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Speeches

Public, Private and Civil Society

Cambridge, Massachutes, USA, 16 April 1999

Ladies and gentlemen, the United Nations was founded to end the scourge of war; to reaffirm faith in fundamental human rights; and to promote social progress and better standards of life in larger freedom.

For more than half a century, the UN and its agencies - including the United Nations Children's Fund - have vigorously pursued these and related objectives, and they have done so by working almost exclusively with governments.

But the end of the Cold War and the growing economic interdependence among nations have led to a profoundly important perceptual shift.

As Secretary-General Kofi Annan put it recently, we now know that peace and prosperity cannot be achieved without a broad expanse of active partnerships - partnerships that involve sharing responsibilities not only with governments, but with international organisations, civil society and the business community.

There has been particular attention paid to the necessity of a UN alliance with the private sector, a theme that the Secretary-General addressed a few months ago at the World Economic Forum in Davos, Switzerland.

"In today's world," he told corporate leaders, "we depend on each other. The business of the United Nations involves the businesses of the world."

Indeed, it is abundantly clear that without development and peace, trade and investment cannot occur and business cannot grow.

By the same token, thriving markets can help create the conditions necessary for development and peace - by creating jobs, by improving standards of living, and by making it possible for developing countries to share in the benefits of the world economy.

Let no one doubt the urgency of this task.

In a global economy worth nearly $30 trillion, a billion and a half people - a quarter of the human race - are living in conditions of almost unimaginable suffering and want. Six hundred and fifty million of them are children - a figure more than twice the population of the United States.

Never in history have we seen such numbers. And never in history have we seen overall aid to the world's neediest countries fall to such shameful levels as they have in recent years.

Yet there has never been a time when development assistance has been more needed - or the evidence of its past success more compelling.

The United Nations System has been active in promoting a variety of approaches to development and in laying the groundwork for greater development cooperation - including cooperation to promote the survival, protection and full development of the world's children.

With aid levels plummeting as the number of people trapped in absolute poverty continues to rise, it is clear that the mission of UNICEF - and that of the entire UN System - is more relevant than ever.

Only the United Nations, with its universal and comprehensive mandate, can offer a central forum to address sustainable human development in all its aspects - and to build the consensus needed to achieve it

Only the United Nations has the operational potential to address the global imperatives that must be met - from humanitarian relief and peacekeeping to peace-building and development cooperation.

And amid all this, the UN is working to promote private-sector development and direct foreign investment. It is helping countries to join the international trading system and to enact legislation aimed at encouraging responsible business practices. And it is promoting micro-finance for women, small-traders and entrepreneurs.

As the Secretary-General has said, business has a compelling interest in the success of these efforts, for thriving markets and human security go hand in hand. We cannot have one without the other.

One widely talked-about rationale for the UN working in partnership with industry and the business community is based on the assumption that the resources of government are not plentiful enough - and that if development is to succeed, we must look for those resources in the private sector and in the marketplace.

I would submit that this is a very poor rationale for partnership.

It is poor for two reasons: first, it is based on the mistaken idea that governments should be allowed to shirk their responsibility as the leading players in development - an issue that I want to return to shortly.

Second, it is a poor rationale for partnership because it is based on a limited and almost patronising view of what the private sector can bring to a relationship with the UN - namely, money.

The problem is that by itself, money is a poisonous commodity - it makes business and industry suspect that they are being courted for their dollars, not their capacity.

In fact, the private sector has an immense store of knowledge and experience. It has vast numbers of talented and insightful people.

And numerous companies have undertaken beneficial and innovative projects in countries in desperate need of help.

Moreover, the private sector has a major role to play in the realisation of human rights, from such issues as child labour practices to gender equality and protection of the environment.

Obviously the UN System looks to the private sector as a source of funding for multilateral development assistance - the kind of assistance that has always sought to address basic human needs, beginning with poverty eradication and the needs of the most vulnerable people - especially children.

