16 March 2001



NEW YORK, 15 March (UN Headquarters) -- Following is the statement of Secretary-General Kofi Annan to the Federation of Indian Chambers of Commerce and Industry in New Delhi on 15 March:

Ladies and gentlemen, let me thank you for that very warm welcome and indeed it is a pleasure for me to be here and to hear you this evening. A lot has happened in India in the last decade, as we heard. I have often used India as an example, and therefore it is really exciting for me this evening to hear you share your experiences and what you have gone through and to hear your determination to make globalization work for everyone and insure that there is equity and inclusion. I am also encouraged by your determination to work with the United Nations and your appreciation for the work we are trying to do.

Let me also thank many of the companies here for participating in the Global Compact, and I know that Indian companies and United Nations agencies are working together on valuable projects to combat HIV/AIDS, to make Indian cities safer and more sustainable places to live and to improve education, in particular in the information technology field. I think our partnership is off to a good start and I have often said at the United Nations that we have lived in a major partnership, we are dealing with major issues that governments can't solve alone and we need to engage everyone, the private sector, non-governmental organizations (NGOs), civil society foundations and universities, and if we pool our efforts in a focussed manner, we should be able to deal with the problems that we are all grappling with.

Companies in many parts of the world are also getting involved in the Global Compact. I believe this reflects the growing recognition that the United Nations and the private sector have many shared interests. We both want to build stable societies in which markets can take root and grow. We both want the global economy to rest on a sound foundation. We both want to keep the trade regime, as you said Mr. Lodha, free of burdens and restrictions it was not meant to bear.

The world trading system should not pay for the policy failures of their governments. I think that you will agree that following the Asian financial crisis and the Seattle protest, not to mention uncertainties in world markets and the terrible poverty that plagues most of humankind, those goals are just as relevant today as they were earlier. The Global Compact is not a regulatory regime or a code of conduct. It is a platform for dialogue and sharing lessons about what works and what doesn't. The goal is to promote corporate citizenship.

The major challenge for all of us continues to be how to make globalization work for the world's people. The benefits of globalization are obvious and we have heard a lot about it this evening. Faster and more sustained growth, higher living standards, more employment and new opportunities and so forth. Yet a backlash has begun, because these benefits are very unequally distributed, because the global system of rules seems to be tougher on protecting intellectual property than basic human rights. And we heard the issue of AIDS and comments that were made earlier. Because market forces by themselves are not sufficient to address the range of social objectives. For far too many people in the world today greater openness looms as a threat.

They feel uneasy, they sometimes feel there are forces their governments can't control and they doubt if there is anyone in charge and quite often there is no one in charge and this really they find worrying, when you see the demonstrations in Seattle and other places.

Initially there was a reaction to dismiss them, but there was real anxiety that needed to be treated and I think we are beginning to realize that there are serious questions that we need to answer. But despite all these demonstrations, most people would not want to reverse globalization; rather they aspire to a different and a better kind than we have today, one that gives greater emphasis to equity and pro-poor growth. Some business leaders may be confident that globalization's growing pains will disappear of their own accord and that the current one is just a bump on the road which will be resolved eventually. Even if that turns out to be true, there is much that needs to be done today to smooth that part.

Developing countries themselves can do more to improve governance, public administration, transparency, accountability and to create the legal and institutional environments that will attract investments -- domestic and international -- and create an enabling environment that will release the energy of its people. I think it is happening here and it is a challenge for other developing countries. Such efforts should help them integrate into the global economy and you are right, we need to open the global market.

It needs to be genuinely free and two weeks ago the European Union decided to eliminate tariffs and quotas for imports coming from the 48 least developed countries, where they called it "everything but arms" could be imported free of quota. I have written to all the European leaders in the Union encouraging them to do this, and I believe that now that they have done it, we should encourage the United States and Canada and Japan to do the same. I agree it's only for a limited number of countries and, in fact, in terms of economic impact its very minimal. And in time we need to encourage governments to begin the next trade round, the next World Trade Organization (WTO) round and I hope when that happens, the third world will get into negotiations well prepared. Well prepared to defend its interests and ensure that the next round will be a truly development round. Industrialized countries have an indispensable role to play. Preaching the virtues of open markets to developing countries is mere hypocrisy if they continue to keep their markets closed to goods and products from these countries. They can provide technology, debt relief, official development assistance, as well as help in fighting disease and rebuilding after destructive conflict.

Private companies, too, have a great deal to offer, as we have heard tonight. I do not mean to suggest that companies should take over the roles and responsibilities that are rightly those of government, but their technology, investment choices and global reach mean that they will do a fair amount of the heavy lifting. Moreover, governments need to listen more to the business community and to work to create an enabling environment in which business can do its part in meeting the present needs of societies. As markets have gone global, so too must the concept and practice of corporate responsibility. Doing the right thing at the end of the day is actually good for business. Indeed, the fragility of globalization poses a direct challenge to the self-interest of the private sector.

A central part of the solution is the need for you, the private sector, to accept the obligations, not merely the opportunity, of global citizenship and here I believe this applies to companies that are much larger than some of those in this room. Your actions and advocacy can help everyone, rich and poor alike, that they have a chance to benefit from globalization. In doing so, you will have my full support and that of the United Nations.

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