Photo Credits Disclaimer - Inclusive businessDivision, UNDP; and Mr. Mounir Tabet , UNDP Country Director, Egypt - we offer our heart-felt thanks. We extend our heartfelt thanks to

i

forBusiness Solutions

Human Development

Business Solutions for Human Development Report 2007

Photo Credits

All photos in this report are copy right of Community and Institutional Development (CID).

Disclaimer

The views expressed in this publication are those of the author(s) and do not necessarily representthose of the United Nations, including UNDP, or their Member States.

ii


AcknowledgmentsDirector and Lead Author Dr. Laila Iskandar

Editor Ms. Janet Breeze

We would like to thank the United Nations Development Programme (UNDP) in Egypt forundertaking this pilot study which is in line with UNDP’s global initiative for Growing InclusiveMarkets (GIM) which recognizes that the private sector is the greatest untapped resource in therace to achieve the Millennium Development Goals (MDGs) by 2015.

The cooperation with H.E. Dr. Mahmoud Mohieldin, Minister of Investment in Egypt wasinstrumental for the development of this report through the Ministry’s substantive inputs, guid-ance on content and support, as well as for the assistance from colleagues in the Ministry ofInvestment. Particular thanks go to Ms. Racha Khalil, Investment & Financial Services Specialist,and Ms. Eman El Gammal, Economist.

Several people provided substantive inputs: Dr. Barbara Ibrahim, Director of the Gerhart Centerfor Philanthropy and Civic Engagement, the American University in Cairo, for the content onPhilanthropy in Egypt, while Ms. Janet Breeze, CSR Consultant, for her contributions in chap-ters one and three. Two UNDP representatives: Mr. Mohamed El Kalla, Private Sector Specialistand Ms. Nahla Zeitoun, Research and Policy Associate for their contributions in sections of chap-ters 2 and 5 and for sparing no effort to bring partners together, research sources, provideresources, organize round table events, contact Readers’ Group, commission papers, contractresearch firms and provide valuable insights into the document. UNDP’s Private Sector Divisionin New York provided continuous support, consultation and insight throughout the process ofproduction of the report, particularly Mr. Sabha Sabhani, Programme Manager and Ms. AfkeBootsman, Programme Analyst.

Two institutional partners made the quantitative and qualitative research possible: ACNielsen onthe former and Center for Development Services in partnership with ACNielsen on the latter.

The outstanding Readers’ Group comments led to a critical review and refinement of the docu-ment to reflect important aspects contributed by them. To: H.E. Dr. Mahmoud Mohieldin,Minister of Investment, Egypt; Dr. Ahmed Galal, Director, Economic Research Forum (ERF);Dr. Barbara Ibrahim, Director, Gerhart Centre for Philanthropy and Civic Engagement,American University in Cairo; Mr. Youssef Mansour, Chairman, Mansour Group; Mr. Ian Gray,Vodafone Chairman, Egypt; Mr. Richard Daly, CEO, Vodafone; Mr. Bruce Jenks, AssistantAdministrator and Director, Bureau for Resources and Strategic Partnerships (BRSP); Mr.Antonio Vigilante, Director, UN/UNDP, Brussels; UNDP; Mr. Sabah Sabhani, ProgrammeManager, Private Sector Division; Ms. Afke Bootsman, Programme Analyst, Private SectorDivision, UNDP; and Mr. Mounir Tabet, UNDP Country Director, Egypt - we offer our heart-felt thanks.

We extend our heartfelt thanks to two corporate partners: Vodafone Corporation and theMansour Group. Special thanks go to Ms. Noha Saad, Corporate Responsibility & FoundationManager, Vodafone Egypt, and Mr. Walid Nagi, External Relations Manager, Mansour Group. iii


Special thanks go to several of Egypt’s business associations, namely the British Egyptian BusinessAssociation, the German Arab Chamber of Industry of Commerce, the American Chamber ofCommerce, the Global Compact Network in Egypt, and the Federation of Egyptian Industries forfacilitating consultations and discussions on the report’s scope and mandate and for ensuring theadoption of a participatory process to its completion.

We would like to thank the Talal Abu-Ghazaleh Organization (TAGO) for their in-kind con-tribution that of translating the Report into the Arabic language. Particular thanks goes to Ms.Sherine El Maghraby, Executive Director, Business Development Office, TAGO.

And last but not least, if it had not been for the tireless, faithful monitoring of every step of thisproject by Community and Institutional Development’s (CID) Ms. Dina Selim, ResearchAssistant, this report would not been completed in the manner and time it did.

iv


v

Preface Egypt has been endowed with a human resource base, which remains to be one of the most impor-tant assets this country possesses. However, human resource development has traditionallyremained a government concern. Today, in the midst of the superlative growth performance of theEgyptian economy and the associated high levels of investments undertaken by the private sector,we are witnessing an increasingly strong sense of ownership by the business community of the goalof human resource development. This report presents excellent documentation of the valuablecontribution of large corporations operating in Egypt -both national and foreign- to this goal.

Achieving the Millennium Development Goals (MDGs) is a top priority on the agenda of policymakers in Egypt. But this is not an easy undertaking. The synergy between government efforts andthe contribution of the business community in Egypt to meet the MDGs is bringing us closertowards achievement. Today, a culture of corporate social responsibility is proliferating in Egypt,with business corporations increasingly realizing the merit of voluntary activities which serve theunderprivileged communities. While large corporations are relatively more knowledgeable andresourceful in terms of learning about the MDGs and gearing their resources in the right direction,we need to share this knowledge with small and medium enterprises, which have been playing anexceedingly dynamic role in economic activity in Egypt, and have strong potential to serve thecommunities within which they operate. A strategy of harnessing the resources of small and medi-um enterprises towards human resource development, should ultimately contribute to the achieve-ment of the MDGs.

This report is a step in the right direction. By sharing the findings of how business corporationsare supporting the MDGs, we are hoping that a 'demonstration effect' will follow, whereby everyresponsible business endeavor regardless of its size should be able to contribute its due share toachieve the MDGs.

It is with this spirit of cooperation and sharing, that Egypt will be able to achieve as well as sustainfurther progress for all its citizens.

Mahmoud MohieldinMinister of InvestmentNovember, 2007


vi


vii

ForewordTraditionally, when international development practitioners think of development they often referto government economic, social and environmental policies that, combined, would improve theliving standards of the poor and hopefully eradicate poverty altogether. In this traditional modelof development the private sector was not always thought of as an important partner. Fortunately,this thinking is changing.

In its first Human Development Report, UNDP stated that “Human development is about muchmore than the rise or fall of national incomes. It is about creating an environment in which peo-ple can develop their full potential and lead productive, creative lives in accord with their needsand interests.” In UNDP’s Global Management Team Meeting of February 2006 theAdministrator of UNDP stated: “Without the energy of the private sector, without private enter-prise, private initiative, private savings, private resources, we won’t make it in terms of stimulatingdevelopment. …the private sector is, indeed, the driving force in development...[and] we need avery strong but lean state working with the private sector, not to undermine it but to strengthenit.”

These two statements summarize the philosophy of UNDP on Human Development and the vitalrole that the private sector plays in promoting it.

As Egypt begins enjoying the fruits of its most recent economic reforms, the question of how thepoor are benefiting from this growth and what is the role of the private sector are beginning to sur-face. The answers are not always easily available. This report is a partial answer to the question onthe role of the private sector in development. It is the fruit of a joint initiative with the Ministryof Investment, private sector partners such as Vodafone and Mansour Group, and is intended tobegin understanding how can the private sector in an environment of positive growth begin toinclude those occupying the base of the economic pyramid (BOP) and contribute to improvingthe overall status of human development in Egypt.

The main premise put forth by this report, entitled Business Solutions for Human Developmentis that “you can bet on the poor”. The report reinforces in the Egyptian context, what has beenknown in other contexts for a while now, that private companies can make profit while simulta-neously contributing to the reduction of poverty when they consciously place the poor as animportant part of their overall agenda.

The first of its kind in Egypt, the report showcases a number of innovative private sector and mar-ket-based solutions that address poverty alleviation. It builds on the Growing Inclusive Markets(GIM) initiative led by UNDP and driven by a strong conviction that the private sector remainsthe greatest untapped resource, providing both investment and innovation, both of which are vitalto achieving the Millennium Development Goals (MDG’s) to which the world has committeditself at the UN summit at the beginning of this century.

Looking at Egypt, one sees great potential in engaging the private sector in a dialogue over thisemerging economy’s development and reform agenda. The private sector has already demonstrat-ed a strong commitment to addressing key issues that inhibit socio-economic development.However, despite many private sector players actively pursuing this agenda, most remain partially


unaware of their potential ability to positively impact poor communities. Pro-development activ-ities are still largely viewed as an ‘add-on’ or voluntary activity as opposed to a tool that, in coop-eration with other sectors, can advocate for and implement change on such a grand scale while havea quantifiable impact on the core business and value chain.

As Egypt makes further progress on the MDGs and as we explore the potential of business engage-ment for human development in Egypt, we note a number of challenges that need to be addressedto go beyond the full achievement of the MDGs to achieve a state of Human Development thatis sustainable and is commensurate with the aspiration and potentials of Egyptian citizens. Thereis a need to create an environment that encourages and supports the confidence in, and growth of,private initiatives and also facilitates the development of public-private partnerships. Thus, giventhe right incentives, business-led solutions can considerably help accelerate the pace of develop-ment efforts. This includes enhancing the existing legal and fiscal frameworks, regulatory condi-tions and further entrenching and deepening progress of stable democratic institutions.

The tripartite sponsorship of this report by the Ministry of the Investment, the private sector andUNDP mirrors in many ways the necessary partnership required for fuller and more people cen-tered development. Achieving the MDGs and going beyond them to more sustainable humandevelopment can only be possible if government, private sector and civil society leaders cometogether as one.

Mounir TabetUNDP Country DirectorNovember 2007

viii


ix

Table of ContentsExecutive summary 10

Background 11

CHAPTER ONE: Evolution of Corporate Social Engagement in Development Definitions 11International context 11Business and the Millennium Development Goals (MDGs) 11Voluntary community contributionsCore business operations and value chain Advocacy and policy dialogue and institution-building Prospects for business engagement in development in emerging economies Moving forward

CHAPTER TWO: Millennium Development Goals

CHAPTER THREE: Dimensions of Business Solutions for Human DevelopmentResearch methodology and scope Findings What is the degree and form of support of the MDGs by the private sector in Egypt? How do companies approach their pro-development activities? Base of the Pyramid modelsValue chain initiatives

Philanthropic and voluntary contributionsPhilanthropy in Egypt Religion and givingServing god / serving the communityInstitutional forms of philanthropyPhilanthropic potential in Egypt

Advocacy and public policy dialogueWhat are the drivers and inhibitors to corporate engagement on the MDGs in Egypt?

CHAPTER FOUR: Analysis of Business for Development Engagement What motivates multinationals to engage in CSR? What motivates large national companies to engage in CSR? What motivates SMEs to engage in CSR?SMEs as learning labs for entrepreneurial livelihoods model

CHAPTER FIVE: Towards an Enabling Environment for Partnerships The role of intermediaries

1. Business associationsa. Development Financing and Technical Support Associations b. The American Chamber of Commerce (AmCham) c. The Federation of Egyptian Industries (FEI)

2. International social entrepreneurship groups: Ashoka


x

3. UNDP and the Global Compact in Egypt Governance factorLearning, monitoring and evaluation factor Intermediary (neutral ground) factor

4. International NGO partnership programs - INJAZ: 5. Academia: John D. Gerhart Center for Philanthropy and Civic Engagement, AUC 6. Public private partnerships - Egypt Education Initiative

Examples of global collective action Partnerships need strong, transparent government structures Conclusion

CHAPTER SIX: The Way Forward Goal One: Eradicate Extreme Poverty and Hunger Goal Two: Achieve Universal Primary EducationGoal Three: Promote Gender Equality and Empower Women Specific recommendations for businessesSpecific recommendations for civil society organizations and intermediaries Specific recommendations for government

References

Appendix 1 – The Millennium Development Goals

Appendix 2 - The Interview Protocol Used


xi

AcronymsADEW Association for the Enhancement and Development of WomenAFNCI Association of the Friends of the National Cancer InstituteAPE Association for the Protection of the EnvironmentBOP Base of the Pyramid ModelBPD Business Partners for DevelopmentCDA Community Development AssociationCDS Center for Development ServicesCEOSS Coptic Evangelical Organization for Social ServicesCEWLA Center for Egyptian Women’s Legal AidCID Community & Institutional DevelopmentCIDA Canadian International Development AgencyCSR Corporate Social ResponsibilityDEO Deutsche Evangelische OberschuleECWR Egyptian Center for Women RightsEEI Egypt Education InitiativeEHDR Egypt Human Development ReportEJBA Egypt Junior Business AssociationEQI Environment Quality InternationalETI The Ethical Trading InitiativeFEI Federation of Egyptian IndustriesGAIN Global Alliance for Improved NutritionGBC Global Business CoalitionGC Global CompactGDP Gross Domestic ProductGIM Growing Inclusive MarketsGTZ German Technical CooperationHEPCA Hurghada Environment Protection & Conservation AssociationIBLF International Business Leaders ForumICED International Center for Environment & DevelopmentICT Information & Communication TechnologyIFC International Finance CorporationILO International Labour OrganizationISO International Standard OrganizationKFW The German Bank For ReconstructionLIFE Literacy Initiative for EmpowermentMDG Millennium Development GoalMNC Multinational CorporationMOE Ministry of EducationMOSS Ministry of Social SolidarityMSC Marine Stewardship CouncilNCCM National Council for Childhood & MotherhoodNGO Non Governmental OrganizationP&G Procter and GamblePPP Public Private PartnershipSME Small & Medium Enterprises


SOY Spirit of Youth Association for Environmental ServicesUNDP United Nations Development ProgramUNEP United Nations Environmental ProgramUNESCO United Nations Educational, Scientific & Cultural OrganizationUNICEF United Nations Children FundUNVA United Nations Volunteer AssociationUSAID United States Agency for International DevelopmentVMS Voice Message ServicesWFP World Food ProgramYAPD Youth Association for Population & Development

xii


Executive SummaryThis study assesses the current and potential scope of business engagement towards the attainmentof the Millennium Development Goals (MDGs) in Egypt. Its findings and recommendations havebeen drawn up using a participatory and consultative approach. They are based on an extensivereview of literature and quantitative and qualitative studies of a representative sample of multina-tional, large national, small and medium-sized companies operating in Egypt.

Chapter 1 defines the international context for, and terms of, private sector engagement in devel-opment. It outlines how companies can impact communities through internal measures and exter-nal outreach, and how often they move from voluntary philanthropic contributions, towards morestructured community investments and proactive management of core business and value chainoperations to bring about wider positive community benefits. It also outlines how some go furtherstill and take a leadership role in advocacy, policy dialogue and institution building to benefit com-munities and society as a whole. In this way, the chapter sets the scene for an assessment of howrelevant this evolution is to emerging economies and Egypt in particular.

Chapter 2 gives an overview of Egypt’s current performance in relation to the eight MDGs. Theseaddress hunger and poverty, education, gender equality, child and maternal mortality, communi-cable diseases, environmental sustainability and partnerships for development. Egypt’s currentmixed achievements on human development are set against Egypt’s positive performance on themacro economic level and provide a backdrop against which to consider the valuable contributionthe private sector can make. The chapter concludes that something critical has to change in theway we conduct business and the way we conduct the business of development if the MDGs areto be met by 2015.

Chapter 3 presents the main findings of the business community survey in Egypt. It answers ques-tions such as: What is the extent and form of support to the MDGs by the private sector? Towardswhich sectors of the economy, segments of the population, and geographic regions do companiesdirect their efforts? What constraints does the business sector face in designing and implement-ing business solutions for human development? What successful and potentially replicable modelsexist in the business and community development/NGO sectors? How can business, the publicsector and NGOs come together to achieve the MDGs? Specific case studies of business commu-nity engagement are featured and the importance of the government’s facilitative and legal role isunderscored.

The chapter also highlights the limitations of the current predominant short-term ‘project’approach towards bringing prosperity to the poor and need for greater focus on pooling resourcesand long-term solutions to end social and economic injustice. It demonstrates through case stud-ies how companies can maximize their potential to contribute to the MDGs through corporate orfamily foundations geared towards development, rather than unfocused charitable activities,through core business and value chain activities, through social entrepreneurship and ‘base of thepyramid’ models as well as through more traditional philanthropic giving.

It concludes that, in spite of the growing practice of philanthropy and corporate social responsibil-ity in Egypt, the private sector’s efforts are still scattered and fragmented and that investment inpartnerships for development is limited. Without greater information-sharing, trust-building activ- xiii


ities and a level playing field for business potential in all these areas will remain unfulfilled. InEgypt fundamental aspects of poor governance adversely affect all three sectors – businesses, gov-ernment, and civil society - and until systemic change comes about improvements in the humancondition of Egyptians and the attainment of the MDGs will not come about. An entire sectionon philanthropy underscores the importance of this traditional mode of giving in sustainable devel-opment and community solidarity.

Chapter 4 explores what motivates companies of all sizes towards engaging in pro-developmentactivities. It analyzes the prospects for future action within the current socio-cultural and politicalcontext. It proposes a model - SMEs as Learning Labs for Entrepreneurial Livelihoods - as a pos-sible solution, as it links youth, education and livelihoods – three vital ingredients for transform-ing the economy for those who are at the ‘base of the pyramid’. By engaging people in gainful,decent work and empowering them to contribute to their own and their families’ well-being, thespiral of poverty is interrupted, creating an environment more likely to be free from conflicts andinstability.

Chapter 5 focuses on intermediaries such as NGOs, business associations, chambers of commerce,business federations, international agencies and foundations and proposes a greater emphasis ontheir role. Intermediaries can bring stakeholders and partners to the drawing board to examine,explore, assess, design and implement actions which will lead to the attainment of the MDGs,rather than just allocate project budgets. On the international level, intermediaries play an impor-tant role in facilitating policy dialogue between the public and private sectors, so creating anenabling environment for partnerships. Successful examples of company community partnershipsare given, involving community development and welfare associations, as well as larger NGOs andinternational development organizations.

Chapter 6 concludes with suggested models for business engagement to achieve impact. Theseaddress the first three MDGs: poverty, education and health and leave the field wide open for fur-ther design and adaptation to meet the remaining MDGs.

Concluding remarks call for a new ‘recipe’ to enable business solutions for human development.Civil society organizations must widen their networks of partners to include business and spreadawareness about the MDGs and the needs of local communities. Government needs to create theclimate for social change, good governance and set in motion incentives for stakeholder engage-ment. The private sector needs to go back to the drawing board and re-think the way it does busi-ness in order to design production processes and service delivery models that spread prosperity upand down the value chain. This requires new leadership from the private sector in Egypt – onethat envisages the harnessing of its resources, technologies, innovations, and problem-solving skillsto achieve the MDGs.

The new approach seeks to measure the private sector’s ‘development footprint’ in the same wayclimate change calls for the measurement of companies’ ‘carbon footprint’. The ‘developmentfootprint’ would record improved well-being and sustainable livelihoods, guiding other businessesin the redesign of their core activities. With such guidance, they could deliberately target segmentsof the population, sectors of the economy, geographical locations, aspects of deprivation, develop-ment indicators, etc in ways that create a social value and development impact while maintainingbusiness growth and profits. Such encouragements will be vital if our journey is to lead to its finaldestination - the achievement of the MDGs for the Egyptian people. xiv


BackgroundThe world is halfway to the 2015 deadline to meet the Millennium Development Goals (MDGs)set by the United Nations in its Declaration of 1999 and signed by member countries in the UNsystem in 2000. The global picture is far from positive in spite of progress in some areas. The sit-uation in Egypt shows that something critical has to change in the way we conduct business andthe way we conduct the business of development if the MDGs are to be met. This report looks atinnovative solutions that might potentially spur the process towards the achievement of humandevelopment for the people of Egypt.

The United Nations Development Program (UNDP) undertakes country and regional reviews ofthe human condition and measures human deprivation and development. It has now embarkedon a review of business engagement in society to achieve the MDGs. As part of that exercise, wemap the current situation with regards to businesses’ role in human development, highlight inno-vative promising trends, identify gaps, and propose new approaches and partnerships within theEgyptian culture and context. By examining case studies from companies of different sizes and sec-tors and drawing out key lessons, we explore ways of transforming challenges into opportunitiesand of promoting the scale-up of existing and new pro-development best practice by the privatesector.

We focus on how companies in Egypt can work in partnership with communities and the govern-ment to achieve the MDGs. In particular, we consider how, while growing local businesses, cre-ating prosperity, contributing to poverty alleviation, and promoting the participation and empow-erment of local communities businesses can expand their markets, increase their profits, andimprove production and productivity. Egypt is an emerging market but we seek to dispel the myththat business engagement for development is only for rich countries and/or for large companies,especially multinational companies. We do so by assessing whether and how national and foreigncompanies have shared the fruits of prosperity while transferring skills and technology to local res-idents and businesses. This might be by extending their distribution channels and supply chainsto include small local businesses, adopting fair trade practices, industry influencing governmentregulations and bureaucracy relating to registration and operations for small businesses and localsmall and medium enterprises (SMEs), or providing microfinance and telecommunications facili-ties to local communities. The report further discusses how to create an enabling environment forbusiness engagement in development with particular attention to the roles of government, civilsociety, and intermediaries.

The report is specific to the Egyptian context and the MDGs. While at the international level dis-cussion about business engagement with the poor tends to revolve around how businesses caninfluence those who are outside the circle of prosperity through value chains, community invest-ment and philanthropy, this report uses the MDGs, the associated indicators, and time-bound andmeasurable targets as points of reference. These are national benchmarks and milestones which Egypt, as a country, needs to achieve.

The project team undertook the report in consultation with UNDP’s Partnerships Bureau and asan integral part in the formulation of the Growing Inclusive Markets (GIM) initiative. The mainobjectives of the GIM initiative are to raise awareness and provide research and analytical tools thatwill enable business leaders, policy makers, and development practitioners to make markets more xv


inclusive for the poor. The current initiative grew out of a need for a better understanding of howmarket-based approaches to human development can ‘do good’ for people living in poverty whilealso being good for business. It is founded on the premise that “inclusive markets” that offer thepoor access to basic goods and services and empower them economically as consumers and pro-ducers can help lift them out of poverty. The initiative is being coordinated through a multi-stake-holder dialogue involving partners from different institutions including international developmentagencies, global intermediary business organizations and chambers of commerce and experts fromleading North and South-based research institutions operating at the interface of business anddevelopment.

The main premise of the report is that the development context of Egypt requires the private sec-tor to play a greater role in facing mounting population and development pressures and in supple-menting inadequate public sector budgets. We believe it must become a more responsible corpo-rate partner in the development of people and communities. The current context and develop-ment indicators in Egypt serve as a call for firms to reassess their responsibilities to all stakehold-ers. While keeping the profit motive in mind they can perceive and implement a new role forthemselves in generating prosperity and opportunity in the community. This is in line with theexisting culture of solidarity and giving characterized by the giving of alms - ‘zakat’ - in the Muslimcommunity and the giving of tithes in the Christian community. We see it on a large scale in char-itable acts, philanthropic ventures, and support in reaching out and connecting to the needy. Thereport searches for models of engagement beyond charity, however, exploring how the potential ofthe business sector is fulfilled through investing in local communities and partnerships among thethree sectors: civil society, business, and government.

A multidisciplinary team using a partnership approach between the private sector, the non-profitsector, the government, academia, and independent experts undertook this study. It drew on theexpertise of UNDP’s global and Cairo-based bureaus, the Ministry of Investment, two activelyengaging companies – Vodafone and the Mansour Group, the consulting firm Community andInstitutional Development (CID) and Janet Breeze, CSR consultant and International BusinessLeaders Forum’s (IBLF) representative who was contributing editor to the report. Backgroundpapers were commissioned from Dr. Barbara Ibrahim, director of the Gerhart Center forPhilanthropy and Civic Engagement, the American University in Cairo. A literature review oflocal and international best practice complemented the quantitative survey conducted by ACNielsen, assisted by the Center for Development Services (CDS) during the structured interviewphase.

UNDP’s partnership approach to the implementation of the study is further illustrated by the con-sultations held with intermediary groups, business associations, and partners who were invited toexpress their views on the topic at various meetings. The objectives of these consultations were, inrelation to the MDGs, to: • assess the development impact of business activities • map current initiatives undertaken by private sector enterprises • produce detailed studies of various companies/cases incorporating a comprehensive overview of

their activities, programs, policies and partnerships • raise awareness and legitimize the debate amongst key stakeholders • identify the development and business case for company involvement

xvi


Through this process, the study succeeded in:• highlighting the extent to which businesses are already contributing to the MDGs and whether

they do so through philanthropy, community investment, corporate social responsibility ortheir core business activities

• demonstrating how the MDGs matter to/can be made more relevant to business• determining which policies need to be reformed by the government so that companies will ini-

tiate activities to help Egypt achieve the MDGs

The international and national review of existing research and data, as a precursor to the mappingexercise in Egypt of business activity along the continuum of philanthropy, corporate socialresponsibility, public private partnership, and business for human development, involved bothgathering case studies and identifying success and failure factors (e.g. policy barriers) to corporateengagement. The survey focused specifically on businesses engaging in human development andthe attainment of the MDGs rather than on business engagement in the economy at large. Theprivate sector’s lack of familiarity with the MDGs and with development language and conceptswere obstacles in conducting the research.

Some of the critical issues that the report explores are: • How can we address the current situation of jobless growth? • Are we engaging businesses in reducing rural poverty and encouraging private sector growth in

rural economies to the point where we can stem rural to urban migration? • Were large-scale private sector investments designed in ways that energize the small and medi-

um scale industries in forward and backward sourcing and distribution value chains? • Is such an approach even considered, or is the business of human development perceived to be

the domain of the government, non-profit associations, and the donor community? • Does the current environment in Egypt promote the kind of business engagement in develop-

ment that we seek? What enabling mechanisms and forces do we need to put in place in orderto see the business of development proceed through the private sector in partnership with thegovernment and civil society?

xvii

Evolution of

Corporate Social

Engagement in

Development

The evolution of corporate social engagement has taken place within the context of an internationaldebate on globalisation. It was brought into focus by the failure by many companies and governmentsto ensure that socio-economic conditions improved for all in countries opening up to internationaltrade. In Egypt, traditional patronage relationships which existed prior to industrialization continue tosome degree but are fast eroding as villages and slums become disconnected from the prosperity of thegrowing private sector. Multinational companies, facing boycotts by sophisticated and well informedconsumers, had to seek new approaches and business solutions to address problems ranging from work-ing children in supplier factories in the Far East to environmental violations and unbalanced trade rela-tions. Large Egyptian companies, on the other hand, had to grope with new industrial standards andinternal compliance in order to penetrate export markets. For the majority of Egyptian businesses, thedistance between them and the local community determines the extent to which they were aware ofurgent and unmet needs. They have begun to translate their traditional, cultural manner of giving fromcharitable acts in the popular economy to more organized and structured methods starting with corpo-rate philanthropic acts to the establishment of business and family foundations.

In such circumstances, it is important to create anenabling environment for business solutions in whichEgyptian companies and business associations take aleading role. This requires a vibrant private sector,supportive government and community partners andthe means to identify, scale up and replicate goodpractice. Account must be taken of good internation-al and indigenous pro-development models and cul-tural mores. The arguments set forth to encourage theprivate sector to play a role in development must, inparticular, be tailored to the main engines of econom-

ic development in emerging economies - small andmedium enterprises (SMEs) and their representativeorganisations.

So what are current definitions and models of corpo-rate engagement in the developed and developingworld context? Are international models currentlybeing promoted helpful in seeking to mobilise busi-nesses in emerging economies such as Egypt? Whatcan we learn from leading practitioners and has itapplicability in the context of Egypt?

1


DEFINITIONS

Definitions of corporate engagement in devel-opment vary and have changed over time, butessentially companies which are socially respon-sible have embraced the concept that they areaccountable for not only their financial, butalso their social and environmental impacts.They put systems in place to ensure that theytake these impacts into account in everydaydecision-making and engage with stakeholderson an ongoing basis to ensure continuousimprovement. In Egypt, corporate engagementoccurs in a less structured manner. Stakeholdersare not organized, networked or informedabout issues to the point where they can engagein dialogue and collaborate in concerted actionand definitions of corporate engagement arestill very culture specific and derive from his-toric patterns and relationships. This presentsan opportunity to define and design freshhome-grown models of corporate engagementthat spring from Egypt’s religious and philan-thropic culture of giving (zakat and tithes) andcircumvent the path international engagementhas taken. The age old cultural solidarity mightbe used by the business sector for the develop-ment of the people of Egypt and the attainmentof the MDGs.

INTERNATIONAL CONTEXT

In the late 1980s and 1990s the importance ofbuilding relationships of trust with a widerrange of stakeholders became apparent. At thistime many companies were scaling down theirhome operations in favour of setting up cheap-er production or sourcing bases abroad.Communities no longer had a strong associa-

tion with them and brand equity establishedthrough years of serving the same communitieswas diluted. NGO campaigns capitalised onthis to draw attention to their cause, highlight-ing the extent of their overseas activities andpre-eminence attributed to shareholder con-cerns relative to workers’. NGOs assumed therole of “international regulator”. By criticisingcompanies for applying lower standards abroadthan in their home countries they also high-lighted risks to reputation and the bottom line.

There followed a period during which manycompanies searched for quick-fix solutions. Astime passed it became apparent that they wouldremain in the spotlight and needed to changetheir operations and establish more constructiverelationships with NGOs and others. SomeNGOs, although wary of selling out to compa-nies, are willing to engage with them on anongoing basis. Businesses’ market orientationlent itself to accountability and reporting at aglobal level but not necessarily to the attain-ment of the MDGs.

Key performance indicators such as the DowJones Sustainability Index1 and FTSE4Good2

appeared on the international scene. Similarlykey initiatives such as the UN Global Compactand sector-specific initiatives such as theEquator Principles3 for the financial servicessector highlight examples where companieshave taken a leadership role in addressing issuesof concern.

Some argue that CSR reporting seeks to deflectattention from more dubious practices. Inresponse the practice of external assurance, theuse of stakeholder engagement standards such

4

1

Evolution of C

orporate Social Engagem

ent in Developm

ent

1www.sustainability-index.com. Launched in 1999, tracks the financial performance of the top 10% of world’s 2500 sustainability leaders across 58industry groups. Information is gathered through a questionnaire and from publicly available sources. 2 www.ftse.com/indices/FTSE4Good_Index/index.jspMeasures the financial performance of companies that meet globally recognized corporate responsibility standardswww.equator-principles.com3 Launched in 2003 and revised in July 2006, provides a framework for addressing environmental and social risks inproject financing.


as AA10004 and reporting frameworks such asthe Global Reporting Initiative5, promote newstandards of accountability and reflect thesophistication of the current debate.

