Key Success Factors of Apple Inc

C ivil society, Social Protection and the Role of Governments: In Search of a F ramewor k 1 Sharif N As-Saber Department of Management Monash University A bstract The advent of globalisation has created a lot of opportunities for businesses, society and governments. Simultaneously, it has generated numerous challenges to the members of the global community. In this regard, the role of the government stays controversial.

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Growing dependence on the private sector in key areas such as health, education and aged care is restricting the capacity of the government to offer these services. In addition, with the declining tax rate, governments are patronising corporate entities and high income earners while deliberately reducing their own capacity of offering assistance to the deserving poor. The various civil society groups are now questioning the wisdom of government policy frameworks in alleviating the social divide and augmenting social protection for the poor and disadvantaged.

This paper attempts to examine the role of the civil society to create awareness about this important issue and to persuade governments to frame and implement more effective social protection policy without undermining the need for a viable social security net. It also calls for a consultative approach conforming to democratic norms and principles. A tentative framework has been introduced linking government policy, social protection and civil society. A set of implications for civil society organisations, corporate entities and governments follows.

K ey Words: Social protection, Civil Society, Consultative approach, Globalisation, Social Capital Introduction The world, no doubt, is plagued by a major problem, the problem of widening gap between the rich and the poor. This problem is exacerbated by a declining level of social security available to the poor and disadvantaged. Despite the endless opportunities created for businesses, society and governments, the marketisation of the global economy together with the increasing 1 Presented as an invited paper at the International Conference on Progress, Problems, and Prospects of Governance and Evidence-Based Government of Asia rganised by the Graduate School of Public Administration (GSPA), Seoul National University on 12 February 2007 (Proceedings of the GSPA Conference, pp. 53-69). 53 power of global corporations and declining role of government agencies are making the problem even worse. As competition is intensifying and becoming ruthless among global players and the social disparity increasing, an important challenge of protecting the vulnerable and the weak remains as an issue of immense significance (As-Saber, et al. , 2004; Rodrick, 1998).

Unfortunately, the role of the government in this regard, remains controversial. As deregulation and privatisation are giving way to market forces, the survival of the weakest is becoming increasingly difficult. Growing dependence on the private sector in key areas such as health, education and aged care is making the situation worse for people on low income. In addition, with the declining tax rate, governments are patronising corporate entities and high income earners while deliberately reducing their own capacity of offering assistance to the deserving poor (Gemmell and Morrissey, 2005).

Although developing economies are suffering the most, developed industrialised countries are not immune to this problem. In general, with the gradual and systematic withdrawal of government support, the poorer segment of the population is becoming more vulnerable to natural disasters and social disorders. The onslaught of tsunami in Asia and the devastation of hurricane Katrina on the Southesat American shore have unravelled the importance of this issue which had not been adequately understood in the past.

The tsunami-hit regions in Asia lacked preparedness to immediately tackle the situation primarily because of the lack of resources. Nonetheless, Thailand coped with the situation better than Sri Lanka and Indonesia. It is argued, a condition is slightly better with a relatively superior infrastructure and more developed social protection policy, especially in the affected area. On the other hand, in the wake of hurricane -increasing income disparity had anything to do with such a devastating impact; or whether Katrina should be blamed entirely for the destruction of habitats and the loss of thousands of helpless lives.

Some argued, utter poverty exacerbated the devastation and contributed to the subsequent misery of the indigent New Orleanians which is one of the poorest states in the US. In one of the counties in New Orleans, more than 40% of the population live below the poverty line (with a state-wide average poverty rate of around 20%). Question may be raised about whether the destruction could have been less devastating if the level of poverty was lower and the sheer 54 misery and inequality among the disadvantaged New Orleans were less pronounced.

Of course, much of the blame should go to Katrina itself for such an impact. However, at the end, it was most of the disadvantaged in the area that suffered the most. 2 Given the area was primarily inhabited by the poorer segment of the population, local councils and other social organisations also lacked resources impacting on their preparedness to tackle and manage a disaster of such an enormous scale. For private social service operators, the area seemed to be unattractive because of a relatively poorer clientele base.

