community development

Business Attraction and Retention in Development Efforts

The idea that business attraction and retention activities are ways to long-term sustainability is based on neo-classical and neo-liberal development paradigms that emphasize the role of transactions within a free market in wealth creation and economic progress . Spurring the growth of the business and corporate sector is therefore seen as crucial to over-all economic growth and development , under the assumption that wealth created by trade and investment activities will ultimately trickle down to the majority in the form of job and income generation (Trainer

, 2002 ,

. 55 ) However , the negative outcomes of development efforts using the market economy-oriented approach in the vast majority of countries in the developing world (Rist , 1997 ,

br 218-19 ) illustrate that the focus on business attraction and retention are not reasonable means of achieving sustainable development

Contrary to the claims of neoclassical and neoliberal development theorists , development that is based on economic and business growth does not necessarily lead to an improvement in the economic life of the majority (Trainer , 2002 ,

. 59 ) On the other hand , the myth of the trickle-down effect ' is challenged by the fact that although increased business activities generate employment , it also results in cheap and repressed labor as the efficiency and profit maximization concerns of corporations usually necessitate cutting down on variable production costs such as wages . Unfortunately , corporations are able to leverage business interests above labor due to the very dependence of the country on investments that creates significant pressure on the government to implement policies conducive for businesses such as tax incentives and lowered minimum wages . For instance , workers in garment factories in Bangladesh receive only 15c per hour in wages despite significant economic growth in the country (Trainer , 2002 ,

. 56

In the same manner , the dominance of financial capital in an economy that is dependent on business activities tends to widen the gap between the rich and the poor in terms of access to resources . Trainer (2002 notes that markets have a strong tendency to allocate scarce resources and products to the rich and to deprive the poor of resources they once had (p . 60 ) As such , the distribution of resources and access to services is based on the capacity of citizens or communities to pay and not based on actual need . Ultimately , this contributes to the continued impoverishment and deteriorating condition of the poor (Rist , 1997 ,

br 236 ) while benefiting the local elite who have ties with business and multinational corporations

Likewise , the realities in developing countries show that market-oriented development policies are often unresponsive to the needs of the poor and marginalized sectors and also undermine ecological and environmental sustainability . This is because investment will flow into those ventures likely to yield the highest returns (Trainer 2002 ,

. 60 ) Thus , the government 's development priorities are often incongruent with the development needs of communities . This is exemplified in the case of Ghana where agricultural activities are focused on export crop production instead of addressing food security and malnutrition problems of the local population (Rainbow Ark , 1992 br

. 9 It is clear that efforts in business attraction and retention activities cannot bring about long term sustainability in community development Setting aside concerns on business ' impact on the environment market-oriented growth dependence leads to negative development outcomes , exacerbating poverty and marginalization instead of alleviating social problems . Thus , there is a need to use alternative development frameworks in the effort to bring about genuine and sustainable community development

Works Cited

Rainbow Ark (1992 . Development Reconsidered . Washington , D .C

Rist , G (1997 . The History of Development . London : Zed Books

Trainer , Ted (2002 . Development , charity , and poverty : the appropriate development perspective . International Journal of Social Economics 29 (1 /2 : 54-72

Community Development

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