Era Is the Exponential Increase

¶ … era is the exponential increase in extreme poverty on a global scale. As globalization and the expansion of transnational business increases our overall global wealth, the problems of poverty have become even more visible as wealth distribution is at its most unequal and inefficient. In the book "A Corporate Solution to Global Poverty" by George Lodge and Craig Wilson, two of the most vocal leaders for global change and initiatives in poverty reduction, a clear and decisive plan is advocated for mitigating the global poverty crisis. Professor Lodge of Harvard University and Craig Wilson of the International Finance Corporation argue that the solution for eliminating global poverty is to create an initiative that directly attacks the problems of poverty through corporate governance. In the below review will look at this book through critical lenses to examine the legitimacy and feasibility of their call for action.

Lodge articulates that the biggest problem facing efforts to reduce poverty on a global scale is the inability of organizations to control its efforts and collectively take action. While many world leaders assert that the reduction of extreme poverty on a global scale is one of their top priorities, little has been done in the past few years to achieve significant progress in this area. Three significant groups are targeted in this book as the vehicles that are attempting change. Lodge asserts that multinational corporations, international development agencies and nongovernmental organizations are the three primary agents in the fight against global poverty, and each has failed in their mission. His primary complaint of multinational corporations is that it takes little risk when expanding into underdeveloped nations, thus not devoting enough resources to build and sustain an economic infrastructure. His criticism is valid because it articulates on the business minded approach to the "volunteerism" of many multinational corporations. Lodge accurately asserts that while many multinational corporations have attempted to assert their own brand of sustainable business development in poverty stricken countries, they do not do nearly enough to build an economic infrastructure. The complaint he has against international development agencies such as the World Bank, UN, and other governmental agencies is that they have inefficiently distributed resources without a carefully constructed business model for how to execute on the resources they grant. In effect, they present the opposite problem with multinational corporations, which is to provide too much funding without fully providing direction. Finally, he argues that nongovernmental organizations (NGOs) do not have the adequate organizational strength to dictate strong economic reform or wealth distribution among poverty stricken areas. Through his criticism, Lodge wishes to paint a vivid picture of why current measures towards solving global poverty is underperforming. In effect, the problem that Lodge appears to identify is the need for greater organization and cohesion within these three agents of action. It is through these three steps that he creates his agenda for global change.

Lodge argues that the best method for reducing extreme poverty is to create a new initiative called World Development Corporation. This organization would be a cooperative of all three of the above agents working in a cohesive unit towards change. His argues that the problems that each of these entities face on their own is insurmountable because of both philosophical perspectives as well as fundamental resource issues. However, a combination of these three agents would result in all the necessary tools to promote greater change. The steps necessary for extreme poverty areas to develop on their own requires them to develop a strong infrastructure. Corporations can effectively invest capital in poverty stricken areas and do so profitably as well as sustainable. The problem lies in that they have little government protection and thus view their risks as very high. Government agencies in turn do not have nearly as meticulous or cohesive business development strategy as most multinationals. The combination of these two organizations into a UN backed initiative would mean that corporations would feel like they have a free hand to develop business infrastructure within these countries with the minimum of risk. NGOs in turn can use the resources of multinationals to carry out the frontier battle through hands on guidance and education. The result is the creation of a sustainable method for economic development hat leads to economic growth and job creation. Lodge believes that the World Development Corporation would be the ideal solution to conquer the existing problems of disunity among the global aid initiatives.

Lodge's perspective on the World Development Corporation is unique and a very intriguing idea. It appears that the weaknesses and strengths of these three organizations compliment each other, and therefore a union would make sense. However, this is not to say that Lodge's initiative is inevitable or fail-safe. The primary barrier to such an initiative is that there are differing philosophies in each of this group's approach. Lodge himself even admits that there are serious barriers to forming such a partnership. Bureaucracies in any shape or form are hard to change; this is because a ripple effect must occur on all levels of the organization for such a significant partnership to work. The history between multinationals, government agencies and NGOs is filled with dark periods and frustrated attempts at partnerships; therefore mutual suspicion is a constant barrier to fully initializing these changes. Large corporations view this partnership as having significant problems because it allows governmental agencies to dictate internal business policy and development ideology. It is still a strong mantra within multinationals that business and government should remain separate and very distant in function. Therefore, such a joint venture goes against the grain of fundamental business ideology and philosophical approaches to corporate development. Lodge explains that one of the fundamental barriers to the WDC is that government is viewed by many as the sole agent in the fulfillment of community needs. From the UN's perspective, poverty reduction should be the sole function of a global political mandate. NGOs in turn feel the biases and philosophical differences towards multinationals; the result of this conflict is that each side has ideological bridges to cross before an actual partnership could be formulated. At the same time however, such a partnership "makes too much sense to ignore." Lodge believes that there is a momentum swing towards the side of the WDC because the idea is too logical and inevitable to ignore forever.