BUSINESS AND THE MILLENNIUMDEVELOPMENT GOALS (MDGs)

While not the natural language of business, theMillennium Development Goals (MDGs) pro-vide an important framework for reporting onhow companies are contributing to communitydevelopment, particularly in the developingworld and emerging economies.

In seeking to promote business engagement onthe MDGs in emerging economies, the trendamongst some intermediary organisations (suchas IBLF)6, is to focus on maximising positivedevelopment outcomes. This can be exploredthrough philanthropy and voluntary contribu-tions, core business operations and value chain,advocacy and policy dialogue and institution-building. This approach derives from the belief,that while companies should continue to focuson financial performance, they are able to bring

considerable additional community benefits byapplying creative thinking to solving develop-ment issues. There is scope to do just this inthe context of Egypt, for instance by engagingthose concerned about Egypt’s attainment ofthe MDGs in discussion and concerted action.

VOLUNTARY COMMUNITY CONTRIBUTIONS

These encompass philanthropic donations, vol-unteering programmes, long-term communityinvestment in, for example, health or educa-tion, or commercial initiatives with communitybenefits (such as sponsorship of cultural eventsor cause-related marketing).

A number of companies commit to donating apercentage of pre-tax profit to community caus-es. Local and global corporate foundations mayhave large endowments, and make grants tonational and international non-profit organisa-tions operative in developing countries. Manyhave management independent of the companyitself, although sometimes they also use fundsto support the company’s community activities. Monitoring and measuring of the outputs, bothon the community and company and in theshort and longer-term, is growing. Companiesare seeking out community partners and usingmechanisms such as The London BenchmarkingModel7 to calculate the full impact and value ofcommunity programmes.

5

1

Evo

luti

on o

f C

orpo

rate

Soc

ial E

ngag

emen

t in

Dev

elop

men

t

4 www.accountability21.net/aa1000/default.aspA framework for improving the quality of the design, implementation, assessment, communication, and assuranceof stakeholder engagement.5 www.globalreporting.orgDevelops and disseminates globally applicable sustainability reporting guidelines for voluntary use. 6 www.iblf.org7 www.lbg-online.netA global measurement standard for corporate community contributions (cash, time, in-kind and management costs)and business and community outputs and longer-term impacts used by MNCs in their national and global report-ing and as a basis for benchmarking performance in key markets.

Global CSR reports are a controversialtool by which companies seek to reassurestakeholders that they are addressingtheir concerns. There is an ongoing andgrowing debate around the measurementof CSR and its use in company reporting.


CORE BUSINESS OPERATIONS ANDVALUE CHAIN

In conducting its everyday business, a companyhas opportunities to raise standards beyond min-imum compliance and influence positively thosewith whom it interacts. Through active engage-ment with employees it can improve terms andconditions and maximise opportunities for pro-fessional development. It can implement meas-ures to reduce energy consumption and waste,through, for example, building design, recyclingschemes and encouraging reduction of the com-pany’s carbon footprint. It can ensure that cus-tomer communications are honest and accessibleand include all information relevant to the use ofits products and services. In terms of its indirectimpacts through the value chain, through ethicalsourcing codes and capacity-building pro-grammes it can help suppliers and distributors toimprove workforce performance and minimiseenvironmental damage.

In the case of large-scale infrastructure projectsand public private partnerships (PPPs) to pro-vide, for example, water and sanitation or elec-tricity, the potential impact on the MDGs canbe tremendous and there are many examples ofcompanies “thinking outside the box” to max-imise the benefits to the poor.

Through its Growing Sustainable Business pro-gramme8 the United Nations is seeking to pro-mote models that open up new markets whileserving less privileged and more geographicallyremote customers. The rising number of so-called “base of the pyramid models” (BOP)illustrate how companies can tap into localexpertise to adapt their existing products, servic-es and distribution channels to expand theirmarkets and bring fringe benefits to the poor.Unilever in Indonesia, for example, marketed itssoap products by highlighting health and

hygiene benefits and in its CSR reporting high-lights its wider positive economic impacts, gen-erating employment and stable sources ofincome9. However, many express concerns thatMNCs’ size and resources give them an unfairadvantage over traditional providers, so chasingthem out of the market, and state that in realitythe potential of such markets is limited.

Other opportunities to tackle the MDGs comefrom working with business partners in thevalue chain. In South Africa, for example, theexpansion of workplace programmes to controlHIV/AIDS infection rates amongst skilledworkers and surrounding communities nowreach out to suppliers and distributors to greateffect. Banning agricultural producers’ use ofharmful pesticides can help protect the ecosys-tem and prevent water contamination. The suc-cessful implementation of such programsrequires the buy-in of the whole community.In many societies there are major inhibitors tosuccess. These include corruption in govern-ment agencies, distrust and entrenched atti-tudes towards the business sector and govern-ment, difficulty in identifying credible commu-nity partners, unfamiliarity with the fundamen-tals and potential of partnership working, andlack of dedicated resources to promote collabo-ration. In such situations the vision and leader-ship of individuals and intermediary organisa-tions have often been vital.

The case of child labour in supplier factories inAsia provides a clear rationale for sustainedinvolvement in tackling the MDGs. On thisissue and many others the case for investing inEgypt’s development must be made so thatlonger-term relationships with NGOs, govern-ment, large businesses and SMEs develop basedon trust and geared towards investment in tech-nology and upgrading skills and managementpractices. Collaborative approaches, such as

6

1

Evolution of C


ent in Developm

ent

8 www.undp.org/partners/business/gsb/9 Clay, Jason. Exploring the Links Between International Business and Poverty Reduction: A case Study of Unilever inIndonesia. Oxfam GB, Novib Oxfam Netherlands and Unilever, 2005


The Vietnam Business Links10 illustrates howpartnerships can reduce costs, raise productivityand quality standards, increase employmentand, most importantly, improve conditions forworkers and their families.

There are also examples of non-food and bever-age companies playing a role, such as technolo-gy companies providing ICT to help producerscheck on international commodity prices,bypass middle-men and ensure more incomereaches farmers11. These examples illustrate theimportance of collaborative action to addressmany development issues highlighted by theMDGs.

ADVOCACY, POLICY DIALOGUE ANDINSTITUTION-BUILDING

A number of studies have shown that the buy-in, commitment and personal leadership ofCEOs and senior managers is often critical inmoving companies towards engagement ondevelopment issues. Externally also CEOs andsenior managers championing business involve-ment in broader development issues can be thecatalyst for policy dialogue and partnershipaction. While often a means to manage risks,broad and industry-specific initiatives such asthe Global Alliance for Improved Nutrition(GAIN)12, Ethical Trading Initiative (ETI)13,Forest Stewardship Council14, ExtractiveIndustries Transparency Initiative15 andPublish What You Pay16go beyond just servingindividual company interests. In the MiddleEast, the Egypt Education Initiative17, which

provides IT inputs and training to schools, isbeing adapted and implemented in experimen-tal government schools. Central governmentsupport is necessary to facilitate networks andgenerate buy-in amongst important stakehold-ers, business contributes primarily technology,innovation and management expertise, and thenot-for-profit sector assesses needs and currentand possible solutions. The combination of allthese creates great potential for improvementsin education, although there is ongoing debateabout whether such initiatives could reachpockets of poverty and address the needs ofthose at base of the pyramid in more targetedand effective ways.

PROSPECTS FOR BUSINESS ENGAGEMENT IN DEVELOPMENT INEMERGING ECONOMIES

Businesses in emerging economies realize thatthere are structural problems which inhibittheir growth and profits. The most strikinglyapparent is the lack of skilled labor to meettheir needs at all levels of the business. Thisderives from a number of factors, including aneducational system which has not responded tomarket needs and which requires major sys-temic changes in order to move the country andbusiness sector forward. Other inhibitors arelimited availability of information and restric-tions on the freedom of association, both ofwhich are so necessary in a networked society.A third is Egypt’s crippling bureaucracy andlack of transparency.

7

1

Evo

luti

on o

f C

orpo

rate

Soc

ial E

ngag

emen

t in

Dev

elop

men

t

10 www.iblf.org/re.g.ions/asia/vietnam.jswww.gainhealth.org. In 1999 shoe manufacturers, governments, multi-lat-eral agencies, MNCs and health and safety agencies came together to improve working conditions, resulting in 60%improvements in the health and safety field. The initiative has now been expanded to incorporate the garments sec-tor. 11 www.kacekenya.com12 www.gainhealth.org13 www.ethicaltrade.org14 www.fscus.org15 www.eitransparency.org16 www.publishwhatyoupay.org17 www.jei.org.jo/


Egypt is now producing its own multinationalfirms. These are venturing into the Arabregion, the Middle East and Africa. Many prac-titioners and thinkers in Egypt questionwhether they should adopt international mod-els of business engagement without furtherscrutiny and debate. There is scope forEgyptian firms to draw their own vision ofequitable development, be it at home or abroad.

SMEs’ valuable role in tackling the MDGs isoften overlooked. Credible worldwide estimatesstate that they account for 90% of business and50-60% of employment.18 They assist the tran-sition from agricultural-led to industrialeconomies and equitable growth. They havegreater reach than MNCs and large indigenousfirms whose supply chains are often limited anddistribution and sales oriented towards urbanareas. Their sound understanding of communi-ty needs enables them to develop appropriateproducts and services while generating incomeand jobs and directing charitable giving towardsthe most disadvantaged. By building their net-works with suppliers in disadvantaged areas,either to support their current operations ordevelop new BOP products and services, facili-tating their access to technology, finance, skills,assisting them to scale up and replicate success-ful practices, large firms can help share econom-ic and other benefits more widely, particularlyamongst the poor.

However, SMEs’ success and potential toaddress the MDGs depends on much morethan the above interventions. The governmentplays an important role, providing infrastruc-ture, appropriate education and training, healthservices and other social safety-nets and facili-tating their formalisation. Most SMEs operatein the informal economy, some through choice,but many due to the heavy burden of bureau-cracy and regulation, low education levels andexpectations of workers, many of whom may befamily members.

Today, philanthropic giving persists as the mostvisible form of corporate community engage-ment in many emerging economies. Many largecompanies donate to high-profile nationalorganisations tackling popular issues such aseducation and health, their focus on gainingprofile with influential stakeholders, rather thanon outputs. Indigenous companies and SMEsusually make charitable donations with noexpressed expectation of return and tend toalign their efforts to personal interests and net-works rather than core business competencies.Larger family-run companies often establishfoundations in memory of their founders andundertake the role of community provider inareas such as health and education. They buildplaces of worship and support orphanages andmake ad hoc contributions to help employeesand others in the local community.

MOVING FORWARD

So are we right to put our hope in the businesssector to address the MDGs?

As indicated earlier in this chapter, many com-panies are willing to accept their responsibilityto manage their operations with due regard tostakeholder concerns. There are many inspira-tional examples of companies tackling theMDGs through voluntary community engage-ment programmes, core business activities andadvocating for action amongst the wider busi-ness community, so contributing to policy dia-logue and institutional capacity-building.

However, given the myriad demands by power-ful stakeholders across the globe and over-whelming challenges developing countries face,is it feasible for businesses to prioritise the inter-ests of economically and often geographicallymarginalised people, as encapsulated in theMDGs? Should efforts focus on other actors –government bodies, both national and interna-tional, civil society groups and indigenous busi-

8

1

Evolution of C


ent in Developm

ent

18 Luetkenhorst, W. CSR and the Development Agenda: The Case for Proactively Involving SMEs, 2004


nesses, large, medium and small?

An international review of good practice in pro-development engagement by business in devel-oped and developing countries suggests thatyes, and that the way forward might be:

• To analyse the true effectiveness of nation-al and international models of corporateengagement in the local context and devel-op indigenous models of that engagement,which focus on the potential and limita-tions of MNCs, large indigenous compa-nies and SMEs to tackle the MDGs

• To clarify the rationale for corporateengagement on the MDGs in the local con-text and on this basis draw up a list ofactions for business, government and civilsociety that will help create an enablingenvironment for the greater take-up of pro-development engagement, by companies ofdifferent sizes and industry sector

• To identify appropriate leaders and neutralbrokers capable of mobilising collaborativeaction which factors in the needs andexpectations of all partners and rigorouslyand openly assesses performance, reinforc-ing accountability to all

9

1

Evo

luti

on o

f C

orpo

rate

Soc

ial E

ngag

emen

t in

Dev

elop

men

t

2

Millennium

Development

Goals

At the Millennium Summit in September 2000, the largest gathering of world leaders in history adoptedthe UN Millennium Declaration, committing their nations to a new global partnership to reduce extremepoverty and setting out a series of time-bound targets, with a deadline of 2015. These have becomeknown as the Millennium Development Goals (MDGs). In order for businesses to design their corporateengagement programs, it is essential that they become familiar with the framework of the MDG’s.

The MDGs address extreme poverty in its manydimensions — income, hunger, disease, lack of ade-quate infrastructure and shelter and exclusion whilepromoting gender equality, education and environ-mental sustainability. The MDGs encapsulatehuman rights - the rights of each person to health,education, shelter, and security.19

The MDGs set out below need to be achieved at thecountry level, not just the regional or global levels.Eighteen targets and 48 indicators define these goals(see Appendix 1). They serve as guidelines for moni-toring and tracking progress on a national and global

level. Country reports periodically reflect the prevail-ing situation and alert governments to the need tospeed up certain actions or focus on specific sectors,while proposing appropriate approaches and strategies.

GOAL 1: REDUCE POVERTY AND SOCIALEXCLUSION/ERADICATE EXTREME POVERTY AND HUNGER

In 2002, the number of poor in Egypt was approxi-mately 11 million, constituting 16.35% of the totalpopulation. In the same year, the number of ultrapoor reached 3.8 million, 5.6% of the total popula-

219 Bahadur, Chandrika, Kruk, Margaret, and Schmidt-Traub, Guido. Preparing National Strategies to Achieve the MillenniumDevelopment Goals: A Handbook. United Nations Millennium Project, United Nations Development Program, October 2005.


tion.20 According to the 2005 Egypt HumanDevelopment Report the total number of thoseliving in poverty in 2004 was 14.1 million(20.7% of the total population), of whom 3.3million are considered ultra poor. Thus inabsolute terms and percentages the poor inEgypt have increased. In addition, the incomeshare of the lowest 40% of the populationdropped from 22.7% in 200021 to 20.3% in200422. The widely accepted global definitionof poor is those living on less than $2 a day atlocal currency purchasing power and of ultrapoor less than $1 a day. The table below illus-trates the poverty picture for Egypt from 1995to 2004. These figures demonstrate theintractable situation of the poor in Egypt andthe fluctuations around the poverty line for mil-lions who in 2002 were struggling to emergefrom below the poverty line and then sank backin 2004 to 2000 poverty levels.

A feature of these fluctuations is the ‘shallow-ness’ of poverty in Egypt, i.e. the elasticity ofincome for the poor which causes them to moveup and down the poverty line. This is an indi-cation that structural changes are needed toaddress the situation, and not financial transfers,emergency funds, etc. which might assist in theshort term but cannot significantly lift this largeproportion of the poor out of their currentpredicament. The last Egypt HumanDevelopment Report (2005) 23 proposed aSocial Contract. Viewed from a business per-spective, in the short term, businesses can con-tinue to operate without paying heed to this

Contract, with little obvious risk to their busi-nesses. However, if structural, systemic changesare to be achieved, e.g. trade-offs between con-tinuing current practices and embracing the newSocial Contract need to be discussed and nego-tiated, so that businesses can see the long-termbenefits of having a well-educated, skilled work-force, a streamlined and functioning bureaucra-cy, and a transparent and level playing field.

In 2001, 8.8% of children below the age of fivewere underweight, dropping dramatically to1.3% in 2003.24 While this is a positive indi-cator signaling lower hunger levels and betternutrition in the home, yet another indicatorbased on sample studies in Upper Egypt reflectsthe alarming levels of stunting and malnutritionamong children above the age of five25.Furthermore, there were an estimated2,786,000 working children between 6-14years of age, constituting 21% of the total num-ber of children in this age group.26 Workingchildren support poor families, particularlyfemale-headed households.

12

2

Millennium

Developm

ent Goals

20 Egypt Human Development Report 2004: Choosing Decentralization for Good Governance. United NationsDevelopment Program and Institute of National Planning.21 Egypt Human Development Report 2003. United Nations Development Program and Institute of NationalPlanning22 Egypt Human Development Report 2005: Choosing Our Future – Towards a New Social Contract. UnitedNations Development Program and Institute of National Planning.23 Ibid.24 Egypt Human Development Report 2005: Choosing Our Future – Towards a New Social Contract. UnitedNations Development Program and Institute of National Planning.25 El Zanaty, Fatma and Ann Way. Egypt Household Demographic Survey 2005. USAID, Ministry of Health andPopulation, UNICEF, National Council for Population, Ford Foundation, and Zanaty and Co., March 2006. 26National Council for Childhood and Motherhood (NCCM). National Survey of Working Children Phenomenon inEgypt. Cairo, 2004.

Figure 1: Percentage of Poor and Ultra Persons

Poor Ultra Poor

0

5

10

15

20

25

2004 2002 2000 95/96


Regional disparities have persisted betweenUpper and Lower Egypt. This situation has per-sisted for too long despite significant inputsfrom international donor agencies in UpperEgypt. The point bears out the fact that donorinputs alone cannot pull a country or a regionout of poverty, although they can offer innova-tive solutions to many hitherto intractable prob-lems and often allow for the piloting and exper-imentation of approaches that, if proven effec-tive, could successfully be adopted more widely.

GOAL 2: ACHIEVE UNIVERSAL PRIMARY EDUCATION

With regards to the second goal, achieving uni-versal primary education, gross primary enroll-ment ratios dropped to 96.4% in 200427 from98.5% in 1998/199928, while literacy rates forthose aged 15 and above have remained almostthe same for the past few years (65.6% in 2001and 65.7% in 2004). There is a striking over-lap between poverty and illiteracy in the gover-norates of Upper Egypt.

Both globally and locally among the ultra poor,literacy has been established as a major factorinhibiting social mobility and escape from theextreme poverty trap. In Egypt, the literacyissue is closely related to the gender equalitygoal. Thus three of the MDGs (poverty, educa-tion, and gender inequality) intersect to create anegative situation with regards to Egypt’s poor.

The Ministry of Education has worked hard toprovide Egypt with much needed schoolsthrough a nationwide construction program. Inthis, it has collaborated with the private sectorand international agencies such the World Bankand the European Union, the German Bank forReconstruction (KfW), the Egyptian SwissDevelopment Fund and Italian Cooperation inEgypt. Besides philanthropic giving in that area,

the private sector has found innovative ways ofparticipating in school refurbishing programs:Vodafone has collaborated with UNDP and theMinistry of Education in targeting schools inneed of renovation. Their ‘Madrasty’ initiativeallocates one piaster to the cause for each callmade during Ramadan. Businesses can contin-ue to support school construction programs butthey can also partner with the Ministry ofEducation in its nationwide quality ofEducation Reform Program, currently support-ed by United States Agency for InternationalDevelopment (USAID), CanadianInternational Development Agency (CIDA),UNICEF, UNESCO, and others. A few com-panies are currently engaged in the enhance-ment of the quality of education in one or twoschools close to their company premises. Theseoutstanding efforts remain fragmented andrequire more concerted planning and strategiceffort in order to achieve impact and truly con-tribute to the attainment of the second MDG.

The research also uncovered many positive andeffective strategies to meet the learning needs ofworking children and to provide quality educa-tion in non-formal, out of school learning pro-grams. The Fostat and Aboul Seoud NGOs inOld Cairo and the Better Life Association inMinya have implemented innovative programsproviding children working in hazardous occu-pations with the chance to acquire alphabet,health, and cultural literacy. They have part-nered with the Ministry of Social Solidarity andnumerous private sector groups which, drivenby religious philanthropic motives, have pro-vided in-kind contributions and donations.They have accessed donor funds and imple-mented projects collaboratively or formedumbrella organizations of smaller grassrootsnon-profit associations. Their interventionshave encompassed a broad range of strategies.The Sohag Businessmen’s Association has

13

2

Mill

enni

um D

evel

opm

ent

Goa

ls

27 Egypt Human Development Report 2005: Choosing Our Future – Towards a New Social Contract. UnitedNations Development Program and Institute of National Planning.28 Egypt Human Development Report 1998/ 1999. United Nations Development Program and Institute of NationalPlanning.


encouraged SMEs to release working childrenfor an hour of literacy classes in return for assis-tance on how to complete technical and legalformalization procedures. They have partneredwith UNICEF and other development agen-cies, as well as with local governments in thisprogram. The Spirit of Youth (SoY) NGO inManchiet Nasser partnered with UNESCO,Procter and Gamble, Unilever, Rotary Sunrise,Save the Children Federation, InternationalCenter for Environment and Development(ICED) and others to design a multiple litera-cies program. This incorporated recycling, cul-ture and the arts, alphabet, legal, health andhygiene literacy, life skills, and youth-to-youthexchanges between Africa and the Arab region.

GOAL 3: PROMOTE GENDER EQUALITY AND EMPOWER WOMEN

In the context of the third goal, promoting gen-der equality, and empowering women, femaleliteracy rose to 56.2% in 200429, compared to49.6% in 2000.30 The low female literacy levelis alarming. Global research asserts the criticalrole maternal education plays in families’ well-being. Thus a focused targeting of female liter-acy as a national goal would go a long waytowards achieving well-being for the majority ofEgypt’s poor. We use the term literacy here inall its senses, not just alphabet literacy. Itincludes health and environmental literacyaround water and sanitation, personal and envi-ronmental hygiene all the way to rights-basedliteracy relating to, for example, access to fish-ing rights, sources of irrigation, protection frompesticides, etc. It also encompasses knowledgeand understanding of legal matters such as howto obtain registration documents - birth certifi-cates and identity cards, and family status laws.

Basic life skills - how to manage micro-credit,to acquire vocational skills, navigate the dailyneeds of living in a village or informal settle-ment starting with survival issues such as read-ing road signs all the way to reading and under-standing instructions, critically assessing infor-mation and questioning the status quo. Civicliteracy is vitally important – understandinghow to relate to local municipalities and villagecouncils around infrastructure needs, servicesand rights, and how to vote.

In the academic year 1999/2000, the femalegross enrollment ratio in basic education was90.5%. It rose to 94% in 2003/2004. While itshows a positive trend, the research questionsthe quality of education delivered in publicschools. It is still at a level that threatens to pro-duce another generation of illiterate adults inthe next decade. School dropout rates amongworking children (2.8 million) are a furtheralarming indicator.

Egypt is classified by UNESCO as one of thecountries eligible for technical and financialsupport under its global Literacy forEmpowerment (LIFE) program. Countrieswho qualify under that program are those withmore than 10 million illiterate people or 50%or more of the adult population. The situationmerits particular engagement from the privatesector as economic progress on a national levelis unachievable while such low literacy levelspersist. Companies may grow and thrive inspecific sectors but illiteracy is bound to affecttheir growth and stability at some point.

The Egypt research uncovered positive pro-grams that dynamic and innovative NGOs areimplementing in many communities. They

14

2

Millennium

Developm

ent Goals

29 Egypt Human Development Report 2005: Choosing Our Future – Towards a New Social Contract. UnitedNations Development Program and Institute of National Planning.30 Egypt Human Development Report 2000/ 2001. United Nations Development Program and Institute of NationalPlanning.


promote the concept of the plurality of litera-cies31 (UNESCO 2004) and have achievedrecognition for their work both nationally andinternationally. They have never offered learn-ers a financial incentive to attend literacy class-es, the strongest motivation being the relevanceof the curriculum, in other words a curriculumgrounded in learners’ everyday, real life needs.The most prominent of these programs isCaritas’ Learn and Be Liberated program(Ta’allam Taharrar) which has proved effectivein both rural and urban contexts. Learners usecommunity literacy centers and libraries as focalpoints to acquire multiple literacies. NGOshave implemented other non-formal programslinking literacy to micro-credit. These includeAssociation for the Enhancement andDevelopment of Women (ADEW), Alliance forArab Women and the Coptic EvangelicalOrganization for Social Services (CEOSS). Yetothers have linked it to income-generatingactivities so that learning and earning occursimultaneously. The Integrated Care Society,Association for the Protection of theEnvironment (APE) in Manchiyet Nasser,Bashayer NGO in Helwan, the Women andSociety NGO in Boulaq el Dakrour and FutureEve (Hawaa’ al Mostaqbal) run such programs.The Center for Egyptian Women’s Legal AidNGO (CEWLA) and Egyptian Center forWomen’s Rights (ECWR) operate in the realmof legal literacy and family status laws. Bothprovide legal aid, counseling and advocate forwomen’s legal causes.

Egypt is rich with experience in how to achievehigher literacy rates among the poor, and par-ticularly among poor women. These models ofbest practice are ready to go to scale at a nation-al level and in partnership with the private sec-tor. Nevertheless, there is still much more to

accomplish. Women constitute only 23.9% ofthe total labor force and occupy 25.9% of leg-islative and managerial positions. While animprovement on 1999 when these figures were21% and 11.6% respectively, private businessescould bring about further improvements. Theycan amend their gender policies and planwomen’s career paths so that they can receiveprofessional training, are not excluded fromcertain occupations and positions because ofstereotyping and so can advance to managerialpositions. They can also ensure adequate day-care provision for their children.

Figure 2: Number of Women in the Workforce

(Millions)32

GOAL 4: REDUCE CHILD MORTALITY

The fourth MDG addresses child mortality.The infant mortality rate (per 1000 live births)dropped from 30 in 2001 to 22.4 in 2004.Similarly, the under-five mortality rate (per 1000live births) fell from 39.1 in 2001 to 28.6 in2004.33 This was due to massive immunizationcampaigns implemented by the government inpartnership with numerous non governmental,and for-profit organizations. Such tangibleimprovements towards MDG targets reflect thevalue of all three sectors working together withone vision, one mind, and one focus.

15

2

Mill

enni

um D

evel

opm

ent

Goa

ls

31 UNESCO. 2004b. The Plurality of Literacy and its Implications for Policies and Programmes, UNESCOEducation Sector Position Paper. Paris, UNESCO. The plurality of literacy refers to the many ways in which literacy is employed and the many things with which it isassociated in a community or society and throughout the life of an individual.32 Information Decision and Support Center (IDSC). www.idsc.gov.e.g.33 Egypt Human Development Report 2005 and 2000/ 2001. United Nations Development Program and Instituteof National Planning.

0

0.5

3

3.5

4

4.5

5

2006 2005 2004 2003 2002 2001 2000 1999 1998 1997

2.5

2

1.5

1


GOAL 5: IMPROVE MATERNALHEALTH

Progress on maternal health, the fifth MDG, ismixed. While the percentage of births attendedby health personnel rose from 56.5% in 2001 to71.7% in 2004, the maternal mortality rate for2006 recorded 59 deaths per 100,000 livebirths.34 Much more still needs to be donearound women’s reproductive health, withopportunities for the pharmaceutical industry toplay a leading role. The clinics sprouting up allover rural Egypt are often staffed by poorlytrained doctors and nurses who place women injeopardy and contribute to poor service delivery.More village birth attendants need to be trainedas women seldom make it to hospitals. ManyNGOs have trained professional birth atten-dants thus there is plenty of experience of effec-tive approaches that could be deployed morewidely. The Sawiris Foundation is an exampleof a private sector family foundation currentlysupporting nursing schools in Upper Egypt.

Doctors need to desist from prescribing multi-ple kinds of antibiotics and to communicatewith patients in culturally appropriate ways andlanguage so that patients do not adopt negativehabits of antibiotic abuse and refrain from, forexample, using a half dose of six differentantibiotics.

GOAL 6: COMBAT HIV AIDS ANDTUBERCULOSIS

The incidence of tuberculosis dropped from18.6 in 1990 to 14 in 2003. Doctors per10,000 people rose from 6.0 in 2001 to 8.9 in2004.35 Trachoma, another disease related topoverty and lack of hygiene, drew little atten-tion, until Al Maghraby’s El Nour Foundationlaunched its large-scale mobile eye clinics.These are linked to their non-fee paying hospi-tal in Rod in Farag in Cairo.

MDG Goal 6 should be tailored more toEgypt’s needs and not dictated by internationalrealities. Egypt has still not won the war on bil-harzias or schistosomiasis, the most widespreadwater-borne endemic disease in rural areas, yetthe current discourse is more about HIV Aids.The alarming rise of Hepatitis C indicates thatthis disease should be a health intervention pri-ority. Both curative and preventive measuresprovide the business community with opportu-nities to work with government and the non-profit sector to look at the full implications ofthe rapid spread of this disease among Egypt’spopulation.

GOAL 7: ENSURE ENVIRONMENTALSUSTAINABILITY

In Egypt, approximately 8.1 million feddansare cultivated, a mere 3.4% of its overall landarea. Total water resources decreased from 60billion m3 in 1992 to 58.6 billion m3 in 2004.Households with access to piped waterremained constant (91.3%) from 2001 to 2004while those with access to sanitation droppedfrom 94.5% in 1999 to 93.6% in 2004. It isimportant to mention that the 2006 EgyptHuman Development Report will offer a newdefinition of sanitation that will most likelyalter the picture for Egypt.

Most households deprived of sanitation are insmall hamlets in Upper Egypt where popula-tion density precludes wastewater networks as aviable option. The Egyptian NGO CARE,Save the Children Foundation, and Danish AidAgency Danida, have had years of experienceinstalling on-site sanitation systems in small,rural communities and have proven models ofmicro-credit for the financing of septic tanksand low-cost solutions for individual house-holds and small communities. The experimen-tation and piloting which has taken place in theNGO sector over the past thirty years presents

16

2

Millennium

Developm

ent Goals

34 Ministry of Health, National Maternal Mortality Surveillance System. 2006. 35 Egypt Human Development Report 2005 and 2000/ 2001. United Nations Development Program and Instituteof National Planning.


a ready market for contractors, developers,wastewater engineers, and banks. Repaymentrates on these loans has traditionally been veryhigh (98%) thus lending institutions are guar-anteed a good return on their investment.However, on-site sanitation is still considered a‘backward’ model among municipal engineersand, for want of other alternatives, villages areleft without any kind of sanitation and sufferpoor environmental community health. Again,systemic and structural aspects of developmentneed to move Egypt out of grassroots experi-mentation, modeling, and demonstration toserious policy approaches.

The seventh MDG includes a quantifiableglobal target of improving living conditions for100 million slum dwellers worldwide.According to a 2003 UN report on “TheChallenge of Slums”, Cairo has four of the 30largest mega slums in the world.

Upgrading informal settlements has become agovernment priority and is achievable if formalprivate sector companies, many of whoseemployees live in these neighborhoods, engage.Upgrading would not only address physicalconditions and infrastructure services but also

extend to education, health, culture and openspaces.