The American market economy that provides minimal publicly available social safety net could, therefore, be partly blamed for such a devastating impact. These two examples signify the importance of a harmonious society as a primary precondition of sustainable growth and development. A functional and efficient social protection regime is an essential requirement of social harmony and wellbeing. In its absence, anarchy and social unrest could be unleashed making it hard for the privileged balising world economy (Vernon, 1998).

This new-found realisation has engendered a debate on the modalities of the policy framework required to safeguard the weakest and create greater harmony within the society. It is argued, therefore, that governments need to be more proactive in their approach in dispensing their core responsibilities of supporting the poor and the disadvantaged. Governments all over the world have started recognising the problem. Yet, their responses, in most instances, remain lukewarm.

The various civil society groups all around the world have long been playing an important role in conveying different national governments of the danger of undermining the importance of social protection and advocating against government moves to downgrade their social security activities. As a consequence, a greater social awareness is emerging. International development agencies (IDAs), non-government organisations (NGOs), social organisations, trade unions and the media are now questioning the wisdom of government policy frameworks in alleviating the social divide and augmenting social protection for the poor.

They are also calling for greater consultation between the government and other relevant actors such as 2 In the wake of Hurricane Katrina, ex American first lady Ms Barbara Bush, in an interview, echoed the . 55 private operators and the various civil society groups in formulating social protection policy framework. This paper attempts to examine the role of the civil society to create awareness about this important issue and to persuade governments to frame and implement more effective social protection policy without undermining the need for a viable social security net.

A tentative framework will be advanced linking government policy, social protection and civil society. A set of implications for civil society organisations, corporate entities and governments will follow. Social Protection and the Role of the C ivil Society: A n O verview According to Unni and Rani (2003:127): [E]conomic growth is worthwhile only if it leads to social justice in the form of equitable distribution, reduction in poverty, and reasonable incomes, and if it meets basic securities such as health and education and promotes political, cultural and economic freedom.

The Nobel Prize laureate economist Amartya Sen argues that the primary focus of development should not be on the material output measures such as GNP per capita. Rather it should aim more at the improving capabilities and opportunities that people benefit from (Sen, 1999). From this perspective, social protection refers to the policies, regulations and programs adopted by governments and other institutions to ensure that individuals are protected against natural, economic and social risks by providing legal, cultural and economic guarantees that, in turn, ensure human wellbeing.

ADB (2003: 1) defines the term, social protection as an array of labour markets, diminishing people’s exposure to risks, and enhancing their capacity to protect themselves against hazards and interr Countries all over the world, developed and developing, require a strong and viable social protection regime. The key institutions of social protection are the family, the community, and the state though other agents may also be providers of social risk insurance. The state, through three major instruments, public spending, the tax system and regulatory framework, provide 56 ocial protection to its citizens (Tanzi, 2000). In describing the importance of the state to social protection, Dunning (1997: 136) suggests: [T]he globalizing economy is requiring national administrations to take a more active stance as the guardians of the well-being of their constituents, but that their willingness and ability to do this efficiently should, itself, be perceived as a public good in its own Accordingly, social protection cannot be considered as a mere function of market power and should not be left with the discretion of philanthropists and private business operators.

Economic growth and the reliance on market economy do not necessarily improve the social safety net. ADB (2007) has expressed its concern in this regard: [G]rowth is not sufficient to prevent and fight poverty and social exclusion. Without additional measures, the advantages of the market economy may be limited to a part of society only, namely those who are educated, own productive assets, and have participated in successful economic activities.

Researchers associated with the globalisation-social protection debate focus on whether globalisation is inducing a “race to the bottom” as nations compete to attract investment and assist their exporters (see Rodrick, 1998). Related issues include whether the social protection regimes of nations tend to converge in certain forms as they globalise, and whether nations should construct social safety nets that can cope with the periodic international crises that appear to be a feature of an increasingly volatile global space.

As mentioned earlier, people living below the poverty line in all countries, developed or developing, require necessary social protection. Recent empirical research suggests that there has been a marked decline in the share of GDP apportioned to this area within the developing world (Rudra, 2002). In addition, in many developed as well as developing countries, privatisation of social service providers and the declining tax regimes have been occurring in a consistent pace.

