Opening Remarks by the Commonwealth Secretary-General: At the Commonwealth Business Forum

"Achieving Sustainable Development: Challenges for Business and Governments"

Prime Ministers, Honourable Ministers, Excellencies, Ladies and Gentlemen,


It gives me great pleasure to address the Commonwealth Business Council's Forum. I would like to take this opportunity to thank our hosts, the Nigerian Government and the people of Nigeria, for their hospitality, their generosity and the efficiency of the planning arrangements for all the Commonwealth events that will be taking place in their country over the next few days.

Let me also thank Hugh Morgan and Rahul Bajaj for inviting me to come and speak to you - as well as Mohan Kaul, the engine behind much of what is happening here today.

If you believe anti-globalisation campaigners, business is to blame for much of what goes wrong in the world today: from pollution to poverty, from armed conflicts to trade wars, business - and particularly multinationals - are at the root of the problem.

I believe, on the contrary, that business must be part of the solution. In fact, the business community holds the key to many of the problems our world is facing today.


1. Democratic development

Business can be at the root of economic growth anywhere and provide the wherewithal for social progress. By producing and marketing products, business provides jobs and opportunities, it creates wealth, it increases spending power and can improve the conditions for a healthy, educated society.

Many would say businesses don't need a social conscience, but a social commitment by the business community can have a direct impact on the health and well being of people.

I applaud, therefore, the decision by AngloGold in South Africa to provide AIDS treatment to its HIV-infected employees. Shares in the company rose minutes after they announced their decision, showing that social responsibility pays.

Industry leaders can also play a key role in promoting good governance. That is very important, because a country's growth depends largely on the investment it encourages and investors will be turned away by an opaqueness in public accounts, by unethical business practices and also by corruption.

The work achieved by the Commonwealth Business Council in helping countries improve good governance both in the public and the private sector has been remarkable. The CBC has been effective in supporting NEPAD, contributing to mobilise private sector involvement in the process.

Another significant initiative is the CBC's 16 Point Action Programme for Investment, which was endorsed by Heads of Government at their meeting in Coolum last year.

This joint Action Programme brings together governments, the private sector and civil society to help countries develop a fair and hopefully enticing business environment.

This programme has already begun in Tanzania and Mozambique and it is encouraging that during that period, these countries have attracted new investment projects worth over US$1.5 billion and US$1.8 billion respectively.

Countries like Nigeria are also making progress in rooting out corruption and I strongly commend President Obasanjo's efforts to improve transparency and raise accounting standards, particularly in the oil industry.

The progress achieved by these countries confirms the fact that good corporate governance makes good business sense, and it is from productive business that people will see and feel sustainable economic growth.

It also reflects the vital importance of the connection between democracy and development, which will be at the centre of leaders' discussions at CHOGM later this week.

Development and democracy are the twin engines of progress. The two are mutually supporting. The more you strengthen democracy, the more development you will get.

When a country is thriving economically, people are likely to get more involved in the democratic process and put pressure on governments for greater levels of openness. This, in turn, puts a state in a better position to attract foreign investment, setting in motion a virtuous circle of good governance and growth.

Conversely, poor economic growth means more poverty and more poverty means weaker democratic structures, instability and usually signs of communities and countries walling themselves off from their neighbours.


2. Trade: business is key

The business community can also make an important contribution in promoting a positive trading environment.

For poor nations, trade offers the quickest and most effective route towards development. That is why it is vital for them to have access to rich countries' markets.

But for this to happen, the world needs to agree on international trade rules that create a level playing field.

The failure to agree on such rules in Cancun last September was a disappointment for everyone.

Many fear that if no deal is reached, this will sound the death knell of trade multilateralism. Instead of a fair, rules-based international trading system, we will have a mish-mash of bilateral agreements, which, in the long run, is to no one's advantage.

Poor countries are bound to lose, as they are forced to accept the terms of bigger players.

And the business community would be hurt too, as confidence in the world economy would take a blow.

Moreover, failure to reach an agreement would create an increasingly complex web of trade rules which would hike up the cost of doing business around the world.

Business leaders can play a key role in ensuring this does not happen. I encourage them to use their position of influence to encourage governments to put the Doha Trade negotiations back on track.


3. Trade: making it happen

The CBC has taken a strong stand on the need to revive the trade talks, appealing to all the players involved to show leadership and political courage.

The Commonwealth as a whole can also play its part in restoring the trade momentum.

We do look to the EU and the US to show their hand. I know that the US Presidential Elections are coming up in November; the EU is currently in a period of reflection and changes at the European Commission are due later in the year.

But we cannot afford to waste time. Discussions need to be set in motion again and CHOGM offers an ideal opportunity to contribute to this. Our leaders' meeting is very timely, as it comes just two weeks before senior trade officials will be meeting in Geneva.

As a multilateral body including countries at both ends of the development spectrum - G8 countries at one end, many Least Developed Countries at the other - the Commonwealth is uniquely placed to achieve a workable consensus on trade.

Such a consensus could then be used as a basis to build broader agreement across the WTO constituency.

We reached a first step towards such a consensus in Cancun when Commonwealth Trade Ministers met for the first time in 15 years and lent their joint support to the Doha Development Agenda as a means to achieve greater fairness in international trade.

Let us not forget that the Commonwealth is also a platform that can help member countries expand their trade and investment networks.

Indeed, on average, trade between Commonwealth countries amounts to 40% and inward foreign investment among member countries is over 50%. It is estimated that Commonwealth businesses that choose to trade within the Commonwealth enjoy a 15-20% cost benefit. The Commonwealth can therefore play a significant role as an instrument of economic and commercial co-operation.

Conclusion

Back in 1964, Kwameh Nkrumah, the first President of Ghana, argued that the real global issue was the gulf between the 'haves' and the 'have nots'. Nearly 40 years later, his words still ring true - unfortunately.

But it doesn't need to be that way. By building a transparent, rules-based international trading system, we can go a long way to helping developing countries pull themselves out of poverty.

The CBC and the business community in general can provide that extra level of horsepower to bring about a multilateral trading structure based on fairness and equity.

By building on the wide-ranging partnerships between governments, civil society and the private sector within the Commonwealth, we can work together to provide real opportunities to people who most need them and help them transform their lives.

By joining forces, you in the Commonwealth Business Council, we in the intergovernmental sector, along with our friends in civil society, can make a real difference in the lives of Commonwealth people.