CSR mindset in Pakistan to include concerns for economic, social and environmental impact of business operations, pressure needs to be generated from the leadership of society in a variety of areas:

1. Leadership from MultiNational Companies Part of MNCs' social responsibility as they expand into Pakistan comes in leading and educating others on how to be more sustainable in a way that benefits business. They need to take responsibility for bringing expertise to CSR-based platforms in Pakistan at the same time as creating more opportunities for people to learn from their best practices.

2. Leadership through Education and Awareness Furthermore, the education of Pakistan's future business leaders,

3. Leadership through Governance Finally, the government needs to take responsibility for holding businesses responsible for their actions through setting, and enforcing, minimum standards in all areas of business impact. Furthermore, the government should proactively support the efforts of NGOs and companies in promoting the CSR agenda in Pakistan. These are just brief suggestions as opposed to comprehensive solutions. Although the current culture of corporate philanthropy is positive, it is clear that this needs to be developed into a culture that incorporates individual responsibility for the economic, social and environmental impact a company has on its surroundings. Such a transformation will have to happen in line with the Pakistani social context and culture and will most definitely require strong leadership from those who shape the mentality of Pakistan's society.

about the writer Andrew is currently based in Karachi and works with the JS Group's CSR Initiatives. He has come here through the AIESEC leadership development programme and has actively been involved in connecting students with companies in CSR-based forums in the UK. He has also written about his experiences of Pakistan for the BBC.

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obs-inion

the grains of truth in crises: food for personal thought by asim malik for tbl

W

e are living in a global food catastrophe that will be more crippling than anything the world has ever seen. The credit crunch and the reverberations of soaring oil prices around the world will pale in comparison to what is about to transpire. The greatest demand challenge is not oil - it has yet to come.

and reduce the pressure on the food supply during the course of the war. Citizens grew food on their lawns, on apartment rooftops, and wherever possible. The Victory Garden's existence ceased when the war ended and things went back to their old (unoptimized) ways, being dependent upon supermarkets and fuel-consuming grocery stores for our food.

"Those who have food are going to have a big edge," is what U.S. Strategist Donald Coxe thinks it has come to. The U.S., of course, is one of those countries with an edge. 54 percent of the world's corn is grown in America's mid-west, as revealed by the United States Department of Agriculture's Economic Research survey.

Now, when we are facing severe food shortages, why wouldn't we start such a programme and encourage people to turn their manicured lawns into a means of survival?

Countries are facing devastating food shortages which could ultimately lead to a war for control over the world's food market. Due to food shortages and escalation in world prices, the poverty trap has become even stronger. This means that the millennium development goals (MDGs) and the eradication of poverty increasingly seem like nearly impossible tasks. Instead of making progress, perhaps we have regressed in our journey towards the MDGs. The situation is dismal, however there are some steps we can all take to soften the blow of food shortages.

Soften the Blow Lesson 1: Victory Gardens During World War II, the American and Canadian governments started a programme which was called, Victory Garden. Its primary purpose was to encourage people to grow food at their homes to ease 46

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With such dire agricultural realities, among our first steps can be to replace ornamentally manicured, water and fertilizer-sucking, perpetually out of season lawns into vegetable gardens - to not only feed families, but also teach children about self sufficiency and natural resources.

Soften the Blow Lesson 2: Urban Agriculture During the Cold War, Cuba's industrial-agricultural system was fueled by oil from the Soviet Union. When the Soviet Union collapsed, Cuba lost its source of oil and the system began to collapse. Food shortages were the norm. However, Cuba prevailed by taking a different approach to their farming methods. Out of the crisis emerged an incredible success story, a classic CSR winner where dire risk was flipped into creative opportunity. More than 80 percent of the vegetables consumed in cities were also grown within them, according to the Financial Post. Yards and vacant lots were put into food

