BUSINESS WELL PLACED TO NOT ONLY GENERATE GROWTH, BUT ADVANCE GLOBAL CITIZENSHIP, SAYS SECRETARY-GENERAL AT 50TH ANNIVERSARY OF MIT’S SLOAN SCHOOL OF MANAGEMENT

BUSINESS WELL PLACED TO NOT ONLY GENERATE GROWTH, BUT ADVANCE GLOBAL CITIZENSHIP,

SAYS SECRETARY-GENERAL AT 50TH ANNIVERSARY OF MIT’S SLOAN SCHOOL OF MANAGEMENT

Following is the address of Secretary-General Kofi Annan at the fiftieth anniversary of the Massachusetts Institute of Technology (MIT) Sloan School of Management in Cambridge, Massachusetts on 11 October:

Let me thank you for those kind words and this very warm welcome.  It is indeed a pleasure to join you today for this anniversary celebration.  Over the course of half a century, the Sloan School of Management has built itself into one of the world’s academic powerhouses.

I say “world”, and not just “country”, because right from the start, Sloan looked well beyond the confines of this campus, encouraged people from many nations to study here, and was eager to advance the cause of international cooperation, scholarly and otherwise.  Congratulations on this milestone.

Three decades ago, I was myself fortunate to become part of the Sloan community, and it is good to see so many familiar faces in the audience.  An event like this really bring back memories -– of walks along the Charles River, of what the world and I myself were like when I first came here.

I recall in particular that Sloan exposed me to some very interesting work in organizational culture and psychology and how to manage change.  That may sound like jargon to some, but I can assure you it has come in very handy at the United Nations.

Back in 1982, when I was working with the High Commissioner for Refugees, trying to deal with the crisis of boat people, I invited my good friend Professor Ed Schein to Geneva to help us improve our internal communications and coordination.

We gathered for what we thought would be a straightforward, hour-long briefing.  Three hours later, we were all physically and emotionally drained from what had quickly turned into a frank, soul-searching exercise on our mission:  what it meant to work for the United Nations and how different people and nationalities around the world work better together.

Some frustrations had been bottled up for years.  But once the floodgates were open, we found new ways forward and, truly, a new sense of unity and purpose. The session was so successful that in 1990 I organized another one, when I was head of human resources; I asked Ed to come in again -– this time with Professor Lester Thurow.  About 30 senior officials from throughout the United Nations system, and from 26 different countries, came together and achieved a similar breakthrough.

I like to think we are replicating that exercise on a global level, among peoples and nations, as we strive to build the trust, confidence and sense of shared values and responsibility needed to address the urgent issues and threats of our times

We are all aware that more and more challenges -- from environmental degradation to drug trafficking and the spread of diseases such as HIV/AIDS -- have a global dimension.  Through work and travel and trips to the store, we can see that trade and communications are stitching the human family ever more closely together.

These phenomena have also helped to make the early twenty-first century a very troubling time for our global village.  Distrust between cultures and religions often leads to violence and has been aggravated by the terrorist attacks of 11 September.  Concern is mounting because of global economic uncertainty, and because the benefits of globalization have been shared so unevenly.  Confidence in markets has been dealt a further blow with a series of corporate scandals in the United States and the gathering feeling that markets, by themselves, cannot respond to the real needs of society or provide the public goods that humankind needs to survive.

In an age of interdependence, global citizenship is a crucial pillar of progress.  In a series of global meetings and conferences over the last two years in particular, world leaders have tried to define just what that citizenship means.  They have been trying to build an inclusive, responsive, effective international system, from which all people can benefit -- and in which all feel they have a stake.

Shared responsibility was at the heart of the declaration adopted at the Millennium Summit in September 2000 when 160 heads of States and governments got together in New York.  All countries came together -- not just to express their general hopes for peace and development in the twenty-first century, but also to give their backing to a set of very specific, time-bound objectives which have since become known as the Millennium Development Goals.

The goals include reducing hunger, providing access to safe drinking water, and ensuring universal primary education.  They will be closely monitored and measured -- how many kids are in school, how quickly hunger and extreme poverty are being reduced.  And we will advertise the results in a way that, we hope, will galvanize politics and policy-making so that the goals can be met by the target date of 2015.

Governments faced a first test of their commitment to these goals last November at the World Trade Organization meeting in Doha.  There, trust was the main issue on the table.  Developing countries have heard a lot of talk about free and fair trade, but have seen far too little of it.  They want to know that their products will have an equal chance to compete in the global market.  That chance is currently denied them because of tariffs on their goods, and because of subsidies given to their competitors in rich countries –- subsidies that also perpetuate unsustainable practices in farming, transport and energy use.

