Chairman's Address
Dr. Helmut Sohmen
Chairman
Pacific Basin Economic Council
Governor Cayetano, Excellencies, Honoured Guests, Members and Friends of PBEC, Ladies and Gentlemen,
On behalf of PBEC let me also warmly welcome you to this 33rd International General Meeting, the first in the new century, and the very first in Hawaii. My colleagues in PBEC and I are delighted that you could join us in what will no doubt prove to be a most memorable event. Some of you did come from a long way away, but we are happy of course to also welcome the large local contingent in the audience.
My first duty this morning is to thank the Governor of the State of Hawaii, representing the people of Hawaii, for the tremendous encouragement he have received from him and from the community at large to bring this gathering to Honolulu. I have to admit that initially there was originally some reservation among our members, since holding the meeting in Hawaii meant breaking with a long-established tradition. But now that we are here, and have seen and felt the enthusiasm surrounding our meeting, I am sure that it will go down in the PBEC history as one of the very best.
I must also thank Mayor Harris of Honolulu and all his officials for what they have done, and are doing, to give these proceedings their full support and protection.
A big vote of thanks is due especially to the local Steering and Organising Committees for this IGM, admirably led by Larry Johnson, and supported by so many prominent individuals and corporations as volunteers and as donors.
Larry, we are very much in your debt. Please convey our sincere appreciation also to all your friends and associates for so generously giving of their time and money to make the event possible. I trust this IGM will be the vanguard of many more to come, focusing attention on the State of Hawaii as a premier business conference venue and investment location, and justifying its unchallenged reputation as the central meeting place of the Pacific. Larry already mentioned the business opportunities: they are not of course all hi-tech. Some of you may have sampled the shrimp at the receiption last night at the Hilton Hawaiian Village; it came from a new shrimp farm venture only recently started on the Island of Kauai. Some of these projects will also help to make up for the plantations that are slowly fading away, and provide for local jobs.
The title of this conference "New Horizons: Economic and Polititical Implications of the Changing Global Landscape" imposed itself at the turn of a new Millennium.
Rapid technological change and incredible advances in communications are constantly changing the way we look at the world and at ourselves. But because of the speed with which they occur, these changes also tend to blur our view of the future. Our horizon remains as a result quite close and short-term, and our predictions for the future must remain tentative, since breakthroughs happen now almost weekly. Computing power is increasing at an accelerating rate. The next stage of the Internet, the so-called "Grid", has left the drawing board stage. Exploration of the Solar system and the cosmos continue apace, as do the insights into the nature of elementary particles. The search for infinitely renewable energy sources may yet be crowned with success. As a tanker owner, I of course look at that latter prospect with some trepidation!
Advances in medical science and in bio-engineering will help to perfect man-machine interfaces and prolong human life. In due course, we will undoubtedly learn how to cope with environmental degradation, food shortages and the scarcity of other vital resources such as clean air and water. It does no longer seem to be a question of HOW, but WHEN.
The sciences and their technological applications are moving almost too quickly. A broadly-based understanding of the new discoveries is patchy, leading to confusion and anxiety, and now also to iconoclastic reactions, or to a utopian yearning for the return to a more pastoral life by those naively believing that progress can somehow be stopped. The critical problem today is how to successfully deal with the ethical and political issues with which we are confronted, to avoid a new generation of Luddites to appear two centuries after they first battled against industrialisation in Great Britain.
As we have seen again recently, new division are appearing in the international community, producing strong emotional arguments and violent demonstrations. Military confrontations are not abating either, as the examples of Kosovo, the Congo, Kashmir, or East Timor have shown, to name just a few of the current flashpoints. Tension continue in the Middle East, in Central Asia, and in the Taiwan Strait. We are fortunate to have Admiral Blair, Commander in Chief, U.S. Pacific Command, leading a group of distinguished panelists discussing the link between economic development and military security, a topic that was on our agenda at the Santiago IGM in 1998, and will no doubt continue to be prominent during most of this new century.
