Editor’s Letter : Capitalism with a Conscience

Dear Reader

This issue is a celebration of emerging markets, of the prospects for future development in nations, many of which have in recent years known only poverty and strife. As many of the more established emerging markets, particularly in Asia and Eastern Europe, make the transition from developing to developed, a new group of countries is jostling to replace them as the providers of low-cost labor to the worlds global corporations. Their efforts are fueled by the hope that they too will one day build strong, independent domestic economies and will take their place among the swelling ranks of the developed markets.

These countries are treading a now-familiar path. They have large populations with low incomes and a poor standard of living so they are hungry for any investment they can lay their hands on. That such countries can benefit as their economies grow is undisputed. But that people will be willing to work for next to nothing in what are often pretty unpleasant conditions is also not in dispute because, frankly, for people living in extreme poverty next-to-nothing is better than nothing at all.

So eager are these countries for investment that they might be willing to sacrifice the long-term health of their people, their environment and, in some cases, their economies in exchange for what often turns out to be short-term financial gains. Again and again countries make the same mistakes. They open their doorsand sometimes their national coffersto companies whose primary motivation is the relentless quest for profits. In many cases those countries are stripped of raw materials, their physical environment is irreparably harmed, and once their populations emerge from extreme poverty and begin to demand better working conditions and higher wages, the companies move on to other low-cost destinations.

It doesnt have to be this wayand with the number of potential emerging markets ever dwindling, it simply cannot remain this way forever. There will come a time when building sustainable operations becomes the only option available to the global corporation, when they will have to view investments in emerging markets as a long-term prospect, not a short-term solution.

Many companies are already moving down that road and for that they should be applauded. It takes nerve to resist the headlong rush for profit at any cost, but those companies that are prepared to do so will almost certainly benefit in the long run.

Until next month,

Dan Keeler