In essence, such developments are limiting the ability of governments to provide required service to their citizens including social protection, and favouring private operators in providing these services with less tax burden on them. In a typical tax cutting exercise, it also becomes evident that the high income earners and corporate entities gain 57 significantly more compared to the low-income earners that eventually increases the gap between the rich and the poor even further. 3 The aging global population could also pose some problems.

As a result of improved longevity rate in both developed and developing countries (with some exceptions), the global population is aging. Subsequently, a marked increase has been registered in the ratio of elderly to the labor force and more and more people are coming into the fold of social security net. Many developed countries are increasingly finding it difficult to commit funding to provide sufficient services to the underprivileged and vulnerable groups of the society including the elderly segment of the population.

For example, in the US, the tax revenue will not be able to fully support the existing social security net at its current level beyond 2018 and the social security trust fund is expected to be empty in 2042 (Mankiw, 2005). From a developing country perspective, tax cuts do not help the poor either. According to (2005), taxes on imports and goods consumed especially by the poor are mostly found to be regressive, whereas appear to be progressive.

The reforms implemented are therefore unlikely to have any positive impact on the poor requiring more committed social protection measures by respective governments. Ironically, such measures are rather becoming more and more market driven and less welfare-oriented. Moreover, despite the contribution of globalisation and its associated economic and technological developments in generating a significant growth in wealth, the process has resulted in an increase in existing inequalities in the distribution of that wealth among the developed and developing nations (Herriot & Scott-Jackson, 2002;

Dunning, 1997). The growing population in the developing world, especially in countries such as India, China and Bangladesh, has been making the condition further complicated. Given the limited availability of resources, the social welfare issue is rapidly becoming important but challenging and more appealing internationally. In addition, once the exclusive domain of the state, private organisations are now increasingly becoming responsible for the social protection needs of the people (Dunning, 1997a; ILO, 2003) resulting in an ambiguity about the sharing of 3

For an example, see the national budget of Australia, 2005-2006 at http://www. budget. gov. au/. 58 responsibilities between the private and the public sectors. One outcome of such trend is an US firms are establishing themselves as global service providers (ILO, 2003). Also, growing linkage between national and foreign firms is prompting international standardisation of social policies in order to mitigate controversies and help the needy (ILO, 2003).

Nonetheless, the failure to maintain a viable social protection regime globally is bound to have an extensive negative impact on the increasingly interdependent global economy and society. Paul Kennedy (1993), in his book, Preparing for the Twenty F irst Century, warned the international community of the negative social consequences of unabated growth of global movements and maintained that the inability to tackle the situation would, in essence, detonate a potential social time bomb.

From this perspective, Gilbert (2002) argues that the changes in the social welfare policy being witnessed in the Western countries in recent years are not mere marginal adjustments to the borders of the welfare state, but represent a fundamental shift in the structure and philosophy of social protection. He further argues that such shift promotes work and economic inclusion over social protection changing the nature of social cohesion and weakening the role of government.

Concerns have been raised from the various quarters in relation to this new trend (Gilbert, 2002; As-Saber et al. , 2004; 2004a). Many consider it as a mere avoidance by national governments of their basic responsibility of looking after the poor and the vulnerable that compromises the primary essence of the democratic principle of social justice and equity. In this regard, an emerging consensus among the various civil society groups is looming on the importance and necessity of a strong state-sponsored social protection regime.

The evidence based on the impact of the Asian financial crisis, tsunami and hurricane Katrina on the poverty-stricken societies in Asia and the US reiterates that there is a limit to the dissemination and dismantling of social protection regimes. These events also emphasise the fact that increasing reliance on private providers largely serves the richer segment of the population and in the absence of strong government commitments of social protection, the poor and the disadvantaged become more vulnerable to natural disasters and social disorders.

