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"Foreign investment must empower the poor" - An interview
with Dr. Jaslin U. Salmon, National Coordinator, Poverty Eradication Programme, Office of the Prime Minister, Jamaica |
 Dr. Jaslin U. Salmon, is an Advisor in the Office of
the Prime Minister of Jamaica, and serves as the National Coordinator of the
Poverty Eradication Programme. He earned his Ph. D. at the University of
Illinois, Chicago. As a sociologist he has had extensive experience managing and
facilitating change in organizations and communities. His occupational career
has been multifaceted and extensive. As a professor of sociology, he has held
positions in several institutions of higher learning in the United States of
America; he is the author of three books and numerous scholarly articles; while
in the USA his many other actives included, newspaper columnist, host of a
popular local television programme dealing with family issues, senior executive,
management consultant and the local president of one of America’s most
outstanding civil and human rights organizations. Dr. Salmon is listed in the
“International Who Is Who Among Intellectuals”, “Men of Achievement” and “Who Is
Who Among African Americans.” |
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What
is your role as National Coordinator of the Poverty Eradication Programme in the
Office of the Jamaican Prime Minister? |
 As National Coordinator, I am responsible for monitoring,
coordinating and evaluating poverty related activities across ten Ministries. In
the final analysis I am charged with initiating new programmes as well as making
recommendations to the Cabinet aimed at reducing poverty and ultimately
eradicating it.
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| What is your reaction to the idea that multinational
corporations can fulfill a vital role in poverty alleviation through investment
in "base of the pyramid" communities in the developing world? What have you
observed directly in this regard, and what are some of the challenges that this
prospect raises? |
| When there are billions and billions of people who are
unable to purchase, the private sector loses. When you can empower them so that
their purchasing power increases it has benefits for the private sector. Having
said that, I am extremely cautious; experience tells me that the private sector
tends to have unifocus on the bottom line, and a change is not going to come
about that quickly. As a Sociologist, I look at human behavior as it typically
is, and I don't expect we will all of a sudden be totally converged on the
mission of poverty eradication and will all be doing the right thing. Therefore,
in as much as I embrace the idea, I am also extremely cautious. What is likely
to happen is that the private sector will focus on providing consumer goods and
services to poor people without having a great impact on poverty. Therefore,
those of us who are in government or in the NGO sector must continue to be
vigilant and keep the private sector oriented toward poverty eradication. If
not, then "eradicating poverty" becomes just another buzz-word and nothing
concrete happens. The private sector tends to have the notion that all it takes
to eradicate poverty is to grow the economy and to produce greater wealth.
Nothing in my experience tells me that that is necessarily true. It could, but
not necessarily. I don't believe that by simply concentrating on greater
provision of consumer goods and services you will alleviate or eradicate
poverty. There must be deliberate strategies focused specifically on poverty
eradication. |
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| There is tension between the private sector interest to
come in and do well through philanthropy, and the need to measure the impact of
any intervention. Some in development are saying there is a need for the
establishment of frameworks for measuring private sector impact and to establish
protocols for conduct. How should government or civil society engage the private
sector in consideration of frameworks, standards and systems of measurement
going forward? |
| Governments and NGOs must take a leading role. The private
sector will make gains in terms of providing capital but will not do the
appropriate work in terms of impact measurement. Governments and NGOs must take
a leading role in establishing the indicators to tell whether or not the inputs
from the private sector are leading to the desired change. |
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| What type of indicators should be used? Should they be the
same ones that are used now, or do we need a new way of considering impact that
is tailored to specific investments and communities ? |
| They have to be tailored to specific country interventions.
Some of these indicators will be what we use now. But there will have to be
additional ones as well. Take GDP; GDP to me is important in the long run
because in as much as you can have reduction in poverty without growth in GDP,
you cannot sustain that reduction. But I also want to look at impact on
employment, on public health care, access to roads, transportation, etc. I
wouldn't want to go as far as the UNDP has done in its human development report
in that some of its indicators are esoteric and far broader than I would want.
