Abeba selected to host the 22nd World Economic Forum
(WEF) on Africa, the movers and shakers of the
global economy will have the opportunity to witness
the irony of economic development in Africa.
glass walled skyscrapers and a series of urban
slums, Lexus sport utility vehicles (SUVs) and old
rusted public buses, as well as groups of big
spending tourists and lines of beggars on the street
are the faces of contemporary Africa.
So long as
poverty remains the principal global hitch, the WEF
serves to stage exchanges on alleviating it.
Creative capitalism is one such an idea introduced
in Davos, Switzerland, in January 2008, by Bill
Gates, the second richest man on the planet who had
a net worth of 56 billion dollars in 2010.
creative capitalism is the new way to align
individuals and social interests.
traditional capitalism designed to serve the
“haves,” the benefits of a free market system do not
reach the globe’s “have nots,” he claimed. Fixing
the system through creative incentive instruments is
essential, according to Gates.
In an era
of technology driven revolutions, the poor are
marginalised as they cannot express their needs in a
way that matters to markets, Gates argued.
respond only to economic demands and are underpinned
by the ability to pay; as a result, companies
innovate for the rich.
conventional free market system continues, the world
continues to witness more deaths from HIV/AIDS,
tuberculosis (TB), and malaria, he claimed.
traditional capitalism to serve the global poor
requires more than changing the rules of the game,
proclaimed pundits such as Michael Kinsley, former
American editor of The Economist.
Traditional capitalism is the panacea as it relies
on a profit motive, the driving force of innovation
and investment, and there is no need to reclaim it,
asserted critics, including William Easterly,
professor of economics at New York University (NYU).
Due to the
accumulation of wealth increasing the financial
incentive to serve, little probability exists for
companies to cater to the poor, argued Gates.
Puritan capitalism enriches the rich while it
deprives the global poor of essentials like food,
shelter, and primary healthcare, he asserted.
the world from these ills through innovation aimed
at the poor is the illusion of a rich man because
democracy is endangered where charity prevails,
according to critics. With philanthropy at the heart
of the proposed solution, the inalienable right of
the poor to hold governments accountable would be
estranged and the task left to the instincts of the
wealthy, they argued.
capitalism through philanthropy, as Gates advocates,
would deprive the poor of the right to change
governments, according to critics. If money defined
election results, corrupt dictators could reign
while filling their pockets with generous corporate
gifts. In this manner, the blood diamond saga would
continue, they claimed.
innovating for the poor could be achieved through
employing recognition as a proxy to market prices.
The more good deeds a company does, the higher would
its recognition incentive be. The inability of the
poor to initiate effective economic demand would
then be compensated through corporate recognition,
continues along with the suffering of the global
poor. In focusing on the market, the debate pays lip
service to government effectiveness and charity
accountability while perpetuating a poverty culture.
can respond naturally if only states could perform
their responsibilities efficiently. As can be
witnessed in Africa, government failure is the
principal cause of underdevelopment.
states becoming increasingly dynastic, patrimonial,
inefficient, and corrupt, markets cannot operate
naturally to reach the poor. Instead, they serve the
rich while denying the poor access to basic services
such as education, roads, and clean water.
that Africa has become the major destination of
corporate philanthropy, it also shows the irony of
charity that is unaccounted for. Public relations
matter most for companies and less attention is
given to the impact of their charity.
the world’s hard labouring to harmonise aid,
corporate philanthropy remained untouchable. While
it continues not to be accounted for, it adds pain
to the overstretched system.
capitalism might also help to take technology nearer
to the global poor. Yet, the capacity of the poor to
use it should be built.
It is not
that they do not want to be a part of the technology
revolution, but they do not have the knowledge and
skills to utilise it. Narrowing the digital divide
cannot be achieved only through making gadgets
of creative capitalism might seem attractive in
theory. However, it is much easier to talk about
than getting it done.
billionaires, such as Gates, might enjoy a life of
compassion and charity. Local sympathisers like
NGOs, volunteer associations, and charities might
even find the cause worth taking on, but none would
lift the poor up from the quagmire of poverty in a
more sustained manner than a regulated free market.
at the WEF and other meetings should be about
investment, free market, and limited state
intervention rather than about repackaging charity.
Retired billionaires cannot be confronted by more
evidence than the faces of poverty on the streets of
A visit to
the city for the forum would reveal these ironies,
which call for a solution with a new tune.