Changing the Philanthropic Face of CSR in the Arab World

Social responsibility and community development projects have been gaining ground in the region. The private sector has been slowly catching up as the drivers in this social undertaking, and gaining speed as pioneers in a field traditionally dominated by the government. As companies push to revamp their initiatives from simple philanthropy into established Corporate Social Responsibility programs, in what areas have regional corporations come out on top?

Corporate Social Responsibility (CSR) has been gaining momentum in the Middle East and North Africa (MENA) region, shaping itself as a new paradigm in the way companies conduct business. With the economic reform agenda in the region, corporations are increasingly being asked to participate in addressing social problems. There has been a consensus on the urgent need for companies to conduct business in a way that adds value to societies in which they operate. No longer are environmental and social problems seen as the executive responsibility of the government alone. So what are the drivers for this change? To what extent is the private sector willing to fulfill...

this demand?

Ten years ago, the term CSR was only used among multinational enterprises and civil society organizations. Individuals and organizations across sectors viewed their social responsibility as either aiding progress, or, at the very least, impeding the stagnant or accelerated degradation of the region. Recently, a remarkable change has occurred – governments in the MENA region have become pro-active in institutionalizing, promoting and supporting the social role of the corporate sector. This change is a continuation of reform programs embarked upon by MENA countries to create environments more conducive to private sector development and participation, while raising the socio-economic status of countries in the region.

After decades of the state dominating economic activity, governments in the MENA region began to increasingly rely on the private sector to foster growth. Corporations in Morocco and Tunisia spearheaded this process, but progress has been slow. Egypt has been able to sell almost one-third of all state-owned enterprises in the last few years, and privatization is picking up in Algeria, Yemen, Jordan and Lebanon. Yet, economic growth in most countries has consistently remained below potential. Though economic performance improved in the 2000s, with GDP growth up from 3.7% in the 1990s to 4.6% between 2000 and 2003, MENA region reform has lagged behind the rest of the world.

One of the greatest development challenges facing the MENA region is high demographic transition – with a heavy supply of young workers to the labor force – and growing unemployment rates that have pressured social and economic infrastructures. According to a prediction by the Arab Labor Organization, more than 32 million people will be looking for jobs in Arab states by 2010. The UN and World Bank have forecast the jobs needed for the growing numbers of school drop outs, alongside the unemployed in the MENA region, as 80 million over 20 years. Even so, MENA’s population growth can be turned into an unprecedented opportunity for sustained economic growth, provided that new entrants become productively employed.

Improving the investment climate, facing unemployment challenges and modernizing governance structures and operations have taken position at the core of MENA’s reform. Governments have begun to realize that CSR can significantly and positively contribute to enhancing countries’ socio-economic development. Bahrain, Egypt, Jordan, Lebanon, the Palestinian National Authority, Oman, the United Arab Emirates, Morocco, Tunisia, and Yemen have all endorsed the MENA-OECD Initiative on Governance and Investment for Development, highlighting the role of CSR and corporate governance in creating a healthy investment climate. Additionally, governments are working to harmonize their national laws and support awareness-raising on CSR-related issues. For example, Morocco has enforced a new labor law that raises the minimum employment age, reduces work-week hours, calls for a periodic review of the Moroccan minimum wage, improves worker health and safety regulations, addresses gender equity in the workplace, and promotes employment of the disabled.

To support the efforts of governments in the Arab region, many corporations have highlighted job creation and opportunities for young people as their corporate cause. In Egypt, Yemen, Morocco and Jordan, Microsoft is partnering with governments, non-governmental organizations and academics to deliver solutions in three key, interrelated areas: transforming education, fostering local innovation, and enabling jobs and opportunities. In addition, Barclays Bank in Egypt is supporting a number of initiatives to equip youths with leadership and labor market skills. According to Rania Hasanen, Barclays Bank Egypt’s Community Relations Manager:

“Around half of Barclays’ CSR budget is directed to youth training and skills development.” Also, Abdul Latif Jameel Company in Saudi Arabia has recently initiated the Grameen-Jameel Pan Arab program, targeting the creation of one million jobs through a microcredit program by 2011.

