Sunday morning in Singapore, C. K. Prahalad spoke at the IMF/World Bank Program of Seminars session focused on "Raising the Stakes: New Frontiers for the Private Sector in Development". Prahalad called for consumption-led, not investment-led, development, with business providing greater choices to the poor and helping reduce the “poverty penalty” where the poor pay more for the same goods than the wealthy. The author of the Fortune at the Bottom of the Pyramid argued that boardroom debate no longer focuses on the "why" of reaching out to 5 billion poor consumers - it just makes sense - but on the “how”. Innovation is required in marketing, pricing and across company operations.
In the same session, Heidemarie Wieczorek-Zeul, German Minister of Economic Cooperation and Development sparked debate with a strong call for corporate social responsibility (CSR) and core global standards.
Nandan Nilekani, CEO of Infosys, made a more measured response outlining a clear business case for good corporate conduct, enlightened business practices that enhance the value chain, and contributions to public partnerships that leverage business skills and knowledge. He went on to argue that philanthropy is more suitable for individuals than corporations - where shareholder money is at stake.
Above all Nilekani noted the contribution of the private sector in terms of job creation – India’s IT sector has added over 1 million jobs that did not exist 10-15 years ago and estimates that for every job in the sector, another 5 are created along the value chain. Yong Li, Vice Minister for Finance in China echoed the core contribution of business growth in moving people out of poverty. The panelists noted the crucial role of the IFC, the session's organizer, in helping forge sustainable private sector development in Asia.
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