production, while the state provided expertise and equipment to get new 'farmers' started. Today, more than ten thousand urban farms provide fresh, cheap, organic food to local neighbourhoods in Cuban cities while providing incomes and jobs to tens of thousands of people. The gardens achieve a productivity level comparable to yields from industrial agriculture. They do this by mimicking nature rather than bludgeoning it into submission with chemicals, artificial fertilizers and excessive irrigation. There is hope that we can curb these foot shortages if we act now, as a nation, unified in our times of crises at least. We must understand the urgency and contribute towards self-sufficiency. There is a need to raise awareness and educate the masses, who can contribute to such programmes. However, ultimately, the government must play its leading role in not only resolving food shortage issues, but proactively preventing them. We want to see our coming generations eating and surviving in this world on their own and it is our common responsibility to give them a planet not green with envy or disease but green with produce. Green: the colour of money, the colour of the environment, and now, the colour of food.

about the writer Asim Malik works in the microfinance industry and has also been involved in providing consultation and bringing innovations in the field of retail distribution for the FMCG sector.

book in focus

sustainable inspiration Author: Chris Laszlo Published by Island Press 208 pp

by khadeeja balkhi for tbl

I

character whose choices most business readers can thoroughly relate to.

was quite excited when Greenleaf Publishing sent TBL a copy of Sustainable Value hot off the press for us to review. Written by Chris Laszlo and published earlier this year, its first few pages are filled with impressive enough praise from academics and business people alike, including a foreword by Patrick Cescau, Unilever's Group CEO.

RISKS - Customer deslection - Pre-emptive regulation - Loss of market shares - Reputation damage - Fines, penalties

By the time readers have shared her 'aha' moments in her -and her company's- journey to more sustainable, ethical corporate citizenship, they're fully primed to read the section that follows: four companies' sustainability case studies, including Walmart's.

OPPORTUNITIES - Enhanced reputation - Product differentiation - Motivated employees - Reduced costs - Entry into new markets

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Unsustainable (value transfer)

Sustainable value

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+ STAKEHOLDER VALUE

Unsustainable (lose/lose)

Unsustainable (value transfer)

this genre, in my opinion)? I don't know if it was intended for such a readership, but I do believe, that it is at this early level of sustainability understanding that it adds the most value. Sustainable Value is also a good book to read if you're feeling low, in need of inspiration. And I don't mean the fruity kind, I mean the quantitative, qualitative kind that not only propels you into action but gives you some pointers on how to stay in action.

The sustainable value framework

Perhaps what sets the book apart is that it begins as a 'story'. It's light reading. It's fun reading (ok you can discount that a little bit because I am a nerd). It doesn't dive into the heavy business-case-forsustainability kind of talk. It's a fluid read. Something you can take on the plane and actually look forward to reading. It starts with the story of Deena, the Chief Executive of a plastics-based industry. Her company is delivering exceptionally high financial returns. Its stock is selected in the 'Vice Fund'- based on the idea that 'sin' stock are highly profitable activities that yield above-market financial returns joining the ranks of the worst environmental performers in the oil and gas sector, tobacco or adult entertainment. She is a

I would say my favourite part perhaps remains The Sustainable Value Framework. If you are a visual person, like me, then try skipping merrily to Section 9. Here, my initial excitement was again justified. It is a basic sustainability concept captured and articulated in a visually convincing and appealing manner - at least for a business audience. The catch is, this book's ideal reader is s/he who needs to be convinced of the business case for sustainable practices. Clearly, that means it has a huge readership in Pakistan. But, how likely are the people that need to be convinced in the first place, of actually picking up a book like this? And then, to read it through and derive the value that lies between these statistics-packed pages (a vital element of any good writing in

The latter, however, is perhaps a weakness of the book. The core of its toolkit, 'the eight disciplines' comes across as a bit underdeveloped. It is a framework that gives the feeling that it is tailored from a generic management background without a true Sustainability agenda toolkit as a real part of it. But again, it remains a framework for beginners to at least start bouncing off of. The bottomline: read it for conceptual clarity and sustainable inspiration. And stay in that topright quadrant where there is true sustainable value creation!

about the writer Khadeeja Balkhi is a Sustainability Consultant who finds great joy in her work, whether it's strategizing, handson implementation, field-based stakeholder engagement or documentation and monitoring. She can be reached at [email protected] may-june 2008

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