Given this background, civil society groups around the world are asking for increased social protection 59 cover for the deserving citizens who cannot afford private care and service. According to Gilbert (2002), the growing incapacity of governments in providing social protection is the glue of the civil society . As a consequence, a global awareness is now emerging and the role of the civil society is gaining momentum and prominence. Although some consider the concept as elusive (FDC, 2002), the civil society s now questioning the lesser capacity and role played by governments with respect to their social protection responsibility. In response, some governments have decided to revisit their social policy measures in order to make necessary adjustments. The World Bank and other multilateral agencies have contributed significantly towards the formulation of such directives. In the post-Washington Consensus (PWC) scenario, these agencies have, in essence, advocated proliferation of institutional innovation around a thematic framework of transnational social protection.

The role of civil society, in this regard, has been given significance. As a result, the importance of social as well as economic empowerment initiatives such as micro credit and social awareness programs have been acknowledged and supported by these agencies. The Bank and its founder, Mohammad Yunus, has further strengthened such recognition. Grameen B Grameen and other members of the civil society have been working towards creating awareness among citizens of the importance of social protection. The various empowerment programs, in this regard have been considered as a critical precondition for social protection.

The assumption is, empowered citizens would be able to protect themselves in the near future leaving minimal role for the governments to play. However, such assumption appears to be flawed at least to a certain extent. Creating social capital through networking, community motivation and empowerment does ease the problem but still falls short of eliminating it. For governments and the various multilateral agencies, the use of empowerment as a means to provide social protection could be seen as a way of avoiding social protection responsibilities.

Empowerment facilitates higher employment but does not guarantee income disparity. 4 Regardless of the levels of employment and economic development, people with low income still require publicly funded social protection facilities. 4 In the aftermath of the Asian financial crisis, one of the major motives of the PWC was to create more employment (see Phananiramai & Hewison 2002). 60 T he Proposed F ramewor k Based on the above discussion, a tentative framework is proposed (see Figure 1).

In the context of a shifting role of governments, the framework shows the role of the various civil society groups and other change agents in moulding the social protection regime. The shifting ______________________ Insert F igure 1 about here role of governments could be seen through the various regulatory reforms which are primarily aimed at creating freer market and a lesser government role in key national sectors. Social protection is no exception. Deregulation of the social protection sector is facilitating private operators to offer services previously retained by the government.

These include healthcare, education, housing and disabled/aged care. The poorer segment of the population cannot afford to access those services while offered by profit-driven private providers. There are, however, some voluntary contributions from the private sector. In most cases, these are driven by the tax advantages promised by the government (Adema, 2000). As privatisation and tax-cuts gradually are making modern governments smaller in both scale and scope, they are increasingly becoming less capable to offer necessary social protection to the poor and the vulnerable.

Moreover, the quality of available public service facilities is significantly compromised because of the lack of funding and government commitment. In some instances, a user-pay system has been introduced requiring citizens to pay for the publicly funded social services. Overall, it is not a good news for people living on the margin. Many civil society groups have been campaigning against the diminishing role of governments in offering social protection to their citizens. Some of them are even pushing for a reversal of such policy initiatives.

Especially, in the aftermath of the devastating impact of tsunami in Asia and hurricane Katrina in the US, such campaigns have gained momentum that have persuaded many national governments to reassess the situation and provide greater importance to the welfare-oriented social protection regime. The impact of civil society campaigns may be two-fold. First, such campaigns directly influence the government in relation to its regulatory framework, including tax structure and public spending on social protection. Second, they help create awareness among the disadvantaged and the poor of their rights and privileges as citizens.

Many civil society groups provide loans and offer institutional supports including 61 trainings and advice on the various social and economic issues. This process strengthens social cohesion and empowers the poorer segment of the population creating social capital. According to Hall et al (2005: 17), social capital has the potential to make a positive contribution to outcomes in diverse areas of social concern such as health, community safety and education Although the creation of social capital social protection responsibility, it does not entirely resolve the problem.

Another important aspect of the framework entails the role of the various change agents with respect to social protection. These agents have the capacity to simultaneously influence the government and the social protection system. They may also impact, and be impacted by, the various civil society groups. The following table attempts to delineate a schema pertaining major themes in relation to the role of the civil society and the government in ensuring social protection (Table 1). This schema may help explain the proposed framework and justify the relationship pattern that exists across major players.

