Development Asia—Profits and Poverty: April–June 2012

By Asian Development Bank

The combined budgets of the Asian Development Bank, the World Bank, and every other development organization in the world make up just a drop of the economic fuel needed to power billions of people into greater prosperity. Those who work in development have long known that the private sector must play a major role in the enormous economic change needed to lift large numbers of people out of poverty. But it is not that simple. Though their motives may be admirable, private sector companies are not created to help the poor and spur economic development. They are complex entities that play by a different set of rules than development organizations. Finding the right partnership between the private sector, the public sector, and the development community is at the forefront of development work today. This issue of Development Asia examines the controversial theory of charter cities, the paradox that is the resource curse, and the increasing popularity of soap operas as agents for social change.

• Language: English
• Publisher: Asian Development Bank
• Release date: Jun 1, 2012
• ISBN: 9789292574420

Book preview

Profits & Poverty

How the private sector is helping to change the fortunes of Asia’s poor

WWW.DEVELOPMENT.ASIA

© 2012 Asian Development Bank

ISSN 1998-7528

ASIAN DEVELOPMENT BANK

PUBLISHER

Ann Quon

MANAGING EDITOR

Andrew Perrin

SENIOR EDITOR

Floyd Whaley

EDITORIAL ADVISOR

Jo Yamagata

ASSOCIATE EDITOR

Maria Liza Solano

COPY EDITOR

Caroline Ahmad

RESEARCH

April Lee

Ng Enna

Shawn Pang

Samantha Seet

Jamie Tan

ART DIRECTOR

Tony Victoria

Development Asia features development issues important to Asia and the Pacific. It is published four times a year by the Asian Development Bank. The views expressed in this magazine are those of the authors and do not reflect the views and policies of the Asian Development Bank and Haymarket Media Ltd. Use of the term country does not imply any judgment by the authors or the Asian Development Bank and Haymarket Media Ltd. as to the legal or other status of any territorial entity.

Advertising of any specific commercial product, process, service bytrade name, trademark, manufacturer, or otherwise, in this publication does not constitute or imply ADB’s endorsement, recommendation, or favoring of any of the product or the entity thereof.

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Cover Photo Illustration: Tony Victoria

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CONTENTS

YEAR V, NUMBER XIII, APRIL–JUNE 2012

16 INVESTING FOR SOCIAL GOOD

40 WHEN WEALTH BECOMES A CURSE

44 CONSIDERING CHARTER CITIES

PUBLISHER’S NOTE

The Balance of Power

The combined budgets of the Asian Development Bank, the World Bank, and every other development organization in the world make up just a drop of the economic fuel needed to power billions of people into greater prosperity. Those who work in development have long known that the private sector must play a major role in the enormous economic change needed to lift large numbers of people out of poverty.

But it is not that simple.

Though their motives may be admirable, private sector companies are not created to help the poor and spur economic development. They are complex entities that play by a different set of rules than development organizations.

Finding the right partnership between the private sector, the public sector, and the development community is at the forefront of development work today. In response, this edition of Development Asia takes a careful look at the role of the private sector in development work and examines innovative strategies being employed in the region.

In addition to examining the broad trends in Asia, we look at how Asian companies have matured to the point that they are investing globally. They now face the same challenges of economic and social responsibility that western companies have grappled with for decades.

This edition also looks at the transition taking place from a focus on microlending to an increase in microsavings programs. We also look at the increasing recognition that the world’s poor—the Bottom of the Pyramid—are a major market for consumer goods. But should companies be selling cola, candy, and mobile phones to people struggling to survive?

In our articles section, we look at the cruel reality that many poor countries that discover vast mineral or energy resources end up less prosperous as a result. We also examine the controversial theory of charter cities: setting up enclaves of good governance in developing countries.

Our Reconnaissance section tries to keep us out on the edge. In this edition, it looks at the increasing popularity of soap operas as agents for social change.

We hope this edition will give you a new perspective on private sector companies and the role they play in society.

Ann Quon

Publisher

Letters to the Editor

Advocating for Public Health

The health edition of Development Asia (July-December 2011) looked at an unprecedented challenge: the double burden of infectious and chronic disease. Rising diabetes, obesity, and cancer rates not only have very real economic costs, but, if left unchecked, threaten the entire region’s social equity and long-term stability.

How people travel, the food they eat, and the air and water quality in our neighborhoods and homes contribute immensely to the well-being of any community. But policymakers must implement measures that improve the way cities function to support better health.

One successful example of this approach is the State of California’s Tobacco Tax and Health Promotion Act of 1998 (Prop 99). Since its inception in 1998, Prop 99 has levied a 25-cent tax on each pack of cigarettes, a portion of which is devoted to funding tobacco control efforts in the state. The results have been remarkable. Estimates are that Prop 99 funded programs have saved more than a million lives in California, and $86 billion in health care costs.

[The People’s Republic of] China already requires enclosed public spaces to be free of tobacco smoke. Policymakers across the region should consider building on that approach with incentives and regulatory mechanisms to increase access to healthy foods and encourage physical activity as well as interventions that prevent easy access to fast food, alcohol, and tobacco.

Public policy that makes a healthy lifestyle choice the easy choice can help create a more equitable, healthy, and prosperous region.

Pilar Lorenzana-Campo, MEP

Senior Associate, Planning and Development

Public Health Law & Policy

California, USA

Holistic Education

While it is wonderful to see the accessibility of education increasing as reported [Development Asia,