Yes roads, water, schools, access to education and healthcare. But we must also
measure access to jobs. People are not going to get out of poverty unless they
have access to jobs. Access to jobs, training and re-training are important
indicators, and all of these things will help increase GDP. |
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| How should countries go about building strong domestic
private sectors in which significant equity is held by local businesses, while
at the same time increasing foreign investment? |
| Unfortunately a lot of FDI is going through a revolving
door. It comes in, is invested, and goes right back out again. Not only is what
is invested going back out, but the profits are going with it as well. Many fast
food restaurants come to our countries. They provide jobs - but mostly dead end
jobs. It is quite probable that the net result is a loss to the country. There
are some direct investmenThe requested resource (/editor/default/) is not availablets that are very good and productive, but only those
that build on domestic capital, and those that support local entrepreneurship.
That's the kind I want to see. FDI that provides microfinance is also very good;
it builds local entrepreneurship. These are the type of investments that are
benefiting our country. Even more worrisome is the fact that many of the grants
that come through development agencies ultimately go right back out again. In
many cases, grant recipients are required by donors to use foreign consultants.
The EU, USAID, and even UNDP use these consultants. I maintain that in my
country at least, we have consultants who are just as capable as the foreign
ones. In many programs, recipients also have to purchase from foreign suppliers.
What you would pay for local consultants is a mere fraction of the cost for
foreign consultants. They come and stay in our hotels. Certainly the hotels
benefit, but many of them are foreign owned. So when you look at it in real
terms there's not much FDI that remains in country. Our need is for more of the
investment dollars to remain in the local economy in order to help build the
community. |
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| Should it be the role of government to regulate how FDI is
used? Who should guide the process? |
| The Government certainly has an important role in this
regard. But the problem is that many of our governments are so financially
strapped, that as far as they're concerned, any little bit of foreign investment
is good. Many of them are short sighted; they are planning for today, not 5 to
10 years down the line. So they can be very myopic, and therefore, do not play
the role they should. |
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| Is the Jamaican government guiding FDI into some of the key
areas you've discussed that have the potential to build capacity and improve
life chances in terms of better health, education, and access to better jobs and
training? |
| I think some of that is happening, but my government is
strapped for cash and any foreign currency means a lot. They have done some good
things in terms of attracting investment. For example, they now invite foreign
investors to come and build toll roads. The investor will collect the tolls each
month for the next 30 years. Afterwards, the toll money will revert to the
government. Now that is very good; it's a very important piece of infrastructure
and it moves traffic. But the fact of the matter is for 30 years a tremendous
amount of money is leaving. We're doing the same thing with one of our airports.
The airport needs improvement but the goverment doesn't have the money to do it.
So again a foreign investor will take over the airport for the next 25-30 years
and all the income from the airport goes to that business. But they will make
some tremendous improvements. So you see there is a trade-off. |
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| Will it be transferred to domestic owners at some
point? |
| No, it is the property of the government. The reason I
think this is good is that it provides some fundamental infrastructure that will
be there in the years to come. So they are doing some good things, but they are
also strapped for cash and will jump at the chance to bring in any foreign
exchange. |
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| One of the points you made offline was that you would
welcome investors willing to work with partners in government and civil society
and to provide resources for use in measuring the impact of private sector
interventions. Could you talk about the kinds of measurement and evaluation
techniques you would like to see the private sector help support? |
| Right now there are many interventions that are supported
by the private sector, but very little attention is being paid to their impact.
I believe the private sector could provide financial support to social
scientists who would develop the indicators and carry out the appropriate impact
assessments. |
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| What final message would you like to convey to the private
sector as it considers greater involvement in markets serving the poor, and
characterizes its investments as a way to reduce if not eradicate poverty? |
| I would say "very good start" but don't delude yourselves
that your're there. You've only scratched the surface. What is important is to
go from there and begin to reengineer your corporations, to begin to inculcate
the notion of commitment to poverty eradication; begin to transform this notion
into practical approaches to business, and demonstrate this commitment by the
way you do business. You cannot afford to lose sight of the bottom line, but in
focusing on the bottom line you must do so through "capitalism with a heart". It
will take time, but there is a need for a concerted, deliberate effort at
transforming the way you engage in business, if you are to contribute to
reducing the gap between the top of the pyramid and the bottom of the
pyramid. |
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Do you agree or disagree with Dr. Salmon?
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comments here |
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