Social entrepreneurship’s answer to problems

ON Aug 9, civil servants and pensioners will receive a half-month bonus and a RM500 special payment respectively.

The government’s gesture in this regard, at a time when the world is facing economic crisis, is indeed commendable.

The economic crisis is felt by many. It is symbolised by the Occupy Wall Street protests, the troubled-states of Greece and Spain and the Arab Spring. It is tearing so many lives apart. People are voicing concern that “something is wrong!”

Two of the major problem is, firstly, the US’s great recession. It began in 2008. It is now five years and counting. Some 24 million people are unemployed or under-employed. Very small new jobs are created. The so called recovery is only benefiting the minority. Because the US is world’s number one economy, when it sneezes, others caught the flu.

The second problem is inequality. Throughout the world, inequalities of wealth are undermining much of what we hold dear. The top one percent of the population own most of the world’s wealth. The expression “we are the 99 percent!” has become a new protest mantra.

World leaders tried to solve these problems at the UN Rio+20 Conference in June. But, because it was not passionately attended by most, the resolution was wanting. Hence, civil society produced an alternative resolution that is more meaningful.

Civil society articulates that the dominant model of development has failed to lift large sections of humanity out of poverty, achieving equality within and between nations or protect the planetary bio-geo-chemical systems and natural landscapes.

They promote a new economic order where there is a system of community-based sustainable economies in which ecological integrity, social accountability and economically equitable distribution are key ingredients.

This position further strengthened earlier calls for a new economic system. Some of the terms used to represent the new system are, “social economy”, “solidarity economy”, “community economy” and “oeconomy”.

There is a crying need for a healthier economic system.

According to David C. Korten, and I agree, such an economy would: provide everyone with the opportunity for a healthy, dignified and fulfilling life; bring human consumption into balance with Earth’s natural systems; nurture relationships within strong, caring communities; honour sound, rule-based market; support an equitable and socially efficient allocation of resources; and fulfil the democratic ideal of one-person, one-vote citizen sovereignty.

To realise it, the current system needs real transforming and not mere tinkering. We need to replace Wall Street Capitalism with Main Street Markets, and phantom wealth with real wealth.

In our context, the New Economic Model (NEM), with social inclusiveness and sustainability as two of its three principles, is a progressive move.

To achieve the desired outcomes, new approaches are required. One of it is “social entrepreneurship” (SE). Two common definitions of SE are, firstly, solving social and environmental problems using business model; and secondly, business with triple bottom-lines or 3Ps (profit, people, planet).

In eradicating poverty, SE is a new kind of affirmative action. Its premise is changed. The old premise sees the poor as one without money who cannot afford to purchase products. Hence, someone, especially the government, is required to give charity.

SE sees them not as one without money. They have money. The only thing is they cannot afford to purchase products that are sold in the current price envelope. SE would make it possible for the same products to be offered in a different price envelope that is affordable for them. They no longer need charity.

Most of the poor can participate in poverty eradication programme, not as passive beneficiaries, but as active contributors to self development. Amanah Ikhtiar Malaysia and cooperatives are good examples. Many civil society organisations have a lot of experience in this area. These are SE in action. We need more.

The business sector is encouraged to move from corporate social responsibility (CSR) to SE. For example, a hypermarket participates in CSR. While doing CSR, it had actually caused a hundred small traders in its vicinity to be out of business because they cannot compete with it. But, with SE, the hypermarket engages the small traders, for example, as suppliers of SME products.

A group of activists, including myself, formed the Malaysian Network for Community Economy to enhance awareness on SE; proposing government and financial policies; encourage business and civil society collaboration; strengthening the civil society; and promoting teaching, research and projects by universities.

We urgently need a conversation on a healthier economy. SE is a good start.

The writer is deputy higher education minister and an Umno Supreme Council member. Comments: [email protected]