Published: 6/12/2009
Bangkok Post
EDITORIAL
Last week John Holmes, the United Nations humanitarian aid chief, hit the nail on the head when he said that there needs to be a more effective partnership between humanitarian aid organisations and the private sector.
The need is all the more critical because global challenges such as climate change, population growth, rapidly growing urbanisation and the impact of the current economic crisis are likely to create more poverty and vulnerability.
Mr Holmes then quickly added that this sort of partnership could only be accomplished by a ''change of mentality''.
In his remarks last week, the UN humanitarian aid chief said that aside from funding, one of the biggest assets that private sector corporations could supply was the capacity for creativity and innovation, and he gave some examples of the private sector making a big and immediate impact in crisis situations.
One of these was in the aftermath of the 2004 tsunami, when global transport company TNT turned 35 of its trucks over to the World Food Programme to deliver food aid in Banda Aceh.
Mr Holmes said some in the humanitarian community might be guilty of ''wrong-headed'' suspicion that private sector companies were trying to profit from their involvement in humanitarian efforts, as had sometimes happened in Iraq and Afghanistan.
His message can be extrapolated to read simply that the private sector should recognise its responsibility to help the less fortunate of the world, and the means for them to do this should be developed.
This is all the more important in these times of growing wealth inequality. The wealth gap is wide and widening in virtually all the countries of the world.
Take for example the United States, where such statistics are relatively easy to obtain. The US came in third place in a recent survey listing countries in order of wealth inequality, behind Singapore and Hong Kong (actually of course a part of China).
The US corporate tax rate is officially 30% of net income, yet in August 2008, the US Government Accountability Office reported that two-thirds of all US corporations and 78% of foreign companies doing business in the US paid no federal income taxes between 1998 and 2005, even though the combined profits of these companies totalled in the trillions of dollars.
The Gross Domestic Product (GDP) of the United States was almost $14.2 trillion in 2008. The government took in $1.2 trillion in estimated receipts and sustained an estimated deficit of $390 billion. Only 12% of government revenues came from corporate income taxes while approximately 45% of the revenues came from individual income taxes and 36% from Social Security and other payroll taxes. The US Tax Policy Center calculates that individual income taxes and payroll taxes now account for four out of every five federal revenue dollars.
It should be noted that the corporate tax rate in Thailand is also 30% of net income, but just as in the US, it's doubtful that many Thai or foreign corporations based here pay anywhere near that much. For example, tax incentives are routinely given to foreign companies setting up in Thailand under the rationale that they are increasing the GDP and creating employment.
While this may be true, little of the economic benefits trickle down to the poorer classes and the wages paid by both foreign and local companies are all too often barely subsistence level.
So the question is what, if anything, can bring about the sort of ''change of mentality'' that Mr Holmes was speaking of?
How can companies be drawn from a purely profit-driven role in society to one which recognises a responsibility to society as a whole? From his remarks it is clear that Mr Holmes believes many in the private sector are interested in forming effective partnerships to assist those who are most vulnerable. Let's hope he's right.
Unless such an attitude takes hold it is difficult to imagine an alternative that won't lead to social unrest and possibly chaos.
Bangkok Post
EDITORIAL
Last week John Holmes, the United Nations humanitarian aid chief, hit the nail on the head when he said that there needs to be a more effective partnership between humanitarian aid organisations and the private sector.
The need is all the more critical because global challenges such as climate change, population growth, rapidly growing urbanisation and the impact of the current economic crisis are likely to create more poverty and vulnerability.
Mr Holmes then quickly added that this sort of partnership could only be accomplished by a ''change of mentality''.
In his remarks last week, the UN humanitarian aid chief said that aside from funding, one of the biggest assets that private sector corporations could supply was the capacity for creativity and innovation, and he gave some examples of the private sector making a big and immediate impact in crisis situations.
One of these was in the aftermath of the 2004 tsunami, when global transport company TNT turned 35 of its trucks over to the World Food Programme to deliver food aid in Banda Aceh.
Mr Holmes said some in the humanitarian community might be guilty of ''wrong-headed'' suspicion that private sector companies were trying to profit from their involvement in humanitarian efforts, as had sometimes happened in Iraq and Afghanistan.
His message can be extrapolated to read simply that the private sector should recognise its responsibility to help the less fortunate of the world, and the means for them to do this should be developed.
This is all the more important in these times of growing wealth inequality. The wealth gap is wide and widening in virtually all the countries of the world.
Take for example the United States, where such statistics are relatively easy to obtain. The US came in third place in a recent survey listing countries in order of wealth inequality, behind Singapore and Hong Kong (actually of course a part of China).
The US corporate tax rate is officially 30% of net income, yet in August 2008, the US Government Accountability Office reported that two-thirds of all US corporations and 78% of foreign companies doing business in the US paid no federal income taxes between 1998 and 2005, even though the combined profits of these companies totalled in the trillions of dollars.
The Gross Domestic Product (GDP) of the United States was almost $14.2 trillion in 2008. The government took in $1.2 trillion in estimated receipts and sustained an estimated deficit of $390 billion. Only 12% of government revenues came from corporate income taxes while approximately 45% of the revenues came from individual income taxes and 36% from Social Security and other payroll taxes. The US Tax Policy Center calculates that individual income taxes and payroll taxes now account for four out of every five federal revenue dollars.
It should be noted that the corporate tax rate in Thailand is also 30% of net income, but just as in the US, it's doubtful that many Thai or foreign corporations based here pay anywhere near that much. For example, tax incentives are routinely given to foreign companies setting up in Thailand under the rationale that they are increasing the GDP and creating employment.
While this may be true, little of the economic benefits trickle down to the poorer classes and the wages paid by both foreign and local companies are all too often barely subsistence level.
So the question is what, if anything, can bring about the sort of ''change of mentality'' that Mr Holmes was speaking of?
How can companies be drawn from a purely profit-driven role in society to one which recognises a responsibility to society as a whole? From his remarks it is clear that Mr Holmes believes many in the private sector are interested in forming effective partnerships to assist those who are most vulnerable. Let's hope he's right.
Unless such an attitude takes hold it is difficult to imagine an alternative that won't lead to social unrest and possibly chaos.
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