UN SECRETARY-GENERAL KOFI ANNAN'S ADDRESS

TO THE WORLD ECONOMIC FORUM

Davos, Switzerland, 23 January 2004

"Prime Minister Martin,

Excellencies,

Professor Schwab,

Ladies and Gentlemen,

 

Five years ago here in Davos, I asked you, the world’s business leaders, to join the United Nations 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 from all the “isms” of our post-cold-war world: protectionism, populism, nationalism, ethnic chauvinism, fanaticism and terrorism.

 

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, labour 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 concrete expressions of global citizenship 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 innovative forms of multi-stakeholder engagement.

 

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.

Dear friends,

 

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 very conduct of international politics have become far less favourable 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, both international terrorism and the war against it have the potential to overturn norms of behaviour and human rights standards that had been painstakingly established over the past half century, while also exacerbating cultural, religious and ethnic dividing lines.

 

And politically, the role of the United Nations itself, the efficacy of its Charter, and the system of collective security are 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 tenuous global order. This is a challenge for the United Nations.  But it compels the business community, too, to ask how to 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, NGOs and development 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.  In the months ahead, the Commission on the Private Sector and Development, chaired by Prime Minister Martin of Canada and former President Zedillo of Mexico, will report on its work, and I expect solid recommendations on what more we all must do to utilize the great capacity of the private sector in our fight against poverty. 

 

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 poor-friendly deal on agriculture.  No single issue more gravely imperils the multilateral trading system, from which you benefit so much.  Agricultural subsidies skew market forces.  They destroy 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 fuelling conflicts, which are often related to factional competition for control of natural resources.  Business efforts to promote transparency and fight corruption can be effective measures in preventing conflict from happening in the first place.

 

Business also has a powerful interest in helping to prevent the international security system from sliding back into brute competition based on the laws of the jungle.  I recently appointed a high-level panel to reflect on our common security threats and challenges, which have been brought into such painful focus in the past few years, and to recommend ways in which our current institutions and practices might need to change.  You know all too well that the free flow of goods and services depends on a stable and collaborative security order.  I urge you to let your Governments know just how much importance you attach to this. 

 

Let me turn, finally, to the global political realm.   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.  I hope that a way will 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.

           

Thank you very much."

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