It also registers key elements of each of these themes indicating authorities/organisations primarily responsible for implementing these themes. The schema is ______________________ Insert T able 1 about here perceptual in nature and does not purport to be comprehensive. However, it provides some tentative insights and philosophical underpinnings with respect to the role of the civil society, the government and private providers in establishing a comprehensive and sustainable social protection regime. It outlines the dyadic relationship pattern across these entities.

The schema suggests that while the relationship could be adversarial on one hand, the importance of developing and maintaining a viable and congenial relationship across these entities should not be ignored. The proposed framework together with the schema of relevant themes reflects the shifting role of governments in relation to social protection. They also help explain complex but dynamic relationship pattern between governments and the various civil society groups and indicate the role of the various change agents in streamlining social protection. 2 Implications The framework and its associated schema of relevant themes provide a unique opportunity for policymakers, civil society groups, corporate entities and citizens to better understand the intricate relationship pattern that exists across each other with respect to the delivery of social protection to the poor and the vulnerable. It appears to, add value to, the existing literature of social protection and civil society and has major implications for future research.

Governments, in their own role, are required to understand the importance of maintaining a viable social protection regime As they have the responsibility and mandate to look after all citizens, the welfare of the poor and disadvantaged should not be ignored. In this regard, governments should not simply look at the need to look at their respective country context and decide on their course of actions accordingly. In this regard, governments may not further limit their capacities through tax cuts. At the same time, in the name of deregulation, hey should not undertake any abrupt policy to privatise the social protection sector without considering its immediate and long-term consequences. However, the proposed framework does not suggest that governments remain totally refrained from deregulation. It may consider creating some opportunities for the private sector to come forward and provide some social protection services without dismantling the existing state-sponsored social protection structure. Private providers, both profit-making and voluntary, need to understand the importance of publicly available social protection.

In addition, as corporate citizens, private providers should not forget their own social responsibility. They should voluntarily contribute to the social protection of the poor and the vulnerable. In most cases, their contributions are not noteworthy and consist of a very small percentage of their profit margins. Ironically, this is often done to receive some tax benefits. The framework highlights the importance of the mutual understanding between the public and the private sectors.

In this regard, a public-private partnership could be encouraged. A regulatory framework needs to be in place which should make it mandatory for private 63 providers to spend certain percentage of their assets (not profit) in social protection activities. With respect to the civil society groups, the framework identifies two different roles, influencing the government and private providers to deliver social protection in a consistent and rational manner, and generating social capital through their own initiatives.

The creation of social capital lessens the burden on the government. However, at the same time, with increased awareness and empowered citizens, it exerts more pressure on governments and private providers to become more pro-active in providing social protection. In this regard, it is important for civil society groups to use a consultative approach. As governments are also becoming more willing to absorb ideas from outside the governments, it is for the sake of mutual interests of all parties that a consultative approach is adopted. As ecommended earlier with respect to the government policy framework, it is equally important to the civil society groups that their campaigns remain context-specific. There could be some global campaigns. However, as each and every society is different, the imposition of so called global policies or introducing a global campaign may not be consistent with the local culture and values. For example, in some societies, aged care and social protection is primarily a function of the government, whereas, there are societies where caring for elders, guiding the younger and looking after the poor are societal norms (informal social protection).

The framework also provides a guideline for citizens as to where they stand with respect to the available social protection network. For the poorer segment of the population, they may consider two different directions in availing social protection. It could be either through public network and private voluntary means or through empowering themselves by way of their own initiatives and the assistance provided by the various civil society groups.

The framework attempts to add a new dimension to the literature of public governance and private-public partnership highlighting the role of the civil society in offering social protection. It considers the danger of ignoring social protection and reiterates that one of the primary responsibilities of state is to look after all of its citizens including the poor and the vulnerable. 64 The framework and the associate schema could act as guides for any empirical research undertaken in the future.

Conclusion It is time now to consider social protection seriously. Accordingly, appropriate measures need to be taken to emancipate misery and indigence of the poor and the disadvantaged. Devastating impacts of hurricane Katrina and tsunami are just two examples where utter poverty and lack of necessary social protection primarily contributed to inadequate preparedness by citizens and local councils to combat the disastrous situations and safeguard human lives and properties.

