UN-business
partnership forged on global economy
By Maria Livanos Cattaui
Paris, 6 February
1998 - The way the United Nations regards international
business has changed fundamentally. Today, with cold war rivalries fading into
history, the UN and other intergovernmental organizations and institutions have
to confront the great new challenges of the global economy. They need business
to help them.
This shift towards a stance more favourable to business is being nurtured from
the very top. As UN Secretary General Kofi Annan has said: "The impact
of the private sector is of growing importance. It would be timely to develop
means of consultation between the United Nations and the business community"
Nowhere has the sea-change in attitudes been more marked than in the field of
international investment. The overwhelming majority of UN governments now see
foreign direct investment as a national asset, the source of economic progress
and new wealth for their peoples. They vie with one another to persuade companies
that their countries offer social stability, the rule of law, and a regulatory
framework capable of inspiring investor confidence.
Long gone are the days when governments of what was then known as the Third
World used the UN platform to berate multinational corporations as rapacious
monsters, interested only in depriving them of their natural assets and draining
their national wealth.
This courting of foreign capital and expertise is a sign of the times. The market
economy system is everywhere embraced as the most effective means of generating
and spreading wealth. But it cannot operate at maximum potential without an
efficient regulatory framework that sets the rules of
the game.
Those rules once came almost exclusively from national governments, but that
is changing fast. As economies become ever more closely enmeshed, the need for
strong multilateral rules becomes even more pressing. The emphasis has to shift
from national or regional legislation to rules that can be applied globally.
For these, business must look to the United Nations and its agencies as well
as to other key intergovernmental organizations like the World Trade Organization.
International institutions increasingly turn to business. An example is the
"Business Partners for Development" initiative launched at the World
Bank to encourage development agencies to involve businesses in their own programmes.
As one senior Bank official remarked: "The public sector isn’t hacking
it alone any more."
The International Chamber of Commerce, representing business throughout the
world, is establishing a systematic dialogue with the United Nations. The purpose
of these contacts is to find fruitful areas for cooperation between the UN and
business as the main agent for diffusing technology and wealth through trade
and investment.
What makes the dialogue possible is the perception by both sides that open markets
are a precondition for spreading more widely the benefits of globalization,
for integrating developing countries into the world economy, and for improving
living standards of all the world’s peoples, and in particular the poor.
One priority area where business can contribute its expertise is to make sure
that the global financial system possesses the checks and balances needed to
avert East Asia-style financial crises. Another is pursuing economic growth
while protecting the environment. Others are trade liberalization, defence of
intellectual property rights, the fight against corruption, modernization of
customs procedures. The list is long.
The dialogue is coming about not a moment too soon. Globalization has the potential
to bring immense benefits to the human race. But – as recent events in
East Asia have demonstrated - it can swiftly magnify local crises into problems
affecting the entire world economy. Hence the need for a framework of rules
on investment, capital markets, competition policy and a host of other areas.
Both governments and business have their responsibilities. As the global economy
grows, it will be for governments – particularly in the poorer countries
– to find ways at national level to ensure that newly generated wealth
benefits all their peoples and not just a privileged few.
The creation of small and medium sized businesses will be the most effective
way of spreading genuine wealth as opposed to providing hand-outs. Here business
knowhow – communicated perhaps through the chamber of commerce movement
worldwide – has a key role to play. Rural infrastructure development, provision
of basic health care and education will be essential too, but these are all
primarily the responsibility of government.
Finally, it remains for business to provide the enterprise, capital and inventiveness,
and to forge the alliances and strike the deals that make the global marketplace
a reality.
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