Economics
Bottom of the Pyramid

Chris Slappendel ... Blood in your jeans? ... the human situation at the BoP and in our supply chains

Burgess COMMENTARY
A very good article ... but what to do?

Closer to home (North America / Europe) there is a impressive technology industry that has created a good few billionaires already, and looks to making more this year, next year and into the future.

The technology is amazing ... but almost all the effort goes into making applications that 'make money' and only a tiny bit goes into making applications that are going to 'do good'. The technology chiefs and would be chiefs seem to have bought in to the idea that if something makes money it must be good ... and if it won't make money then 'why bother!'

The problem is that the modern world economy has two tracks ... one track with amazing productivity and profits and another track with tremendous under-investment, unemployment growth, accelerating dissatisfaction with everything, and, as the article pointed out ... nothing worth living for.

There is a socio-enviro-economic train-wreck in our future, and it will not be pretty. However, we do have the technology to change things ... but we also have a system that won't fund the change investments that are needed. I argue that material change cannot happen until there are some quite modest changes in the way we do the numbers. A complex global socio-enviro-economic system that expects to get decision making right with the simplistic system of money metrics now in use is bound to fail ... but new metrics can change the trajectory in a big way and quite quickly with only a modest commitment of resources. Buckminster Fuller would have recognized this as a Trimtab situation.

Dangerous times ... but also exciting times full of possibilities

Peter Burgess TrueValueMetrics.org
Peter Burgess

Blood in your jeans?

Jeans. An ordinary piece of clothing found in nearly everyone’s wardrobe especially in the Western world. Hanfu, traditional Chinese clothing, is still worn in large parts of China and sarongs are still immensely popular in most parts of South-East Asia and in costal areas of the Indian Ocean. Everyday clothing that we see as normal to wear. I wonder if you consider it normal if you have read this article.

Farmer suicides account for 11% of the total number of suicides in India. This is the official rate. There are speculations that in reality the number is even higher. But 11% is just a number. In itself it does not mean anything. But perhaps this will make it a bit clearer: 1.6 out of 100.000 farmers in India kill themselves. To make it even more real, in the last 20 years almost 350.000 farmers have killed themselves. An average of 16,500 per year. And most of them are growing the cotton that is in your jeans, in the hanfu of their fellowman or in their neighbor’s sarong.

This is was just an example of the Indian situation. But I would like you to know that these situations are applicable for lots of other countries, especially Southeast Asia. Like Bangladesh, Sri Lanka, Pakistan, Vietnam and Cambodia.

Of course, each person has its own reasons why he or she commits suicide. The reasons for Indian farmers to commit suicide are many. The insecurity involved with a good or bad crop because of the many rains and droughts, public health issues, the economical policies of the Indian government, large debts and genetically modified seed are considered the most influential reasons. In most studies it shows that there is often not one main reason but a combination that brings a farmer to this tragic death.

In India suicide among farmers is not to be talked about. Many think it’s a disgrace for the family. But the government is also reluctant to do something about it for reasons no one knows for sure. One of the reasons might be that acknowledging the situation must lead to improvement and that means that most part of India’s import industries in India must be restructured. Did you know that around 60% of the people in India are directly or indirectly dependent on agriculture?

The production of jeans, hanfu and sarongs and many other articles in your wardrobe that are made of cotton is often the same. In short, after the growing of cotton it goes to markets where it’s bought by spinning mills that spin the cotton into yarn that can be used for the production. This yarn is often dyed before they make the product. Although there are lots of small differences in the production process it’s vital to understand that there are big corporations that benefit a lot from the strangling of farmers.

For example, Li & Fung Ltd. is an investment holding company, which engages in the trading, logistics and distribution of consumer products. The company operates its business through three segments: Trading Network, Logistics Network and Distribution Network. The Trading Network segment focuses on the global sourcing business. The Logistics Network segment operates both the group's international and domestic logistics services networks globally. The Distribution Network segment operates the onshore distribution businesses in the United States, Pan-European and Asian regions. The company was founded in 1991 and is headquartered in Hong Kong. Spencer Fung, the chairman, has to manage 25,000 employees with a turnover of almost 20.000.000.000 USD. The value of this company, according to Forbes Magazine, is estimated around 8,200,000,000 USD.

As a supply chain manager across many producers and countries, Li & Fung provide product design and development, raw material and factory sourcing, production planning and management, quality assurance and export documentation to shipping consolidation.

This is just one of the major players. There are many other big ones. And their policy is what one can call ‘aggressive’. Because of their economic importance it’s possible for them to use their bargaining power to the fullest. Governments, like the one in India, are dependent on the taxes of these companies, and are very reluctant to interfere in the system. That is actually why these companies can say to take it or leave it.

And they know full well farmers can’t leave it.

The system behind the textiles industries is a rotten one and has to change. As farmers themselves can’t do it consumers need to do it. This is why there are organizations that offer certificates like Fair Wear of Fair Trade. This is a step in the right.

But the real step is for consumers to become aware of what’s happening. And awareness starts with the willingness to see what’s happening. If you know that the conditions in India are so bad that 16,500 farmers commit suicide, will you be able to change your mind?

Or able to change your behavior with regard to buying clothes?