Governments are simply not going to solve the big challenges facing the world such as poverty, inequity and the environmental and social sustainability of our major cities.
To put it bluntly, governments can’t afford to fix these problems. And those with the biggest challenges are often the governments that have the least money.
Solutions are going to have to be borne out of market forces in which corporations can find profitable ways to enable those at the margins of society to access market solutions.
The communication revolution that has been unleashed by making mobile phones accessible across even the poorest of countries and the success of companies like Coca-Cola to get their product to the furthest corners of the globe are all testament to the power of the market.
The new laws by the Indian government mandating that companies over a certain size give 2 per cent of their profits to corporate social responsibility projects also highlight the recognition of the role of corporates in bringing solutions to community challenges.
This will be the case in tackling one of the largest issues confronting the Asia-Pacific region — the uncontrolled, unsustainable growth of their cities.
Cities across Asia are buckling under an influx of 120,000 new people every day in a mass migration from rural to urban areas. The failure to house these people is creating a humanitarian crisis in slow motion.
It is estimated the number of people living in substandard, city slums across the globe will reach two billion over the next 20 years. This represents a quarter of the world’s projected population for 2030. And cities in Asia are at the forefront of the crisis.
New research from Habitat for Humanity Asia Pacific finds that corporations could fill a growing gap in government funding, by forming public private partnerships to build new housing stock and to create new financial mechanisms for the poor.
Australian companies, especially those in the financial and construction sectors with a footprint in Asia, are well positioned to forge these new partnerships.
These new opportunities are reflected in the Australian government’s foreign aid policy shift which seeks to encourage the private sector to play a greater role in the delivery of aid projects.
While the deep cuts to the aid budget are troubling for Habitat for Humanity, there is now a unique opportunity for private companies to take up the slack and contribute in a way that could turn out to be very effective — both for them and the millions of families living on the edge.
The philosophy behind the government’s changes is fairly straight forward, namely that the aid money provided by taxpayers should connect more directly with the private sector here in Australia and in the countries being assisted. In the long term, these connections will encourage economic growth in developing nations through trade opportunities and valuable business connections.
This approach has the potential to add scale, impact and efficiency to how we deliver aid and, in the process, boost trade opportunities on both sides.
Perhaps one of the easiest first steps is demonstrated by the partnership Habitat for has forged with Boral, where the company will provide the products, technology and expertise, where possible, to build houses for some of the poorest people in Asia.
The partnership works because we start at a common point: we are both in the business of building houses.
In the case of Habitat, we improve housing for a family somewhere in the world every four minutes, with support from governments, corporations and from the public. There is a strong focus on Asia and also building and repairing homes in Australia.
In Boral’s case, every second home or building in Australia is likely to incorporate some of Boral’s products. Across most of Asia about 40 per cent of plasterboard is manufactured by Boral with the company’s products continually improving construction methods and the way people live.
As part of our partnership, we are working to build or renovate disaster resilient houses and water and sanitation facilities in Quang Nam Province in Vietnam, a poor coastal region often affected by extreme weather events, such as typhoons and flooding. This work will provide shelter and clean water facilities that can withstand natural disasters.
In Indonesia we are working together on an urban slum upgrade project in Jogyakarta, again focusing on building disaster resilience within the community.
Boral is also lending its support to Habitat when disaster strikes. Australian donor-funded houses, including funding from Boral, were among the first permanent houses to be completed after Typhoon Haiyan devastated The Philippines one year ago.
Partnering with a not-for-profit organisation like Habitat for Humanity — or one of the many other organisations doing terrific work in the area — is the easiest and most effective way for Australian companies to contribute.
Like many other Australian and regional companies, Boral had no option but to become much leaner and smarter in recent years to survive the global financial crisis, adapting quickly to the new realities of the marketplace and the increasing competitive forces from some of our neighbours.
It is that ability to adapt and to do more with less that drives some of the work Habitat for Humanity and Boral are undertaking in Vietnam, Indonesia and The Philippines, making a difference to families one house at a time.
And that is why the commitment by Canberra to involve the private sector in delivering foreign aid has the potential to make a significant impact.
This article written by Habitat for Humanity Australia CEO Martin Thomas and Boral CEO and Managing Director Mike Kane originally appeared in The Australian on 2/12/2014. Read the article online.
