SECRETARY-GENERAL, IN REMARKS TO IBERO-AMERICAN BUSINESS, CIVIC MEETING, LAUDS ‘GREAT STRIDES’ IN RECOGNIZING MARKET-STATE COMPLEMENTARITY

SECRETARY-GENERAL, IN REMARKS TO IBERO-AMERICAN BUSINESS, CIVIC MEETING,

LAUDS ‘GREAT STRIDES’ IN RECOGNIZING MARKET-STATE COMPLEMENTARITY

Focus on Macroeconomic Polices Not Enough,

He Says, Stressing Need for Adequate Funding of Social Policies

Following is the text of UN Secretary-General Kofi Annan’s remarks at the joint session of the first Ibero-American Business and Civic Meetings, in Salamanca, Spain, today, 14 October:

It is a great pleasure to join you today, soon after the World Summit in New York.  That Summit took important decisions on security, development and human rights, and has given us a lot of work to do.  As we move ahead, partnerships will play an even more important role than they have done to date.  I am glad that Governments are using this Summit in Salamanca to explore new ways of working with business and non-governmental organizations.

Most of the challenges we face can only be tackled through cooperation.  Growing numbers of actors have come to understand that poverty, disease, environmental degradation and bad governance not only erode social capital.  They hamper the emergence of vibrant civil society organizations, threaten markets and undermine opportunities to create jobs, especially for millions of unemployed young people around the world.  Businesses will grow only if societies are stable and inclusive.  Entrepreneurship will flourish only if public institutions are effective, and set the right parameters and the right regulatory laws. 

Ibero-American countries have made great strides in recognizing the complementarity of the market and the State.  Business leaders and civil society are understood to be key partners in a social contract.  European, and especially Iberian, efforts to build social cohesion offer lessons for Latin American and Caribbean countries seeking the same objective.  Experience shows that it is not enough to focus on macroeconomic policy.  There must also be adequate funding for social policies, and adequate incentives for productive development. 

Such a social contract also means that all constituencies have responsibilities.  How a business conducts its affairs, and how it engages with communities, public institutions and the policy-making process, can make a big difference in achieving stability and progress.  It is for this reason that the United Nations has long been a strong advocate of responsible corporate citizenship.  And it is why we have established the Global Compact as a values-based platform for engagement with the business community.

The Compact is founded on universal principles in the areas of human rights, labour, the environment and anti-corruption.  Here in Spain, and in many countries of Latin America, including Argentina, Brazil, Chile, Mexico, Panama and Peru, the Global Compact has firmly taken root.  More than 455 companies in the region have joined the Compact, along with over 220 in Spain and 20 in Portugal.  Many have started to make the principles -- such as fighting corruption and working for the elimination of the worst forms of child labour and discrimination -- part of their strategies and daily operations.  Many have also started to take tangible action in support of broader societal goals.  Dozens of innovative public-private partnerships are under way in key areas such as microfinance, education, health and environmental protection.

However, even when real growth takes place, the challenge of inequality and informal employment remains.  That, in turn, explains why poverty persists from generation to generation.  Young people need to trust that competitive and productive economies are also creating opportunities for them.  Formal and decent work is the best social protection.

Ibero-American cooperation, with the participation of business and civil society, is essential if we are to tackle global problems and create global public goods such as security, financial stability, environmental stewardship and a truly fair international trading system.  It is my hope that this meeting will explore what more business can do to meet these challenges, and how the actions many of you are already taking can be scaled up.  I also hope you will explore ways in which business can work more effectively with non-governmental organizations, labour groups and other essential partners.

At the World Summit last month, and now at this Ibero-American Summit, leaders at the highest political level are putting their weight behind important decisions aimed at securing peace and prosperity for all humanity.  I look forward to working with you on the crucial task of implementation.  Thank you very much for your commitment and your engagement.

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For information media • not an official record