Howard Buffett, Warren Buffett’s eldest son and the successor apparent of Berkshire Hathaway, as well as CEO of the $340 million Howard G. Buffett Foundation, doesn’t show up in the limelight often. But when he does, you’d better listen up.
“Every corporation has a responsibility. The idea that [a company] is a pure profit-generating machine is dead wrong,” the 63-year-old philanthropist contemplated on capitalists’ social responsibility when speaking at this year’s Concordia Summit in New York City on Monday.
“I think capitalism is the greatest way to generate an economy, but capitalism has shortfalls. And I think it falls on companies to pick up on those shortfalls,” Buffett said, which is why he deliberately chose challenging humanitarian issues like food safety and international conflict mitigation as the theme of his charity causes.
The Howard G. Buffett Foundation’s latest peacemaking effort is particularly ambitious: to build a drug-free society in Colombia, a country long plagued by drug cartel violence and crimes.
To make it happen, Buffett’s foundation is partnering with Colombia’s newly elected administration led by President Iván Duque Márquez in carrying out a series of infrastructure projects, including road construction and land titling, all with the goal to eliminate the South American country’s reliance on growing coca, the crop used to produce cocaine.
“You’ll have to build a whole new value chain,” Buffett explained. “Even after you’ve got land titling, you’ll have to help farmers convert from coca to another crop. And [building roads] is important, because the new crops are going to require different types of transportation to reach new markets.”
Still, eradicating coca plantations will be a challenging job. It’s estimated that about 100,000 Colombian families depend on coca plantations. And the dominance of local drug lords can make it difficult for these farmers to quit.
“We’ve worked in Afghanistan, and we found that an armed group has probably the best business plan that’s very hard for a government to beat,” Buffett said. “They are trying to deliver something that’s very difficult for a government to deliver. It’s very hard to go up against that. It does take a lot of money and effort, and that effort has to be maintained over years.”
Buffett said his next stop will be Catatumbo, a notoriously lawless region in eastern Colombia neighboring Venezuela. “Obviously the situation in Venezuela makes it more challenging. The criminals are able to act with more impunity because of the ability to cross borders and get people in Venezuela to help them move coca out of Colombia…So, that’s the place where we need to cripple them.”
Buffett said his foundation plans to invest at least $150 million to $200 million over the next five to seven years to build roads, schools, hospitals and other infrastructure needs in Catatumbo.
“You have to get the community to buy in. That’s something that an armed group cannot do effectively or maintain in the long term,” the philanthropist said.