To encourage these and further efforts, many governments have facilitated the creation of a policy environment conducive and rewarding to the adoption of CSR. This year, for example, the Cairo and Alexandria Stock Exchange has launched its Corporate Social Responsibility Award in accordance to the CASE 30 Index. CEMEX, Assiut Cement Company, received the CASE “Best Social Responsible” Award in recognition of the company’s various efforts to build the infrastructure of surrounding communities, improve the well-being of CEMEX plant neighbors and employees, and conserve natural resources.
MENA governments have also promoted and engaged public-private partnerships (PPP) to affect positive social and environmental change, and to realize targeted developmental goals. Over the past few years, numbers of PPP projects have taken place across various industries in countries such as Egypt, Morocco, Saudi Arabia, the UAE, Oman and Jordan. Furthermore, some Arab countries have started to pass legislation on transparency and accountability in reporting and assurance - an indication to companies that CSR is being taken seriously.

Currently, CSR has substance in almost all Arab countries, yet its perspectives differ from country to country, according to governance performance and the economic reform strategies being applied. In some countries, the focus is on the search for a business case, while in others, CSR is arising from or responding to pressures and demands from society. Still, in others, the debate is driven by and rooted in moral reasoning. Certainly the gradual change in the role of governance has highlighted the need to transcend CSR from an ad hoc, voluntary, charity, and philanthropic action to a deliberate and regular developmental action that will leave sustainable impacts and support countries’ socio-economic development plans. Therefore, education, youth empowerment and employment projects supported by private corporations have been increasing in the MENA region - shifting the simple acts of charity and donation to the implementation of sustainable development projects. en.v

Aramex
In the past 25 years, Aramex has been committed to acting responsibly towards its shareholders, customers, people, the community and the environment. Aramex has become a strong advocate of Corporate Social Responsibility (CSR) and has succeeded in institutionalizing a strategic approach to its responsibility towards society. A prime example of Aramex’s achievements in CSR is the founding of “Ruwwad,” an initiative with the purpose of acting as a catalyst for members of marginalized communities to work together to meet their needs. Other activities that Aramex engages in encompass areas of disaster relief, youth development, education and employment, entrepreneurship and athletics support.

BP
BP operates in a way that contributes to the company’s long-term sustainability and that of the society and environment around it. BP supports a range of projects at all levels of education - from early childhood learning to advanced research at leading universities around the world. To contribute to solving the problem of unemployment, BP has expanded its educational programs to fund the Technical Skills Employability Program, which aims at providing industries with a qualified and highly skilled workforce. BP is also involved in the area of health by funding water quality improvement projects and investing in programs to reduce the incidence of disease and improve public health.

Procter & Gamble
P&G’s motto, ‘Touching lives, improving life,’ is about ensuring a better quality of life through the company’s commitment to quality brands that meet consumer needs and contribute to the prosperity of employees, shareholders and communities. Through P&G’s corporate cause ‘Live, Learn and Thrive,’ the company supports projects targeting the development of children (aged 0-13) in need. These projects are in line with the UN Millennium Development Goals, and seek to keep children healthy and disease-free. P&G also works in local communities where it operates to create places that enhance children’s ability to learn, as well as provide access to programs that help develop self-esteem and skills for life.

Vodaphone
At Vodafone, the business strategy and Corporate Social Responsibility strategy are inseparable and vital to the company’s ongoing commercial success. The company does not consider CSR as merely a philanthropic gesture. Vodaphone invests significant resources to respond to the needs of the communities in which it operates. It has a remarkable footprint in supporting disaster relief projects and programs targeting the most disadvantaged youth and their communities with a focus on the areas of health, education and welfare. Their aim is to make a difference in people’s lives through alleviating poverty, enhancing wellbeing and promoting the development of sustainable economic activity.

Lafarge
Lafarge is convinced that sustained economic growth cannot occur without improving the quality of lives of the communities where it operates. Everywhere it has a presence, the company works with local populations and associations to implement action programs for economic and social development, environmental protection and public health. Lafarge’s strategy is to exchange viewpoints and know-how and implement practical solutions that respond to local needs. It collaborates with the expertise needed - including NGOs, public and semi-public organizations and medical staff - to implement sustainable development projects that support natural disaster relief, youth skills development, child education, prevention and treatment of diseases, building houses for the needy, and heritage protection.

By Passinte Mokhtar