GOAL 8: DEVELOPING PARTNERSHIPSFOR DEVELOPMENT

Goal 8 has both national significance and aninternational dimension. Developed and lessdeveloped countries share the responsibility of“Developing a Global Partnership forDevelopment”. The extent to which agree-ments, treaties, and trade cooperation existbetween countries, regions and in the interna-tional market should be assessed, as they facili-tate the transfer of new technologies and know-how.

At the national level, we can assess the degree ofapplication of Goal 8 through an overall analy-sis of those macro economic and macro socialpolicies, which facilitate regional cooperationand integration into the global system.

Currently this goal is measured in Egypt by thenumber of telephones per 1000 households -364 in 2004. This indicator is a basic measureof a population’s ability to communicate andshare information. The full measure of partici-

17

2

Mill

enni

um D

evel

opm

ent

Goa

lsTable 1: Largest Mega Slums Worldwide

Million Million

1. Neza/ Chalco/ Izia (Mexico City) 4.0 16. Dharavi (Mumbai) 0.8

2. Libertador (Caracas) 2.2 17. Kibera (Nairobi) 0.8

3. El Sur/ Cindad Bolivar (Bogota) 2.0 18. El Alto (La Paz) 0.8

4. San Juan de Lurigancho (Lima) 1.5 19. City of the Dead (Cairo) 0.8

5. Cono Sur (Lima) 1.5 20. Sucre (Caracas) 0.6

6. Ajegunle (Lagos) 1.5 21. Islamshahr (Tehran) 0.6

7. Sadr City (Baghdad) 1.5 22. Tlalpan (Mexico City) 0.6

8. Soweto (Gauteng) 1.5 23. Inanda INK (Durban) 0.5

9. Gaza (Palestine) 1.3 24. Manshiet Nasser (Cairo) 0.5

10. Orangi Township (Karachi) 1.2 25. Altindag (Ankara) 0.5

11. Cape Flats (Cape Town) 1.2 26. Mathare (Nairobi) 0.5

12. Pikine (Dakar) 1.2 27. Aguas Blamcas (Cali) 0.5

13 Imbaba (Cairo) 1.0 28. Agege (Lagos) 0.5

14. Ezbet El Haggana (Cairo) 1.0 29. Cite-Soleil (Port-au-Prince) 0.5

15. Cazenga (Luanda) 0.8 30. Masina (Kinshasa) 0.5


pation far exceeds just being able to communi-cate. It covers aspects of freedom of associationand expression, the ability to organize, partici-pation in elections and the wider democraticprocess.

The percentage of households with access to tel-evision sets was 89.4% that year, the number ofcell phone subscribers 108 per 1000, and thosesubscribing to internet services a mere 55.7 per1000. While chosen to indicate the degree towhich people have access to the benefits of newtechnologies, in reality the significance of thesestatistics is very limited. They do not paint apicture of where the country stands in relationto either MDG 8’s general objective or thehigher objective of the Millennium Declaration- development. Unless these communicationtechnologies influence positively Egypt’s widersocial and economic structures and capacitiesand create opportunities for all their develop-ment contribution will be minimal. From ahuman development perspective it is more sig-nificant to note the degree to which Egypt iscontributing to the production of new tech-nologies or to their active and productive use inimproving governance both at the national andlocal levels (e-government etc) and to otheraspects of empowerment.

Target 16 of MDG 8 (youth employment)illustrates further the critical significance andtrue dimension of partnering for development.This youth-oriented target can be split into twostrategies: on the international level, establish-ing partnerships with developing countries andimplementing strategies for decent and produc-tive work. On the national level: creating jobopportunities. At this level, the 15-24 year oldunemployment rate is inadequate as an indica-tor unless we compare it with the generalunemployment rate amongst the overall activepopulation. Such a comparison gives a morevaluable insight into problems in the nationaleconomy.

In many countries in the Arab region (Egyptincluded), the overall unemployment rate isaround 7-10%, while the youth unemploymentrate is around 30% - three times the nationalrate. This indicates that employment marketsare static and that it is increasingly difficult foryouth to ‘partner for development’. Currently the majority of young Egyptians fallinto one of two categories:• Highly qualified: they tend to work in

multinational or large national firms, athome or in foreign neighboring markets inthe Gulf or in Europe where economies aregrowing at a rapid pace and are in need ofnew competences and skills

• Poorly qualified or not qualified at all: theymay hold a degree or be illiterate orunskilled, but for whatever reason, they arenot qualified for the market and are search-ing for any available job in order to survive

Stimulating employment is one of the majortools to reduce poverty (MDG 1) and a signifi-cant measure of the attainment of MGD 8 inthat it demonstrates whether youth is collabo-rating in the shaping of their economy andnation.

Similarly, target 17 of MDG 8 specifies partner-ships and cooperation with pharmaceutical com-panies to provide access to affordable, essentialdrugs in developing countries. While on thenational level this target relates to MDG 6(health), on both international and national lev-els it is also a significant measure of whether part-nerships for development have been established.

The complex ramifications of MDG 8 encom-pass all aspects of development. To secure pri-vate sector engagement in the achievement ofthe MDGs they should be fully explored.

The government of Egypt’s ten-point programfor the country’s development is of great rele-vance when assessing the potential role of busi-ness in development.

18

2

Millennium

Developm

ent Goals


With Egypt’s progress towards the MDG’svarying in magnitude and momentum, the pic-ture on the macroeconomic level looks moreoptimistic. Egypt’s main economic indicatorsfor 2007 reveal that real GDP growth reached7.1% as the pound stabilized and business andconsumer confidence recovered and sweepingreforms were instituted.36 This followed a lowof 3% in 2001/2002 and sharp falls in private

consumption and investment growth at theturn of the millennium, when monetary policywas tightened so that real lending rates rosemarkedly and credit to the private sectordeclined. The initial recovery was gradual -growth rose to just 3.1% in 2002/2003 and4.2% in 2004, led by exports of goods and serv-ices following the sharp decline of the poundthat raised Egypt’s export competitiveness.37

19

2

Mill

enni

um D

evel

opm

ent

Goa

ls

Ten Point Government Program - 2007

Program 1: Investment and Employment• Objective: To achieve higher rates of economic growth by increasing investments and exports, and creating new

job opportunities.

Program 2: Enhancing Economic Performance• Objective: To augment economic activities through restructuring the financial sector, reducing tax and customs

impediments, and increasing growth rates and competitiveness.

Program 3: Freeing the Market Economy• Objective: To establish sound macroeconomic policies that will support the transition to a market-based econo-

my while minimizing the impact on indigent citizens.

Program 4: Building an Information Society• Objective: To bring Egypt to the forefront of the information revolution by strengthening the telecommunica-

tions industry, infrastructure and workers.

Program 5: Developing Education and Scientific Research• Objective: To create a qualified and well trained labor force that will give Egypt a competitive advantage in the

international market.

Program 6: Modernizing Government Organizations• Objective: To enhance the efficiency of the administrative body, enabling it to handle change dynamically, man-

age state resources more efficiently, and deliver services to the people in a timely manner

Program 7: Expanding Basic Public Services• Objective: To provide basic services equally to all Egyptian citizens in both rural and urban regions regardless of

socio-economic status.

Program 8: Modernizing Health Services and Controlling Population Growth• Objective: To modernize & expand preventive healthcare, family planning & medical services for the public, to

sustain healthy individuals & stabilize population growth.

Program 9: Cultivating the Political and Legislative Environment• Objective: To implement ongoing democratic reforms within a political and legislative framework, and encourage

the participation of the citizenry at all levels.

Program 10: Management of Natural Resources• Objective: To utilize Egypt’s extensive natural resources for economic benefit while responsibly preserving the

environment.

36 The Egyptian Economy – Towards new Frontiers. The Ministry of Investment Report on the Egyptian Economy,Cairo, September 2007.37 Egypt Country Report. The Economist Intelligence Unit, United Kingdom, 2006. Printed and distributed byPatersons Dartford, United Kingdom.


In spite of the declining unemployment, thegovernment recognizes that in the context ofcontinued population growth, the private sectorneeds to become more engaged in addressingthe challenges facing the attainment of theMDGs. It also acknowledges that micro enter-prises and SMEs, both in the formal and infor-

mal economies, need to be included in the newgrowth paradigm. This sector contributes mostto job creation and poverty reduction, althoughhitherto it has not fulfilled its potential to con-tribute to technological innovation or industri-al modernization. Further assessment can helpidentify those sectors able to become catalysts20

2

Millennium

Developm

ent Goals

Construction7% Agriculture

14%

Industry32%Tourism

3%Finance

7%

Services35%

Communication &Information Technology

2%

0

1

2

3

4

5

6

7

820

00/0

1

2001

/02

2002

/03

2003

/04

2004

/05

2005

/06

Q1

2006

/07

Q2

2006

/07

Q3

2006

/07

3.4 3.2 3.1

4.24.6

6.9 7.16.5

7.2%

Figure 3: Real GDP Growth (at factor cost) Figure 4: GDP Sectoral Breakdown for FY 2005/06

Source: Ministry of Economic Development

The Egyptian Economy – Towards new Frontiers. The Ministry of Investment Report on the Egyptian Economy,Cairo, September 2007.

Source: Ministry of Economic Development

GDP LE 18 Billion Market Prices

The Egyptian Economy – Towards new Frontiers. The Ministry of Investment Report on the Egyptian Economy, Cairo,September 2007.

Reforms endorsed by the Government since July-2004 have been anchored to a clear setof economic policy objectives

• Ensuring macroeconomic stability as well as achieving and sustaining average annual real GDP growth in excess

of 7 percent

• Creating new job opportunities by enhancing the role of private investment both domestic and foreign in eco-

nomic activity

• Maintaining price stability through fiscal discipline and prudent monetary policy

• Financial sector reform

• Deepening the integration of the Egyptian economy into the global nexus of investment and trade

• Improving the public debt structure of the country

• Upgrading the quality of government services

• Ensuring an equitable distribution of income through the redesign of social policies

This gradual economic recovery (real GDPgrowth) since mid-2003 can in part be attrib-uted to government measures. The Cabinetappointed in 2004 took a series of bold anddecisive steps in the areas of trade and tariff aswell as foreign exchange reform. These havealready yielded tangible results on the macro

level, but have not improved the well-being ofthe people at the base of the pyramid.However, Egypt’s socio-economic programscontinue to be vulnerable to external shocksand fluctuations in relation to the internationalprices of its major exports: oil and cotton.


for micro enterprises and SMEs to play a moredynamic and active role in both business andhuman development in Egypt.

A study conducted by the International FinanceCorporation (IFC) entitled “The SMELandscape in Egypt” suggests that the numberof M/SMEs in Egypt in 2003 accounted for2,576,937 enterprises. These are distributed as2.4 million micro enterprises representing93.5% of the sample; 127,631 very small enter-prises (4.97%); and 40,305 small and mediumsized enterprises (1.56 percent). Micro enter-prises were identified as employing from one tofour employees; very small enterprises from fiveto nine employees; and small and mediumenterprises from 10 to 200 employees.38

While the macro economic picture of Egyptshows improvement, human development indi-cators do not demonstrate the same upwardtrend. This mismatch calls for all three sectorsto work together to scale up community levelbest practice in order to achieve greater impact,at regional and national levels. This will enable

and facilitate private sector partnership withNGOs in touch with the poorest of the poorand maximize government spending and target-ing of the poverty sectors. However, a reduc-tion in bureaucracy and trust-building meas-ures are also necessary.

As previously highlighted, the situation is seri-ous because a full one quarter of Egypt’s popu-lation – some 18 million – live on an annual percapita income of less than $1,500 - at the baseof what Professors Stu Hart and C.K. Prahaladhave dubbed the ‘economic pyramid’. The‘base of the pyramid’ represents a potentialmarket for the private sector but companiesmust make concerted efforts to lift these peopleout of their current poverty. They can do so byselling low-cost, appropriate products to themand engaging them in that productive process.It is in the government’s interest to create anenabling environment for companies to reachthis market as their efforts can, potentially, liftthe poor out of poverty, overcome income dis-parities, and prevent conflicts from arising.

21

2

Mill

enni

um D

evel

opm

ent

Goa

ls

38 The Ministry of Foreign Trade. The Small and Medium Enterprises Policy Development Project.(SMEPoL)Profile of M/SME’s in Egypt, October 2005.

3

3Dimensions of BusinessSolutions for Human Development

Businesses in Egypt contribute to development in a variety of ways but most contributions are of a phil-anthropic nature. This forms the foundation of other forms of engagement such as core business andvalue chain activity, advocacy and policy dialogue. In this chapter, we present the findings of the researchincluding a number of local and international case studies. These provide businesses with examples onhow to contribute to the MDG’s in a way that leverages core competencies and has lasting impact.

RESEARCH METHODOLOGY AND SCOPE

The research consisted of:• An extensive review of literature and web-sites on

CSR and corporate engagement in developmentwith the aim of identifying good practice relevantand applicable to Egypt

• A questionnaire administered face-to-face or overthe telephone to managers in 574 formal privatesector companies of various sizes, operating in arange of business sectors and geographical loca-tions. The aim was to analyze the extent and formof corporate engagement in poverty reduction anddevelopment in Egypt

• Based on an analysis of this initial quantitativeresearch, follow-up face-to-face interviews withmanagers responsible for development activities in44 of those companies were conducted. The aimwas to gain a deeper understanding of how they

view and conduct pro-development activities andof the obstacles and incentives to further corporateengagement. (Discussion / interview guide givenin Appendix 2)

• The British Egyptian Business Association,German Arab Chamber of Industry andCommerce, American Chamber of Commerce, andFederation of Egyptian Industries hosted meetingsat which the Project Team briefed members andinvited their comments on corporate engagementin development and their role as intermediariesbetween business, government and the community.

FINDINGS

What is the degree and form of support of the MDGs bythe private sector in Egypt?

A significant percentage of the 574 companies sur-


24

3

Dim

ensions of Business Solutions for H

uman D

evelopment

Table 2: Overview of companies involved in quantitative phase of research

Manufacturing 48% 276Food & Beverages 60Industrial & Consumer products 60Textile, Apparel, & Leather 43Pharmaceutical 39Oil, Gas & Mining 30Chemicals 24Metals 20Service 27% 158Education 41Health Services & Hospitals 40Wholesaling & Retailing 32IT & Telecommunication 30Transportation & Warehousing 15Tourism 9% 50Hotels, resorts, floating resorts & restaurants 30Travel agencies 20Construction & Real Estate 5% 30Construction & Real Estate / Mining / Building Material 30Financial 5% 30Investment / Insurance / Banking Services 30Agriculture 6% 30Agricultural activities 30TOTAL 100% 574

Sectors %Sample Total

��

��

��

��

��

��

��

�� !��"��#��$��

��

��

�%� ��

��$��&��'��(��)**��"�+*�

��

��

,��

-�.��

Figure 7: Company Origin Figure 8: Business Sector

Figure 5: Scope of Operations Figure 6: Locations of Operations


veyed in the quantitative research phase (61%)reported no involvement in pro-developmentactivities. While in reality, their operations willaffect local communities, in the main they didnot view development as their responsibilityand reported having no specific policies or pro-cedures to enhance their positive impacts on theMDGs. The remaining 39%, however, report-ed that they actively contributed to the achieve-ment of the MDGs. An overview of the extentand type of their activities is given below.

Many interviewees were unfamiliar with theMDGs and were not used to categorizing their

programs using this framework. When prompt-ed, most companies spoke only of their volun-tary activities in the community. A detailedanalysis of their pro-development engagementdemonstrates that their contribution is muchwider than they perhaps perceive and is partic-ularly significant in some areas, with well overhalf contributing to MDGs 1, 3, 7 and 8.

In terms of how companies contributed, it wasmostly through financial or capital donations,although they also allocated human and in-kindresources. Contributions were either fully sup-ported / funded by the company (internally

25

3

Dim

ensi

ons

of B

usin

ess

Solu

tion

s fo

r H

uman

Dev

elop

men

t

Figure 9: Major Contribution Area Cited by Companies

Companies contacted 2960

Companies Interviewed 574 (100%) All figures indexed to 100

Companies involved in pro-development activities related to

MDGs - 221 (39%)

Companies not involved in pro-development activities related to

MDGs - 353 (61%)

Goal 186

(39%)

Goal 227

(12%)

Goal 34

(2%)

Goal 420

(9%)

Goal 52

(1%)

Goal 614

(6%)

Goal 720

(9%)

Goal 825

(11%)

Others23

(10%)

Goal 1: Eradicate extreme poverty and hungerGoal 2: Achieve universal primary educationGoal 3: Promote gender equality and empower womenGoal 4: Reduce child mortality

Goal 5: Improve maternal healthGoal 6: Combat HIV/AIDS, tuberculosis, and other diseasesGoal 7: Ensure environmental sustainabilityGoal 8: Partnerships for development

0

10

20

30

40

50

60

70

80

90

Goal 1 Goal 2 Goal 3 Goal 4 Goal 5 Goal 6 Goal 7 Goal 8

85

39 37

12

62

2

36

922

117

6

75

9

66

11

All Activities Most Important Activity

0

10

20

30

40

50

60

70

80

90

100

Mon

ey /

Cap

ital

Hum

an r

esou

rces

Tran

spor

tati

on/v

ehic

les

Con

sulta

ncy

Gov

ernm

ent s

uppo

rt

Vol

unte

er ti

me

of s

taff

Eco

nom

ic r

esea

rch

Tech

nica

l ass

ista

nce

Internal ResourcesExternal Resources

9288

5953

3227

13 9

Total

Goal 1: Eradicate extreme poverty and hunger (NET)

Goal 2: Achieve universal primary education (NET)

Goal 3: Promote gender equality and empower women (NET)

Goal 4: Reduce child mortality (NET)

Goal 5: Improve maternal health (NET)

Goal 6: Combat HIV/AIDS, malaria, and other diseases (NET)

Goal 7: Ensure environmental sustainability (NET)

Goal 8: Develop a global partnership for development (NET)

Figure 10: Companies’ overall contribution to MDGs Figure 11: Form of Contribution

supplied), or partially or fully supported byother companies than the respondents (exter-nally supplied) or were a combined contribu-tion from both sources.

The response rate of 574 out of 2960 intervie-wees is the basis of our analysis. It reflects a siz-able SME sample although for many more, thesubject matter was unfamiliar, and they did notfeel they had information to contribute.Indeed, during the course of the quantitativeand qualitative research it became apparent thatmost companies were unaware of the MDGsand had limited understanding of the privatesector’s potential to impact development, eitherin conducting its day-to-day operations orthrough voluntary activities. Often respon-dents were unfamiliar with CSR and develop-ment terminology and, although a full 70%reported “usually” being involved in the plan-ning and reporting of pro-development activi-ties (with the remainder “quite often”), it isprobable that the full extent of the companies’activities were not captured. What respondentsmeant by ‘pro-development’ activities werecommunity outreach activities, more in thesphere of corporate philanthropy than actions

focused on long-term business success or sus-tainable projects to address poverty, illiteracyand unemployment in Egypt.

The table below charts progress towards the2015 MDG targets and assesses the likelihoodof them being met.

More companies report more contributions toMDG 1 than any other goal. However, withmore than 60% of companies reporting no pro-development activity, much more needs to bedone to engage SMEs, the most significantemployers, and to ensure that efforts are welltargeted. The study revealed the strong engage-ment of the private sector in providing employ-ment to unemployed youths. On the basis thatthe growing numbers of young people in Egypthave low skill levels or qualifications that do notmeet the needs of the formal private sector, thisshould remain a priority. Nevertheless, thereare other areas where the private sector could bemore active. Less than 10% of companiesreport MDGs 3, 4, 5 and 6 as their main areaof activity, although the role of women andhealth in promoting sustainable development isincontrovertible.


26

3

Dim


uman D

evelopment

Average: 4 times per year Average: 11 years

38%

3%19%

24%

7%9%

AnnuallyMore than once every 2 years (0.75)Less than once a monthMonthlyQuarterlySemi-annually

21%

4%

29%21%

25%

More than 20 years ago (20)Past year (1)Past 1-5 years (3)Past 6-10 years (8)Past 11-20 years (15.5)

Figure 12: Frequency of Undertaking the Activity Figure 13: Period during which contribution sustained


27

3

Dim

ensi

ons

of B

usin

ess

Solu

tion

s fo

r H

uman

Dev

elop

men

t

Indicator

• Goal 1 Eradicate extreme poverty and hunger1 Percentage of population below $1 per day___________________________________________

1a Percentage of population under national poverty line__________________________________

2 Poverty gap (using national poverty line)_____________________________________________

3 Share of poorest quintile in national consumption______________________________

4 Prevalence of underweight children under 5________________________________________

5 Percentage of population below minimum level of dietary energy consumption________

• Goal 2. Achieve universal primary education6 Net enrolment ratio in primary education____________________________________________

7 Percentage of pupils who reach grade 8______________________________________________

8 Literacy rate of 15-24 years-olds____________________________________________________

• Goal 3 Promote gender equality and empower women9a Ratio of girls to boys in primary education____________________________________________

9b Ratio of girls to boys in secondary education_________________________________________ __

9c Ratio of girls to boys in tertiary education (physical sciences)__________________________

9d Ratio of girls to boys in tertiary education (social sciences and humanities)_____________

10 Ratio of literate women to men, 15-24 years old____________________________________

11 Share of women in wage employment in the non-agriculture sector____________________

12a Percentage of seats held by women in People’s Council_____________________________

12a Percentage of seats held by women in Consultative Assembly____________________________

• Goal 4 Reduce child mortality13 Under-five mortality rate_____________________________________________________________

14 Infant mortality rate________________________________________________________________

15 Proportion of 12-23 months old children immunized against measles____________________

• Goal 5 Improve maternal health16 Maternal mortality ratio______________________________________________________________

17 Proportion of births attended by skilled health personnel_____________________________

• Goal 6 Combat HIV/AIDS, malaria and other diseases18 HIV prevalence among pregnant women aged 15-24 years____________________________

19 Condom use rate among married women using contraceptives_________________________

20 Number of children orphaned by HIV/AIDS___________________________________________

21 Prevalence of malaria______________________________________________________________

23 Incidence of tuberculosis___________________________________________________________

24a Proportion of tuberculosis cases detected under DOTS________________________________

24b. Proportion of tuberculosis cases cured under DOTS__________________________________

• Goal 7 Ensure environmental sustainability25 Proportion of land area covered by forest_____________________________________________

26 Ratio of area protected to maintain biological diversity to surface area27 Energy use (metric ton unit equivalent) per $1000 GDP_______________________________

28a Carbon dioxide emission per capita__________________________________________________

28b Consumption of ozone-depleting CFCs________________________________________________

29 Proportion of population using solid fuels____________________________________________

30a Proportion of urban population with sustainable access to an improved water source___________

30b Proportion of rural population with sustainable access to an improved water source____________

31a Proportion of urban population with access to improved sanitation____________________

31b Proportion of rural population with access to improved sanitation______________________

32 Proportion of households with access to secure tenure________________________________

• Goal 8 Develop a global partnership for development47 Telephone lines and cellular subscribers per 100 population__________________________

48a Personal computers in use per 100 population______________________________________

48b Internet users per 100 population_____________________________________________

Level in 1990

8.224.37.1

9.9a

25.6c

85.5e

83.9g

73i

81.3c

77.0c

51e

65e

84.7i

19.24.04.0

56.037.881.5a

174a

40.7a

4.2a

18.6

6.53.92.0l2.144

96.9a

61.1a

94.7a

..

8.3l

1.2l

0.3l

Level in 2004

0.942 20.2

3.98.38.6b

14.0d

94.0f

86.8h

87.0f

90.9j

104.3j

66.0b

99.0b

86.4f

20.6k

2.68.0

35.4k

28.2k

95.6b

67.669.4b

15b

0.014.0b

58.088.0

10.06.33.11.335k

10095

100..

21.2b

2.2b

3.9b

Target for 2015

4.112.1

3.6

5.012.8

100100100

100100100100100505050

18.712.6100

43.5100

0.0

0.0

17.0

98.580.697.4

Table 3: MDGs tracking indicators

Potential forachieving target

MetProbable

Met

PossiblePossible

ProbableProbableProbable

ProbableMet

UnlikelyMet

PossibleUnlikelyUnlikelyUnlikely

ProbablePossibleProbable

ProbableProbable

Met

MetMetMet

a data for 1992b data for 2003c data for 1990/91 d data for 1999/2000

e data for 1995f data for 2005g data for 1991/92h data for 1992/93

i data for 1996j data for 2002/03 k data for 2001 l data for 1999

Source: Ministry of Planning (2005), Achieving the Millennium Development Goals: Success and Challenges

not available

2

not available

not available

not available

The Maghraby group set up Al Noor foundation as an independent entity registered in Egypt as a charitable non-governmental organization, under registration No. 214A for the year 1999. Start up funds for the foundation weredonated by the Maghraby group. The sustainability of the foundation is guaranteed through external funding frominternational donors as well as international NGOs and universities.

AL MAGHRABY GROUP – AL NOOR FOUNDATION

The Al Maghraby Group and Unilever casestudies below illustrate the approach of a largeindigenous company and an MNC with stronglocal roots. Such examples, where the compa-ny sets clear priorities, seeks opportunities to

contribute in areas of particular expertise(health and hygiene) while gaining marketshare and working in partnership with commu-nity-based NGOs, could be replicated by otherlarge companies operating in Egypt.


28

3

Dim


uman D

evelopment

The Village Development Project aims to improve the conditions of poor villages in Alexandria and Greater Cairo.T. El-Talat Kabary village near Alexandria was selected as a pilot project. Approximately 90% of its population isitinerant workers with a high rate of illiteracy.

A credit scheme was launched around animal husbandry over 3 years, interest free. A veterinarian and an agricul-tural specialist conduct regular visits to beneficiaries and a board of directors from the community acts as liaisonbetween Unilever and the village. Literacy classes and handicrafts production are additional components of thisCSR activity.

In the field of health care, Unilever has been providing a dental health educational program for a number of years.This is organized under the Signal brand, and promotes children’s awareness of the importance of dental hygiene.Each child receives a free toothbrush and toothpaste. More than 5 million children in governmental schools have ben-efited from this program and from the regular visits by dentists to schools to provide free check-ups and treatment.

Partnerships

In collaboration with the Rotary Club of Alexandria, Unilever funded a medical convoy to Sudan with 25 physi-cians from different specialties who performed over 500 medical procedures, mostly among children.

In collaboration with the Rachid Foundation for Cultural and Social Development, and the Egyptian GeneralAuthority for Adult Education, Unilever provided literacy programs for its 3000 employees.

In partnership with the Arabian Academy for Science and Technology, Unilever partly funds intensive computertraining to high achievers in IT technology and applications.

A special committee in Unilever organizes and manages CSR initiatives. The committee consists of a Board mem-ber, the financial controller, and representatives from the various departments. Unilever’s main criteria for choos-ing a potential CSR initiative include compatibility with the company’s plans and policies, and for beneficiaries tofall within the company’s specific target groups (unemployed, orphans and special needs groups).

UNILEVER

Over the past seven years, Al Noor foundation has conducted field research study on Trachoma disease. The studysurveyed 13,500 people in three governorates and determined that the disease causes loss of eyesight in the longterm. The study was funded by foreign donors and technically supported by the University of British Columbia.The government shared the results of the study with WHO, which reformed its health sector program in this areato be able to mitigate the causes that spread this disease. The main challenge Al Noor Foundation encountered inthe study was the common perception that Trachoma had been eradicated in Egypt.

Partnerships: The Ministry of Health in Cairo, the three governorates, BC Center for Epidemiology (University of BritishColumbia), the International Trachoma Initiative, and the Social Research Center (American University in Cairo).The outcomes of the project included forging new relationships with partners, indirectly reforming governmentalhealth sector policies on Trachoma, and gathering much needed authoritative baseline data for future reference.

Among Al Noor Foundation’s other projects are medical caravans, which began in 2000. Doctors go out to differ-ent governorates and examine patients with ophthalmologic disorders free of charge twice a week. An annual plandirects the caravans to governorates.

A training facility for eye doctors was established at Al Noor foundation. It offers a two-month training course freeof charge. In 2002, Al Maghraby Group established a non-paying hospital, and by 2005, the hospital becamefinancially sustainable by having fee-paying patients cover the cost of those who are unable to pay for treatment.The Ministry of Social Solidarity and NGOs refer poor patients to it.

Al Noor foundation advocates for hygiene as part of the World Sight Day, and raises awareness about hygiene.

Almost all foundation activities are related to the core business of the Maghraby group i.e. eye care. The founda-tion staff manages these. Al Noor foundation perceives its strength in having a hospital, a well-trained cadre ofdoctors and staff, and a solid reputation among the community. Obstacles faced by the foundation include highcosts of eye care, and the need to achieve financial sustainability.


Some companies might choose to set up foun-dations with clearly-stated objectives. This isthe case of Infosys in India as described above.

For some companies such large-scale initiativesmay not be feasible, but in all cases a better tar-geting of groups and more deliberate design ofpro-development engagement is needed. Thuscompanies have the choice of targeting basedon segments or beneficiary groups, regions orspecific business sectors, or even on all three, asoutlined below: • Segments / beneficiary groups: these might

be unemployed youth (currently the mostfavored by companies), women, children

• Regions: companies tend to target commu-nities in the proximity of their operations,thus Cairo is the most targeted region, fol-lowed by the urban Delta and Alexandria.Achievement of the MDGs would require amajor shift in emphasis towards Upper

Egypt where human development indicatorsand the likelihood of meeting the MDGs arelowest

• Business sectors: an analysis of differentbusiness sectors’ actual and potentialimpacts on the MDGs can be made and col-laborative projects initiated

The diagrams below illustrate how thisapproach might be implemented on theground. Some companies are already support-ing these and other targets, for example, work-ing children (especially girls) in on-farm andoff-farm activities in rural Upper and LowerEgypt’s herbal flower and cotton trade, envi-ronmental health in slum areas, environmentaldegradation of water sources in the urbanDelta, water and sanitation for small towns andhamlets, etc. However, few are undertaking thethree-pronged targeting approach, and feweryet are referencing it to the MDGs.

29

3

Dim

ensi

ons

of B

usin

ess

Solu

tion

s fo

r H

uman

Dev

elop

men

t

Infosys, an Indian information technology services firm, grew from less than $10 million in sales in the early 1990sto become a leading global player with almost $800 million in sales today. Along the way, it has also been settinginternational standards for corporate governance and creating a new partnership for development with local andcentral government.

