Final Documentation

Exploring the Links between International Business and Poverty Reduction: Unilever in Indonesia, 2005

    Foreign direct investment is recognised to be important for economic development, in terms of wealth creation, employment, skills development, and technology transfer. But there is an on-going debate about the extent to which these contributions translate into real benefits for people living in poverty.

    In an attempt to evaluate the impacts of international business on people living in poverty, two organisations with very different aims and perspectives - Unilever (a major company operating in some of the poorest countries in the world) and Oxfam (an international development and humanitarian organisation) - collaborated on an ambitious research project. The research considered the impacts of Unilever Indonesia across the entire business value chain, from producers and suppliers, through the company's core business operations, to its distributors, retailers, and consumers.

    This report presents the findings of the research. It is a contribution to the debates among the wider business community, governments, civil-society organisations, and academics who seek to understand how the wealth, employment, and products that a large company creates could bring increased benefits to people living in poverty.

    Summary of results
    The study found many impacts; while the core workforce is only about 5,000 people, for example, the full-time equivalent of about 300,000 people make their livelihoods from UI's value chain. More than half of this employment is found in UI's distribution and retail chain, with about one third in the supply chain.

    About two thirds of the value added in the whole value chain is distributed amont other actors, with the benefits being dispersed even more widely than those relating to employment.

    The whole report can be downloaded from the Oxfam website (link above), after answering a few questions; hard copies can also be purchased from that site.