I came across the tagline ‘fight poverty through trade’ for an international NGO. As I browsed through the organization’s website, I thought about that tagline in the context of India. The Indian economy has grown spectacularly, touching $1-trillion in 2007. This would suggest a healthy trade environment in the country which then should have secured poverty reduction. But that has not been so. As we all know from the World Bank’s statistics, over 40% of the population lives below the international poverty line.

Given these facts, I would insert the word ‘fair’ in the tagline, i.e. ‘fight poverty through fair trade’. It is the lack of fair and ethical business practices that hinders poverty reduction efforts in India. While the poor are the worst affected, the problem of unethical business practices affects even those higher up the socio-economic ladder.

For instance, it would be easy to assume that I, an urban, educated professional, wouldn’t encounter the kind of unhelpful business practices that the NGO is working to change. And yet, I have. For instance, a client expected me to handover all my training material – without compensation – for its internal trainers to use. Meanwhile, this company’s CSR and green initiatives are widely publicized across its offices.

In interactions with small and medium enterprises (SMEs) the complaint is always about delayed payments by customers. Countless small businesses struggle to stay solvent as their large business clients just simply refuse to honour the mutually agreed upon credit period. A 30-day credit limit can extend to six months. With expected revenues not being realised, but with expenses continuing, SMEs are pushed into becoming non-performing assets for the banks. The SMEs receive no help. Instead they are regarded as the problem. After all, they are bad debts.

Earlier this week, I was interviewing an applicant to an MBA programme at a business school in the city. The candidate described how his job had become uncertain because his employer’s key client was taking long to make payments. He then wryly smiled and added, “We are now doing to our vendors what our client is doing to us”. Sooner or later, those at the bottom of the socio-economic pyramid will be impacted and face far worse instability than the loss of a well paid job. Which is why I say, ‘fight poverty through fair trade’.

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