REVIEW: Article

Address to the World Economic Forum

Five years ago, here in Davos, I asked you, the world’s business leaders, to join the United Nations (UN) on a journey. You were already well embarked on a journey of your own—on the road to globalization.

At the time, globalization appeared to many to be almost a force of nature. And it seemed to lead inexorably in one direction: ever-closer integration of markets, ever-larger economies of scale, ever-bigger opportunities for profits and prosperity.

And yet even then—ten months before the Seattle protests burst onto the scene—I felt obliged to warn that globalization would be only as sustainable as the social pillars on which it rested. Global unease about poverty, equity and marginalization was beginning to reach critical mass. I was concerned that unless global markets were embedded in shared values and responsible practices, the global economy would be fragile, and vulnerable to backlash.

That was why I urged you, as a matter of enlightened self-interest as well as the common interest, to work with us to build and fortify those social pillars. I emphasized, in particular, the areas of human rights, labor standards and the environment, on which your activities have such a direct and major impact.

And I called for a compact—not a contract; not a code of conduct; not a set of regulations, or new system of monitoring, but a concrete expression of global citizenship. I was looking for something that would strengthen the economic openness that business needs to succeed, while also creating the opportunities that people need to build better lives.

I am pleased that so many of you stepped forward to embrace that leadership challenge, and to internalize the Compact’s principles into your operations. Today, more than 1,200 corporations are involved, from more than 70 countries, North and South, and from virtually every sector of the economy. Civil society organizations and the global labor movement have joined in the effort to make the Compact work. Governments are supporting the effort.

The Compact has inspired dozens of practical initiatives on some of the key issues of our times, from AIDS awareness to anti-corruption, from e-learning to eco-efficiency. It has generated investment in some of the world’s poorest countries. And it has opened the doors of the United Nations itself to new forms of partnership, with many different stakeholders.

Yet much more can be accomplished—and it must. With that in mind, I am convening a Global Compact Summit at UN Headquarters in June, to reassess and reposition our efforts, aiming at even higher levels of achievement.

Even as we deepen and expand the Compact’s mission, the global landscape around us is shifting profoundly, and in some respects adversely.

Today, not only the global economic environment, but also the global security climate, and the very conduct of international politics, have become far less favorable to the maintenance of a stable, equitable and rule-based global order. So I come before you again, asking you to embrace an even bigger challenge—as leaders of profit-making enterprises, to be sure, but also as global citizens with enormous interests at stake.

Economically, we see dwindling investment in those parts of the developing world where it is most needed, coupled with trade negotiations that have failed so far to eliminate the system’s egregious biases against developing countries.

On the security front, international terrorism is not only a threat to peace and stability. It also has the potential to exacerbate cultural, religious and ethnic dividing lines. And the war against terrorism can sometimes aggravate those tensions, as well as raising concerns about the protection of human rights and civil liberties.

As if all that were not enough, the role of the United Nations itself, the efficacy of its Charter, and the system of collective security are now under serious strain.

In just a few short years, the prevailing atmosphere has shifted from belief in the near-inevitability of globalization to deep uncertainty about the very survival of our global order.

This is a challenge for the United Nations. But it obliges the business community, too, to ask how it can help put things right. Allow me to suggest some ways that you might do your part.

In the economic realm, there is a direct connection between your interests and the international community’s ability to meet the Millennium Development Goals. The Goals are central to our struggle for peace and human dignity. Yet in the past year or two, the war in Iraq and other events caused our attention to drift dangerously away from them. It is time to re-balance the international agenda.

The Goals offer a compelling platform for business involvement. The target for water, for example, is to cut in half, by the year 2015, the proportion of people without access to safe drinking water. That requires making 270,000 new connections per day until then—something that governments, nongovernmental organizations (NGOs) and develop-ment agencies alone simply cannot do. I could give you similar numbers for many of the other targets, and for the broader development investments needed to achieve them, from energy to telecommunications.

The Goals are intended, first and foremost, to help people. But they can be good for business: first, because helping to build the infrastructure is an enormous business opportunity; and second, because, once it is built, business will find larger, eager markets in place.

