Exploring the Links Between International Business and Poverty Reduction: A case study of Unilever in Indonesia

Publication date

01 Mar 2005

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The role of big business in poverty reduction cannot be overemphasized. This study looks at one of the corporate giants in Indonesia, Unilever, and examines its business activities for their impacts on the poor who along the line link with these activities either directly or indirectly.The study suggests the extent to which the wealth created by business can reduce poverty is determined by many factors, an industry's operating structure and the values and strategies of individual companies within it are critical factors. Likewise, the opportunities open to people living in poverty, and their negotiating power - as citizens, workers, producers, consumers, and community members - are key determinants in the local context. The paper attempts to improve understanding of the relationship between big business and poverty reduction. On signing a Statement of Intent and Memorandum of Understanding (MOU) between Oxfam and Unilever, the two parties agreed to examine activities along Unilever Indonesia's entire value chain, from sourcing of raw materials to the impacts on consumers who purchase UI's products. This had the advantage of giving an overview of this fastmoving consumer-goods (FMCG) company within Indonesia.