Some, however, could argue that in a competitive marketplace, everyone should be responsible for his or her own fate. The proponents of this view seem to miss one important question has the government created enough opportunities for each and every citizen to live well or has the state established sufficient conditions for the poor and the vulnerable to survive before withdrawing any social protection support and shifting its responsibilities to the private sector? In this regard, the civil society has roles to play.

These include generating awareness across all levels of government, businesses and citizens about the need for a comprehensive social protection regime, creating social capital through enhancing social cohesion and empowering the poor and disadvantaged through training, technical support and financial assistance. Lobbying governments and persuading corporate entities to make them more welfare-driven is one of the major objectives of the various civil society groups.

The paper attempts to provide an integrated framework with a list of associated schema of relevant themes in relation to the role of the civil society in ensuring social protection. It aims to generate a holistic model highlighting the complex relationship pattern across policy makers, corporate entities, citizens, numerous change agents and the various civil society groups. It iterates the importance of more engaged government in delivering social protection, emphasises the public-private partnership and calls for necessary control on independent private providers to make them more socially responsible. 65

If provided with appropriate support and freedom to act, civil society can do magic. The campaign by Jodie Williams and her organisation, International Campaign to Ban Landmines (ICBL) made land mines banned permanently. In recognition of her campaign, Williams recived the 1997 Nobel Peace Prize. Similarly, Mohammad Yunus and his Grameen Bank have improved lives of thousands of disadvantaged families worlwide through finacial support and training and have used micro-credit as an enabler to emancipate poverty and empower thousands of poor and disadvantaged people creating much needed social capital in many disadvantaged socities.

A viable civil society may also act as an indicator of the existence of democratic principles and good governance in a specific society. Nonetheless, while civil society itself can make some differences in a society and the presence of a strong and responsible civil society can somewhat influence governments and private operators, it should not be considered as a panacea. It requires concerted efforts by all concerned to achieve an appropriate and sustainable social protection regime. From this perspective, the moral dimension as well as the practical outcome of positive actions is important to consider.

Hence, it is now time for all actors, governments, corporations and civil society organisations, to come forward and tackle inequity and endemic poverty in order to build a fairer and peaceful world. They should undertake this responsibility in their own interests as well as for the well-being of the people of the world. Accordingly, if they channel their commitments and resources in the right direction and become able to reverse the race to the bottom, hurricane Katrina and tsunami may still strike back but with much less devastating impact on the planet earth and its inhabitants.

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Multinational Enterprises, Cambridge: Harvard University Press. F igure 1 Social Protection and the C ivil Society: A n Integrated F ramewor k G lobalisation and Shifting Role of Governments (Regulations, Tax structure & Public Spending) C hange Agents Social Protection Management Philosophy Economic environment (Growth, profit, competition, efficiency & the level of development Culture (including corruption & clientelism) Political environment Labour market Geopolitics (international economic & political relationship and the role of power) Uncertainties & shocks Law & order The nature of governments ax Private Providers Profit Making/ Voluntary A wareness & E mpowerment Social C apital C ivil Society G lobal A ctors International Development Institutions Environmental groups Others (eg. , Anti-globalisation Movements) National A ctors Non-Govt Organisations Religious Institutions Political Parties Labour/Employers Groups Environmental/Civil Liberty groups Media/Writers Professional Groups Other Community Groups (eg. , women/child welfare groups) Business Lobby (firm/industry-specific A ctors) Local /Foreign 68

T able 1 A schema of major themes sur rounding the role of the civil society and the government in ensuring social protection M ajor themes People before system K ey elements Public policy formulation and implementation Society before individual Collectivistic approach; Creation of social capital Rationality not arrogance/ Scrutinizing policy related Information before agendas; Opposition not for perception the sake of opposition should be primarily backed by logic, not by mere perception Consultation not Ongoing dialogues can confrontation achieve magic a better option compared to confrontation and violence Context before replication Imposition of so called global policies may not be consistent with the local context including local values and norms. Primary responsibility Government Civil Society Civil Society All relevant parties Government 69