I should stress that the Global Compact is not the only current United Nations initiative, which aims to mobilize the great capacity of the private sector in our fight against poverty. Last July, I asked the United Nations Development Programme to convene a Commission on the Private Sector and Development.

Prime Minister Martin, I would like to thank you for the dynamism you have brought to the Commission’s work, along with your co-chair, former President Zedillo of Mexico. I know that you and your colleagues from the business and policy-making communities have been working hard at all the key questions—in particular, how multinational business can become a supportive partner for local entrepreneurs, and help developing countries to build up their own independent private sectors.

I am sure you will give us solid recommendations that will help us tackle this key development challenge—and I look forward to the Commission’s report in the months ahead.

Business also has great potential influence in the arena of trade. Business can and should use that influence to help break the current impasse in talks. More than anything else, we need a deal on agriculture that will help the poor.

No single issue more gravely imperils the multilateral trading system, from which you benefit so much. Agricultural subsidies skew market forces. They damage the environment. And they block poor-country exports from world markets, keeping them from earning revenues that would dwarf any conceivable level of aid and investment flows to those countries. For all our sakes, and for the credibility of the system itself, they must be eliminated.

We also need your help in efforts to manage threats to peace and security, particularly through your operations in countries afflicted by conflict. Businesses must find ways of reducing the contribution—sometimes conscious, sometimes inadvertent—that firms make to fueling conflicts, which are often related to factional competition for control of natural resources. Business efforts to promote transparency and fight corruption can help to prevent conflict from happening in the first place.

Business also has a powerful interest in helping to re-build our system of collective security, and thus prevent the world from sliding back into brute competition based on the laws of the jungle.

You know, all too well, how much business confidence depends on political stability and security. I hope, therefore, that you will support the work of the high-level panel, which I have asked to make recommendations on ways of dealing with threats and challenges to peace and security in the 21st century.

People have described this as a panel on UN reform. It may indeed propose changes in the rules and mechanisms of the United Nations. But if so, those changes will be a means to an end, not the end itself. The object of the exercise is to find a credible and convincing collective answer to the challenges of our time.

The Charter of the United Nations is very clear. States have the right to defend themselves—and each other—if attacked. But the first purpose of the United Nations itself, laid down in Article 1, is “to take effective collective measures for the prevention and removal of threats to the peace.”

We must show that the United Nations is capable of fulfilling that purpose, not just for the most privileged members of the Organization, who are currently—and understandably—preoccupied with terrorism and weapons of mass destruction. The United Nations must also protect millions of our fellow men and women from the more familiar threats of poverty, hunger and deadly disease. We must understand that a threat to some is a threat to all, and needs to be addressed accordingly.

I urge you all to tell your governments just how important this is to you, as business leaders, and try to persuade them to support the Panel’s recommendations, when they are published later this year.

Indeed, the United Nations is not an end in itself. It is a means for building a better world through reliance on universal principles—such as justice, respect for international law, and the peaceful resolution of disputes—and the day-to-day work of translating those principles into action.

To succeed in that mission, however, political leaders need to develop a deeper awareness of their dual role. Each government has responsibilities towards its own society. At the same time, governments are, collectively, the custodians of our common life on this planet—a life that citizens of all countries share. Each of us needs to promote that understanding. All of us need to work together to that end.

I applaud the World Economic Forum for its efforts to engender a new concept of corporate leadership, concerned with creating public value as well as private profit. I also applaud the World Social Forum for drawing attention to those members of the human family who have least, need most, and yet lack a voice.

And I hope that a way will soon be found to establish links between these two communities. For all the differences between them, they are united by a shared interest in a global order that is equitable, that is governed by the rule of law, and that reflects the needs of all the world’s people. Let each of us, and all of us, make that our overriding aim.*

* Editor’s Note: Secretary-General Kofi A. Annan delivered this address to the World Economic Forum in Davos, Switzerland on January 23, 2004.

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Secretary-General of the United Nations