The new round of negotiations agreed to at Doha offers the prospect that markets will be truly opened -- but it is too soon to say that trust in the trading system will be achieved -– only time will tell, but I think we need to work hard to have the markets truly open to all.

The Monterrey Conference on Financing for Development last March was also an exercise in recognizing shared responsibilities.  The Conference generated substantial new pledges of official development assistance, reversing a decade-long decline, and made good progress on issues such as debt relief, investment, and corruption.  Just as important, developed and developing countries reached a common understanding on their respective responsibilities in the pursuit of balanced, equitable development.

Finally, last month, at the World Summit on Sustainable Development in Johannesburg, global citizenship once again took center stage.  All leaders committed themselves to a path of development and economic growth that safeguards resources and ecosystems for succeeding generations.  Leaders from rich countries in particular agreed to reduce their nations’ ecological footprint on the planet.

      Taken together, these summits and conferences give us a blueprint, a blueprint for development, that puts people -- not states, and not gross domestic product (GDP) statistics -- at the center of policy-making.  The overriding challenge now is implementation.  And for that we shall need people from all sectors -– public, private and civil society -- to forge more and better partnerships to implement these goals

One of the most welcome developments at the United Nations in recent years has been the steadily growing engagement of the business community –- both in policy forums and in projects on the ground.

Though the relationship is not without its difficulties, there is growing recognition that we must move beyond the politics of confrontation, and that solutions to poverty, environmental degradation and other challenges can only be found if the private sector is involved.  More and more businesses are themselves recognizing how much they depend on international norms and standards for the conduct of business on a global scale, and on the United Nations wide-ranging work for peace and development to have an impact.

The Global Compact initiative I, launched in 1999 at the World Economic Forum in Davos, was based on my belief that open markets and human well-being can go hand in hand.  Over the long run, human well-being can be dramatically advanced by well-functioning markets.  But markets themselves cannot be sustained if they do not ensure human well-being.

I asked business to embrace nine universal principles in the areas of human rights, core labour standards and the environment, and to enact these principles within their spheres of influence.  I picked these areas because I was worried by a severe imbalance in global rule-making:  while there are extensive and enforceable rules for economic priorities such as intellectual property rights, there are few strong measures for equally vital concerns such as human rights and the environment.

The Compact has since become more than a call to action.  Today it involves not only business but also labour federations and non-governmental organizations. It has promoted the importance of universal values and encouraged investors to look harder at opportunities in the least developed countries, particularly in Africa.  The Compact has also created a learning forum – a worldwide academic network that examines case studies, trying to determine what works and what doesn’t.  I am pleased that the Sloan School plays an important role in this forum.

None of this is meant as a substitute for action by governments, or as a regulatory framework or code of conduct.  Rather, the Compact is a voluntary initiative, a platform for showing how markets can be made to serve the needs of society as a whole.

Businesses may ask why they should go down this path, especially if it involves taking steps that competitors might not, or steps they feel are rightly the province of governments.  Sometimes, doing what is right -– for example, eco-efficiency or creating decent workplace conditions –- is in the immediate interest of business.

Sometimes, we must do what is right simply because not to do so would be wrong.  And sometimes, we do what is right to help usher in a new day, of new norms and new behaviours.  We do not want business to do anything different from their normal business; we want them to do their normal business differently.

Openness is the emerging hallmark of our time.  But we need to make it work.

Otherwise, countries and peoples might retreat behind protectionism or, worst of all, reject global citizenship or globalization in favour of narrow concepts of national interest not at all appropriate for an interdependent world.

Business is well placed not only to generate employment, investment and growth, but also to advance global citizenship.

Sloan is well placed to teach more than economics, accounting and finance, and to help define the parameters of corporate citizenship.  I am delighted to hear that your programme is already evolving in this direction and there is a great deal of enthusiasm for globalization.

And the United Nations is well placed to promote dialogue that will build trust, and to create the multilateral norms and frameworks needed to fulfil our shared responsibilities.

All of us -– the private sector, civil society, labour unions, non-governmental organizations, universities, foundations, and individuals like you -– must come together in an alliance for progress.  Together, we can and must move from value to values, from shareholders to stakeholders, and from balance sheets to balanced development.  Together, we can and must face the dangers ahead and bring solutions within reach.

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