Infosys Foundation, the philanthropic arm of Infosys Technologies Ltd., came into existence in December 1996with the objective of fulfilling the social responsibility of the company by supporting and encouraging the under-privileged sections of society. In a short span of time, the Foundation has implemented numerous projects in select-ed areas – health care, social rehabilitation, rural development, learning and education and art and culture. Frommaking high-quality healthcare accessible, to enabling the spread of education where it is needed the most, theFoundation has undertaken various initiatives in providing medical facilities to remote rural areas, organizing novelpension schemes and in aiding orphans and street children. It has undertaken a large rural education program titled“A library for every school” under which 5500 libraries have been set up in government schools spread across manyvillages. Other activities include the reconstruction of old school buildings, setting up of rural Science Centers andschemes to provide support to dying traditional art and culture forms.

INFOSYS 39

39 http://www.infosys.com/infosys_foundation/learning.htm

WorkingChildren

Rural Egypt

Agri-Business

UrbanYouths

SME’s

Manufacturing

Distrubution SectorSouth Sinai

IlliterateAdults

Crafts Sector

Upper Egypt


By aligning these activities to core businessoperations (e.g. the large-scale agribusinessesworking with producers) and working withother companies and NGOs with grassrootsexpertise, companies can achieve scale and soenhance standards, not only within their ownvalue chains, but also in the business sector as awhole. In this manner they can achieve morewidespread and sustainable positive outcomesfor communities in some of Egypt’s most disad-vantaged regions. SMEs in particular, whichmay not have resources to set up foundations orspecific teams and departments to manage theircommunity activities, may wish to adopt a sec-tor-specific or partnership approach to max-imise impact. Many development agencies andbusiness associations are willing and able toadvise on appropriate partners and projects andact as brokers with government and others.

How do companies approach their pro-development activities?

Our international research identified severalexamples of specifically pro-development orMDG-oriented initiatives by business. Muchof the literature focuses attention on businesses’impacts in terms of core business operations inthe workplace, market place and along the sup-ply chain, philanthropic and voluntary activi-ties, advocacy, and policy dialogue. So, forexample, how can large companies modify theirdistribution channels and products to bring insmall operators and reach new BOP markets?

Below we use that framework to present thefindings of our quantitative and qualitativeresearch, highlighting specifically pro-develop-ment models that are, or might be implement-ed in Egypt.

Given that most of the companies surveyedwere SMEs, it is perhaps not surprising that in90% of cases the owners, followed by CEOs,were the main decision-makers around pro-development activities / initiatives, with only6% reporting dedicated personnel to organizeand manage these activities in their company.

However, the current trend amongst MNCsand large-scale indigenous companies is to con-sider CSR as a separate function in the compa-ny – one that is seldom referenced to the devel-opment context of Egypt or the MDGs.Companies such as Mobinil, Vodafone, theMansour Group and the Arab AfricanInternational Bank (AAIB) have appointed CSRmanagers with international, business and devel-opment backgrounds with the remit of drawingup CSR strategies and professionalizing volun-tary contributions, benchmarking against inter-national best practice. Such companies are,however, still very much in the minority.

Many MNCs operating in Egypt have well-developed worldwide company policies andmanagement and reporting proceduresdesigned to minimize social and environmentalrisks to the business. Some have gone beyondbasic compliance to thinking creatively abouthow they can adapt workplace policies to bringgreater benefits to local communities.Unilever’s partnership in Cairo with The Rightto Life Association is a good example. Thecompany provided 10 days training to 180handicapped youths, enabling them to work ina specially established small-scale soap packag-ing production unit. This project helped theseyouth become “extended employees” ofUnilever, earn independent income and takepride in their skills and abilities.30

3

Dim


uman D

evelopment

52

38

6 63

0

10

20

30

40

50

60

Ow

ner

CE

O

Cor

pora

te S

ocia

lR

espo

nsib

ility

CSR

Exe

cuti

ve

PR

Man

ager

Mar

keti

ng M

anag

er

Figure 14: Activity Decision Maker


There is evidence that Egyptian companies, andparticularly those with international exposure,are also beginning to mainstream CSR throughreinforcing adherence to local laws and seekingaccreditation to international standards in areassuch as labor rights, health and safety and theenvironment. Eighty-nine percent of compa-nies surveyed had some form of certification orguarantee for internal compliance to appropri-ate standards.

Figure 15: Internal Compliance Certification 40

The study also documented a number ofplanned, development projects that areattempting to upgrade the SME sector’s prac-tice concerning rendering the working environ-ment safer, reducing, if not totally eliminatingchild labor in workshops, introducing technol-ogy and improved production processes. Thisindicates willingness by informal SMEs to

adhere to labor laws, child protection princi-ples, and environmental standards when givenfinancial and technical support.

Base of the Pyramid Models

The study did not reveal many so-called “Baseof the Pyramid” (BOP) models, wherein a com-pany develops or adapts products and servicesspecifically to meet the needs of poorer cus-tomers. A few are mentioned below:

• Village adoption schemes involving compre-hensive development of a range of services

• Interest-free and micro loans from banksand other companies, often to employeesbut sometimes geared specifically towardswomen

• Specialized banking and other products forpoorer customers, such as low-cost, easyinstallment housing plans which do notrequire down payments

• Building water, sanitation and electricityinfrastructure for poor areas

• Promoting and marketing local crafts • Creating environmentally sustainable busi-

nesses for the underprivileged • Providing knowledge and expertise to initi-

ate and support socially sustainable agricul-tural, feeding, and food development pro-grams

The Kheir Zaman chain of supermarkets man-aged by the Mansour Group is an example.

31

3

Dim

ensi

ons

of B

usin

ess

Solu

tion

s fo

r H

uman

Dev

elop

men

t

79

25

149

5 5 4 4

0

10

20

30

40

50

60

70

80

90

Loc

al L

abor

Law

ISO

900

0 Se

ries

ISO

140

01

Inte

rnat

iona

lL

abor

Law

EC

O-T

EX

TQ

M

HA

CC

P

ISO

Soc

ial

Stan

dard

s

40 ISO 9000: http://www.iso.org/iso/iso_catalogue/management_standards/iso_9000_iso_14000/iso_9000_essentials.htmISO 14001: http://www.iso.org/iso/iso_catalogue/management_standards/iso_9000_iso_14000/iso_14000_essen-tials.htmInternational Labor Law: http://www.itcilo.it/actrav/actrav-english/telearn/global/ilo/law/lablaw.htmEco-Tex: http://www.textil-online.net/englisch/Publications/Yearbook2002/E1350.htmTQM: http://www.managementhelp.org/quality/tqm/tqm.htmHACCP: http://en.wikipedia.org/wiki/HACCPISO Social Standards:http://isotc.iso.org/livelink/livelink/fetch/2000/2122/830949/3934883/3935096/home.html?nodeid=4451259&ver-num=0


While international research records manyexamples of MNCs or large companies, such asCemex in Mexico, supporting such projects,there are other examples of smaller operatorstaking the initiative and achieving scale throughthinking creatively about how to access previ-ously untapped markets. The 2004 UNDPpublication entitled “UnleashingEntrepreneurship: Making Business Work for

the Poor”41 presents a number of best practicesadopted by national and multinational compa-nies. They demonstrate the tremendous poten-tial of the private sector to contribute to devel-opment while contributing to company profits.The following case studies were selected with aview to their relevance to the Egyptian contextand to their potential replication by SMEs.

32

3

Dim


uman D

evelopment

Cemex, the Mexican cement firm, has become one of the world’s leading producers and innovators in the indus-try, employing thousands. The company partnered with federal, state, and local governments to provide Mexico’spoorest residences with a concrete floor. The “Piso Firme” program has now been implemented in Mexico andColombia and helped almost 200,000 disadvantaged families by replacing their dirt floors with a unique antibac-terial concrete, an ideal way to preserve a clean and healthy environment.

Cemex has also helped to make the dream of home ownership a reality for more than 120,000 Mexican familiesthrough the “Patrimonio Hoy” program that organizes low-income families into self-financing cells that facilitateand expedite the typical home-building process. Cemex provides them with all the materials they need as well astechnical assistance, including an architect who helps design their house with an eye to future growth, so that theycan optimize space and reduce waste.

Through its “Construmex” program, Mexicans living in the US can transfer money home to fund their families’construction needs. For only a dollar each, Cemex’s clients can transfer orders directly through a network of morethan 20,000 distributors across Mexico who then delivers the building materials to clients’ designate recipients.

CEMEX 42

41 Commission on the Private Sector and Development. Unleashing Entrepreneurship: Making Business Work for thePoor. Report to the Secretary General of the United Nations. United Nations Development Program, New York,

March 2004.42 http://www.cemex.com/cc/cc_cm.asp

The Mansour Group focuses on literacy, education, orphans, and the environment. Their projects include theKheir Zaman chain of supermarkets, which serves the needs of lower income bracket consumers, offering high qual-ity products in more affordable packaging. The Group plans to purchase supplies for this project from smaller busi-nesses as a means of both acquiring their goods at a lower cost, and helping these businesses flourish by procuringthe bulk of their stock.

The Mansour Group established an advanced school for Autistic Children in 1999, complete with a hospital, gar-dens, and storefronts where the children can sell their handicrafts

In the area of corporate volunteerism, the Mansour Group supports the INJAZ program that uses the JuniorAchievement International Curriculum designed to enhance skills of the Egyptian youth to enter the job market asemployees or entrepreneurs.

The Mansour Group signed a protocol of agreement with the General Authority for Adult Education in 2005whereby the company produced and aired three 30-second television advertisements to create awareness about theimportance and value of literacy. In addition, the company has been supporting literacy classes in Beheira andMansoura Governorates from 2006 until 2009, and provides scholarships for students who continue their educa-tion beyond literacy.

THE MANSOUR GROUP


Value Chain Initiatives

The research also revealed that, in planningtheir pro-development activities, a number ofcompanies are taking into account their widerimpacts along the value chain. Therefore, forexample, they incorporate consideration of howstandards and positive impacts can be raisedamongst suppliers, distributors and in the mar-ket place. International research indicates thatthis is perhaps an area of significant potential in

Egypt. Such approaches might look at howfood-processing companies can engage smallfarmers, the hotel industry community-basedhandicraft producers; the automotive industrycan promote road safety or the food exportindustry greater compliance with internationalhealth and hygiene standards amongst ruralsuppliers and in the home.

The EQI case study below illustrates thisapproach.

33

3

Dim

ensi

ons

of B

usin

ess

Solu

tion

s fo

r H

uman

Dev

elop

men

t

Examples include social enterprises, not-for-profit organizations, and cooperatives of other institutions developinginnovative solutions that provide a social, environmental, or economic benefit to the community. Examplesinclude “digital dividend” projects that bring telecommunications and internet access to poor communities andsolar power projects, which bring electricity and other services to off-grid communities.

In India, small-scale soybean farmers use a village internet kiosk to check spot prices for their products on theChicago Board of Trade’s web site, bypassing local intermediaries and getting better prices.

Casas Bahia in Brazil has developed a unique business model providing efficient retail services aimed at poorer cus-tomers. As the largest retail chain store in Brazil, it was one of the first companies to offer highly successful creditsales schemes enabling the urban poor to buy electronic and other household products. Their installment salesschemes unlocked the purchasing power of Brazil’s enormous working class and catered to the needs of low-incomegroups while earning good returns for the company.43

The ICICI Bank in India is applying technology to access a range of new markets, but particularly rural SMEs andmicro-entrepreneurs. It provides farm equipment loans for farmers in 381 locations and gives them easy repaymentterms from one to 9 years. 44

In Cambodia hundreds of small private providers offer services ranging from battery recharging to fully meteredelectricity provision for entire communities. These providers now serve and estimated 115,000 customers – morethan one-third of electricity customers nationwide.

BASE OF THE PYRAMID MODELS

43 http://www.icmr.icfai.org/casestudies/catalogue/Marketing/MKTG102.htm44 www.icicibank.com/Pfsuser/loans/farmequip/fehome.htm45 http://www.eqi.com.eg/index.php?activemenu=Project%20Showcase&screenid=11

In 1996 EQI President Mounir Neamatalla, expanded the company’s activities beyond advisory services to directinvestments in sustainable development. Based on consultations with the local community and other stakehold-ers, EQI designed and implemented The Siwa Sustainable Development Initiative which incorporates a number ofcommercial ventures aimed at promoting economic development in Siwa, that are in harmony with its sensitiveenvironment and that revitalizes its unique cultural heritage. EQI’s approach has been to draw on the indigenouswisdom, traditional skills, and creativity of the local community, and complements them with modern know-how,to develop Siwa into a model of sustainable development.

EQI, the principal investor and catalyst, partnered with the local community and local authorities bringing techni-cal expertise on economic development. and garnering political support for the project. Key initiatives include aShali lodge built in the traditional Siwan architectural style, ecotourism activities, organic agriculture products, andwomen’s artisanship, cultural expression.

EQI 45


Voluntary Contributions

The study reveals that most activities reportedby companies in Egypt as contributing to theMDGs can be categorized as voluntary withsome small and scattered models of base of thepyramid actions. In other words, most werenot closely linked to core business operations,but rather philanthropic in nature. While notincluded in our survey of 574 companies, thereis evidence that on a small scale, informal SMEsundertake similar philanthropic activities intheir immediate neighborhoods. Examplesinclude feeding the poor and indigent, support-ing orphans and widows, subsidizing children’seducation, etc. This provides a valuable oppor-tunity to re-orient cultural modes of givingtowards pro-development activities with moresustained outcomes and to depart from the‘project’ mindset of existing actions in favor ofbuilding structures and systems that allow forthe scale-up of sound models.

Typical and widespread examples of currentvoluntary contributions by business are:• Offering and supporting literacy classes • Establishing, renovating and/ or equipping

entire hospitals and clinics (also mobile) inimpoverished areas or specialized medicalunits within them(e.g. kidney dialysis,neonatal health, X-ray or liver units, rehabil-itation and physiotherapy departments)

• Distributing meals and food products dur-ing religious festivals such as Ramadan andfeasts and providing financial support for thepoor

• Organizing health campaigns, vaccinationprograms

• Building mosques and supporting commu-nity development centers which offer basicservices (education, health, computers, voca-tional training, culture and arts) at nominalfees

• Establishing charitable foundations

From the above, it is clear that most of theactivities fall into the categories of pure charityor longer-term community investment.Examples of paid time off for employee volun-teering are also evident. Cause related market-ing, wherein a company links its products tospecific social causes, are relatively rare,although Procter and Gamble’s CSR programhas elements of such an approach.34

3

Dim


uman D

evelopment

The community welcomed the project because it allowed women to work from their homes, or in an all-womensetting, in keeping with Siwan tradition. Within a year, 300 joined up.

Women artisans earn a steady income comparable to - and sometimes higher than - the average earnings of Siwanmen. Marketing occurs in high end outlets in Europe. Branding, quality control and shipping are handled by EQI.

In partnership with the International Finance Corporation (IFC), EQI developed Siwa into a center of excellencefor the production of organically grown produce and agro-culinary products, while improving the standard of liv-ing of Siwan farmers. The project, which benefited 300-450 farmers and 50 off-farm workers, added value to Siwanagricultural produce by promoting organic farming methods and farm management systems compatible with inter-national certifications. Project components included a crop pre financing scheme, a cattle-financing scheme, arenewable energy initiative, and a packaging warehouse.

EQI manages the funds, provides the necessary training and technical assistance, and undertakes all post-harvestactivities up until shipment.

The Siwa Sustainable Development Initiative has revitalized centuries-old systems for managing the environment thatwere being abandoned in favor of modern but inappropriate technologies that were depleting the natural and cultur-al assets of the oasis. It has renewed Siwans’ pride in their cultural heritage, creating a wave of building in the Siwantraditional architectural style. It has also resulted in a decree by the Governor of Matruh that all new construction bebuilt in the traditional style. Most importantly, the initiative has benefited the local community by creating environ-mentally and culturally sustainable employment and income-generating opportunities that draw on materials andexpertise available locally rather than imported from the Nile Valley. Six hundred Siwans are now gainfully employedin such areas as the supply of raw materials, production of furniture and handicrafts, transport of goods, transporta-tion of workers, and operation of tours. The renewed interest in Siwan architecture is also providing employmentopportunities for the new generation of craftsmen and builders that has emerged as a result of the project.


35

3

Dim

ensi

ons

of B

usin

ess

Solu

tion

s fo

r H

uman

Dev

elop

men

t

In Egypt, P&G markets fourteen brands, seven of which are manufactured in Egypt. P&G’s CSR portfolio encom-passes the fields of education, health, women, and children, through donations, development projects, and partner-ship development.

The Mokattam Recycling School. The project was an initiative by Community and Institutional Development(CID) in 1998, when, shampoo-producing companies realized that they were incurring losses caused by the factthat empty bottles of their products were in demand by fraudulent market operators who refilled them with a coun-terfeit product.

P&G extended financial support to allow destitute adolescents among the garbage collectors’ community to pur-chase these containers from the market before the fraudulent merchants got to the product. The adolescents deliv-er the empty containers to a recycling school that was established specifically to prevent fraudulent brand nametrade. At the school run by the Spirit of Youth NGO for Environmental Services, the program combines a tech-nical recycling, literacy, numeracy, health, recreation, industrial safety, legal literacy program with an income gen-erating mechanism to provide income while recovering P&G’s specific brand of shampoo to protect it from beingrefilled fraudulently. P&G leaves the revenue generated from the sale of the granulated plastic to the NGO to coverthe running costs of the school and teaching staff salaries. To date, almost one million shampoo bottles have beenrecycled. The project continues today, and the older children from the area are now paid to transfer their recyclingexpertise to other children in other communities.

P&G participates in INJAZ, an outreach program to foster and develop the life skills of young people prior to theirentering the workforce. Employees of P&G are encouraged to volunteer their talents and time to impart their voca-tional knowledge to the beneficiary youth of the program.

P&G’s brand of baby diapers, Pampers, established a telephone hotline for mothers with questions regarding prop-er hygienic care for their children. In addition, the brand has signed an agreement with the USAID funded healthproject TAKAMOL to provide health awareness pamphlets at the medical clinics the initiative is renovating in vil-lages throughout Upper Egypt.

P&G’s External Relations Department manages the company’s socially responsible initiatives. The funding forthese projects is a percentage of the company’s overall profit—that varies from country to country.

PROCTER AND GAMBLE

For the most part, the companies researcheddid not strongly align their pro-developmentactivities to their business operations, in thesense that they do not capitalise on companies’core competencies nor take a long-term view ofdevelopment. Most companies, regardless ofsize or origin, continue to make ad hoc grants

without considering whether this is the mosteffective use of resources, from either a businessor community perspective. The EMAKInternational Academy example given below,however, is a clear exception and illustrates thevalue of working with partners with comple-mentary skills and resources.

The Kharafi Group established EMAK International Academy in 2002. Its partners are Oracle Egypt and the ArabAcademy for Science, Technology, and Maritime Transport. EMAK Academy builds the technical capacity andsoft skills of employees. It gives students of modest backgrounds priority in its CSR activities

Partnerships: A Main Feature of EMAK’s CSR Program

Over the past five years, EMAK Academy has initiated three main CSR activities. The first is the Oracle AcademicInitiative for top students, in partnership with Oracle International and Egyptian universities e.g. Cairo University,Ain Shams, Alexandria, and Minya Universities. Top students from these universities are nominated to attendtraining on Oracle free of charge. EMAK draws up stringent selection criteria Academy staff volunteers their time

EMAK ACADEMY

Corporate and family foundations tend to bemore focused and consistent. Egypt has a fewwhich offer good role models for other corpora-tions considering the establishment of suchstructures. The Sawiris Foundation is the fore-runner of this trend. They have gone throughseveral cycles of grant making helping themovercome the lack of professionalism that mostnewly established foundations face.

PHILANTHROPY IN EGYPT46

Traditional practices do not change overnight.It is likely that for some time to come business-es will continue to behave philanthropically,will give to rather than invest in communities,and that engagement in CSR activities alignedto core business and in development-orientedpolicy dialogue and advocacy will remain limit-ed. We therefore take an in-depth look at thecurrent predominant philanthropic model ofCSR in Egypt.

Egypt has a long and venerable tradition of phi-lanthropy. Some of the world’s earliest forms ofinstitutionalized giving, such as the Islamicendowment (waqf) and Coptic Christian tithe(ushour) are rooted in Egyptian history.Today, despite a century of secular moderniza-

tion, religion remains the primary articulatedmotivation for giving among Egyptians of allclasses and faiths. In this context, any attemptto understand how private sector efforts can bemobilized for social purposes must take accountof the cultural traditions that have shaped phil-anthropic practice in Egypt. Below, some ofthe major factors contributing to the profile ofphilanthropy at the present time are outlined.Religious belief, the relationship of the state toits citizens, and attitudes toward public recogni-tion all play a part in shaping how and whyEgyptians give and some of the challenges facedby programs to expand and professionalize con-temporary giving are also discussed.

Philanthropy is defined for present purposes asthe mobilization of private assets, whethermaterial or human capital, for the public good.

RELIGION AND GIVING

Religion is a primary motivation for givingaround the world. Yet the form and extent ofphilanthropic practices is shaped by particularhistories and religious beliefs. Thus, we findthat Buddhism strongly encourages personalvolunteering, and countries such as Thailandand Vietnam have very high rates of volun-


36

3

Dim


uman D

evelopment

46Ibrahim, Barbara. John D. Gerhart Center for Philanthropy and Civic Engagement, AUC, May 2007

to teach students at locations provided by the universities while Oracle provides the training material free of charge.

500 to 600 top students undergo training each year through out Egypt. They undergo preparation for the localand international job markets as many are recruited to work in the Gulf. Their remittances are valuable for theirfamilies and the economy at large.

The second is a Training Initiative for university graduates in collaboration with the Future Foundation, andOracle. EMAK Academy covers half the costs, while Future foundation covers the other half. The FutureFoundation identifies students and EMAK staff provides the training and course materials.

The third initiative is Grants from Ministry of Communications and Information Technology. The ministry iden-tifies trainees and EMAK carries out the training.

Management of CSR

The Executive manager and the different program heads who contribute lead CSR activities in EMAK Academy tothe CSR initiative through providing technical skills or trainers. They are able to identify the technical needs inthe Egyptian market and tailor training accordingly. Professional and certified trainers at EMAK academy volun-teer their time to train youths.


37

3

Dim

ensi

ons

of B

usin

ess

Solu

tion

s fo

r H

uman

Dev

elop

men

tteerism compared to other areas of the world(Gallup 2005). The same survey found thatvoluntary activity is relatively low in the MiddleEast (14%), including Egypt, but that the pro-portion of individuals who give material sup-port for charity is quite high. According to a2004 survey conducted by the Center forDevelopment Services (CDS), 62% of adultEgyptians contribute some amount of moneyor gifts to a social cause (Daly 2007, 173).Because of a tendency to keep giving anony-mous, the percentage of those who actually giveis probably much higher. Even amongEgyptians with relatively modest incomes, char-itable giving is widespread.

Muslims in Egypt give in a variety of forms, themost common of which is zakat. This is anobligatory distribution of 2.5% on accumulat-ed wealth per year. As one of the five pillars offaith, all Muslims are expected to give zakat andelaborate systems have developed for calculat-ing how much is owed and how zakat may bedistributed. Zakat al mal is of particular inter-est as it is a contribution incumbent onMuslims who have achieved a certain level ofpersonal wealth, traditionally set at the equiva-lent of 85 grams of gold. This type of giving istargeted largely to charitable causes and is usu-ally monetary rather than in-kind. Over 40%of Muslim Egyptians who report any philan-thropic giving state that they pay zakat al mal(Daly 2007, 174).

Another category of giving is sadaqa, a morevoluntary and spontaneous form of generosity.Sadaqa jariya are gifts of a lasting nature.Popular expressions of this in Egypt are to buildor furnish a mosque, set up a public water foun-tain, or print and distribute religious booklets.The later is a common way of commemoratinga loved one at the time of death. After giving toneighbors, it is reported as the second mostdesirable form of philanthropic giving (Daly2007, 155).

For centuries, a flourishing aspect of sadaqajariya was the waqf system, whereby property or

other assets were withdrawn from commercialcirculation and dedicated to the support of apublic cause or the welfare of a family overtime. Waqf endowments played an importantrole throughout the Muslim world in maintain-ing hospitals, orphanages, schools and otherpublic institutions. That continues to be thecase today in countries such as Turkey andIndonesia, but the practice, once flourishing,has all but disappeared in Egypt. Nonetheless,the concepts of sadaqa jariya and waqf areenjoying renewed interest in recent years, witha number of prominent individuals calling forthe revival of these mechanisms because theyallow for sustained support to social causes(Gerhart Center seminar, Cairo, October2005).

The demise of endowed giving has had the con-sequence of making most contemporary philan-thropy in Egypt charitable in nature. By this ismeant that giving is short-term in its benefitsrather than sustained and capable of supportingdevelopmental improvements in society.Typical of this kind of philanthropic giving isfood donations during Ramadan, clothing,blankets, and medicines for the poor, toys fororphans and so forth. The distribution of con-sumable goods meets the requirements of zakatfor the Muslim giver and assuages some of theimmediate needs of disadvantaged people.Zakat is organized in Egypt through Al Azharand tens of thousands of individual mosquecommittees. It is a huge sector comprising largeresources and literally millions of individualdonors. It provides significant levels of supportto needy individuals and families who wouldotherwise ‘fall through the cracks’ in Egypt.

Egyptian Christians have strong traditions ofgiving. Coptic Christians are called upon togive a tithe or ushour (meaning a tenth) of theirincome and wealth. In addition, Copts shouldalso tithe with their time, either through volun-teering or through prayer. Churches are oftenplaces of community gathering, for social andphilanthropic activities beyond weekly devo-tional services. Adherents to the faith are

enjoined to apply the tithing calculation by the‘spirit of the law’ and not the ‘letter of the law’by extending the 10% to an unlimited percent-age of income if they are able and inclined to doso from the heart.

Even though the exact percentages to be paiddiffer between Muslims and Christians, basicattitudes towards charitable as opposed todevelopmental giving and beneficiaries of giv-ing were found in the CDS survey to be similarfor both faiths. (Daly 2007, 141, 151). Thissuggests the pervasive cultural weight of thesetraditions for all Egyptians.

SERVING GOD/ SERVING THE COMMUNITY

Religious motivations for giving contain twoelements: one that associates the gift with a spir-itual act, in other words, the gift is for God, andanother that emphasizes the needs of others orbenefits to the community. In Egypt, the for-mer concept is stronger, the idea that giving ismainly a devotional practice, something givenfor God. When asked why they give, most peo-ple say that it is a personal religious act or thatthey are doing a religious duty for God. Thirdis the idea that it is traditional or customary.Only fourth is any mention of responses relatedto alleviating poverty or helping the communi-ty (Daly 2007, 144). A commonly mentionedreason for charitable giving and for volunteer-ing of one’s time is thawab - the accumulationof good credit with God (Ibrahim 2007).

This close association of philanthropy withservice to God has a number of consequences.One is that the giver may not be particularlyfocused on the worldly impact of his or her giv-ing. Second, religiously motivated giving isoften accompanied by a desire for privacy orsecrecy. Both Muslim and Christian traditionssuggest that God does not bless gifts that arepublicly announced or bragged about. There isalso a strong feeling among Egyptians that oneshould not embarrass the recipient by drawingattention to the gift. The anonymous aspect of

much giving makes it more difficult to measureand evaluate the scope of philanthropic givingand it discourages collective activities or coop-eration. Finally, legal or policy incentives suchas tax deductions are unlikely to have a signifi-cant impact on giving when many people areconcerned that a monetary incentive under-mines the purely spiritual nature of their gifts.

The second factor that motivates philanthropy,although less prominent than spiritual piety, ishelping one’s community or relieving the bur-dens of poverty and disadvantage. Egyptianrespondents mention this aspect of giving lessfrequently than religious motivations (Daly2007, 144-145). However, it is worth notingthat ideas of public service are more likely to bementioned as motivation for giving by residentswho live outside major cities and towns. Itseems that identification with a local communi-ty and sense of solidarity with neighbors is morehighly developed in smaller communities.

The balance between religious and communityservice motivations for giving is no doubt diffi-cult to disentangle, not only in Egypt but alsoelsewhere. Philanthropy and its underlyingimpulses are complex matters and not easilycaptured in surveys. It is likely that multiplelayers of factors motivate Egyptians, including amix of spiritual, communitarian, and evenpatriotic impulses for giving. In the contempo-rary social climate, religious motivations aremost often articulated. (Ibrahim 2006).

INSTITUTIONAL FORMS OF PHILANTHROPY

While religion is cited as a major motivation forgiving in Egypt, not all of the forms that suchgiving takes are themselves religious in nature.Dissatisfied with purely interpersonal, a grow-ing number of Egyptians have channeled theirphilanthropy through NGOs or have them-selves created new organizational structures thatpromise to offer more permanence and effec-tiveness. We will not discuss general NGOshere - there are nearly 18,000 registered


38

3

Dim


uman D

evelopment


39

3

Dim

ensi

ons

of B

usin

ess

Solu

tion

s fo

r H

uman

Dev

elop

men

tgameyaat, or private voluntary associations.However, philanthropic organizations, definedas asset-bearing agencies that serve a publiccause are increasing rapidly in Egypt. From lessthan 10 in 1990 there are now over 400 foun-dations (in Arabic moasasaat) registered withthe Ministry of Social Solidarity.

Sometimes modeled loosely on western founda-tions or trusts, these are registered non-profitscharacterized by a material asset base donated

by an individual, family, group of donors, or acompany. The targets of their programs may becultural, charitable, advocacy, social or develop-mental in nature. They can operate by makinggrants, by administering their own programsin-house, or by establishing rotating loan pro-grams. These organizations tend to have asmall, self-elected board structure of gover-nance and many are beginning the practice ofmaking public their assets, expenditures, andprograms.

The Lead Foundation is an Egyptian NGO founded in 2003, under NGO law number 84/2002, by a group ofprivate sector businessmen, with contributions from the Egyptian private sector and the International FinanceCorporation (IFC), with support from the United States Agency for International Development (USAID). TheMansour Group of companies is the Foundation’s key private sector partner.

The Lead Foundation’s mission is to support the expansion of Egypt’s small business sector, to raise employmentand earnings among low-income and poor groups, with a focus on women. The Lead Foundation delivers creditand related business support services starting from the Greater Cairo area, and progressively expanding in areaswhere needed. It started its activities with a pilot project providing market-led job skills training to underprivilegedpeople through the “Chance to Work” program, the SME Individual Lending Program and the Blossoms ofGoodwill Group Lending Program. In the first, loans start from as little as LE 1,000 ($170). Individuals have theoption of pursuing repeat loans, which can gradually increase in size, depending on the repayment performance andthe needs of the enterprise.

The second is directed to female-headed households located in disadvantaged areas using the Group LendingMethodology. Program loans start from as little as LE 50 ($8), with the potential for subsequent bigger loans upto a maximum of LE 1,000 ($170). If clients demonstrate efficient use of the loans, are able to expand their busi-ness and demonstrate their business’ sustainability, they may be upgraded to the SME category and become eligi-ble for individual loans.

