11-01 Implications

During my twenty years as a member of the Executive Committee of the International Small Business Congress (ISBC), I became fixated on understanding income inequality. It was more than economics.
We learned that as the relative income of middle and lower income citizens decline, it makes it difficult for economies to grow. Sounds like Communism.
And yet, this phenomenon is happening all over the world. It is called globalism. So, it is not hard to understand why so many people think the economic system is rigged, as suggested in the cartoon.
The problem is that global forces of change are complex and difficult to understand and assess. Changing people to keep up with changes in markets or technology is the big societal challenge of our time.
Here is a relatively simple small business example using the experience of our on-line learning company called Vubiz Ltd., or Virtual University for Business.
When we were just an Ontario company, we did not worry about functioning in Quebec French. This changed when we became a national company. And when we decided to function in the US market out of Southern California, we had to function in Mexican Spanish. If we had located in Miami it would have been Cuban Spanish. So, nothing is simple. Functioning in multiple languages is complex.
Then there is the issue of income inequality in terms of how it impacts people’s security.
For example, the first thing we used to do at the ISBC was to have the members of the governing body stay in the same hotel, so they did not have to take the risk of leaving their hotel to attend meetings.
We were even warned about wandering about outside our hotel at night in Washington, DC in 1976. That was a shock at the time.
Then there were Nordic countries like Sweden and Finland that had a powerful social security safety net in place paid for by a VAT tax to cope with income inequality. And they have had real successes. Safe to walk about at night.
The Congress hosts, in both countries, did the same thing when providing a banquet for the visiting VIPs. They held them in private residences where someone was hired to bring in the food and prepare the dinner to avoid paying a 30 percent VAT tax at a local restaurant. Yes, there is a black economy in the Nordic countries.
At the special banquet associated with the Congress in Sao Paulo, the function was again held in a private home, but one with a twelve-foot wall and guards with automatic weapons. From the photo, it is obvious this is a monster city.
I remember being the guest of the trade commissioner in Jakarta and hearing the doorbell ring. It was a local person selling videos for cash. They were all copies of course. Apparently, it was too dangerous for the staff of the embassy to leave their compound to do outside shopping or entertainment.
I tried to understand just how difficult it was for the average citizen of a nation like Indonesia to cope. Officials told me that there is so much bartering and cash transactions that this kind of thing is almost impossible to measure.
Anyway, to try to put it all in simple terms, a relatively affluent westerner lives a very sheltered existence, despite levels of income disparity.
And people like my wife and I have become smart travellers and are careful to remove all forms of jewellery when walking about. I even have what I call a traveller’s watch that a thief can have if I am held up.
Will I ever forget the problem we had as an international body trying to assess the risk of taking a world conference to Johannesburg, South Africa in the 1990s. The members of the executive committee representing five nations all went back to their governments for advice. And all came back with the same directive to not take their delegation to this city. They called it the most dangerous place to visit in the world.
Income inequality has implications or should I say scary consequences.
That’s the way I see it anyways.