Poverty: Why Business Must Care

By David J. O'Reilly, Chairman and CEO
ChevronTexaco Corporation

World Economic Forum

Davos, Switzerland, January 23, 2004

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Speaking during a plenary panel session on poverty alleviation at the World Economic Forum in Davos, Switzerland, ChevronTexaco Chairman and CEO Dave O'Reilly made comments drawn from the following prepared remarks.

I'm grateful for the chance to talk about poverty in a country that is home to so many organizations devoted to improving the plight of poor people.

Poverty is of deep concern to me. I believe the issue of poverty and the meeting of basic human needs is the defining challenge of the 21st century.

Of the over 6 billion people alive today, nearly half get by on less than two U.S. dollars a day. That's less than many of us paid for the coffee we enjoyed this morning.

Meanwhile, the world's population continues to increase, adding a projected 3 billion people, mostly in the developing world, over the next half century.

So our defining challenge as participants at this forum, as leaders, and, simply as human beings is this: How do we help nearly 3 billion people born during the next 50 years -- plus a current developing world population of some 5 billion -- attain a standard of living at least approaching that enjoyed by the developed world?

There was a time, believe it or not, when poverty was viewed as a competitive advantage to be exploited. In 1958, a London Times Middle East correspondent attributed the economic strength of Egypt to – and I quote – "its broad base of individual poverty." Thankfully, we're more enlightened now. The days when anyone could construe a nation's poverty as a "strength" are long gone.

Even today, however, I'm sometimes asked why a company whose success depends on satisfying the world's energy hunger should care about the world's physical hunger? Or, put more generally: Why should business people care about poor people?

Here's my answer: Business must care not only for ethical and moral reasons, which I think we all share, but, quite frankly, it's also in our own financial interest to care.

In today's highly connected yet fragile world, the reasons business should want to lift the burden of poverty are compelling – as compelling, in fact, as for any part of society. Ask yourselves who, more than business, needs:

  • an operating environment of peace and political stability;
  • a healthy, educated work force;
  • the highest-quality local suppliers;
  • thriving demand for our products.

There exists, of course, yet another, even more important reason why business must join the fight against poverty: It is the right thing to do.

At ChevronTexaco, we are committed to improving the quality of life wherever we operate. That means making a positive contribution to social progress, economic growth and environmental quality. And it means helping people, especially in developing countries, find ways to help themselves.

It comes down to this: How we do business is as important as the business we do.

So how can business fight poverty?

First, business must advocate for trade reform, debt relief and good governance and other global issues that impact the poor.

Second, and even more important, business must act, nationally and locally, by initiating projects that directly reduce poverty through economic growth. Business can stimulate small and medium enterprise, help improve health and education, and sponsor training. We can encourage local entrepreneurs by underwriting microcredit loans. We can help revitalize agriculture. And we can and must pursue "outside-the-fence-line" solutions that improve the lives of people and communities beyond our immediate areas of operations.

But we cannot succeed alone. By itself, no single entity or organization can effectively address poverty. We need to tie companies, governments, communities and nongovernmental organizations together in ways that can leverage our efforts across nations and regions.

During the past year, I've seen the power of partnership by watching the progress of a $50 million initiative ChevronTexaco launched in Angola with a diverse group of development partners. Our goal was to create sustainable, scalable projects that could help the nation rebuild from its protracted civil war.

With our 40-year history in Angola, we wanted to help. But we knew we could never tackle such a project by ourselves. We turned to NGOs with expertise in agriculture, finance and education -- even seed multiplication and goat raising. We worked with international banks and development agencies, the government of Angola and, most important, with communities and rural villagers themselves. One initiative alone, aimed at reviving the nation's small farms, will have helped nearly 900,000 Angolans by the end of this year [2004]. That's about 8 percent of the entire population.

The point is, success will come and will only come through new partnerships and coalitions that combine our separate strengths.

An ancient Arab proverb cautions us: "In the desert of life, the wise travel by caravan – only a fool travels alone." I say this: Let's travel with the wise. Let's join our hearts and minds in a new, shared resolve to take on the great challenge of global poverty.

Thank you.

Updated: January 2004