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| Sunday, 31 October 2004 |
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Business |  |
| News Business Features Editorial
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'Tap reservoir of diaspora investment' Address by Mr. Jayantha Dhanapala on the occasion of the 75th anniversary of the Employers Federation - 21st October, 2004
"I begin by congratulating the Employers Federation on its 75th anniversary and wishing this great institution many more years of service to our country, its economic development and the strengthening of the social compact that must bond the Government, the private sector employers and the workers as we move towards common objectives. Seventy-five years is a very long time in the life of an institution. Born in 1929 out of the ashes of the Great Depression and the crash of the stock market in the USA, the Federation first served the mercantilist interests of the British colonial power. From the laissez-faire capitalism of that colonial era to the Corporate Social Responsibility (CSR) of today's globalised world economy the Federation has been a cohesive force and a beacon for the private sector - the undisputed engine of economic growth in our country. As an institution it has been resilient enough to adapt to changes in economic and social policy and yet maintain the core interests of efficient and profit-oriented management, collective bargaining and the retention of a competitive edge for Sri Lankan products. CSR "In my own career I have had the unique experience of working in the private sector, in the public sector and finally in an international organisation. From each experience I have derived invaluable lessons leaving me with an enhanced respect for the people who were my workers and their respective contributions to add value to the lives of our fellow men and women. Today as I help to manage the peace process I remain grateful for the efforts of the business community in Sri Lanka to assist in the search for solutions. A number of groups such as Sri Lanka First have demonstrated their sense of corporate social responsibility by taking bold initiatives. The economic causes of conflict and the perpetuation of conflict have been well researched by Prof. Paul Collier, who observes that "various identifiable groups will 'do well out of the war'. They are opportunistic businessmen, criminals, traders and the rebel organisations themselves. The rebels will do well through predation on primary commodity exports, traders will do well through widened margins on the goods they sell to consumers, criminals will do well through theft, and opportunistic businessmen will do well at the expense of those businesses which are constrained to honest conduct". Peace We have to deprive these vested interests of the pickings of war and ensure that the peace dividend makes peace more profitable and more durable than war over and above the more obvious political, moral and social benefits of peace. I was happy to see many leading employers representing civil society at the inaugural meeting held earlier this month, of the National Advisory Council for Peace and Reconciliation (NACPR) - a part of the new peace architecture designed by President Chandrika Bandaranaike Kumaratunga. The Committees of the NACPF are scheduled to meet next month and I look forward to seeing more initiatives being proposed by the business community. The synergy generated by all sectors of our society working together to seek solutions to the conflict that has ravaged our land can bring about the transformational change that we have all hoped for. But it is not enough that you bring your ideas and proposals to this inclusive and transparent exercise that is being conducted. Role of private sector We need the private sector to invest in the conflict-affected regions; to begin income and employment generating activities in areas outside the Western Province and to link the various regions of our land through interdependent economic structures. It is this that will ultimately keep us together as we look to each other for essential parts of our livelihood. The Government's Economic Policy Framework states that our economy is lopsidedly weighted towards the Western Province which accounts for over 50% of the Gross Domestic Product while the Southern and Central Provinces generate 18% and the Eastern Uva, North Central and Northern together produce less than 5% of GDP each. This is not a situation we can tolerate as socially responsible citizens. While 70% of our population live in rural areas the ratio of the poor among them is disproportionately high with 45% of our people living below the internationally accepted poverty line of US $ 2 (or approximately Rs. 200) per day. The employers and the business community in general must realise that relocation of industries serves not only the interests of income redistribution and equity but also of nation building at a critical time in our history. No doubt there will be questions raised about infrastructure and, most importantly, about security. We have frequently been told that businesses are not charitable institutions. That is indeed true. But it is also a little like the argument about which came first the chicken or the egg? If business does not take bold initiatives to locate industry in the conflict-affected and under-developed parts of our country, waiting for the Government to provide infrastructure support or for a permanent peace, we will be perpetuating the inequality and poverty that exists if not worsening it. Creativity Let us think creatively by exploiting