MAIN PAGE | EVENTS & PROGRAMS | 2001 | IGM | SPEECHES | ALFONSO VALDIVIESO
PACIFIC BASIN ECONOMIC COUNCIL
MAIN PAGE | EVENTS & PROGRAMS | 2001 | IGM | SPEECHES | ALFONSO VALDIVIESO
Regional Vitality in the 21st Century
April 6-10, 2001 — Tokyo, Japan
His Excellency Ambassador Alfonso Valdivieso
It is a privilege to attend this 34th Annual Meeting of the Pacific Basin Economic Council - PBEC -, the oldest regional business organization in the region and a selected forum to share ideas and exchange views on the economic, social and political development of more than half of the world's population. I also want to thank the Japanese Committee for PBEC for the outstanding organization of this important event as well as for their warm hospitality. And it is particularly challenging to address such an important audience on topics that are fundamental to management in the twenty-first century such as transparency, environmentalism and corporate responsibility. None of us doubts that these topics are key to the future of a global economy that is increasingly dependent on the behavior of the private sector. Developing countries share many problems and opportunities. That is reflected in the fact that our private sectors still have a long way to go in the area that is subject of this Plenary Session. The support of the Chambers of Commerce and of the Governmental Agencies in the developing world is fundamental for business people to overcome the challenges that the new century poses in the areas of transparency, environmentalism and corporate responsibility. TRANSPARENCY One of the world's major scourges in these times is the problem of illegal drugs. The money generated by this illegal activity affects not only the economy but also has a perverse effect in the democratic system and the social values in the form of corruption and loss of transparency in the public administration as well as in the corporate governance. Therefore, strong leadership in both the public and private sectors is required to confront this grave threat that could overwhelm a nation, undermining the fundamental principles of the social contract. Transnational crime is probably the most serious challenge that international transparency has to face in this globalize world. It was precisely when drug money attempted to take over legal companies in Colombia that we understood the importance of transparency in the corporate world. Fortunately, the values of our entrepreneurs were stronger that the temptation of easy money. Some succumbed to the "money or lead" threat of the drug traffickers, but most managed to root out corruption and to enhance transparency in their companies. That was a decisive factor in the struggle by which the Colombian society was able to dismantle powerful criminal organizations. Being the traffic in illegal drugs a global problem that extends beyond national borders, as the international community has accepted through the principle of co-responsibility, there is still a lot to be done in order to deal with the more complex ramifications of this transnational crime. Money laundering as well as the uncontrolled trade of chemicals involved in the production process of illegal drugs are issues that must be addressed by the competent international forums to define proper and coordinated actions. If we are to act effectively we must act collectively. ENVIRONMENTALISM As one of the countries with the richest bio-diversity and home to at least ten percent of the flora and fauna on the planet, Colombia bears a heavy responsibility towards mankind. Our immense bio-diversity has a great socio-economic and environmental potential. However, we need to preserve our environment while at the same time guaranteeing to our people the right to use these resources in a sustainable way for development. Industry is one of the main sources of environmental pollution in the world as it affects the air, water and soil. Likewise, deficiencies in waste handling and disposal can pose an enormous threat to our environment. For this reason, the serious environmental damage that can be produced by industry requires the adoption of clean technologies and environment-friendly management. In Colombia we are currently working in two complementary fronts. The first one being the introduction by the Government of regulatory mechanisms such as compensatory and retributive rates. The second lies within the industry itself through the adoption of environmentally sound production processes. The Colombian Government and the private sector have subscribed agreements on clean production, but further efforts are needed to reduce the impact of industrial development on the environment. The experience of the Pacific Basin Countries in the promotion of both industrial development and environmental preservation are highly valuable to countries such as Colombia. I am certain that PBEC is an instrumental mechanism for this objective. CORPORATE RESPONSIBILITY There is no doubt that lack of transparency and pollution of the environment are huge threats to society in this new century. That is why corporate governance and corporate responsibility must rank high on today's agenda. Business is not just business anymore. Companies now have to enhance transparency, protect and preserve the environment and build communities. But, in addition to the benefits that our societies can get from the development and implementation of specific business practices in these fields, it is becoming imperative for the success of our private sector to do it since the compliance with international management standards becomes a requirement to access the markets of the First World. However, the significant economic cost that this process involves makes it extremely expensive and hardly achievable for our corporations if let alone to accomplish it. Most of them are currently focusing their efforts and available capital resources on enhancing efficiency, improving the export-oriented management model and deal with the great challenge of the Information Revolution. Thus, the concepts of environmentalism and transparency, though recognized as key factors in the fundamental role that private sector plays inside the society, are not priorities for the allocation of resources during the business process. In addition to this, there are currently some other obstacles to a more effective and efficient system of corporate governance that allow for the compliance with those international standards as well as some key steps that need to be taken: reviewing existing laws, modernizing our own standards, providing more information to entrepreneurs, enforcing existing regulations, promoting best practices and disseminating successful cases that serve as motivating examples. Some of the cases to be highlighted are the ones regarding the community building programs that Colombian businessmen are funding as a sign of their strong social consciousness and sense of corporate responsibility. All major economic groups and almost all the companies have philanthropic endeavors and community building projects. They know that they are obliged to give back to society, and particularly to the less privileged. This is a fundamental requirement, especially in developing countries where the gap between the rich and the poor is still very wide. I also wish to remark the importance of the input of the multinational companies in this regard, as well as in the progress of the whole business community in the developing world toward more sophisticated management practices in compliance with international standards of transparency, environmentalism and corporate responsibility. In the rich world, according to OECD research, foreign firms pay better than domestic ones and create new jobs faster. That is even more true in poorer countries: in several developing countries wages paid by foreign firms are more than 50% above average and their workfroces have been expanding steadily compared to local firms. Big foreign firms are also the principal channel for the introduction of new technologies, as is clear from the fact that an important percentage of all international royalties on technology involve payments between parent firms and their foreign affiliates. As for the environment, most research suggests that standards tend to converge upwards, not downwards. In this regard, allow me to comment on some of the experiences that I have had as Permanent Representative of Colombia to the United Nations and particularly since Colombia was elected a member of the Security Council. Almost all national and international conflicts have their origin in the lack of democracy and strong institutions. It is for this reason that state corruption is rampant and degradation of the environment almost the general rule. Companies and businesses are to be called upon to play a key role in helping governments to deepen their democracies and to devolve more power to their institutions. Democracy, community and institution building are the basis for enhancing transparency and protecting the environment. I invite all business leaders of PBEC to work together with governments committed with these goals. Their cooperation and compromise is also crucial in the struggle against crimes of transnational nature such as money laundering, arms struggling and drug trafficking. As international relations required increasing tolerance and the peaceful settlement of disputes, it is particularly important for companies to be aware of the negative impact that some business behavior may have on social conflict around the world. Let me conclude this presentation by expressing my gratitude to PBEC for this opportunity to share with you my views on this important topic. I also wish to assure you of my hope for a better future for our world, for our region, which has overcome the most severe economic downturn of the last 50 years, and for my country, which undoubtedly will overcome, in peace and prosperity, the turmoil and uncertainty of recent years. Thank you. |
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