The two programs combined were able to issue 89,327 loans and serve 49,210 clients. The LEAD Foundationreached a monthly lending capacity of over LE 5 million in September 2005, equivalent to an annual lending capac-ity of over LE 60 million.

LEAD FOUNDATION 47

47 www.lead.org.eg

At least four broad categories of non-religiousphilanthropic institutions can be noted:

1) Family foundations, where bequests are frompersonal assets and management may stay atleast partially among family members. Such

foundations are often established in the nameof a family member or an individual’s memory.They have existed in Egypt since the 19th cen-tury and are being revived today by successfulentrepreneurs, a process that began in the1990s.


40

3

Dim


uman D

evelopment

The Sawiris Foundation for Social Development was founded in April 2001, with a family endowment from theSawiris family. It was the first grant-making family foundation dedicated to social development in Egypt. It focus-es on job creation projects, by identifying job opportunities then training unemployed youth to take them up. Priorcommitment from employers is obtained to hire successful trainees. The Foundation fosters the spirit of entrepre-neurship and the creation of self-employment opportunities. It funds training for potential entrepreneurs and pro-vides seed money for the start-up of micro and small enterprises. The Foundation’s approach is based on three fun-damental concepts: the backward model of job creation; partnerships; and leverage and replicability.

Partnership:Projects funded by the Foundation are based on collaboration between civil society, the government, and the cor-porate sector. The Foundation’s institutional partners function as implementing agencies and are sometimesinvolved in the design and co-funding of projects. Implementing agencies include government bodies, non-gov-ernmental and non-profit organizations, universities, and business enterprises. Thus, employment creation pro-grams are implemented through partnerships involving institutions willing to undertake the training component;businesses willing to host on-the-job training; and partners willing to participate in project funding or provide tech-nological transfer.

The Foundation supports and develops projects that are innovative, answer socio-economic needs, demonstratepotential for success, and can be promoted as a model to be replicated and adapted by other institutions. TheFoundation focuses on:

1. Health: a. Improving the profession of home healthcare providers in Cairo Governorate: training is provided for

home healthcare providers to care for the elderly and people with special needs and their supervisors who areplaced in different healthcare institutions and NGOs across Egypt.

b. Improving the nursing profession in Qena Governorate: new nursing teachers in the nine Qena nursingschools have been trained; the management and administrative skills of existing nursing teachers have beenupgraded. Ten NGOs have been mobilized to conduct community-based activities; an operational manual toenable others to replicate and mainstream this project has been created.

c. Training special needs educators in Qalyoubiya Governorate: 125 university graduates have been trained towork as special needs educators in both Cairo and Qalyoubiya Governorates.

2. Other vocational training: Examples of projects include:a. Training printing technicians in Qalyoubiya Governorate: paper-printing, textiles printing has been given

to designers, photographers, printing technicians and quality controllers.b. Employment unit in Mokattam in Cairo Governorate: focusing on two different professions: driving and

simple home repair skills and cooking, with banquet and catering services.

3. Small and micro businesses: Learn and Earn in Cairo Governorate: The project created employment forwomen by expanding a micro-credit unit in Manshiet Nasser, allowing it to disburse 379 additional loans, andestablishing a new micro-credit unit in Masr al-Qadima to provide loans for 757 female-headed households.

4. Scholarships: The Sawiris Foundation Scholarship to Germany: Awards a full scholarship (fees and livingexpenses) for two candidates from the Deutsche Evangelische Oberschule in Cairo (DEO) for a maximum of five yearsto complete their undergraduate degree, either International (Bachelor/ Master) or National (Diploma) in Germany.

SAWIRIS FOUNDATION FOR SOCIAL DEVELOPMENT 48

48 http://www.sawirisfoundation.org/en/index.htm


41

3

Dim

ensi

ons

of B

usin

ess

Solu

tion

s fo

r H

uman

Dev

elop

men

t

5. Educational and professional development: a. Training development practitioners in Cairo Governorate: in areas such as planning, fundraising, project imple-

mentation, monitoring and evaluation and then employing them in different organizations. The training wasundertaken in four governorates: Cairo, Fayoum, Aswan and Beni Suef.

b. Training literacy instructors for the hearing impaired in Alexandria Governorate

2) Corporate giving (either legally autonomousor within a division of a company) operating onannual infusions of profit or shares from a par-ent company. Corporate social responsibility(CSR) has gained prominence recently, withthe establishment of a number of committeesand support programs to spread the ideas.Often the motivation is PR and company mayfear public criticism of any controversial or even

mildly unpleasant causes and spurn support forworthy causes because they would not look‘positive’ in the company newsletter. Theseattitudes may limit the scope of what privatesector companies are willing to support. Onthe other hand, a number of pioneering compa-nies are undertaking truly innovative andimportant social causes and committing signifi-cant resources to public benefit.

In 2003, the Vodafone Egypt Foundation was registered as a separate entity from Vodafone Corporation to makesocial investments by sharing the benefits of developments in mobile communications technology and supportinglocal communities.

The Vodafone Egypt Foundation has three main objectives:- expand the impact of Vodafone’s corporate social responsibility initiatives- actively coordinate with civil sector organizations to achieve sustainable development- reach a wider segment of the Egyptian society through networking with local NGOs, government bodies, andprivate sector entities.

Vodafone Egypt Foundation’s two main areas of concern are education and health.

To ensure transparency, the foundation adopts clear-cut criteria for selection. In collaboration with local NGOs,UN agencies and international organizations, Vodafone Egypt Foundation implemented the following:

Reception center for street childrenIn partnership with Hope Village Society, it offers different services, trainings, literacy, and psychotherapy activi-ties in Hagana.

Supporting ICT in education in partnership with CARE EgyptLINC is designed to meet some of the educational needs of rural villages in Upper Egypt, empowering schools,communities, and civil society using Information and Communication Technology (ICT).

Fostering VolunteerismIn partnership with the Youth Association for Population and Development (YAPD), it endorsed volunteerismamong’ primary, preparatory, and secondary students. This “Bader Project” (Volunteer), encourages students tovolunteer and participate in solving their most pressing problems.

Deaf and mute rehabilitation centerIn partnership with Nedaa’ Association, the project rehabilitates children with sensory communication disordersand provides them with diversified channels for social integration. The project established a fully equipped educa-tion center for deaf and mute children and increases public awareness about handicap prevention through the earlydiagnosis of deafness. It also offers social and medical services for their families.

VODAFONE FOUNDATION

3) Community foundations enable multiplesmall donors to pool their financial resources fora common purpose, often directed to a specificgeographic area. This model operates informal-ly in many parts of Egypt, in the form of tradi-tional burial societies or NGOs in the name of alocal community. Registered CDAs are a rem-nant of the socialist era in Egypt - some are mereextensions of government, but others have atruly committed local membership.

4) Finally, a sort of hybrid can be noted that wemight call the partners foundation model.Here a small group of individuals pledge found-ing and/or annual amounts to a foundation andserve on its board of trustees. Often these arebusiness people who have established relation-ships of trust and share a common vision for theuse of their philanthropy. The Food Bank inEgypt is a recent example of this type of philan-thropic organization.


42

3

Dim


uman D

evelopment

Millennium Development Goals (MDG’s) InitiativeIn coordination with UNDP, Vodafone Egypt Foundation contributed to the MDG’s initiative: an intensive edu-cational campaign was conducted on poverty, education, primary education, gender equality, women’s empower-ment, child mortality reduction, maternal health improvement, and global partnerships.

Establishing a computer center for blind and visually impaired youth in MinyaThe ultimate goal of the project was to provide these youth with the necessary skills to join the workforce. Theproject was implemented in partnership with the Arab Women Alliance in Minya, a national NGO.

Vocational training for youth with special needsIn partnership with the Right to Life Association, Vodafone Egypt Foundation funded a project aiming at rehabil-itating youth with intellectual disabilities and enabling them to join the workforce.

Establishing a computer center for the Blind children in Old CairoIn partnership with al Nour Foundation, it established a computer center in Old Cairo Area for blind children. Acommunication and IT unit was established, providing special programs for the blind, in addition to offering freemedical care services in cooperation with the Maghraby Foundation.

The Egyptian Food Bank is a national non-governmental non-profit organization established under law number 84for the year 2002. Its corporate members and individuals came together informally as friends concerned about acommon issue - the wasted food from a variety of sources, such as restaurants, supermarkets, bakeries, weddingsand large receptions that they felt could be directed towards orphanages, elders, widows, needy families, and per-sons incapable of work or profit. The Egyptian Food Bank’s vision is to overcome hunger by supplying appropri-ate food to the truly needy on a continuous basis.

The Egyptian Food Bank uses connections and in-kind resources, such as refrigerated trucks, staff, and knowledgeof needy groups to manage the program and reach the target.

EGYPTIAN FOOD BANK 49

49 http://www.egyptianfoodbank.com/


43

3

Dim

ensi

ons

of B

usin

ess

Solu

tion

s fo

r H

uman

Dev

elop

men

tThese various foundation models cannot easilyfit a single profile but in some respects differfrom religiously based philanthropy. Manystate a principle of inclusion - the intention toassist all people of a given community regardlessof religion, gender, or sect. They are more like-ly to apply professional management and scien-tific knowledge to advance their chosen cause.Independent accounting and transparency inreporting are also increasingly recognized asimportant aspects of stewardship. Attackinginequality and the root causes of problems byempowering people is more likely to be part ofthe mission statement, if not the actual prac-tices, of these foundations. We can categorizeorganizations that aspire to this kind of givingas ‘social justice philanthropy’, recognizing thatin reality they live up to that standard to vary-ing degrees.

THE POTENTIAL IN EGYPT

The CDS survey mentioned above is a richsource of data on attitudes to and the practiceof Egyptian philanthropy. That survey has esti-mated that the total amount of private philan-thropic giving in Egypt is approximately 5.5billion pounds annually (equivalent to US$950million). This is a rough estimate, of course,because much charitable giving remains anony-mous and therefore unreported. Nonetheless,

it suggests the large potential for mobilizing pri-vate wealth toward sustained programs of socialchange.

The survey also confirmed that most Egyptiansfeel comfortable giving close to home, for theirneighbors and people with whom they have aface-to-face relationship. Therefore, in order to‘capture’ some of the giving, trustworthy struc-tures must be developed for channelingresources toward effective action. This wouldprovide a role for every scale of Egyptian enter-prise, not simply the large national and multi-national firms. This could also greatly augmentthe financial resources available for sounddevelopment and social justice programs. Inthis way, local CSR efforts on the part of theEgyptian business community could become animportant catalyst for significant social change.

The Vodafone “Madrasty” case study below isanother example of focused grant making. Ithas deployed its extensive customer networksand marketing expertise to conduct a cause-related marketing campaign. It has channeleddonations through its foundation that has part-nered with strong community partners toachieve maximum positive long-term commu-nity outcomes while gaining the company pro-file as a good corporate citizen.

Vodafone is one of the leading mobile telecommunications companies worldwide. Since 1998, it has been encour-aging voluntarism among its employees, by inviting them to dedicate two working days per month to volunteer inany of the company’s CSR initiatives. In partnership with Ashanek Ya Baladi NGO, a number of Vodafoneemployees provide training in interpersonal skills for university students at public universities.

The Vodafone “Madrasty” project seeks to provide a healthy environment for underprivileged primary studentsthrough rehabilitating infrastructure of schools in Egypt’s 27 governorates. The main funding source of this activ-ity was one piaster per each minute that Vodafone users paid during the Holy month of Ramadan. To implementthis activity, Vodafone partnered with the Ministry of Education as well as several local NGOs, namely the YouthAssociation for Population and Development, The Association for Development and Enhancement of Women(ADEW), CARE, Resala, HEPCA, and Hemaya. An international agency, UNDP provided the technical designof the CSR intervention, particularly its monitoring and evaluation component.

VODAFONE

As highlighted in earlier research such profes-sionalism – linking community activities tocore business competencies - is likely to becomemore commonplace. As seen below, Mobiniland El Nekheily Brothers have linked commu-

nity outreach to their core competence, trainingunderprivileged and/or unemployed youths intheir line of business and by using their compa-ny’s technology to address a variety of commu-nity needs.


44

3

Dim


uman D

evelopment

For the past 5 years, Mobinil has engaged in a variety of CSR development activities utilizing its staff and commu-nications technology. It targets health/disability, education, culture, industry, sports, environment, as well as othersectors, as the need arises. It regularly sponsors Ramadan Good Will Caravan Activity. In 2006, it became involvedin INJAZ.

In coordination with UNICEF, Mobinil started a polio vaccination campaign in 2003, which has been ongoingever since. It utilizes its Voice Message Services (VMS) as well as its customer databases to narrow down demo-graphics by age and send VMSs to customers reminding them of the campaign.

Mobinil lobbied the Ministry of Interior to establish a free emergency hotline and set up a countrywide campaignto publicize the service.

Mobinil supports a number of cultural activities, such as Sakyet el Sawi, events in honor of Naguib Mahfouz, andSOS concerts, Cairo International Film Festival.

Management of CSR

Mobinil has a (CSR and Donations) division under the (Events and Sponsorship) department, which tries to main-tain a geographical outreach beyond Cairo. While using technology, such as IVR and VSMs, they are not neces-sarily prerequisites for supporting a CSR activity. Drivers of Mobinil’s CSR activities are company reputation, staff creativity, motivation and loyalty, and sharehold-ers awareness in the importance of developing the community

MOBINIL

El Nekeily Brothers Company is a local information systems and telecommunications company that manufacturesIT and electronic devices. Established in Egypt in 1972, El Nekeily Brothers Co. concentrates their CSR effortson the education sector where the core business of the company operates.

Their main initiative took place in 2006, with the installation and maintenance services of indoor electronic wire-less internet and networking systems at Mansoura University. An assessment of the university’s needs preceded thesuccessful installation of the indoor electronic devices and wireless connection, selection and training of tenMansoura University students on the proper usage and maintenance of the electronic devices and systems installed,and the promotion of the services offered by El Neikeily Brothers. The company expanded their operation to otherEgyptian governorates outside of Cairo. The total cost of the project was 50,000 LE that El Neikeily Brothers fund-ed fully.

Management of CSR

El Nekeily has a specific department for the training seminars it offers students. No specific CSR budget is allo-cated, as the amount fluctuates each fiscal year, depending on the company cash flow. Besides financial resources,the company contributes its workforce volunteer time and expertise. The company considers them and its finan-cial resources to be the main assets of its CSR programs.

The company’s primary criterion for choosing this CSR initiative was the desire to respond to a need in the com-munity.

EL NEKHEILY BROTHERS


45

3

Dim

ensi

ons

of B

usin

ess

Solu

tion

s fo

r H

uman

Dev

elop

men

tA number of foundations, banks, and manufac-turing firms have already made strategic choic-es of the sectors, segments, and regions inwhich they will operate. The Arab AfricanInternational Bank has adopted the Abou ElReesh Children’s Hospital and, based on itsexperiences, plans to extend its program toother health and education institutionsthroughout Egypt. They have established afoundation and are exploring the possibility ofsetting up endowments to support each hospi-tal they adopt.

Al Mazlawy group of companies concentratesits programs on Sohag from where the compa-ny owners originate. El Gouna Resorts haveestablished their own training institute in orderto groom unemployed graduates for work intheir own sector - tourism.

The trend for most companies is to increasetheir overall level of pro-development engage-ment in the coming few years, pointing to themarked potential for the corporate sector topartner with other organizations towards theattainment of the MDGs.

Advocacy and Public Policy Dialogue

Our research identified many examples of com-panies, CEOs, and business associations taking aleading role in addressing, at both global andnational level, issues such as health and the envi-ronment and influencing the enabling environ-ment for the private sector to contribute to socio-economic development. In Egypt too, compa-nies can and do engage with the government andothers on MDG issues, particularly youthemployment and education and, generally, wel-come ministries’ greater openness to private sec-tor involvement in establishing a better legal andregulatory environment for domestic and foreignprivate sector investment. Companies, however,bemoan the pace of change and say that manymore reforms are required if the entire economy– formal and popular – is to be energizedtowards the achievement of that competitiveedge in local and global markets.

The concept of social entrepreneurship is well-developed in Egypt and is a powerful force forchange. The SEKEM Group, Ashoka fellowsand members of the Young Arab Leaders net-work are strong advocates for business solutionsto key development issues.

A number of businessmen have channelledtheir efforts through business associations,advising and funding young entrepreneursthrough, for example, the Alexandria SmallBusiness Association micro-finance project.Over the past year or so, specialised CSR com-mittees have been set up and become moreactive in reaching out to the business commu-nity. The American Chamber of Commerce,Egyptian Junior Business Association andBritish Egyptian Business Association are exam-ples. It seems likely that this trend will contin-ue. To promote the take-up of mainstreamCSR by SMEs, the Federation of EgyptianIndustries plans to provide technical and finan-cial assistance to its broad membership base forengagement in pro-development activities.

Increasingly companies are also workingthrough international development agencies,such as UNDP and the Global Compact office.Many have extensive programs and expertise intackling the MDGs, create neutral platforms fordiscussion between companies, government andcivil society groups, and, broker partnerships toachieve greater impact. National leadership andan ability to see above personal agendas becomeall the more important in this context.

Partnership is a form of engagement which isstill not very common in Egypt and whichmany feel will grow in the coming years. Thereis evidence, however, that the high level ofawareness of the scale of the problems and astrong tradition of giving back with no expecta-tion of return, is beginning to speed up andcatalyse business solutions for development.With increased networking, improved gover-nance, enabling the participation of previouslyexcluded groups, the prospects are good.


The private sector in Egypt demonstrates astrong commitment to addressing key issuesinhibiting Egypt’s socio-economic develop-ment. However, while many are actively pursu-ing this agenda, most are not fully aware oftheir potential to influence poor communities.Most view pro-development activities as an“add-on” voluntary activity rather than assess-ing how they can have impact through theircore business and value chain and come togeth-er with other sectors to advocate and imple-ment change on a grand scale.

Given support, many SMEs express willingnessto improve their practice and efforts to improvecompliance in areas such as human and laborrights and environmental standards. On thisbasis and the fact that it is widely recognizedthat this is where business can deploy mostinfluence and resources for development, theFederation of Egyptian Industries shouldexpand its planned training so that companieshave the greatest potential to impact the MDGsin a sustainable manner.

Literature and international practice demon-strate the benefits of larger companies’ supportfor suppliers in tackling a number of MDG-related issues. We discuss further the impor-tance of business linkage models in an economysustained by small-scale informal enterprisesemploying millions of unskilled and semiskilled youths and adults in Chapter 4. Childlabor is another area for engagement that bene-fits businesses both directly and indirectly. TheILO estimates that there are 2.7 million work-ing children in Egypt,50 many of whom livewith their single mothers. They account for thelargest category of female-headed households inEgypt (estimated to be 25% of total house-holds). Their children often work in informalSMEs, and do not have access to education andother services. The impacts of their poor work-ing conditions in early adulthood may be a con-tributing factor to the low life expectancy of

males in Egypt and certainly perpetuates inter-generational poverty. At present scores ofNGOs, provide children working in SMEs withalternative opportunities for an education basedon basic literacy, primary health care, nutrition,recreation, and support in emergencies.Companies can support and build on theseefforts.

Indeed, a number of success stories of corporateengagement on this issue already exist in Egypt.These interventions are donor-driven but involvepartnerships with local government, NGOs andthe private sector. They provide valuable lessonsthat can feed into policy dialogue.

The Climate Change Initiative which was pilot-ed with funds from the Canadian InternationalDevelopment Agency (CIDA) is an example ofhow projects can be initiated through donordriven interventions but turn into investmentopportunities which include both value chainand social development aspects. The CleanDevelopment Mechanism (CDM) whichallows companies to benefit from carbon trad-ing is a potentially dynamic tool to attract largeinvestments into Egypt for reduced carbonemissions on the one hand and improvement ofsocio-economic conditions for the poor on theother. Attached to these investments aremonies available as ‘grant money’ for theEgyptian government to use in pro develop-ment activity. As Climate Change takes centerstage on the global scene, businesses would dowell to partner with foreign investors and localcommunity groups for the design and executionof Clean Development Mechanism projects.The government stands to gain substantialfunds which it can allocate towards its socialdevelopment programs. Streamlining and coor-dinating government procedures are essential tomake this happen.

Our research also highlighted examples of socialenterprises, such as SEKEM, described below.

46

3

Dim


uman D

evelopment

50 www.ilo.org/childlabour

SEKEM was founded in 1977 on 125 acres of desert land 60km northeast of Cairo. The SEKEM Initiative estab-lished several specialized companies to ensure production and marketing of its products, which include phyto-phar-maceuticals, organic foods, organic cultivation, organic cotton textiles, dried organic herbs and species, fresh organ-ic products, and organic seedling.

SEKEM was established with the aim of contributing to the comprehensive development of the individual, socie-ty, and environment. A holistic concept encompassing integrated economic, social, and cultural developmentforms the cornerstone of SEKEM vision.

SEKEM takes on its responsibility by working for sustainable development locally and in the region through insti-tutions in economics, organic agriculture, research and development, education and health care. In this respect,SEKEM’s companies support the social and cultural enterprises like the institutions of education, research centers,and hospitals.

CSR Initiatives

The SEKEM School was founded in 1989 and includes a primary and secondary school for 300 pupils. The pupilsrepresent all social levels coming mainly from the nearby town of Belbeis and the surrounding rural vicinities.Although the SEKEM school is approved by the Egyptian Ministry of Education and is based on the Egyptian StateCurriculum, it also promotes new forms of pedagogic and social interaction. Thus, courses in crafts, drama, dance,or music supplement conventional education. By combining traditional pedagogical methods with innovative prac-tices, it is possible to nurture the maximum social, cultural, and educational development of the child.

As with all age levels, working and learning are inter-related and go hand in hand.

SEKEM’s Illiterate Children’s Program, provides classes for illiterate children between the ages of 10 and 14.Curricula is designed to increase awareness, raise consciousness and introduce new experiences in order to help stu-dents see themselves as part of the wider community, to facilitate them making a positive contribution.

The Handicapped Children’s Program includes children with all types of disabilities: general physical disabilities,the deaf and dumb, and the mentally retarded. The program aims to improve the quality of the child’s life and tointegrate them as full members of society. Many handicapped individuals integrate successfully into the differentactivities within the SEKEM group of companies.

Along the theme of education that SEKEM adopts, it established The Institute for Adult Education “Mahad”,which offers general consciousness-raising programs for local adult residents in various areas through weekly semi-nars and lectures using non-conventional methods with learning by doing as the basic principle. The Mahad’s pro-gram includes literacy training (reading and writing), English language classes (incorporating computer literacy),computer training, hygiene in the workplace, arts, music, and sports.

SEKEM’s Vocational Training Centre seeks to provide young people with specific skills for self-employmentbecause of the lack of opportunities that currently exist in the labor market. Fifty trainees participate each year ina 2-3 year program that guides them in every aspect of their chosen profession. When they graduate, they are suf-ficiently skilled either to start their own business or find employment.

Trainees are encouraged to gear their studies to the conditions and market needs that can be expected to exist whenthey graduate. Through intensive course work the students are immediately involved in production. Thus, prac-tical skills take precedence over theory. Training by professional teachers both foreign and local, takes place in fullyequipped workshops. The training offered includes biodynamic agriculture, carpentry, textiles, electrical Work,and metalwork.

A new project that will in launched soon as part of SEKEM’s projects geared towards education is the establish-ment of a new institution – the SEKEM University. Its focus will be the economic, social, and cultural empower-ment of people to reach out for their country’s development through science. The University will not only offerqualifications in key areas that are vital to the continuing development of Egypt, but will also incorporate SEKEM`sphilosophy and ideals.

Sekem is a member of the Global Compact and produces an annual corporate social responsibility report.

SEKEM 51


47

3

Dim

ensi

ons

of B

usin

ess

Solu

tion

s fo

r H

uman

Dev

elop

men

t

51 http://www.sekem.com/english/cultural/Foundation.aspx?PageID=1


Based on this and other models presented, wepropose the following priorities for pro-devel-opment engagement by business:• special employment schemes for youths in

marketing and distribution trades, as smalllabor contractors

• further investment in schemes to enable dis-advantaged young people to enter formalsector employment

• large companies adapting products and serv-ices to serve the BOP market –examplesinclude financial sector companies develop-ing pro-poor services – loans, insuranceproducts, credit facilities to support businessstart-ups

• partnering with business to introduce tech-nology, quality and improved managementtechniques

• new business ventures in the quarry industry(cement, marble, bricks etc)

• new agribusiness opportunities linked tofarming and rural communities

• revival of handicrafts to serve the tourismindustry

• health sector improvements that benefit thepharmaceutical industry

When such business models are developed, theprivate sector can play a dynamic role inupgrading smaller businesses and, by inference,the economy.

Such core business models of pro-developmentengagement offer the greatest long-term poten-tial for meeting the MDGs. However, to bemainstreamed a new mindset must be createdin Egypt. Innovation and access to good prac-tice examples will be key, as will learning from,and engaging with, other sectors. Most impor-tantly, the government has to institute deep-seated and far-reaching structural changes inthe economy.

In the meantime, current voluntary forms ofcommunity support are likely to predominateand remain an important tool with which toaddress the MDGs and bring the full 20% ofthe population who live in poverty into the

prosperity net by the 2015 deadline. The mag-nitude and focus of this voluntary support canprovide a dynamic springboard for subsequentlong-term development and is worthy of seriousconsideration as a culture specific method ofengaging business in development.

Our research shows that the existence of a ded-icated person or team for the design, planning,and execution of pro-development activities is asignificant factor in the level of outreach,engagement and targeting of needs. However,it is simply unreasonable to suppose that SMEs,close to 60% of which operate in the informaland popular economy, will allocate resourcesspecifically to this task. We thus propose anentirely different role for them and suggest thatthey are viewed as a major conduit for largerfirms and multinationals to reach the base ofthe pyramid, to upgrade industry, to expanddistribution networks and to reach unskilledand semi-skilled youths.

Our research also identified international mod-els that can help identify the benefits of suchprojects, both to the community and the busi-ness itself. One such tool, the LondonBenchmarking Group (LBG) model, whichalso measures the impacts of employee volun-teering programs and commercial initiativessuch as cause-related marketing, is outlinedbelow.

Identifying the “win-wins” of voluntary activi-ties by applying such management and meas-urement techniques to community activitieswould help ensure that they are more sustain-able, targeted, and development-oriented.They can also facilitate partnerships by manag-ing expectations regarding the level of resourcesavailable and clarifying outputs sought.

What are the drivers and inhibitors to corporate engagement on the MDGs in Egypt?

The study revealed that many of the drivers ofresponsible business practices and pro-develop-48

3

Dim


uman D

evelopment


ment activities present in more developedeconomies are not yet pertinent to Egypt. Themedia and public are not sensitized arounddevelopment issues to the point where they seekto influence corporate practices by, for example,campaigning for them to halt environmentalinfringements. Workers have limited influence,being largely unorganized and unwilling to riskdismissal by challenging employers when alter-native jobs are hard to find. Despite the grow-ing CSR debate in Egypt and the increasingexposure and pressure on companies to con-form to standards, the incentive to take meas-ures to manage companies’ social and environ-mental impacts is weak because a failure to takestock of and address these issues rarely jeopard-izes or weakens their reputation.

The research highlighted that companies’ com-

mitment and desire to learn more about theirpotential role in achieving the MDGs derivesmostly from a cultural or religious base and anacknowledgement of the scale of the problemsand hence the clear and pressing need for allsectors of society to take responsibility forEgypt’s development. They have not evolved aclearly defined “pro-development approach”.

The majority of SMEs and certainly the infor-mal sector are motivated by philanthropyinspired by religious and cultural mores.Hence, we find family-run companies orientingvoluntary activities towards their homeprovince or local communities in the desire,primarily, to share the fruits of prosperity withthe less fortunate and alleviate poverty. They,as larger companies, acknowledge the need tosupplement government services. 49

3

Dim

ensi

ons

of B

usin

ess

Solu

tion

s fo

r H

uman

Dev

elop

men

t

The London Benchmarking Group model (LBG) was developed in 1994 by the philanthropic staff of six globalcorporations. It measures results and impacts so that corporate motivation is more clearly targeted. However, thisdoes not preclude the need for context specific impact assessment tools to be designed and assessment studies to beundertaken with sensitivity to the local culture. However, it is a starting point to guide Egyptian businesses towardsmeasuring the effects of their new business models. The diagram shows that business benefits are greater at the bot-tom of the triangle where engagement is neither ad hoc, nor driven by philanthropy but rather designed as an inte-gral part of the core company purpose and process. The top part of the pyramid is the traditional philanthropicenergy of a corporation, while community investment and commercial initiatives in the community — are the firstseeds of CSR.

Pruitt, Bettye. Working with the Business Sector: Pursuing Public Good with Private Partners. Grant Craft, 2004.

THE LONDON BENCHMARKING GROUP

Intermittent support to a wide range of good causes in response tothe needs and appeals of charitable and community organizations,

increasingly through partnerships between the company. Itsemployees, customers and suppliers.

Long-term strategic involvement in community partnershipsto address a limited range of social issues chosen by the

company in order to protect its long-term corporate interestsand to enhance its reputation

Activities in the community, usually by commercialdepartments, to support directly the success of the

company, promoting its corporate brand identitiesand other policies, in partnership with charities

and community-based organizations

The core business activities in meetingsociety’s needs for cost effective goods and

services in a manner which is ethically,socially and environmentally responsible

CharitableGifts

CommunityInvestment

Commercial Initiativesin the Community

Businiess Basics

The London Benchmarking Group Model


Our research indicates that the most effectiveprograms are those that have adopted a partner-ship approach and have responded directly toreal community needs. We record a few below:

• On-site water and sanitation for small andremote communities

• Community-based primary healthcare intro-ducing preventive measures into the homeand community and with a strong focus onimmunization, hygiene, nutrition, trainingof birth attendants, prevention of waterborne diseases, and skin and eye infections

• Micro-credit programs for water and sanita-tion projects, for income generation, forhome and community-based enterprises andhousing improvements

• Revival of handicrafts through design, mar-keting and skills upgrading such as those inNagada, Sohag, Akhmim and Hagaza inUpper Egypt

• Non-formal learning programs for out-of-school youths and working children

• Adult literacy programs which do not focusexclusively on alphabet literacy but whichadopt a holistic, multiple literacies approach

• SME development through the provision oftechnical assistance, financing and legal aid

Many of the best practices identified address anumber of MDGs. Micro-credit for poorhouseholds targeted families whose childrenwere working. They benefit from the programby gaining access to literacy and learningopportunities, health and safety measures,recreation, etc. These same projects includedthe formalization of workshops, upgrading ofhealth and safety standards, as well as the adop-tion of a gender strategy by the business.

