• Erase ‘inclusive’ from the economic dictionary

    Ben D. Kritz

    Ben D. Kritz

    A FEW days ago, one of my more sarcastic friends proposed an “APEC drinking game,” something to do while we spend endless hours next week watching the live feed from various forum events. “Every time someone says the word ‘inclusive’, you have to take a drink,” he explained.

    “Hindi pwede,” I replied. “If we do that, we’ll all be dead of alcohol poisoning before lunch.”

    Adding “inclusive” to words like “growth,” “business,” or “trade” turns the terms into painless bon mot expressions of first-world guilt by at-taching the pretension that macro-level discussions of things that are primarily relevant to central banks, international finance and devel-opment bodies, trade ministers, and multinational enterprises are suddenly applicable to the teeming masses. It is a guilty but still largely clueless acknowledgement that there is something fundamentally discriminatory about the pattern and direction of the world economy. It is a well-meaning acknowledgement but not at all an enlightened one, and it comes across sounding the same way as your grandmother say-ing, “It’s okay to be friends with gay people at work:” a realization that not acknowledging there is something wrong with the status quo would be politically incorrect, but a deep reluctance and likely the practical inability to do anything to fundamentally change it.

    A perfect example of the pretense was the discussion about “inclusive business” Thursday in a forum of business and government man-agers led by an official from the International Finance Corp.—the head of IFC’s Inclusive Business Team, to be specific. “Inclusive busi-ness” as a stand-alone concept supposedly refers to a component of a business model that targets poverty reduction; since this is other-wise indistinguishable from the already familiar concepts of social enterprise or corporate social responsibility, the advocates of inclusive business make the distinction that “IB,” as they stylishly refer to it, has a profit motive and a much greater scale. Examples of successful inclusive business projects highlighted in Thursday’s meeting included Manila Water’s low-cost water supply program for poor urban vil-lages, and Nestlé’s enterprise support program for small farmers, which provides the latter with a reliable market for their crops, and pro-vides the company with a reliable supply of high-quality Philippine coffee to repackage as chemically-treated sawdust.

    While these programs—and there are many others like them—are praiseworthy in some ways, they are not really “inclusive” at all, because they are predicated on “the poor” remaining so; in Nestlé’s case, for example, volume and cost of supply is factored into their overall busi-ness model according to the parameters under which that supply is produced—if all of those small farmers operating at just above sub-sistence level were to actually grow into being commercial-scale farmers, the model would fail. That being the case, the distinction between “inclusive business” and corporate social responsibility is lost; it is still paternalistic—a more productive and cost-effective form of CSR, perhaps, but still CSR.

    The rhetoric about “inclusiveness” exposes one of the most significant limitations of the APEC community, which applies to other inter-national cooperatives as well: The bigger the scope of the effort, the more generalized the objectives have to be. Inclusive anything at the level of APEC can only be addressed in very broad terms, with aspirational statements such as “providing greater export market access” or “empowering small and medium enterprises”—things that can appear to be achieved with CSR projects like earmarking a certain percentage of water delivery capacity for poor areas, or sourcing a proportion of raw materials from small local producers who are willing to exchange potential market price for lower market volatility.

    While efforts like these are not entirely bad—after all, a poor family that has access to water supply infrastructure is materially better off than one who does not—at best all they are achieving is shifting the entire economic spectrum, without really reducing it. The world has achieved remarkable progress over the past decade or so in reducing absolute poverty, but relative poverty—otherwise known as inequali-ty, and which is the real problem and the source of economic unrest in the world now—has not changed at all, and in fact, is generally per-ceived as getting worse.

    That is not something that APEC can fix, because the solution lies in improving governance, capacity-building for the lower end of the economic spectrum, and physical infrastructure, all things that have to be addressed both in terms of tangible work and in mindset at or below national levels. Better, then, to take every speech and piece of written material that will circulate next week, and cross off the word “inclusive” everywhere it appears. Not only will that focus APEC’s attention on the regional, and global-level trade issues it was designed for, it will keep at least one of my friends from becoming embarrassingly and possibly dangerously intoxicated.



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    1. Agree. No such thing in PRACTICE in the Philippines, especially in the private sector, so Nestlé and Ayala are not exactly models for this. According to OECD, Inclusive Growth is economic growth that creates opportunity for all segments of the population and distributes the dividends of increased prosperity, both in monetary and non-monetary terms, fairly across society. Inclusive Growth approach per OECD is multidimensional, going beyond income, and that the proceeds of economic growth must be shared. Building on many years’ work on inequalities, well-being and structural policies.

    2. Walter Paul Komarnicki on

      it seems the height of hypocrisy to link the word ‘inclusive’ to concepts like ‘growth’ or ‘health’ or ‘education’ or ‘housing’ or ‘poverty alleviation’ in the context of the Philippines, one of the most unequal – unegalitarian – and therefore unjust nations on the face of the earth.
      The correct word in this context is ‘exclusive’, for that is what splashy international talkfests like APEC or DAVOS are, with little if any embarrassing questions from the journalists present, no consensus about anything of consequence, and next to no relevance to ordinary people living a hand-to-mouth existence and trying to get by on gridlocked roads and even slower internet speeds.