Why would Dr. Helene D. Gayle, the president of international humanitarian group CARE USA, be accepted onto the Coca-Cola board of directors? At first glance, one might say it’s a public relations stunt. Yet on closer examination, Coca-Cola’s potential altruism may yield greater worldwide profits.
In 2011, Coca-Cola and 50 other major U.S. companies sent a letter to congress in support of “a strong and effective international Affairs Budget.” International Affairs programs are applauded in the letter for creating sustainable new markets for U.S. products, despite being only 1% of the nation’s budget in a time of recession. Developing countries, described in this letter as “America’s fastest growing markets,” currently accept 45% of U.S exports. Growing these markets is not just an act of philanthropy: it’s a smart business decision.
Chris Policinski, president of Land O’Lakes, was one of the many CEOS to sign this letter to congress and has been a forthright advocate against global poverty. Speaking at the 2013 Chicago Council Global Food Security Symposium, he stressed the importance of utilizing developments in science and business to combat poverty and hunger. He cited production of corn as a specific example of technologies in farming that can be utilized to realistically feed a worldwide population; since the 1930s, corn production has grown six and a half times despite consuming 13% few acres of lands. He argues that food security leads to economic and political security, all of which would help make strong trade partners out of developing countries.
Investments in impoverished nations have been proven by history to be wildly profitable for U.S. markets. From 1960 to 1974, the United States provided $2.8 billion in aid to Brazil. In 2010, the United States exported $35.4 billion to Brazil in goods. Even by the most generous inflation conversions, the sales of exported goods for that one year far exceed the amount of aid provided in the entirety of the 15 years of aid. This is not an isolated success story either: South Korea, India, Indonesia, and Mexico were all recipients of U.S. aid for at least 20 years, and each has since become a major importer of U.S. goods. In fact, the largest transaction ever made by airline company Boeing was a deal with Indonesian company Lion Air for 230 jets.
In the words of U.S. Trade and Development Agency Director Lee Zak, “for every foreign assistance dollar that we spend, we’re seeing $40 in exports.”
In a time of tight budgets, aid programs could be a powerful component of economic growth both worldwide and at home. Robert Mosbacher Jr., former CEO of Mosbacher energy, describes any potential decision to cut foreign aid as “extremely short-sighted.” Strengthening poverty aid could be the key to a sustainable economic future in the face of insurmountable uncertainty in recent years. It is a bi-partisan goal that big businesses and small entrepreneurs can benefit from, and when The Coca-Cola Company and PepsiCo can put their names side by side on the same letter to congress, it’s clear that only great unity can come of it.
– Timothy Monbleau
Source: Coca Cola Company Press Release, Business Leaders Letter to Congress, Chris Policinski at Global Food Security System, Inflation Calulator, Development and our Economy, Borgen Project
Photo: Blog Do JJ