As we explore the potential for business engage-ment for human development in Egypt, wenote a number of serious obstacles facing theachievement of the MDGs:

1. Partnerships between NGOs and the privatesector are not facilitated by a sufficiently net-worked NGO sector working topically orgeographically

2. The limited funds available to NGOs fostercompetition and isolation rather than coor-dination of efforts. This results in promot-ing to the private sector an incoherent pic-ture of the problems, in which a particularNGOs mandate or goals are presented ratherthan successful approaches and MDG tar-gets

3. Regulations restrict NGO networking andcoalition building. As a result, their abilityto adopt one vision, one strategy, and uni-fied approaches to present to the private sec-tor is limited. The laws that govern the non-profit sector do not allow sufficient collec-tive advocacy work of the kind that will sup-port the level of engagement required for thenext phase of the MDGs. NGOs need to befree to form coalitions, be represented onpolicy committees and be equal partnerswith the private sector in shaping povertypolicies and development programs

4. The same problem is noted for the businesssector where each company prefers to oper-ate on its own rather than associate with awider network of companies and work in aconcerted manner towards a specific, long-term goal. Each company prefers to designand implement its own corporate social phi-lanthropy or corporate social communityinvestment activity in isolation from othercompanies

5. To date, the government has not taken intoaccount lessons learnt from grassroots mod-els implemented by NGOs when designingelements of the next phase of solutions forhuman development in Egypt and theattainment of the MDGs. For instance,national literacy programs still call for thepayment of a financial incentive to learnerswhile providing them with content that isirrelevant to their real needs, with poorlytrained facilitators and an examinationwhich tests the ability to take an exam ratherthan the degree of empowerment to livefully and participate in community life 50

3

Dim


uman D

evelopment


51

3

Dim

ensi

ons

of B

usin

ess

Solu

tion

s fo

r H

uman

Dev

elop

men

t6. Donor-driven models and pilot projectswhich have involved partners from the pri-vate sector, the government and NGOs andwhich have yielded positive results are notscaled up or integrated into national policies

7. Many businesses still focus on specific popu-lar themes and sectors in order to achievepublicity and visibility rather than assessingreal human needs. This tends to directfunds and energy away from substantiveissues and towards public relations andimage building rather than communityinvestment and human development.

The quantitative and qualitative phases of thestudy also revealed that outreach to communi-ties is not trouble-free and that companies facecommon problems in implementing pro-devel-opment activities. Some of the obstacles mostoften cited by companies to further engagementare:• A lack of familiarity and buy-in for volun-

teering programs by both management andstaff, coupled with heavy work commit-ments

• Lack of personnel to plan and implementCSR initiatives, companies’ limited knowl-edge of poverty issues and the developmentsector and difficulty in identifying crediblepartners and projects in which to invest

• A lack of professionalism in the NGO sec-tor. Many do not develop clear strategies,plans and targets to achieve maximumresults and demonstrate limited capacity tocommunicate effectively

• The Ministry of Social Solidarity (MoSS)may lack capacity to play the role of nation-al coordinator of pro development engage-ment

• Government bureaucracies do not alwaysfacilitate the implementation of pro devel-opment activities.

• Companies’ limited knowledge of goodpractice in the pro-development field andresistance from management to the adoptionof new ideas or allocation of sufficient fundsfor pro-development activities

• Competition between private sector compa-nies, meaning that they are unwilling to col-laborate or share information

International research indicates that good gov-ernance and, in particular, an organized civilsociety sector, which includes labor unions,youth clubs, women’s organizations, coopera-tives, etc, not just NGOs, are effective inenhancing businesses’ role in development.Some of the obstacles listed above indicate thatthis does not exist in Egypt. This is reinforcedby the finding that, when asked how they wereinformed about communities, groups, causes orsectors in which to engage, the key sources ofbusiness learning about potential pro-develop-ment activities were ‘employees’ and ‘media’,while NGOs scored relatively low as sources ofknowledge about potential activities (althoughof course many employees may also be NGOrepresentatives).

Figure 16: Sources of Knowledge about Activities

Despite this finding, our research also indicatesthat NGOs that had succeeded in bringingtheir causes, projects and programs to the atten-tion of corporate partners, and had been able todemonstrate effectiveness, timeliness, trans-parency and good governance, had been able toenter into long-term partnerships with them.

Most NGOs that approach the private sectordo so to seek financing for specific projects ontheir agenda, or to seek technical support rather

32 29

1610 10 9 8 7 3 2

13

9

12

14 134

2 2 50

0

5

10

15

20

25

30

35

40

45

50

Em

ploy

ees

in t

he fi

rm

Med

ia

Civ

il So

ciet

y

Lab

or U

nion

s

Gov

erne

mt

Shar

ehol

ders

NG

O’s

Oth

er F

irm

s

Adv

ocat

es

UN

DP

45

38

2824 23

1310 9 8

2

Have been seeking themHave been approached by them

Total

play a watchdog role. Interestingly, one of thespecific recommendations made by businessesregarding how NGOs could promote pro-development corporate engagement was thatthey should collectively approach businesseswith a common cause. The research team alsodrew out the following recommendations formore private sector engagement with NGOs:

• Strengthening incentives for positive corpo-rate action by recognizing (and partneringwith) leadership companies

• Establishing clear priorities for action, socompanies can determine whether theyshould partner with NGOs or not

• Investing in progressive alliances and scala-bility of initiatives

• Establishing clear ‘rules of engagement’ toprotect their integrity and independence

• Enhancing transparency and accountability,ensuring legitimacy by holding business, andparticularly high-impact companies, govern-ment and other actors to account

• Publicizing and professionalizing their workso companies can distinguish between activeand inactive NGOs

• Acting as intermediaries between the privatesector and the government

• Conducting studies on community needsand assets per governorate, district, and vil-lage, so establishing clear priorities for action

• Assisting the government in drafting anational CSR plan to propose to the privatesector for engagement,

• Collaborating with the private sector in thedesign and implementation of pro-develop-ment programs

• Transferring their knowledge of local com-munities to the private sector

Many efforts are ongoing by international agen-cies, business associations and others to rein-force good governance in Egypt and promotethe involvement of all sectors of society in iden-

tifying, discussing, and resolving problems. Byfacilitating partnerships of this nature, they arehelping to overcome obstacles to wider impactand sustainability for pro-development activi-ties and building trust and appreciation of thecontributions of different sectors. Internationalexamples of such action are numerous, includ-ing on the thorny issue of corruption and caninform local initiatives. In Slovakia, for exam-ple, the NGO Integra works with SMEs andlocal communities to build awareness aroundand prevent corruption. Regionally,Transparency International is working with theInternational Business Leaders Forum (IBLF)and other partners to move ahead its new pro-gram entitled “Business Principles forCountering Bribery”.52

Such examples highlight the important role thatNGOs play in development. In Egypt, howev-er, they have yet to enjoy the freedom to oper-ate independently – networking and organizingthemselves effectively, campaigning againstsocial and economic imbalances and gatheringresources to support the scale-up and replica-tion of innovative and effective grassroots pro-grams. Often they do not receive the recogni-tion they deserve for serving many communityneeds and are rarely viewed as sources of expert-ise or potential partners.

Many interviewees also highlighted the impor-tant role the media can play with regard to theMDGs and pro-development business engage-ment in Egypt. It can bring potential commu-nity partners to companies’ attention andencourage a pro-development business stanceby giving companies positive press coveragewhere deserved and, conversely, highlightingmalpractice.

Without appropriate structural and systemicmeasures – enforcing relevant legislation, fight-ing corruption, changing regulations affecting


52

3

Dim


uman D

evelopment

52 From Transition to Accession: The Experience of Corporate Social Responsibility in Central and Eastern Europe. ThePrince of Wales International Business Leaders Forum, November 2002.

small businesses, providing tax incentives forcommunity investment, partnering with NGOsas equal partners, particularly those with astrong track record of working with disadvan-taged communities, and providing legitimateplatforms for debate, progress towards theMDGs will be slow and the private sector unen-gaged.


53

3

Dim

ensi

ons

of B

usin

ess

Solu

tion

s fo

r H

uman

Dev

elop

men

t

The major role, however, in establishingan enabling environment for pro-develop-ment activity, lies with government.Without appropriate structural and sys-temic measures, progress towards theMDGs will be slow and the private sectorunengaged.

4

4Analysis of

Business for

Development

Engagement

Egypt can either seize this opportunity to build on the momentum created by a new business climate, themounting social needs of the population and a reformist inclination in the political and governmentarena, or go about its business as usual and face the risks involved in such an approach. This chapter callsfor industries and the private sector to create partnerships and synergies based on small-scale operations.Although small, they have the potential to impact larger areas of the economy and reach that 20% at thebase of the Egyptian economic pyramid in ways that will significantly reduce the gap between them andthe top of the pyramid and to do so without losing or ‘giving away’ money or ‘giving out’ assistance.

Hitherto, the predominant thinking has been that thebusiness sector should concern itself with productiveand profit-making activities, leaving issues of povertyto the government and NGOs in partnership withinternational development agencies. This conven-tional thinking is now being challenged. It hasbecome clear that aid alone cannot pull nations out ofunder-development and into prosperity. A vibrant,innovative business sector can play a critical role indeveloping new models and solutions and in promot-ing the scale-up of current best practices. The privatesector is confronting the challenge and opportunity ofbuilding strong foundations for the country’s eco-nomic growth and contributing to long-term, wide-spread positive social impacts and poverty alleviation.Priorities are creating sustainable livelihoods forEgypt’s youth, but also protecting scarce and endan-

gered natural resources, improving health, education,and general infrastructure.

Such an approach might be questioned. Why shouldbusinesses bother? Are they not enjoined to makeprofit, provide employment, comply with laws, paytaxes, and innovate within the confines of their busi-ness boundaries? Why burden business with respon-sibilities that many perceive as falling well beyondtheir purview?

The answer has become clear for many. In order togrow markets businesses need a healthy society wheremore than basic health, education and infrastructureneeds are met. Communities need successful compa-nies as no social program can match the power ofcompanies to create jobs, increase wealth, and inno-


56

4

Analysis of B

usiness for Developm

ent Engagem

ent

vate to improve standards of living. To createthis “win-win” scenario business needs to adopta new vision, one which takes into account thepoverty map of Egypt, the MDG targets thecountry is pledged to achieve, and seeks outopportunities and markets which, if developed,can meet both societal and business needs.

WHAT MOTIVATES MULTINATIONALSTO ENGAGE IN CSR?

The research indicates that companies give, anddo so generously. MNCs are often influencedby international practices driven by reportingrequirements to stakeholders, brand loyalty,and image-building motives. These practicesare shaped in contexts where workers are awareof their rights, where state legislation establish-es minimum standards for workers in areas suchas wages, industrial safety, job security andworker compensation, and where unemploy-ment and welfare measures are in place andcompliance is monitored by both the publicand state. In many MNCs’ home countries,shareholders and stakeholders enjoy high levelsof education and awareness around sensitiveissues, such as environmental infractions, illegalexploitation of natural resources and humanrights infringements affecting both individualsand communities. In spite of this, cases of non-compliance still occur but a vigilant civil socie-ty sector and free press often play a major rolein bringing to light violations. Under such legaland democratic systems, non-compliant com-panies face prosecution, are forced to pay finesand compensation, or to cease illegal or unethi-cal practices, even business operations.

Many companies monitor such developmentsand draw lessons from highly publicized cases.However, while complying with the laws ofcountries where effective legal and public restric-tions on activity exist, they operate to lowerstandards elsewhere. In many countries laws,labor unions, environmental agencies, consumergroups, etc are weak or incapable of playingtheir watchdog role, the press is not free andcivil society monitoring is weak or non-existent.

Can this apply to the context in Egypt?

If the main motivations for CSR for leadingMNC practitioners on the global stage arebrand value, a desire to comply with clear andenforceable laws and consideration of an alert,organized, well-informed public represented bystrong, articulate pressure groups, should weexpect companies in Egypt to be influenced bythe same drivers? Our analysis leads us to theconclusion that the motivation for CSR inEgypt will differ from that of MNCs operatingin an international context. Egyptian compa-nies operate in an environment where compli-ance is mostly voluntary. Trade unions do notnegotiate for labor rights in the same manner,or at the same level, as in other countries andlegal, labor and environmental infractions arebut loosely monitored by government agencieswho struggle to build their capacities and fail toenforce laws recently enacted. NGOs are stillunable to access information or use it freely andpublicly to the point of monitoring companies’labor and environmental violations. The gener-al context in which companies operate is onewhere levels of education remain low. Adultilliteracy is amongst the highest in the region,female illiteracy close to 50%, and the formalschool system, from primary grades all the wayup to university, promotes rote memorizationand penalizes critical thinking, questioning andproblem-solving.

Poverty and unemployment are such that work-ers are more desperate for work than a job thatguarantees their rights. Businesses circumventlaws designed to protect workers from arbitrarytermination of employment and adopt practicesviolating workers’ rights in order to protectthem from having to keep on inefficient, non-performing workers who create a burden oncompany performance and profitability. Civil

It is highly unlikely in the current businesscontext in Egypt to expect national compa-nies to be motivated by the same driverswhich motivate MNC’s towards CSR


57

4

Ana

lysi

s of

Bus

ines

s fo

r D

evel

opm

ent

Eng

agem

entsociety organizations in Egypt do not play a

watchdog role in any sector of the economy:Restrictive laws proscribe their actions, theyoperate in a climate of mistrust and are orient-ed towards welfare services rather than coali-tion-building and a rights-based and advocacyapproach.

Thus what we generally see in terms of CSR inthe private sector are actions which are accom-panied by public relations and image-buildingcampaigns rather than well-conceived and tar-geted programs of action built around a carefulreading of business and social needs in theeconomy at large. Indigenous companies, driv-en by religious motives to give, engage less inthese PR activities. The drivers of their actionsdiscourage making a public display of their giv-ing. Neither SMEs nor large national compa-nies are accountable to shareholders or otherstakeholders, such as labor unions, even if theyreact to cases of non-compliance to labor law orthe poor treatment of company employees. Inthe absence of strict, transparent law enforce-ment, companies are driven by motives that arequite different from those governing MNCsand companies in the developed world. InEgypt, motives largely derive from religiousbelief and, to a lesser extent, the desire to con-tribute to Egypt’s development.

International practice indicates that a seriousplan to engage businesses in pro- developmentactivities in Egypt needs can start with the thor-ough review and transparent enforcement oflaws pertaining to business operations in Egyptand a re-examination of labor representationand workers’ rights. A strong motivator wouldbe establishing a level playing field for businessand the widespread practice of transparencyand good governance inside private enterprises,in NGOs and in the government and publicsector.

Further lessons can be drawn from internation-al best practice regarding the government andothers’ perception of NGOs’ role in monitoringand acting on public issues. A perception of

NGOs as essential partnerships for develop-ment, rather than being considered strictlylocal, welfare and development-oriented, canyield positive results.

In reality it will take a very long time for corpo-rate accountability to prevail in Egypt.Meanwhile the 2015 deadline set for achievingthe MDGs approaches and alternative ways toengage companies in the country’s develop-ment, while achieving their own business devel-opment agenda, must be found. The transferand application of lessons and drivers from thedeveloped world to Egypt will require moretime than Egypt has. Thus the questionbecomes, what model of business engagement ismost suitable for Egypt, especially given itspresent business context – over 38,000 localbusinesses registered with the Federation ofEgyptian Industries, many more unregistered inthe informal sector, and only a minority ofnational large firms and a handful of MNCs?What effective, indigenous models of CSR, tai-lored to large, medium and small enterprisesmight be deployed with the clear and focusedpurpose of achieving the MDGs?

WHAT MOTIVATES LARGE NATIONALCOMPANIES TO ENGAGE IN CSR?

Businesses in this category subscribe to the fullmenu of philanthropic activities described earli-er in this report. They also engage in longer-term community investment, for examplebuilding and refurbishing schools and clinics,supporting cultural activities and youth groups,extending credit to employees, granting schol-arships and training. They have been driven todo so partly out of a desire to ‘do good’, but alsopartly to improve their image, balancing theirfocus on genuine outreach with getting market-ing mileage from the act of giving. On occa-sions the government directs them to give tospecific sectors and causes.

If we are to capitalise on business engagementto achieve the MDGs, clearly much deeperinterventions, which do not spring solely from


58

4

Analysis of B


ent Engagem

ent

the desire to polish corporate image, respond toshareholders or maintain customer loyalty arerequired. The new models we are searching forwill spring from a deep sense of corporateresponsibility towards the country as a wholeand a deeper understanding of the economicand social condition of the poor. The aim willbe sharing the fruits of prosperity enjoyed bythe formal private sector with the masses stillliving below the poverty line.

Potential models might link small farmers,informal sector workers and others with formalbusinesses. Such models can address a numberof critical MDGs as they target poverty reduc-tion by creating livelihoods, not just employ-ment. They focus on partnerships betweenSMEs in the informal rural and urban sectors,large firms, NGOs and labor representatives.They promote lifelong learning to compensatefor young people’s current poor educationallevels. They integrate learning with livelihoodsand provide education, in a much boarder sensethan the current conventional manner preva-lent in the formal school and technical voca-tional education systems.

Most firms enter into short-term partnershipswith short-term commitment, merely respond-ing to the latest request or recommendationmade by a community group or trusted employ-ee. Few firms have established committeescharged with corporate giving, report to share-holders on their community investments, or seethe link between their brand reputation andcommunity investments. Most are driven bythe desire to ‘do good by the community’ or to‘appear to be good’ to the government. Whenprivate firms establish foundations, they articu-late specific goals and giving criteria. The estab-lishment of the foundation forces them to definetheir vision and mission and to draw up strate-gies and action plans to achieve them. It alsoallows them to assign professional staff to imple-ment the program, resulting in more targetedoutreach. The Sawiris Foundation, for example,explicitly sets the number of new jobs created asa determining factor when approving grants.

Others focus on the number of new businessstart-ups that their credit program facilitates.

WHAT MOTIVATES MICRO, SMALLAND MEDIUM ENTERPRISES (M/SMEs)TO ENGAGE IN CSR?

SMEs undertake extensive activity contributingenormously to the indigent. They supportorphans, widows, finance students’ school uni-forms, and tuition fees, feed preschoolers, andthe elderly, and establish literacy classes,libraries, and computer literacy laboratories. Itis undertaken in an ad hoc manner with noclear, business motivation, more out of concernfor local communities.

SMEs AS LEARNING LABS FOR ENTREPRENEURIAL LIVELIHOODSMODEL

One model for channelling business engage-ment towards the informal sector combines corebusiness activity with a community investmentapproach. The Learning Labs forEntrepreneurial Livelihoods Model links thetechnical vocational education context of theinformal economy with production and formalenterprises’ value chain. It focuses on the poorand encompasses a range of MDGs - povertyeradication, education, gender equality, envi-ronmental sustainability and partnership. Fromthis perspective it is unlike international modelsmotivated by brand recognition, image-buildingor customer loyalty. It rather capitalises onEgypt’s current preoccupation with employ-ment for a broad base of youths seeking to enterthe workforce. This necessitates educationalreform, inclusive partnership models with civilsociety, improved environmental standards, andgovernment actions and policies to promote aclimate of transparency and good governance.

Where do the Poor Work?

The poor in the developing world own fewassets besides their labor and depend on theinformal economy for survival. This economy


59

4

Ana

lysi

s of

Bus

ines

s fo

r D

evel

opm

ent

Eng

agem

entcurrently employs millions of unskilled, semi-

skilled, and illiterate youths, adults, and chil-dren. The sector has grown exponentially inEgypt for a number of reasons:

• formal labor markets have generated insuffi-cient jobs and are unable to absorb a contin-uously growing unskilled workforce

• the informal sector is an easier option forunskilled workers and is more suited to theirskill level

• the community-based nature of the informaleconomy makes information about workopportunities in this sector more accessibleto the poor

• the complexity of registering businesses andthe uncertainty of the business’s sustainabil-ity which often extends the ‘trial’ period intoa more permanent status of informality

HOW MANY M/SME JOBS ARE THEREIN EGYPT (BY SIZE AND CATEGORY)?

In 1996 small and micro firms provided around80% of the jobs in the non-agricultural privatesector (more than 3 million jobs in the 1 to 9employee size in 1996 and generate 80% ofvalue added by that sector). This emphasizesthe importance of SME’s in creating jobs.Although the percentage increase is higher forlarge enterprises than small ones, yet in 1996small enterprises employed 3,483,542 personscompared to 461,268 employed in large enter-prises.53

A study conducted by the Economic ResearchForum revealed that the estimated numbers ofMSEs increased by 4.7% annually and from 2.5

million Economic Units in 2003 to 3.5 millionEconomic Units in 2006. Furthermore, thestudy documented the vibrancy of that marketwith huge numbers of Economic Units enteringand exiting every day. The trend seemed topoint to the new, efficient units replacing mar-ginal and inefficient ones.54

The informal economy has proven to be vital inproviding the poor with employment andincome when they have no other means to sur-vive. The role of these workers is generallyunderestimated in terms of their contributionto production, services, and the formal sectorand the informal sector’s role in providing alearning environment for workers has not beencalculated. Youths acquire technical, businessand market skills but in a largely unstructured,under-valued, and unplanned manner. Thequantitative phase of the study indicated that,while the formal private sector currently targetsunemployed youths, it does so with a view toproviding them with jobs in the formal sectorrather than livelihoods in the informal SMEsector. The two approaches need to convergeto create a critical mass of activity that will gen-erate a full menu of options for unemployedyouths to match their skill set and level of edu-cation with livelihood opportunities.Innovative thinking is required to empower the

The informal economy thus provideslivelihood opportunities for those thathave no other means to survive

53 The Ministry of Foreign Trade. Profile of M/SME’s in Egypt, The Small and Medium Enterprises PolicyDevelopment Project.(SMEPoL) March 200354 Alia el Mahdi and Ali Rashed. The Changing Economic Environment and the Development of Micro and SmallEnterprises in Egypt 2006. The Economic Research Forum Working Paper Series #0706, Cairo 2007.

Number of Workers 1988 1998 2006

% % %1-4 45 48 505-9 9 17 1410-29 9 10 1030-49 2 4 550+ 13 16 15Don’t Know 22 6 6Total % 100% 100% 100%Total in thousands 2546 3995 6430

Source: Assad, R., ELMPSO6 data files

Table 4: The Size of Enterprises EmployingFormal/Informal PNAWW in 1988,1998, 2006 (%)


60

4

Analysis of B


ent Engagem

ent

marginalized by:• increasing SMEs’ income earning potential• upgrading their technology • improving working conditions• introducing industry safety measures • offering literacy, in all senses - alphabet,

legal, health, culture and the arts, etc – inkeeping with UNESCO’s multiple literaciesapproach.

This will require collaboration amongst a size-able range of stakeholders - grassroots organiza-tions in popular neighborhoods, the Ministriesof Labor, Education, Investment, LocalDevelopment and Agriculture, Trade andIndustry, local city councils, other governmentagencies, the formal private sector and donoragencies. There are important contributionsthat MNCs can make to the model, such asextending advice on best practice and good gov-ernance.

The outcomes of such an approach could be thetransformation of SMEs into Learning Labs forEntrepreneurial Livelihoods wherein ‘liveli-hoods’ are much broader than employment,encompassing the manner in which youths indeveloping countries organize their income-earning activities for survival.

Why Learning Labs?

Today, vocational education and teacher train-ing and methods in Egypt no longer match thespeed of labor market developments. There isan obvious mismatch between labor marketneeds and the vocational skills and qualifica-tions of current graduates from formal technicalschools and centers. They are ill-equipped toseek a livelihood in any place other than theinformal, popular market. Teaching is over-whelmingly traditional and ‘on-the-job’ train-ing schemes are potentially open only to thosewho are literate, skilled and in the formal jobmarket already. The millions left behind neednew options and a fresh conceptualization ofwhere they are to learn, earn a living and beentrepreneurial needs to emerge. An enormous

amount of money has been spent on formaltechnical and vocational schools, yet there isgrowing evidence that the money has not beenwell spent.

Since most of Egypt’s working age people oper-ate outside the modern, formal economy andlabor market, it is imperative to implementskill-building and learning programs whichintegrate them. Private sector partners give gen-erously to educational causes. Support for sucha model would perpetuate this giving but re-direct it towards workplace learning programs,informal workshops, small rural communitiesand remote desert areas. The model furtherproposes that businesses do not give randomlybut specifically support workshops and learningprograms linked to its production, distributionand sourcing, in other words align core businessand community investment. Such an approachmight lead to advocacy engagement by formalbusinesses as it would bring them face-to-facewith problems undermining dynamic informalenterprises which contribute significantly to theeconomy by employing vast numbers of youths.This model derives from the success of theSekem and EQI models in Egypt which weretested in the agriculture, food processing, tex-tile, tourism and handicraft sectors.

This model proposes that formal companiesinvest in the community of informal sectorworkshops which belong to their same sectorand link up to them in a core business activity.This would be the main driver of the model,rather than image building, brand product, ordirect answering to shareholders, stakeholders,watchdog groups, the law or the press. It wouldbring the formal private sector in a partnershipwith the informal private sector where themajority of the poor work – a partnership forlearning for the unskilled poor youths and earn-ing for both formal and informal sectors.

There is a need to move away from a cen-trally driven school-dominated modeltowards the informal sector learning labmodel


61

4

Ana

lysi

s of

Bus

ines

s fo

r D

evel

opm

ent

Eng

agem

entUnder this model formal companies’ current

charitable contributions towards educationwould go further towards serving business andcommunity interests because it would be drivenby the combined interests of the two.

Egypt’s youth have burgeoning needs whichthreaten the attainment of the MDGs. Youngpeople are concentrated in urban centers whichoffer the poor the best opportunities foremployment, shelter and development.However, when urban agglomerations housemounting numbers of unemployed youths,they become breeding grounds for discontent,extremism, and violence. The number of infor-mal settlements in Egypt has reached 1,221. InGreater Cairo alone they number an estimated

88 and are a mounting threat to internal securi-ty and stability. The need to engage young peo-ple in the economy and in the country’s growthand prosperity is not just the responsibility ofthe government, but of everybody, includingthe private business sector.

The belief that economic growth is an effectivepath to employment generation in all countriesand all levels of society overlooks the immediateand short-term problems facing those living inpoverty. They cannot make the leap from theirpresent condition to reap the benefits of policyapproaches that only facilitate formal sector jobopportunities.

5Towards anEnablingEnvironment forPartnerships

A significant finding of this report has been the importance of partnerships for development. Numerousinternational examples exist to demonstrate the variety and diversity of these. In Egypt, the questionbecomes: How can the three sectors – private, non-profit and government – design a partnership basedon a shared vision, shared values, and benefits? Can we institute a partnership of peers with each part-ner contributing skills and resources to achieve a winning idea – the development of enterprise and pros-perity for all Egyptians? The fruits of development take time to grow. Are we able to enter into long-term and collaborative action with a commitment to achieving the MDGs and more?

These are the central questions of this report.

Both the quantitative and qualitative phases of thestudy revealed that a number of companies are part-nering with other entities in philanthrophic or com-munity projects. These partnerships are between gov-ernment, civil society organizations and other privatesector firms, and include Apache’s partnership withUNICEF and NCCM and several firms’ partnershipwith INJAZ.

The qualitative phase of the study focused on compa-nies with a track record of social investments in thecommunity. It highlighted the large number and var-ied nature of partnerships involving all three sectors.They range from simple two-party partnershipsbetween one private sector firm and a donor (ABB-

EU and Barclays-USAID) to complex networks oforganizations and partnerships with NGOs.Examples of the latter include:

• Barclays – Resala, Hope Village• Hashem Brothers – Egyptian Association for

Environment and Community Service• BG - Nahdet El Mahrousa, Association for the

Protection of the Environment (APE)• Marriot – AFNCI• EMAK – Future Generation Foundation• Kandil Egypt – Ezbet Senouda Association for

Community Development• Hazem Hasan – Future Generation Foundation• Unilever – Consumer Protection Society, Rachid

Foundation for Cultural and Social Development,Egyptian Literacy Society


• Vodafone – Youth Association forPopulation and Development, ADEW,Resala, Hepca, Hemaya, Alashanek YaBalady

• NATGAS – Resala• Tetrapak,– Association for the Protection of

the Environment (APE), Horus Foundation,Friends of the Environment Association,Alexandria

Some firms have opted for partnerships withintermediaries such as business associations andinternational organizations. Examples are:

• ABB – Egyptian Industries Association• Hazem Hasan – Egyptian Association for

Auditing and Finance• Unilever – Rotary Club of Alexandria,

Scientific Society for Food Industries• Vodafone – Rotary• AAIB – CDS• BG – Save the Children• Maghraby Group – Social Research Center

(AUC), International Trachoma Initiative• Vodafone – NGO Service Center, CARE,

UNDP• Mobinil - UNICEF

Others see merit and sustainability for futuregenerations in partnering with universities andschools:

• AAIB – Cairo University• El Nekheily Brothers – Mansoura University• Maghraby Group – BC Center for

Epidemiology – University of BritishColombia

• Unilever – Arab Academy for Science andTechnology

• Vodafone – Misr Language School

A few have entered into public private partner-ships (PPPs), with either quasi-governmentalagencies or government ministries:

• Astra Zeneca – NCCM

• Kandil Egypt – Mubarak Kohl Program • BP – Ministries of Education and Interior • EMAK – Ministry of Communications and

Information Technology• Faisal Islamic Bank – Ministry of Social

Solidarity• Maghraby Group – Ministry of Health• Vodafone – Ministry of Education• Mobinil – Ministry of Interior, Ministry of

Culture• Tetrapak – Ministries of Education, Health,

Environment, Industry and Trade• Nestle – Ministry of Education• City Gas – Social Fund for Development,

Governorate of Suez• Unilever – Governorate of Alexandria

The main reasons cited by companies for notpartnering with other actors were that they hadnever been approached, lacked knowledgeabout other groups’ activities, or did not knowhow to approach and partner with others. Afurther reason given was that the activities/proj-ects which the firm had selected did not requirecooperation with other organizations.

There are many areas where partnership candevelop and trust be built:

• As previously highlighted, NGOs have valu-able experience in tackling child labor andare promising and essential partners for thenew design of business solutions towards theachievement of the MDGs.

• Vital changes in regulations relating to, forexample, licensing, zoning, land encroach-ment, environmental infringements can onlybe achieved through advocacy with nationalgovernment and municipalities and wouldhave important knock-on effects on devel-opment

• Individual companies cannot, in the main,fund business incubators and support cen-ters or provide sufficient mentoring support64

5

Tow

ards an Enabling E

nvironment for P

artnerships


for young entrepreneurs. Scaling up andreplicating successful partnership models insuch areas provide the only means to movefrom the current practice of dependency,particularly amongst youth, toward a vibranteconomy. They also have the potential tohalt the growth of the alarming number ofdiscontented, idle youths in Egypt

• Business leaders, business associations andchambers of commerce also have an especial-ly important role to play in addressingthrough policy dialogue the bureaucraticprocesses which face small companies tryingto register and the insecurity of land tenurein informal settlements (where workers ofthe formal private sector live)

• The situation with the current high levels ofilliteracy can only be tackled through part-nerships with experienced NGOs, the AdultEducation Authority and all stakeholders.