We talk glibly of globalisation but continue to struggle with national sovereignty issues, protectionism, and local turf wars. We notice only slow progress in the formulation of policies and in the development of norms that can be internationally applied and enforced to keep pace with changes the in the commercial market-place. A global competition policy, an international criminal court, or an agreed regime for international supervision of financial transactions and institutions can be mentioned as cases in point.
We are presently caught in the struggle between the globalising forces of business, and the protective defence of the sovereign rights of the nation states; between those who advocate the benefits of an open and multilateral trading system and those who argue that the latter is only a framework to ensure a deepening of the gulf between rich and poor nations. As so often in history, the emotions prevail over rational argument but with the added difficulty today that the dispute is carried out on a truly global scale, affecting literally billions of human beings. We cannot really afford to get it wrong for any length of time.
It is probably too simplistic to argue, although some do, that the freedom to trade and invest freely anywhere in the world can and will over time solve most of the present and future social and political problems. Despite a high degree of economic liberalisation over many years already, the economies of the Far East found themselves not immune to the sort of financial conflagration that swept through the region in 1997 and 1998. To create a well-functioning and prosperous civil society, more is needed than foreign direct investment, free trade, and improvements in the job markets and in infrastructure. It also requires the rule of law, transparent government, a level playing field for business, and above all better education. The diverging developments in Latin America and in Africa during the past decades provide empirical proof for this state of affairs.
As evidence around the world mounts that open and stable societies provide the best platform for the manifold forms of business activity, our foremost objective as businessmen should be to help those places where reform is most urgent. In so doing, we may be able to gather more popular support for the idea that free trade and unrestricted investments promote public welfare. If we fail in this task, then judging by recent events, the forces of protectionism will reassert themselves, undoing the steady progress of liberalisation of the last decades. It is of course a difficult ridge to walk.
In so doing, we are not helped by the fact that the business world is traditionally fragmented. Businessmen are by definition competitive, although as cross-border mergers and acquisitions, and global supply and distribution networks proliferate, we are becoming at least less nationalistic in outlook. However, political parties espousing pure business philosophies are thin on the ground in almost all jurisdictions, providing much fewer opportunities for exercising real political influence than the public at large and the media generally assume.
While we have imagination and entrepreneurial drive, very few of us businessmen and -women are visionaries, preoccupied as we usually are with short-term operational problems and profit targets, or the worries about the probable stock market reactions to our quarterly performance. We normally cannot spend much time on philosophical or political deliberations. As businessmen we are also not seen as traditionally strong in being good propagandists for wider social causes. And we often shy away from taking strong positions on controversial subjects, lest they damage our individual commercial prospects.
If we are honest with ourselves, we have to admit that while we are prone to criticise government involvement in commercial affairs, we often do leave the initiative and the decision-making to governments. Globalisation has not brought many changes to this attitude so far. The relative success of the APEC process to project a steady move forward towards the 2010 and 2020 goals for the Pacific region, while in reality producing progress only in small doses and behind schedule, highlights the intrinsic belief by the business community in the powers of government to get things done.
So, given the personal and procedural weaknesses of most business lobbies around the world, do we have a chance to be able to influence events on a broader scale? I submit that we do. Otherwise PBEC and other similar organisations would not have lasted so long.
However, what we do need for business to become more effective in this age of globalisation is something I would like to see as part of PBEC's mission statement are unity, consistency, selectivity, and simply more guts.
PBEC is a model for the regional pooling of commercial interests with the purpose of identifying and highlighting causes that need the attention of governments and the wider public. PBEC did better in its earlier days when there was little competition from other networking groups, and when the exchange of information over large distances was not as easy and as instantaneous as it is today. Today there is a vast array of associations and institutions, also espousing liberal views on the markets, defending free enterprise, and arguing for the removal of barriers to trade and investment. What we now must try to achieve is better coordination among them, and greater uniformity and consistency in the messages we are trying to deliver.