for example the enormous reservoir of Diaspora investment resources that exists in Western countries not just among all Sri Lankan expatriates. In Gaza and the West Bank, the private sector - spearheaded by the Palestinian Diaspora and the support of the European Union - has created new banking systems, venture-capital funds, and mechanisms for the privatisation of telecommunication and other industries. The Government of India has also harnessed the resources of Non Resident Indians (NRIs) wisely. We can do the same and bring in capital and skills to the under developed areas in our country. Under the aegis of the National Council for Economic Development I have the privilege of chairing the cluster dealing with North East Donor Co-ordination. We have merged our cluster with the sub-group proposed by the donor community for post conflict reconstruction so that our mandate is now countrywide and includes both the policy framework and the implementation aspects. I call on the business community to support us in our endeavours. You have the entrepreneurial skills that we need at this moment of time. Global Compact The global context of corporate social responsibility provides us with best practices and lessons we can learn and adapt for our own needs. Kofi Annan has done more than any other Secretary General of the United Nations to extend the scope of the UN beyond the Governments who traditionally represent nation states. He has reached out to civil society and to business. Challenging business leaders to join an international initiative to support ten principles in the areas of human rights, labour and the environment, he launched the Global Compact. Today with more than 1500 companies in 70 countries in the Global Compact, I am happy to note there are some Sri Lankan companies as well. This initiative seeks to advance responsible corporate citizenship so that business can be a part of the solution to the challenges of globalisation ushering in a more sustainable and inclusive global economy. MDG The mechanisms under the Global Compact include policy dialogues , local structures and projects. While the ten principles themselves are laudable objectives we must also bear in mind the eight Millennium Development Goals (MDG) adopted by the largest gathering of Heads of State and Government at the 2000 UN General Assembly. Next year as the UN observes its 60th anniversary we will also have an opportunity to undertake the first five yearly review of the progress we are making in achieving the MDG. The World Bank estimates that there are hopeful signs and that global poverty rates are continuing to fall. In our region of South Asia almost 50 million fewer people were living in extreme poverty than in 2001 and powered by growth in India we are likely to meet the target of having the proportion of people living in extreme poverty between 1990 and 2015. Relevant to this discussion of the MDG and to the Employers Federation is the new report on 'A Fair Globalisation: Creating opportunities for all' produced by a World Commission on the Social Dimension of Globalisation under the auspices of the ILO with whom you work closely. The link between fair globalisation and economic arrangements under it, with peace, prosperity and security is emphasised. The report calls for a better balance between economic and social policies at the national and global level and advocates improvements in the quality and quantity of jobs as well as sustainable livelihoods. Focus The report also urges a focus on people; democratic and effective states, sustainable development; productive and equitable markets; fair rules; globalisation with solidarity sharing responsibility for helping countries and people excluded or disadvantaged by globalisation; greater accountability to people; deeper partnerships and an effective United Nations. Significantly the report does not confine its recommendations to the global level and examines what nation states must do in the management of their internal affairs. Let me quote from the Report since it is so relevant to our present situation: "There is wide international agreement on the essentials which we must urgently strive for: * Good political governance based on a democratic political system, respect for human rights, the rule of law and social equity. * An effective State that ensures high and stable economic growth, provides public goods and social protection, raises the capabilities of people through universal access to education and other social services, and promotes gender equity. * A vibrant civil society, empowered by freedom of association and expression, that reflects and voices the full diversity of views and interest. Organisations representing public interests, the poor and other disadvantaged groups are also essential for ensuring participatory and socially just governance. * Strong representative organisations of workers and employers are essential for fruitful social dialogue. "The highest priority must be given to policies to meet the central aspiration of women and men for decent work; to raise the productivity of the informal economy and to integrate it into the economic mainstream, and to enhance the competitiveness of enterprises and economies. "Policy must focus squarely on meeting peoples' needs where they live and work. It is thus essential to nurture local communities through the devolution of power and resources and through strengthening local economic capabilities, cultural identity and respecting the rights of indigenous and tribal peoples." To be concluded next week |
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