This will require a major paradigm shift from‘project focus’ to national policy focus.

THE ROLE OF INTERMEDIARIES

The results of the quantitative and qualitativeresearch and the review of international bestpractice suggest that intermediaries promotingand facilitating partnerships play an importantrole. They help identify suitable partners, planand implement collaboratively and design proj-ects that are more comprehensive. In Egypt,intermediaries include business associations,chambers of industry and commerce, interna-tional organizations, local and internationalNGOs and public private partnerships.

1. Business Associations

a. Development Financing and TechnicalSupport AssociationsA large variety of these exists with the pio-neering work begun more than two decades

ago by the Alexandria Business Association.Along the same lines the Ismailiya BusinessAssociation, the Port Said BusinessAssociation, the Dakahleya BusinessAssociation, the Assuit Business Association,etc. have all engaged in partnerships withdonors to provide much-needed funds toexisting SMEs at the local level. Non-finan-cial services have also been channeled tohundreds and thousands of small businesses.These include assistance in product design,marketing, pricing, promotion, and one-stop shops for business registration. Manyhave become autonomous from the originaldonors and have generated funds from thefast turnaround of their revolving loanfunds. They have spun off special creditlines for women in general, for female-head-ed households in particular, and for microbusinesses at large.

b. American Chamber of Commerce(AmCham)The American Chamber of Commerce’sCSR Committee was established in 2006with the goal of creating a forum to raiseawareness and promote constructive dia-logue on CSR. It also seeks to facilitatecross-sector partnerships and foster effectiveand mutually beneficial relationshipsbetween businesses and the communities inwhich they operate. The committee plans toinstitute an annual CSR award for goodpractices for large companies and SMEs, aswell as initiating dialogue with the Ministryof Social Solidarity with a view to creating anational CSR agenda.

The CSR Committee’s greatest strength liesin the fact that AmCham in Egypt is one ofthe largest and most active overseas affiliatesof the US Chamber of Commerce. Itcurrently has over 1,300 members consistingof US companies doing business in Egyptand Egyptian companies doing business inthe US. 65

5

Tow

ards

an

Ena

blin

g E

nvir

onm

ent

for

Par

tner

ship

s


c. Federation of Egyptian Industries (FEI)Egyptian entrepreneurs established FEI in1922. Today it has 16 chambers and 12decision support committees that are con-stantly developing programs and services totackle barriers to enterprise developmentand strengthen the entire industrial sector.FEI’s vision is to develop realistic, value-richprograms designed to enhance the perform-ance and global competitiveness of Egypt’sindustrial sector.

The largest business association in Egypt,FEI launched the UN Global Compact(UNGC) initiative in February 2004,declaring Egypt to be the first Arab countryto embrace formally the notion of CSR. InApril 2007, FEI officially became a UNGCmember.

By disseminating knowledge and best prac-tices, developing practical tools tailored tothe local environment and providing othermeans of support, FEI will help Egyptiancompanies develop CSR strategies andmainstream CSR principles within variousindustrial sectors. FEI collaborates closelywith the government, international donors,other business associations, and civil society.

2. International Social EntrepreneurshipGroups: Ashoka

Ashoka is an international association of theworld’s leading social entrepreneurs. A leadingsocial entrepreneur is a mass recruiter of localchange-makers, a role model, proving that citi-zens who channel their passion into action canattain remarkable achievements.

Since 1981, Ashoka has elected over 1,800 lead-ing Ashoka Fellows, creating a global networkof peers in more than 60 countries. Ashoka’smethodology revolves around three mainapproaches: supporting social entrepreneurs,promoting global entrepreneurship and build-

ing sector infrastructure. Ashoka is building aninfrastructure that supports the growth andexpansion of the field of social entrepreneur-ship, including seed financing and capital,bridges to the business and academic sectors,and strategic partnerships that deliver social andfinancial value. Ashoka launched its Cairooffice in March 2003. It is a hub for operationsin North Africa and the Middle East, engagingregionally-based social entrepreneurs in allmajor fields of social concern. These includeeducation, health, women’s empowerment,human rights, peace and conflict resolution,democracy, environment, economic develop-ment, agriculture, water, disability, early child-hood development and children’s rights.

In Egypt, Ashoka creates a ‘space’ and platformfor dialogue between the business and NGOsectors. Forging a strategic partnership with theEgyptian Junior Business Association (EJBA)and Young Presidents’ Organization estab-lished an entry point to the private sector andintroduced members to the concept of socialentrepreneurship. With its partners, Ashokaholds roundtable events where speakers fromthe private sector and civil society share theirexperiences of collaboration for communitydevelopment.

The “Business Plan Competition” is a nine-month training program for NGOs on how tobe financially sustainable. The initiative is sup-ported by a number of private sector compa-nies, such as Citibank and Barclays Bank, inaddition to the EJBA. These organizations vol-unteer staff time to assist NGOs in developingself-sustainable projects.

Ashoka attempts to raise awareness of CSRthrough the media. It regularly translates andcirculates, among a wide network of journalistsand key figures in the media, international arti-cles on CSR and corporate engagement indevelopment.

66

5

Tow

ards an Enabling E

nvironment for P

artnerships


3. UNDP and the Global Compact in Egypt

The Egyptian national network of the GlobalCompact was formally launched on February 9,2004, following a year of dedicated work by amulti-stakeholder committee under UNDPleadership, with the UN Executive Office of theSecretary General’s Chief of Staff representingthe UN Secretary General. Some 200 partici-pants from government, the private sector,chambers of commerce, academia and civilsociety attended the event and 62 companieshave since become members. The launch waspreceded by a series of workshops and a nation-al event to popularize the Global Compact andthe concept of CSR in Egypt.

In its attempt to strengthen further the imple-mentation and outreach of the Global Compactin Egypt, the Egyptian Global Compact net-work held a national event, under the patronageof the Prime Minister, to mark its first anniver-sary in Egypt and fifth anniversary since itsglobal launch. The national event, jointlysponsored by the UN in Egypt and MansourGroup, a leading Egyptian company, took placeat the Library of Alexandria on 16 June 2005.Attended by more than 250 business represen-tatives, it succeeded in increasing awareness ofthe Global Compact in Egypt and recognizingthe efforts made by a number of active Egyptiancompanies in implementing its principles.Egyptian Global Compact members showcasedsome CSR best practices and discussed withother stakeholders how to enhance the privatesector’s contribution to national developmentpriorities.

The Egyptian network is currently working toestablish what will be called the NationalGlobal Compact and CSR Foundation inEgypt. The newly created institution willbecome a vehicle for enhancing and encourag-ing business contributions to development andinternal CSR compliance.

The emergence of the Global Compact inEgypt at a time when CSR was not a frequenttopic for discussion, and subsequent develop-ments leading up to the current situation whereCSR is commonly discussed, provides a uniqueopportunity for engaging, monitoring and eval-uating the enabling environment for socialengagement in Egypt. This is an aggregate ofseveral factors.

GOVERNANCE FACTOR

The recent raft of regulations, designed toimprove the investment climate, have not beenaccompanied by regulations to promote socialengagement or CSR. Private sector companiesoften voice their dissatisfaction regarding out-dated regulations hindering their social engage-ment, citing in particular tax exemption regula-tions and registration procedures for privatesector foundations. Despite officials expressingcommitment to CSR, it is yet unclear how thegovernment will address this issue.

LEARNING, MONITORING AND EVALUATION FACTOR

• There is a pressing need for an annual CSRauditing tool and reporting system to moni-tor and evaluate companies’ engagement

• Very few CSR promoters in Egypt have thenecessary background and technical capacityto carry out their work

• Social engagement in Egypt is poorly man-aged, usually unplanned and ad hoc with noidentified benchmarks

• Very few academic institutions in Egyptteach business ethics and social engagement.The American University in Cairo (AUC) isone of the few that does.

• MNCs have sophisticated monitoring andevaluation systems but they are insufficient-ly tailored to the local culture 67

5

Tow

ards

an

Ena

blin

g E

nvir

onm

ent

for

Par

tner

ship

s


INTERMEDIARY (NEUTRAL GROUND)FACTOR

• A mediator or trustworthy neutral partner isessential to establish multi-stakeholderforums capable of overcoming competitiveand PR elements in CSR practices in Egypt

• The mediator can play a crucial role in con-necting the private sector to other stakehold-ers such as the government and civil society

• The mediator should be an independentdevelopment organization, a business associ-ation or business development service unit

4. International NGO Partnership Programs - INJAZ

INJAZ started up in Egypt in 2003 under theumbrella of the international NGO Save theChildren. INJAZ, meaning “Achievement” inArabic, is licensed to use Junior AchievementInternational curricula to enhance young peo-ple’s job market and entrepreneurial skills.

The INJAZ vision derives from the realizationthat school graduates are ill prepared for thechallenges they will face when seeking employ-ment and aims to close the gap between theskills acquired in the Egyptian education systemand those demanded by the private sector.

The private sector’s support of INJAZ is notpurely financial, but more importantly,involves employee volunteers. INJAZ hasformed a board of directors represented by theCEOs of leading private sector companies andis registered as an independent private sector-led Egyptian Foundation. It is supported byMobinil, Citigroup, Americana Group, BritishGas, British Petroleum, Mansour Group,ExxonMobil, Barclays Bank, Pepsi, Shell, andProcter & Gamble.

Private sector volunteers commit 10 hours permonth to reach out and inspire a class of stu-

dents. Courses are based on a participatorylearning approach which fosters creative think-ing, critical problem-solving and improvedinterpersonal communication skills. The proj-ect is structured to reinforce company volun-teers’ commitment and individual empower-ment. It does this by fostering a sense of soli-darity and highlighting the organization’s cred-ibility and neutrality.

UNDP and Save the Children agreed to grantUN Volunteer Associate (UNVA) status to over130 employees from participating companiesteaching entrepreneurial skills and providingcareers advice in Egyptian governmentalpreparatory schools for children between theages of 10 and 13. UNVA status also gives cor-porate volunteers access to a worldwide net-work of volunteer organizations.

5. Academia: John D. Gerhart Center forPhilanthropy and Civic Engagement,American University in Cairo

The Gerhart center is a university-based institu-tion offering resources for the promotion ofphilanthropy and civic engagement in the Arabworld. Established in 2006, the center aims tofurther the American University in Cairo’s(AUC) mission to advance social responsibilityand active citizenship. The center’s mission is topromote social change in the Arab regionthrough building a culture of effective givingand civic responsibility.

The center’s work on civic engagement includesinterfacing with Arab universities to becomemore engaged with their surrounding commu-nities and promoting cross-cultural understand-ing and diversity through international pro-grams with a focus on local community service.The center encourages community based learn-ing (CBL) as a fundamental approach to effec-tive teaching and fosters social innovationthrough student leadership programs, seminarsfor young professionals, and programs to link68

5

Tow

ards an Enabling E

nvironment for P

artnerships


government institutions with civil societyorganizations.

On philanthropy the center acts as a catalystproviding technical consulting services to start-up and expand philanthropic institutions in theArab region. The center also works with the pri-vate sector to deepen the understanding of theprinciples of Corporate Social Responsibility(CSR). The center’s staff document the statusof Arab philanthropy while highlighting bestpractices, and promote networking opportuni-ties and strategic alliances for enhanced philan-thropy in the Arab region and internationally.

The Gerhart Center also engages in researchand documentation on subjects ranging frommotivations of youth activism to mapping ofArab philanthropy and disseminates informa-tion widely through a quarterly newsletter, aseries of scholarly working papers and website. 6. Public Private Partnerships - EgyptEducation Initiative

The Egypt Education Initiative (EEI) is a pub-lic private partnership (PPP) under the auspicesof First Lady, Mrs. Suzanne Mubarak, andPrime Minister Dr. Ahmed Mahmoud Nazif.It aims to improve education in Egypt throughthe effective use of information and communi-cation technology (ICT). EEI brings togetherthe Ministries of Communications andInformation Technology, Education andHigher Education, donors and MNCs,amongst them eight World Economic Forummember companies. These are Cisco, HP,IBM, Intel, Microsoft, Oracle, CA andSiemens. They, along with all other partners,have assisted in formulating the initiative tomeet national challenges and needs. EEI hasfour tracks - pre-university education, highereducation, lifelong learning, and e-learningindustry development. It hopes to benefit

around 820,000 young people in 2,000 schoolsand 300 universities as well as to develop thecapacity of the local IT industry to adopt inno-vative learning solutions.

EXAMPLES OF GLOBAL COLLECTIVEACTION 55

The Global Compact

In an address to the World Economic Forumon 31 January 1999, the former SecretaryGeneral of the United Nations, Kofi Annan,challenged business leaders to join an interna-tional initiative – the Global Compact – thatwould bring companies together with UNagencies, labor, and civil society to support uni-versal environmental and social principles. TheGlobal Compact’s operational phase waslaunched at UN Headquarters in New York on26 July 2000. Today, thousands of companiesfrom all regions of the world, internationallabor and civil society organizations are engagedin the Global Compact, working to advance tenuniversal principles in the areas of humanrights, labor, the environment and anti-corrup-tion.

Through the power of collective action, theGlobal Compact seeks to promote responsiblecorporate citizenship so that business can bepart of the solution to the challenges of global-ization. The private sector, in partnership withother social actors, can help realize the previousSecretary General’s vision: a more sustainableand inclusive global economy.

The Global Compact is a purely voluntary ini-tiative with two objectives:

• Mainstream the ten principles in businessactivities around the world

• Catalyze actions in support of UN goals

69

5

Tow

ards

an

Ena

blin

g E

nvir

onm

ent

for

Par

tner

ship

s

55 Davies, Robert and Nelson, Jane. The Buck Stops Where? Managing the Boundaries of Business Engagement inGlobal Development Challenges, The Prince of Wales International Business Leaders Forum, Policy Paper No. 2,January 2003.


To achieve these objectives, the GlobalCompact offers facilitation and engagementthrough several mechanisms: policy dialogues,learning, country/regional networks, and part-nership projects. http://www.unglobalcom-pact.org

Business Partners for Development (BPD)

Business Partners for Development (BPD),completed in 2002, was a project-based initia-tive set up by the World Bank to study, sup-port, and promote strategic examples of cross-sector partnerships to develop communitiesaround the world. It was created in the beliefthat such partnerships could provide long-termfinancial benefits to the business sector andmeet the objectives of civil society and the stateby creating stable societies. BPD worked infour areas -natural resources, water & sanita-tion, youth development and road safetyhttp://www.bpdweb.orgVoluntary Principles on Human Rights

The US and UK governments, NGOs andcompanies in the extractive and energy sectorshave developed a set of voluntary principles toguide companies in maintaining the safety andsecurity of their operations within a frameworkguaranteeing respect for human rights and fun-damental freedoms. These principles aredesigned to provide practical guidance that willstrengthen human rights safeguards in compa-ny security arrangements in the extractive sec-tor. They are the basis of a global standard forthe extractive sector.http://www.iblf.org/csr/csrwebassist.nsf/con-tent/a1a2a3d4a5.html

Global Business Coalition on HIV/AIDS

The Global Business Coalition on HIV/AIDS(GBC) is a rapidly expanding alliance of inter-national businesses dedicated to combating theAIDS epidemic through the deployment of thebusiness sector’s unique skills and expertise.

The GBC works from the principle thatHIV/AIDS should be a core business issue forevery company, particularly those with interestsin heavily affected countries. With the supportof global leaders in government, business, andcivil society, the GBC promotes greater part-nerships in the global response to HIV/AIDS,identifying innovative opportunities for thebusiness sector to join the growing globalmovement against this terrible disease.http://www.gbcaids.com

Digital Partnership

The international Digital Partnership involvesIT users and suppliers, educators and commu-nity leaders with the aim of promoting socio-economic development in developing andemerging market economies. It facilitatesaffordable access to technology, training, andthe internet by providing ICT skills training indisadvantaged communities. An initial pilotwas launched in South Africa in June 2002.http://www.digitalpartnership.orgExtractive Industries Transparency Initiative

The Extractive Industries TransparencyInitiative was announced in 2002 by UK PrimeMinister Tony Blair at the World Summit onSustainable Development in Johannesburg.Bringing international NGOs, national govern-ments and international mining and mineralcompanies together, this initiative aims toincrease transparency over payments by compa-nies to governments and government-linkedentities, as well as transparency over revenues byhost country governments.http://www.dfid.gov.uk/Pubs/files/extractive_industries_transparen.htm

Marine Stewardship Council

The Marine Stewardship Council (MSC) is anindependent, global NGO working to reversethe continued decline in the world’s fisheries.70

5

Tow

ards an Enabling E

nvironment for P

artnerships


The MSC is seeking to harness consumer pur-chasing power to generate change and promoteenvironmentally responsible stewardship of theworld’s most important renewable food source.First established by Unilever and WWF in1997 the MSC program works through amulti-stakeholder partnership approach, takinginto account the views of all those seeking tosecure a sustainable future. http://www.msc.org

PARTNERSHIPS NEED STRONG,TRANSPARENT GOVERNANCE STRUCTURES

The discussion above leads to the conclusionthat, if Egypt wants to establish sound founda-tions for a strong formal and socially responsi-ble business sector, it will have to create newinstitutions, undertake legal reforms and facili-tate the establishment of multi-stakeholderpartnerships. Measures include the enactmentof new laws to help formalize small businesses,promote their compliance with health and safe-ty standards, prohibit the employment of chil-dren and raise the quality of production toguarantee consumer safety.At present, the private sector in many countriesaround the world, faces the following chal-lenges to engaging in development activities:

• Inadequate legal frameworks and gover-nance structures to ensure a level playingfield for business

• Weak, authoritarian and failing public sectorinstitutions

• Bribery and corruption• Human rights violations• High levels of poverty and inequality in the

distribution of resources and livelihoodopportunities

• Lack of access to basic services such as edu-cation, healthcare, energy, water, sanitationand telecommunications

While the private sector expresses a desire and

commitment to improve conditions for peopleat the base of the pyramid in Egypt, as encapsu-lated in the MDGs, they cannot do so effective-ly and in a sustainable manner unless certainconditions prevail. They need to be able tooperate in an environment that provides a min-imum of structure, due process, and good gov-ernance; to operate in partnership with the gov-ernment and civil society; and to enjoy incen-tives for long-term, innovative engagement.New development solutions will often requiremajor investments and these will not be forth-coming without guarantees that companies,and the communities they partner with, willreap the benefits and that the risks to their busi-nesses are minimized.

Streamlining registration procedures forNGOs, be they community-based developmentNGOs or foundations, is equally important.The current legal process for registering foun-dations is outlined below.

Law 84 of 2002 governs the registration ofNGOs and foundations. Those intending toregister either such institution purchase the rel-evant forms from the Federation of NGOs atgovernorate level. The Federation issues aninternal bye-laws document and forms requir-ing the founding members to provide personaldetails such as their full name, date of birth,occupation, address, highest degree attained,national identity number, etc. The legaladdress given can be either owned or rented bythe organization and is verified by a Ministry ofSocial Solidarity employee. A foundation isrequired to deposit a minimum sum of LE10,000 in a bank account, whereas NGOs areonly obliged to open up a bank account con-taining a few hundred pounds. The registrationdocuments must state the proposed activities ofthe organisation - social, development, reli-gious, cultural, etc - and the applicants mustverify that no other non-profit has registeredunder the name proposed. Once these docu-ments are submitted to the local Directorate of 71

5

Tow

ards

an

Ena

blin

g E

nvir

onm

ent

for

Par

tner

ship

s


Social Solidarity the entire file passes to thesecurity agencies who must give approval for allnominees to engage in non-profit activities andto become members of a registered NGO. Thisstep may take as little as two months or as longas two years. When proposed members receivesecurity clearance, the file is returned to theMinistry of Social Solidarity which, in turn,issues the group with a registration number.The establishment of the new organization, beit NGO or foundation, appears in the Egyptianlegal bulletin: al wathaa’eq al masreyya.

The governance structure of foundations andNGOs differs. NGOs are required to nominatea minimum of ten founding members with theoldest founding member appointed head of thefirst board until registration is complete andelections take place. NGOs must also deter-mine at the outset how many members theyplan to have on the board. It has to be an oddnumber of no less than five to enable majorityvoting. Foundations must nominate three peo-ple to their leadership posts and can registereither an individual or group as founders.Foundation board membership does not needto rotate, whereas NGOs need to renew onethird of their board annually or every two years.

Once established, NGOs must hold quarterlyboard meetings and request approval from theMinistry of Social Solidarity to receive foreignfunds, a rule to which foundations are alsobound. Both may receive donations fromEgyptian nationals or corporations. TheMinistry of Social Solidarity must clearfundraising activities, the start and completionof which must be stipulated, and numberedreceipts must be provided. There is evidencethat this framework is not conducive to an envi-ronment which promotes partnerships.

IBLF’s 2002 report Business and Poverty:Bridging the Gap, states that, for companies toget more actively involved in tackling poverty,the following must be present and that businessbenefits accrue56:

• Secure business environment - Ensuringgood governance, a strong economy and acompetent workforce can help companiesand the poor to prosper

• Bottom-line benefits - Action on povertycan contribute to profitability for individualcompanies

• Market development – Innovation unlockscommercial opportunities while meeting theneeds of the poor

Private sector interviewees in Egypt suggestedhow the government could facilitate businessengagement in development.

• Reduce bureaucracy and red tape (e.g.licensing procedures and approvals)

• Understand and promote CSR, activelyencouraging the private sector to participatein the country’s development by supportingtheir efforts and co-financing projects

• Gain the trust of the private sector bydemonstrating that government is a trans-parent, efficient partner

• Establish a focal point in a relevant ministrywith members of the private sector and civilsociety forming its advisory group

• Create synergies between pro-developmentbusiness engagement and UNDP's SocialContract Project, implemented by theInformation Decision Support Center(IDSC), the Prime Minister’s Office

• Give tax breaks and other incentives to pri-vate sector donors

• Draw up a map of needs, gaps, etc and pres-ent a clear development plan and ready pro-

72

5

Tow

ards an Enabling E

nvironment for P

artnerships

56 Forstater, Maya, MacDonald, Jacqui and Raynard, Peter. Business and Poverty: Bridging the Gap. Resource Centerfor the Social Dimension of Business Practice, The Prince of Wales International Business Leaders Forum, December2002.


posals to interested business and communitymembers

• Establish a CSR partnership monitoring andevaluation system to ensure programs areimplemented fully and effectively and thateffective solutions and gaps are identified

• Co-design specific activities with privatecompanies, particularly those related to basicneeds in the areas of healthcare, food securi-ty, and education. In other words, the gov-ernment should make sure that CSR initia-tives complement its own

• Help create a clear vision with regards to theachievement of national development goalsin which effort and investment are equallydistributed, duplication is avoided and con-crete impacts are identified

• The Ministry of Social Solidarity should beproactive in providing direction and supportfor CSR and pro-development programs,encouraging the growing role of NGOs andamending legislation to empower them

• Identify best practice and replicate / scale upsuccessful models

• Provide reliable baseline data on Egypt’sperformance on the MDGs and povertyindicators

The private sector in Egypt is clearly looking fora closer engagement with government on CSRmatters and would strongly welcome aroadmap, a proposal, or a strategy on develop-ment issues.

Further aspects that the study explored are thecurrent level and degree of stakeholder partici-pation in development issues in Egypt, and oftransparency, accountability and public report-ing and the environment in which such engage-ment takes place. This is based on the premisethat, if the business sector in Egypt is to assumea groundbreaking, significant, and innovativerole in the development of sustainable liveli-hoods, then transparent and strong stakeholderrelationships are a prerequisite.

At present communication channels betweenthe private sector, NGOs and the governmentare weak. This is due to NGOs’ limited capa-bility to approach potential private sector part-ners appropriately and to a general mistrustbetween the three sectors. The media has amajor role to play in bringing the private andnon-profit sectors closer together, yet it too ispoorly informed and reports inaccurately aboutevents, partners, actions, and programs.

Improved dialogue among stakeholders requiresa strong and articulate civil society sector thatdemands public accountability from business,monitors, and reports on environmentalinfringements and influences decision-makingregarding the allocation of public funds. Aspreviously stated, this requires that general gov-ernance is improved and all sectors becomemore accountable, transparent, inclusive, andethical.

Egypt has signed and ratified major interna-tional instruments fighting corruption andreinforces their implementation through theEgyptian Penal Code. The Ministry ofInvestment and Egypt’s UNDP country officehave also embarked on a challenging programto support transparency and anti-corruptionmeasures by establishing a transparency centerat the Ministry. The initiative will have threemain thrusts:

a) Support the drafting and issuing of the legaldocument on Freedom of Information

The project will focus on providing technicalassistance to the Ministry’s legal department inthe provision and drafting of the sections whichfollow the mandate of the Ministry, in the legaldocument on Freedom of Information

There are four strategic areas of intervention:

1. Legal framework of access to information2. Capacity strengthening of the media 73

5

Tow

ards

an

Ena

blin

g E

nvir

onm

ent

for

Par

tner

ship

s


3. Raising awareness regarding the right to offi-cial information and strengthening mecha-nisms to provide such information and use it

4. Strengthening communication mechanismsfor vulnerable groups

b) Public Awareness and StakeholderEngagement

The project will also focus on increasing publicawareness in order to support the enhancedtransparency process.

Strategic and long term interventions are fea-tured in two components: the supply side ofinformation and the demand side thereof. Onthe supply side, interventions will be designedto offer assistance in the process of generationof information and its accessibility on the partof government agencies. On the demand side,they will seek to provide assistance in promot-ing demand for information and build capacityto use information for informed policy dia-logue. Finally, the project seeks to assist in cre-ating platforms of multi stakeholders who willuse the transparent access to information forthe purpose of engaging in policy dialogue.The project hopes to increase responsiveness viasuch platforms.

Including the private sector is imperative in theimplementation of successful anti corruptionstrategies. The positive relationship betweenthe Ministry of Investment (MoI) and the pri-vate sector should be utilized for the followingpurposes:

• To provide a constructive forum for the pri-vate sector to voice their concerns about theembedded incentives for rent-seeking in thepublic sector; this would assist the MoI andUNDP to design relevant strategic entrypoints for anti corruption initiatives.

• To provide a constructive platform for theprivate sector to voice their concerns aboutissues surrounding lack of transparency

within the private sector as well as prioritiesfor stronger private corporate governanceupon which the MoI and UNDP mightwant to base a strategy for anti corruptioninside the private sector.

• To build an alliance for a stronger presenceof Global Compact, the UN agreement onCorporate Social Responsibility, in the anticorruption campaign.

c) Capacity Building and KnowledgeManagement

The project will support the institute ofDirectors in developing training courses andtraining of trainers programs on anti-corrup-tion to be included in their curricula on goodgovernance. The project will also conductmuch needed research and reform the currentknowledge management system utilized byMOI.

d) Investment promotion through enhancingtransparency

The purpose of this output is to improve theinvestment climate and stimulate more invest-ment by improving the performance of theMinistry of Investment through the reductionof bureaucracy and increased transparency.

CONCLUSION

It is clear from the above discussion that thesearch for the right intermediary and umbrellagroup under which the private sector can cometogether and collaborate has begun. Somecompanies choose their own business associa-tions, others international development agen-cies or neutral agencies with a broad agenda,others prefer to operate under the umbrella of anational program, hoping that they will be ableto impact positively an issue which the govern-ment has targeted but has few resources toaddress. The international examples offeredabove demonstrate the breadth and scope of74

5

Tow

ards an Enabling E

nvironment for P

artnerships


intermediaries that exist in Egypt. For example,it is conceivable that a group of large nationalagribusiness firms will form a coalition to pre-vent environmental and human damage causedby pesticide use. This would bring small farm-ers and large landowners together in a seriousdiscussion. Such business engagement couldincrease Egypt’s competitive position in theexport markets for agricultural produce.

Likewise, indigenous people and the rapidlyexpanding tourist industry could work togeth-er, under an umbrella intermediary, to promoteeco-tourism and curb the fast growing destruc-tion of coral reefs, waterways, and marine bio-diversity. The field is wide open for partner-ships to address Egypt’s myriad developmentneeds and concerns.

75

5

Tow

ards

an

Ena

blin

g E

nvir

onm

ent

for

Par

tner

ship

s

6

6The Way

Forward

The final chapter of this report focuses on actions that the private sector can take to help meet the firstthree MDGs. They serve as examples that could be applied to the full scope of the eight MDGs. Theyoffer engagement options along the continuum running from mainstream core business practices to pol-icy, advocacy and philanthropic and voluntary contributions.

The last decade began with the promise that globaliza-tion and the elimination of trade barriers would con-tribute to global prosperity. This has not happenedfor billions of the world’s poor. The world is nowprobing for ways to bring the masses of people at theBOP into the development net. The global commu-nity has reassessed its pursuit of globalization as an endto poverty and concluded that a new paradigm of busi-ness and development is urgently needed, particularlyin light of global warming and its potentially devastat-ing effects on those at the BOP. The global debatenow perceives them to be the main consumers ofgoods and services produced by business and stressesthe importance of improving their standard of living.

GOAL 1: ERADICATE EXTREME POVERTYAND HUNGER

Corresponding Government Ten PointProgram:

Program 1: Investment and EmploymentProgram 4: Building an Information SocietyProgram 7: Expanding Basic Public Services

Core Business Engagement by Providing AffordableProducts and Services

Model 1: The poor in Egypt lack access to water, san-itation, and affordable housing. Mexican firmsCemex and Construmex provide us with models toimprove housing which Egyptian private sector firmscould replicate, both in rural and urban areas and par-ticularly in Upper Egypt. The rural poor seek accessto credit to install on-site sanitation and, when grant-ed, have good repayment rates. There is further scopefor banks, contractors, and producers of plumbing,tiling, etc to partner in an innovative way to bringthese products to the poor. Such improvementswould have very positive repercussions on the healthof people at the BOP, as, for example, dirt floors and


the lack of toilets often account for low stan-dards of hygiene in rural homes. The GrameenBank asserts that repayment rates on loans tocover dirt floors with cement have reached 98%worldwide, indicating that banks would beexposed to minimum or very low risk were theyto offer special products for small borrowers insuch areas. Easy delivery terms and linkageswith NGOs experienced in implementingmicro-credit programs can be designed throughwhich companies would generate profits andliving conditions be upgraded.