For that reason, we respectively also need to be more selective in our approach. None of the various competing business groupings can be all things to all men. Rather, we should try to agree to individually tackle those issues on which we stand the best chance to have a positive impact in our efforts at persuasion. By so doing we will be able to eliminate the duplication of work and the proliferation of bureaucracies that now exist and which in effect are getting worse. There are obvious geographic lines of demarcation, and there are institutional differences that make one or the other organisation destined to be more successful. What is required is the positive cooperation of all to allow these assessments to be made, so that a productive division of labour among the existing international and regional business groups can be achieved. Consistency in our individual and collective pronouncements would then also be better assured. The fear of submersion or loss of identification should be overcome by the acceptance of the fact that when operating in a global context with its myriad of challenges, there is more than enough to do to keep us all busy.
Above all, as businessmen we need to have the courage to speak out: to expose hypocrisy and double standards, to publicise opposition to ill-conceived policies in all the economies in which we operate, to warn against overpoliticisation of appointments to international bodies, and to push for more transparency. It was surprising that few business leaders have commented on the prolonged wrangle for the senior positions in the WTO and the IMF. The international business community seemed simply shell-shocked by the events in Seattle last December, and unable to mount an organised and effective response in support of the WTO principles and practice. The Asian economic crisis produced much discussion, among other things, about the need for reform of the international financial architecture: again, the business lobbies left the debate mostly to government officials and academics. With recovery in sight, the urgency for reform seems ot have disappeared again, and yet obviously there are aspects of the current situation that still need improvement.
We spend a good deal of time talking about electronic commerce and the commercial benefits it will bring, rather than challenging governments to put their cards on the table as regards regulation, taxation, or customs treatment of this new and exciting technical form of conducting business. We often only half-heartedly criticise market restrictions where they still exist, such as in financial services, shipping, or aviation. And businesses are often driven by the environmental lobbies into taking action but rarely manage to be seen as the drivers for change themselves. We need to polish our image if we wish to compete effectively with the many other non-governmental entities and against their anti-globalisation rhetoric.
Again, because of globalisation, more coherence among the multitude of organisations representing the business community around the world, both large and small, would go a long way to ensure better results. It could be one of PBEC's missions in the 21st century to spearhead such a move. PBEC has good credentials for such a task. We have a long history of exemplary corporate citizenship among our many members from 20 economies. Most of the leaders of our organisation not only run profitable enterprises but do so in a manner that reflects an awareness of the needs of the larger society in which we all operate. We understand that this social responsibility for the promotion of education, of environmental protection, and of philanthropy complements and does not run counter to our concurrent responsibility for the bottom line of our companies. We simply need to be more active in getting this message publicised and accepted, and I hope that our meeting will do its share in accomplishing this objective.
I am grateful that so many of our friends from the media are covering events here in Honolulu, and I trust that the results of our gathering will not disappoint them. We have a most impressive line-up of speakers and moderators willing to share their expertise and their wisdom with us. I would like to thank them also very much for being willing to spend time and effort to assist PBEC in fulfilling its mission.
Yesterday, the Board of Directors of PBEC passed a policy statement to re-affirm our belief in the future of the multilateral trading system as the only way forward to ensure optimum economic growth and development. In it we stated:
"PBEC views globalisation as an inevitable reality. PBEC member companies will therefore continue to move forwad making investments and providing goods and services across international boundaries, thereby raising living standards and the quality of life for all citizens of the Pacific Basin. The launch of a new WTO round of negotiations would be a positive and desirable step which PBEC therefore strongly endorses."
We could have said "for the world's citizens", not just for those living the Pacific Basin. Because whatever we or other interest groups or governments do from now on, the effects of our action will inevitably be global in scope.
Governor: thank you and all our friends in Hawaii very much again for your hospitality and your friendship.
Ladies and Gentlemen: thank you for your interest and support. Let me wish you all three stimulating as well as enjoyable days ahead, and let me encourage you and your associates to take a good look around Hawaii.
And do try and come back often! Thank you very much.