Model 2: Information technology has beenused innovatively in many parts of the develop-ing world to generate incomes (e.g. usingmobile telephony to connect small farmers inIndia to distant agricultural commodity mar-kets). Egypt ranks as the one of the world’smajor users of mobile phone technology rela-tive to population, suggesting that IT productscould be used here to provide people with rapid

and low-cost market and product informationthat, evidence suggests, is currently highlysought and greatly lacking. Such informationcould greatly enhance the competitiveness ofsmall producers, workshop owners, and female-headed households who have limited mobilityand access to such information.

Other Models: 57

• Manufacturing, food and beverage and con-sumer goods companies can source raw mate-rials from local suppliers

• Agribusiness companies can work with smallfarmers in global supply chains to providecredit, improve productivity and food quali-ty

• All large companies can outsource or subcon-tract support activities to local entrepreneurs

• Consumer goods companies can use SMEs todistribute their products


At the other end of the CSR continuum, busi-nesses can sustain their religiously and cultural-ly motivated modes of giving. Supportingorphanages, feeding the poor during Ramadan,distributing food and clothing to the needy,providing free medical care, etc are all impor-tant activities that meet the poor’s everyday andemergency needs.

The business sector can expand or initiatemainstream CSR and community investmentprograms, such as workplace training to gradu-ates, school construction, equipping of comput-er labs, upgrading health clinics, etc.

Pharmaceutical firms, hospitals and the health-care sector in general have a major role to playin a country where many people are still unableto access adequate health services and where thelack of health education has devastating affectson the poor. Training midwives, nurses, rural

78

6

The W

ay Forward

NGOs

Banks

Construction Co.

Mobile Phone Co.’s

Export Markets StockMarket

Small Farmers, tradersSME workshops

57 Prescott, Dave and Nelson, Jane. Business and the Millennium Development Goals: A Framework for Action. ThePrince of Wales International Business Leaders Forum in Collaboration with the United Nations DevelopmentProgram, 2003


doctors, and generally communicating morewidely on relevant health issues could bringabout significant improvements.

GOAL 2: ACHIEVE UNIVERSAL PRIMARY EDUCATION

Corresponding Ten PointGovernment Program: Program 4: Building anInformation SocietyProgram 5: Developing Education andScientific Research


1. Facilitate the education of employees’ chil-dren: Although a number of Egyptian firms arealready active in this field, current governmentand others’ efforts to upgrade human resourceswill remain inadequate without further supportfrom the private sector. Extending scholar-ships, providing summer school opportunitiesfor workers’ children and helping low-incomeworkers to cover expenses relating to, for exam-ple, tuition, uniforms and books are all meansby which companies can help.

2. Support school feeding programs:Companies in the agribusiness sector can tapinto the expertise of the World Food Program(WFP) which implements school feeding pro-grams in Egypt. With its extensive knowledgeof areas of greatest need, effective distributionoptions, and experience of overcoming obsta-cles, WFP can link companies to those areas ofmost need and facilitate partnerships with theMinistry of Education that can also facilitateprivate sector food contributions by institutingstreamlined processes that overcome the currentcumbersome procurement system.

3. Invest in local schools or support the workof NGOs and international organizationsspecializing in education: This can be throughfinancial or in-kind contributions (e.g. books,technology and equipment) to schools, toNGOs working in the field of education or via

intermediaries who can pool the contributionsof a number of scattered efforts and direct themto one region (e.g. Upper Egypt) or educationlevel (e.g. primary). Collectively or individual-ly, companies can organize programs to mentorstudents and link them to the world of work.Those with well-established management sys-tems can transfer skills to school principals andadministrators. Such interventions are particu-larly timely, as Egypt has just concluded itsNational Education Strategy that focusesstrongly on quality and accrediting schoolsaccording to newly established national stan-dards.

4. Harnessing Technology for Education:Under the umbrella of the Egypt EducationInitiative, IT companies, the Ministry ofEducation and a number of experimentalschools have already come together to form apublic private partnership to this end.However, the program is limited in its geo-graphic scope and must be targeted to, in par-ticular, the poorer segments of rural Egypt.The Ministry of Education’s continuedinvolvement will be key in facilitating the pro-liferation and use of IT products in publicschools.

5. Provide pre-school and daycare services forchildren of all company employees, not justwomen. Such services can make a major con-tribution, both to higher worker productivity

79

6

The

Way

For

war

d

Companies

NGO’s

Ministry ofEducation

Ministry ofSocial

Solidarity

The FoodBank

Workers–Male andFemale


resulting from reassurance about their chil-dren’s whereabouts, and to meeting the criticaldevelopment and preparation needs of childrenbelow the age of six. The Ministry ofEducation has set the target of raising pre-school enrollment from 18% to 60% by theyear 2012. Large and medium firms can play amajor role by offering their employees thisessential basic service at subsidized cost by, forexample, partnering with NGOs experts intraining young, unemployed youths to becomequalified pre-school teachers. The pre-schoolmodel is flexible and can incorporate, amongstother things providing nutritional supplementsfor preschoolers.

Advocacy and Policy Dialogue

Develop national partnerships with educa-tors around quality of education issues:Replicating the Instituto Qualidade no Ensinomodel from Brazil, which was instituted by theAmerican Chamber of Commerce’s 3000members in São Paulo, businesses can collabo-rate with the Ministry of Education in con-tributing to this much-needed aspect of educa-tion reform. Business associations in Egyptpresent ready intermediaries to play a similarrole, basing their program on a needs mappingexercise undertaken by intermediaries e.g. largenational NGOs or international agencies suchas UNDP, CIDA, UNICEF, and / orUNESCO while the appropriate targeting ofresources can be facilitated by the Ministry ofEducation.

GOAL 3: PROMOTE GENDER EQUALITY AND EMPOWER WOMEN

Corresponding Government TenPoint Program: Program 1: Investment andEmployment

Core Business Engagement

Millions of women of all income and educationlevels contribute to their families’ well-being.

In rural Egypt, women are a mainstay of theagricultural workforce, putting in endless hoursof unpaid manual labor and working witharchaic tools and implements. There are manyways in which businesses can, and do, supportwomen who make valuable contributions tohousehold incomes, both in rural and urbaninformal enterprises. Many NGOs have a longtrack record of lending to female-headed house-holds and to other rural and urban women pro-ducers. These models can be easily replicatedand scaled up by banks and lending institu-tions. There is also room for agricultural inno-vation and design e.g. solar drying of foodproducts, growing new crops for export markets(e.g. herbs, etc), linking small farmers to theseexport markets and high-end value chains, aswell as in the design of home-based rural hand-icrafts by leading designers and marketingfirms. The model can be as simple or as com-plex as the situation allows. Egypt already hastried and tested examples of this type of engage-ment in Sekem, EQI and Shahira Mehrez’sdevelopment of the handicrafts workers of theNorth Sinai. Potential partners in this modelare large businesses, small producers, banks,consultants and donors.

Advocacy and Policy Dialogue

At present technical vocational education forthe millions of workers in the informal sector –both men and women - who wish to enter theformal labor market but do not possess the req-uisite skills and qualifications is being debated.The ministries involved have a major andurgent facilitator role, engaging in particularthe private sector, which, after all, is most80

6

The W

ay Forward

Egypt’sYouth

MOEBusiness Associations

Donors

NGO’s


affected by the current skills deficit amongstyoung men and women, but also ensuring thatinter-ministerial boundaries of responsibilityand authority do not stall progress. An analysisof the current skill levels and growth potentialof different business sectors in Egypt, in thecontext of global markets, would help ensurethat relevant standards are designed and imple-mented by government-run technical vocation-al schools.

Donors such as GTZ and CIDA could supportthis effort by providing Egypt with best practicefrom other countries that have already devisedand implemented skills building and qualifica-tion programs. NGOs with previous experi-ence in this field could also be valuable part-ners, ensuring flexibility and adaptabilityaccording to Egypt’s institutional structure andculture.

Putting the poor at the center of the valuechain

Doing Business with the Poor: A Field Guide. World Business

Council for Sustainable Development, Geneva, March 2004.


Worldwide evidence that an educated mother isthe key to an educated nation has led countriesto focus on designing programs that supportwomen’s advancement and well-being. Manycountries are now reaping the benefits of theseapproaches by having well-educated youths,well-nourished children and well cared-forinfants. A prerequisite to any achievement of

Egypt’s development targets in the coming tenyears is national engagement of all partners toaddress low female adult literacy rates. Sincethe needs are vast and nationwide, it will becrucially important to work through intermedi-aries and address the issue collectively ratherthan, as is currently the case, through fragment-ed efforts. Businesses can work outwards, firstrunning literacy classes for their adult work-force and then conducting wider efforts in theirbusiness sector and local communities. Theywill need to partner with leading NGOs with atrack record in the field as well as with theAdult Education Authority that administersadult literacy examinations.

While the needs of women at the BOP can inpart be met by providing goods and services,information about good health practices isequally important. Egypt’s performance on theMDG relating to maternal mortality is lacking.Information on reproductive health, legal aidand support and counseling services can be pro-vided through call centers and must supple-ment continued investment in mobile clinics,free health care from private hospitals etc. Thedistribution of pharmaceutical and health aidsto poor women can also provide a vehicle foradvertising agencies to contribute their expert-ise and resources by disseminating public healthmessages in areas relevant to the MDGs.

For businesses to grow they need healthy, well-nourished and educated communities. Sincegovernments are often unable to provide goodbasic services, health care and education to bur-geoning populations, the private sector mustexplore ways to bridge the gap. This realizationis shared, by both the private sector and govern-ment of Egypt and has created expectations and 81

6

The

Way

For

war

d

The poor play anactive role in thecreation of value

The poor benefit fromthe supply of appropriate

products and services

Businesspartners

Customers

R&D RawMaterials

Production Distribution Marketing End User

Consumption

Sell

toB

uyfr

om

Supp

ly

Production DistributionM

arketing

NGOsAdult

EducationAuthority

Donors

Businesses


pressure that the former augment its role inbuilding schools, equipping hospitals andrestoring decaying neighborhoods.

SPECIFIC RECOMMENDATIONS FORBUSINESSES 58

1. Mobilize core competencies and resourcessuch as money, products, skills, premises, andpeople to strengthen local communities.Particular recommendations are to:• Support education, training, youth develop-

ment, environmental, health and nutritionprojects in local communities

• Build the capacity of community leaders andsocial entrepreneurs

• Train local technical specialists in environ-mental management

• Build the governance capacity and voice oflocal civil society groups and media organi-zations

• Support multi-cultural education programs• Assist with voter education initiatives• Establish and support micro-credit programs

and small business support

2. Internal Compliance: Obey the law, man-age risks, minimize negative social and environ-mental impacts, and create positive value for hostcountries and communities. Companies should:• Pay fair wages, taxes, dividends and make

timely payments to suppliers• Encourage and facilitate positive organized

labor relations• Develop their own people through training,

skills development, health and safety in theworkplace

• Spread responsible business standards andpractices in the areas of environment, healthand safety, human rights, ethics, quality etc

• Invest in cleaner and safer production sys-tems and transfer to smaller SMEs

3. The Enabling Environment: Take individ-ual and collective action: • Work with governments to improve social

infrastructure –- supporting reform andquality improvements in the health and edu-cation sectors

• Address environmental regulatory and fiscalpolicies with government and civil society

• Engage in global dialogue on issues such asclimate change and biodiversity

• Support local and national governments toeliminate bribery and corruption, inefficientpublic administration and service delivery;fair and transparent regulations and respectfor human rights

SPECIFIC RECOMMENDATIONS FORCIVIL SOCIETY ORGANIZATIONS ANDINTERMEDIARIES 59

• Help the private sector set clear priorities fortheir interventions

• Assist companies to comply with labor andenvironmental standards as partners inEgypt’s development by enhancing trans-parency and accountability

• Invest in long-term alliances with other part-ners in the non-profit sector and with clus-ters of businesses and/or with intermediaries

• Adopt transparent and democratic practicesto protect their own integrity and independ-ence

• Consult companies on how to reach out tocommunities and achieve the MDGs

• Grassroots organizations have the greatestinsights into community needs. LargerNGOs can build bridges between them andlocal and international businesses to ensuremaximum impact derive from corporateengagement on the MDGs

• Business associations and internationaldevelopment agencies have a major interme-

82

6

The W

ay Forward

58 Nelson, Jane and Prescott, Dave. Business and the Millennium Development Goals: A Framework for Action. ThePrince of Wales International Business Leaders Forum in Collaboration with the United Nations DevelopmentProgram. 200359 Gearing Up: From Corporate Responsibility to Good Governance and Scalable Solutions. Sustainability and theGlobal Compact, 2004.


diary role, bringing clusters of companiestogether with clusters of smaller communitydevelopment associations (CDAs), collabo-ratively drawing up specific business sectorplans, obtaining relevant data and validatingneeds etc

SPECIFIC RECOMMENDATIONS FORGOVERNMENT

To promote CSR the government should:

• Actively seek participation from civil societyand business as equal partners

• Reduce and simplify regulations and proce-dures affecting businesses wishing to registerand operate in Egypt

• Build and encourage innovation, ingenuityand pragmatic, scalable solutions

• Reward good corporate performance withinstruments such as fiscal incentives, pro-curement policies, endorsements, labeling,training and information

• Develop and enforce laws, rules and regula-tions that mandate appropriate businessbehavior (for example, creating and enforc-ing legal requirements for mining companiesto eliminate negative environmentalimpacts)

• Facilitate private sector CSR programs (e.g.developing codes and standards that serve asa guide/ direction for CSR activities)

• Step in to encourage private financial insti-tutions to provide services to informal settle-ments, rural and underserved areas

• Public investment in facilitating land titling,land tenure and registration of businesses ininformal settlements and the informal econ-omy

There will be obstacles along the way. Thesecan in part be overcome by:

1. Creating space for profit and non-profitorganizations to come together to forge link-ages, exchange experiences and build trust.This process is essential for the two sides tocome to a common understanding and agree-ment on shared interests, goals, and values.Clearly, this is a time-consuming approach,but without it a solid basis for designing andsustaining long-term business interventionsfor development will not be built

2. Approaching partnership with an openmind, acknowledging that there are deep-rooted cultural and ideological differencesbetween the way businesses operate and theway the popular economy or non-profitsoperate. Such differences impact on the waythe two sectors perceive problems, designsolutions, and determine workable plans

3. Taking the long-term view. Just as business-es take time to become firmly grounded inthe market, so do partnerships gearedtowards business success and sustainablelivelihoods. Partners must develop a work-ing relationship, adapt working methods,acquire new skills, and build on experiences

83

6

The

Way

For

war

d


References

Alia el Mahdi and Ali Rashed. The Changing Economic Environment and the Development of Microand Small Enterprises in Egypt 2006. The Economic Research Forum Working Paper Series #0706,Cairo 2007.

An-Na’im, Abdullahi Ahmed and Asma Mohamed Abdel Halim. Rights-Based Approach toPhilanthropy for Social Justice in Islamic Societies. Cairo: The John D. Gerhart Center forPhilanthropy and Civic Engagement, 2006.

Bahadur, Chandrika, Kruk, Margaret and Schmidt-Traub, Guido. Preparing National Strategies toAchieve the Millennium Development Goals: A Handbook. United Nations Millennium Project,United Nations Development Program, October 2005.

Clay, Jason. Exploring the Links Between International Business and Poverty Reduction: A case Studyof Unilever in Indonesia. Oxfam GB, Novib Oxfam Netherlands and Unilever, 2005

Commission on the Private Sector and Development. Unleashing Entrepreneurship: MakingBusiness Work for the Poor. Report to the Secretary General of the United Nations. United NationsDevelopment Program, New York, March 2004.

Daly, Marwa. Philanthropy in Egypt: A Comprehensive Study on Local Philanthropy in Egypt andPotentials of Directing Giving and Volunteering Towards Development. Cairo: Center forDevelopment Studies, 2006.

Davies, Robert and Nelson, Jane. The Buck Stops Where? Managing the Boundaries of BusinessEngagement in Global Development Challenges. The Price of Wales International Business LeadersForum, Policy Paper No. 2, January 2003.

Doing Business with the Poor: A Field Guide. World Business Council for SustainableDevelopment, Geneva, March 2004.

Egypt Country Report. United Kingdom: The Economist Intelligence Unit, 2006.

Egypt Human Development Report 1998/1999. Cairo: United Nations Development Program andInstitute of National Planning

Egypt Human Development Report 2003. Cairo: United Nations Development Program andInstitute of National Planning

Egypt Human Development Report 2004: Choosing Decentralization for Good Governance. Cairo:United Nations Development Program and Institute of National Planning.

Egypt Human Development Report 2005: Choosing Our Future – Towards a New Social Contract.Cairo: United Nations Development Program and Institute of National Planning.

84


85

Ref

eren

cesEl Zanaty, Fatma and Ann Way. Egypt Household Demographic Survey 2005. USAID, Ministry

of Health and Population, UNICEF, National Council for Population, Ford Foundation, andZanaty and Co., March 2006

Forstater, Maya, MacDonald, Jacqui and Raynard, Peter. Business and Poverty: Bridging the Gap.Resource Center for the Social Dimension of Business Practice, The Prince of Wales InternationalBusiness Leaders Forum, December 2002.

From Transition to Accession: The Experience of Corporate Social Responsibility in Central and EasternEurope. The Prince of Wales International Business Leaders Forum, November 2002.

Gallup International. Voice of the People: Volunteer Work. Accessed online http://www.gallup-international.com (May 16, 2007).

Gearing Up: From Corporate Responsibility to Good Governance and Scalable Solutions.Sustainability and the Global Compact, First Edition, 2004.

Ibrahim, Barbara. Pathways to Participation: Youth and Service in Egypt. AUC, Egypt, 2007.Under publication.

Ibrahim, Barbara. Discourses of Public Engagement among Young Egyptians. Seminar presentation,Middle East Studies Center, The American University in Cairo, December 2006.

Innovative Practices in Vocational Education and Training Standards in the Mahreq Region. Cairo,Egypt, 7-9 April 2001.

Jean-François Rischard, Vice President for Europe, The World Bank. Extracted from: Davies,Robert and Nelsen, Jane. The Buck Stops Where? Managing the Boundaries of Business Engagementin Glob al Development Challenges. The Prince of Wales International Business Leaders Forum,Policy Paper No. 2, January 2003

Luetkenhorst, W. CSR and the Development Agenda: The Case for Proactively Involving SMEs, 2004

McCue, Sarah, and Jarvis, Michael. Business Action for the MDGs: Private Sector Involvement as aVital Factor in Achieving the Millennium Development Goals. The World Bank Institute, 2005.

Michael E. Porter and Mark R. Kramer .The Competitive Advantage of Corporate Philanthropy.Harvard Business Review, December 2006

National Council for Childhood and Motherhood (NCCM). National Survey of Working ChildrenPhenomenon in Egypt. Cairo, 2004.

Nelson, Jane. Leveraging the Development Aspect of Business in the Fight against Global Poverty.Corporate Social Responsibility Initiative, Kennedy School of Government, Harvard University,and International Business Leaders Forum. Prepared for the Brookings Blum Roundtable: ThePrivate Sector in the Fight against Global Poverty, August 2005.

Prakash-Mani, Kavita, Thorpe, Jodie and Zollinger, Peter. Developing Value: The Business Case forSustainability in Emerging Markets. Sustainability, the International Finance Corporation and theEthos Institute, 2003.


Prescott, Dave and Nelson, Jane. Business and the Millennium Development Goals: A Frameworkfor Action. The Prince of Wales International Business Leaders Forum in Collaboration with theUnited Nations Development Program, 2003

Pruitt, Bettye. Working with the Business Sector: Pursuing Public Good with Private Partners. GrantCraft, 2004.

Sustainability Management and Reporting: Benefits for Financial Institutions in Developing andEmerging Economies. United Nations Environment Programme (UNEP) Finance Initiative.December 2006

The Egyptian Economy – Towards new Frontiers. The Ministry of Investment Report on theEgyptian Economy, Cairo, September 2007.

The Ministry of Foreign Trade. The Small and Medium Enterprises Policy DevelopmentProject.(SMEPoL) Profile of M/SME’s in Egypt, October 2005.

The World Bank. Doing Business in Egypt. http://www.doingbusiness.org/ EconomyRankings/

Internet Resources:• Accountability: www.accountability21.net/aa1000/default.asp• Casas Bahia: http://www.icmr.icfai.org• Cemex: http://www.cemex.com/cc/cc_cm.asp• Egyptian Food Bank: http://www.egyptianfoodbank.com/• Environmental Quality International: http://www.eqi.com.eg.• Extractive Industries Transparency Initiative: www.eitransparency.org• Ethical Trading Initiative: www.ethicaltrade.org• Forest Stewardship Council: www.fscus.org• Global Alliance for Improved Nutrition: www.gainhealth.org• Global Reporting Initiative: www.globalreporting.org• ICICI Bnak: www.icicibank.com/Pfsuser/loans/farmequip/fehome.htm• Information and Decision Support Center (IDSC). www.idsc.gov.eg• Infosys: www.infosys.com/infosys_foundation/index.htm• International Cocoa Initiative: www.cocoainitiative.org• International Labor Organization: www.ilo.org/childlabour• Jordan Education Initiative: www.jei.org.jo• Kenya Agricultural Commodities Exchange: www.kacekenya.com• Lead Foundation: www.lead.org.eg• London Benchmarking Group: www.lbg-online.net• Publish What You Pay: www.publishwhatyoupay.org• Sawiris Foundation for Social Development: http://www.sawirisfoundation.org• Sekem: www.sekem.com• Sustainable Agricultural Initiative Platform: www.saiplatform.org• The Equator Principles: www.equator-principles.com• The Prince of Wales International Business Leaders Forum: www.iblf.org• United Nations Development Program: www.undp.org/partners/business/gsb/• World Economic Forum: www.weforum.org/en/initiatives/globalhealth/index.htm

86

5

References


87

App

endi

x 1:

The

Mill

enni

um D

evel

opm

ent

Goa

lsAppendix I: The Millennium Development Goals (MDGs) 60

Goals and Targets(from the Millennium Declaration)

Target 1: Halve, between 1990 and 2015, the propor-tion of people whose income is less than one dollar aday

Target 2: Halve, between 1990 and 2015, the propor-tion of people who suffer from hunger

Target 3: Ensure that, by 2015, children everywhere,boys and girls alike, will be able to complete a fullcourse of primary schooling

Target 4: Eliminate gender disparity in primary andsecondary education preferably by 2005 and to all lev-els of education no later than 2015

Target 5: Reduce by two-thirds, between 1990 and2015, the under-five mortality rate

Target 6: Reduce by three-quarters, between 1990 and2015, the maternal mortality ratio

Target 7: Have halted by 2015 and begun to reversethe spread of HIV/AIDS

Indicators for monitoring progress

1. Proportion of population below $1 (PPP) per day2. Poverty gap ratio [incidence x depth of poverty]3. Share of poorest quintile in national consumption

4. Prevalence of underweight children under-five yearsof age5. Proportion of population below minimum level ofdietary energy consumption

6. Net enrolment ratio in primary education7. Proportion of pupils starting grade 1 who reachgrade 58. Literacy rate of 15-24 year-olds

9. Ratios of girls to boys in primary, secondary and ter-tiary education10. Ratio of literate females to males of 15-24 year-olds11. Share of women in wage employment in the nona-gricultural sector12. Proportion of seats held by women in national par-liament

13. Under-five mortality rate14. Infant mortality rate15. Proportion of 1 year-old children immunizedagainst measles

16. Maternal mortality ratio17. Proportion of births attended by skilled health per-sonnel

18. HIV prevalence among 15-24 year old pregnantwomen19. Condom use rate of the contraceptive prevalencerated20. Number of children orphaned by HIV/AIDS

Goal 1: Eradicate extreme poverty and hunger

Goal 2: Achieve universal primary education

Goal 3: Promote gender equality and empower women

Goal 4: Reduce child mortality

60 Millennium Development Goals Indicators – The Official United Nations Site for the MDG Indicators. http://millenniumindicators.un.org/unsd/mdg/Host.aspx?Content=Indicators/OfficialList.htm

Goal 5: Improve maternal health

Goal 6: Combat HIV/AIDS, malaria and other diseases


88

Appendix 1: T

he Millennium

Developm

ent Goals

Target 8: Have halted by 2015 and begun to reversethe incidence of malaria and other major diseases

Target 9: Integrate the principles of sustainable devel-opment into country policies and programmes andreverse the loss of environmental resources

Target 10: Halve, by 2015, the proportion of peoplewithout sustainable access to safe drinking water

Target 11 By 2020, to have achieved a significantimprovement in the lives of at least 100 million slumdwellers

Target 12: Develop further an open, rule-based, pre-dictable, non-discriminatory trading and financial sys-tem.

Includes a commitment to good governance, develop-ment, and poverty reduction – both nationally andinternationally

Target 13: Address the special needs of the least devel-oped countries

Includes: tariff and quota free access for least developedcountries' exports; enhanced programme of debt relieffor HIPC and cancellation of official bilateral debt; andmore generous ODA for countries committed to pover-ty reduction

Target 14: Address the special needs of landlockedcountries and small island developing States (throughthe Programme of Action for the SustainableDevelopment of Small Island Developing States andthe outcome of the twenty-second special session of theGeneral Assembly)

21. Prevalence and death rates associated with malaria22. Proportion of population in malaria risk areas usingeffective malaria prevention and treatment measured23. Prevalence and death rates associated with tubercu-losis24. Proportion of tuberculosis cases detected and curedunder directly observed treatment short course(DOTS)

25. Proportion of land area covered by forest26. Ratio of area protected to maintain biologicaldiversity to surface area27. Energy use (kg oil equivalent) per $1 GDP (PPP)28. Carbon dioxide emissions (per capita) and con-sumption of ozone-depleting CFCs (ODP tons)29. Proportion of population using solid fuels

30. Proportion of population with sustainable access toan improved water source, urban and rural

31. Proportion of urban population with access toimproved sanitation32. Proportion of households with access to securetenure (owned or rented)

Some of the indicators listed below are monitored sepa-rately for the least developed countries (LDCs), Africa,landlocked countries and small island developing States.

Official development assistance

33. Net ODA, total and to LDCs, as percentage ofOECD/DAC donors’ gross national income

34. Proportion of total bilateral, sector-allocable ODAof OECD/DAC donors to basic social services (basiceducation, primary health care, nutrition, safe waterand sanitation)

35. Proportion of bilateral ODA of OECD/DACdonors that is untied

36. ODA received in landlocked countries as propor-tion of their GNIs

37. ODA received in small island developing States asproportion of their GNIs

Goal 7: Ensure environmental sustainability

Goal 8: Develop a global partnership for development


89

App

endi

x 1:

The

Mill

enni

um D

evel

opm

ent

Goa

ls

Target 15: Deal comprehensively with the debt prob-lems of developing countriesthrough national and internationalmeasures in order to make debtsustainable in the long term

Target 16: In co-operation with developing countries,develop and implement strategies for decent and pro-ductive work for youth

Target 17: In co-operation with pharmaceutical com-panies, provide access to affordable, essential drugs indeveloping countries

Target 18: In co-operation with the private sector,make available the benefits of new technologies, espe-cially information and communications

Market access

38. Proportion of total developed country imports (byvalue and excluding arms) from developing countriesand LDCs, admitted free of duties

39. Average tariffs imposed by developed countries onagricultural products and textiles and clothing fromdeveloping countries

40. Agricultural support estimate for OECD countriesas percentage of their GDP

41. Proportion of ODA provided to help build tradecapacity

Debt sustainability

42. Total number of countries that have reached theirHIPC decision points and number that have reachedtheir HIPCcompletion points (cumulative)

43. Debt relief committed under HIPC initiative, US$

44. Debt service as a percentage of exports of goodsand services

45. Unemployment rate of 15-24 year-olds, each sexand total

46. Proportion of population with access to affordableessential drugs on a sustainable basis

47. Telephone lines and cellular subscribers per 100population

48. Personal computers in use per 100 population andInternet users per 100 population

Appendix 2: The Interview Protocol Used

Framework for CSR Actions1. How does the company define the CSR concept?2. Why did your company choose to implement CSR activities?3. What is their targeted impact on the company and on the community?4. How does the company conceptualizes their responsibility towards the following areas:

a. the workplace b. the marketplace c. the supply chain d. the community

5. Does the company’s code of conduct articulate this responsibility towards 1) the workplace 2)the marketplace 3) supply chain and 4) the community? If yes, how?

Management of CSR1. What is the structure of the CSR workforce?2. What are the educational or training background of CSR staff (e.g. development business,

CSR, etc)?3. What are the company’s criteria for choosing a potential initiative?4. To what extent the CSR initiative is related or unrelated to the company’s core business

(brands, products, management skills, etc)5. What are the company’s strengths to implement these CSR initiatives?6. What are the challenges faced by the company in implementing these CSR initiatives?

Ability to Tackle the MDGs1. What are the company’s main areas of focus? (education, health, environment, etc)2. Is the company familiar with the Millennium Development Goals?3. Does the company relate these issues and their CSR initiatives to the MDGs?

If yes, how? If No, why not?

Level of Engagement1. What size of the company budget is allocated to implementation of the CSR initiative? 2. Is it part of the overall budget or a percentage drawn from a particular department (e.g. mar-

keting, public relations, etc.)?3. What is the company’s level of contribution (cash, time, in-kind) to the implementation of

their CSR initiatives? Why they prefer this sort of contribution? 4. On a company level, how aware are employees of CSR? Is there any educational or other for-

mal training on CSR available for employees outside the company’s CSR component?


90

Appendix 2: T

he Interview P

rotocol Used


91

App

endi

x 2:

The

Int

ervi

ew P

roto

col U

sedPartnerships

1. Do you partner with other stakeholders (civil society organizations/private sector/govern-ment/media) to implement CSR initiatives? Why or why not?

2. Please list those who you have partnered with. 3. If yes, what are the criteria according to which a company selects partners? What are the

terms of these partnerships? What does a company gain from partnering with specific stake-holders?

4. What are the obstacles/challenges you face in cooperating with these partners?

Best Practices1. Identify at least two specific initiatives.2. Collect the following information about the initiative.

a. Objectivesb. Steps of implementationc. Initiative’s activitiesd. Partnershipse. Outcomesf. Lessons learned

Enabling Environment1. How do you feel these stakeholders may better promote and encourage the implementation

of CSR concept?a. the public sectorb. civil society organizationsc. private companiesd. Media

2. Are there any challenges in the Egyptian environment (be it political, economic or social) thatthe company faces in implementing sustainable development initiatives contributing to thecountry development? If yes, in your opinion how can these challenges be overcome?

Future PlansWhat is the future vision for CSR in your company? This may include: CSR activities internal or external, future partnerships, internal structuralCSR workforce, level of engagement, MDGs)

Documents

Photo Credits Disclaimer - Inclusive businessDivision, UNDP; and Mr. Mounir Tabet , UNDP Country Director, Egypt - we offer our heart-felt thanks. We extend our heartfelt thanks to