But it is also important to see the private sector in a more expansive context, as a source of knowledge and expertise for multilateralism.

And we in the United Nations, we on the multilateral side, on the development side, must also be mindful of something else: that in dealing with the private sector, we cannot be uncritical.

To begin with, it is dangerous to assume that the goals of the private sector are somehow synonymous with those of the United Nations, because they most emphatically are not.

Business and industry are driven by the profit motive - as they should be and must be, both for their shareholders and their employees.

The work of the UN, on the other hand, is driven by a set of ethical principles that sustain its mission - principles set out in the Charter of the United Nations, in the Universal Declaration of Human Rights, in the Convention on the Rights of the Child, and elsewhere in the galaxy of international instruments and treaties that have been promulgated since the UN's founding in 1945.

The founders had two things on their minds at the end of the Second World War. One was to prevent a third world war. The other was to avoid another global economic depression and to ensure universal economic and social well-being.

That vision was based on a set of universal values: freedom, justice and the peaceful resolution of disputes; social progress and better standards of living; equality, tolerance and dignity.

Just as the private sector is not embarrassed by the fact that it is driven by profits, the UN is hardly self-conscious that its work grows out of underlying ethical principles.

It is perfectly right and legitimate for both to be pursuing their singular mandates - and where they can work together as partners, so much the better. But in coming together with the private sector, the UN must carefully, and constantly, appraise the relationship.

It is one thing to say that we want to work in partnership with corporations that recognise their responsibility for human rights, who care about labour codes, working conditions, environmental protection and the like. But these are generalities.

The heart of the matter is the exercise of "due diligence." The UN must look carefully at these companies. This does not mean putting them under a microscope, fixing them with a degree of scrutiny that few of us could pass. Rather, it means identifying organisations whose behaviour, on balance, shows evidence of a willingness to exercise corporate responsibility. And these are the businesses with which the UN can enter into fruitful partnerships.

Without due diligence, one runs the risk of becoming associated with companies whose past records suggest that they may not be the best partners. At UNICEF, where I will start my fifth year as Executive Director next month, we have avoided such situations, despite the fact that UNICEF - now three years past the half-century mark - has the most extensive corporate involvement of any single UN agency.

The reason is simple. We are exceedingly careful. For instance, UNICEF attaches ethical strings to its supply contracts, favouring companies that pledge to avoid links with such activities as landmine production and exploitative child labour. We do not deal with cigarette companies or accept contributions from manufacturers of infant formula.

And with these sorts of ground rules as a foundation, we can enter into whatever partnerships make sense.

For example, Warner Brothers, Turner Network Television, Time for Kids and Coinstar are all key supporters of the Trick or Treat for UNICEF campaign. And companies like British Airways, the Sheraton and Westin hotel chains and American Express are involved in UNICEF marketing efforts linked to specific fund-raising activities.

In half a century, we have learned a few things about private-sector partnerships. We have learned that they should not exceed expectations. They should not be based on unwarranted assumptions. And they should not be focused solely on money, for that will surely sour the relationship.

Let me turn now to another aspect of partnerships for development, those involving non-governmental organisations, or, as they are commonly known, NGOs.

It is a truism that NGOs, in their numbers and diversity, have proved themselves absolutely indispensable in development efforts, especially given the perpetual crisis of multilateralism - a crisis that tends to revolve around funding and humanitarian capacity.

But however generous and expansive their motives, many are not immune from legitimate criticism. For example, some humanitarian NGOs have come under fire because their work and very existence seems tied to catastrophe, and catastrophe alone.

And there is also criticism of the NGO community for not being sufficiently sensitive to the fact that in some areas of NGO work, there is a great deal of overlap and redundancy among organisations, whether national or international.

That said, it is also true that NGOs have not, in many cases, been sufficiently well treated by those who take the crisis of multilateralism seriously - and by well treated, I am not talking so much in terms of money as I am in terms of the recognition that NGOs deserve for what they do, and how well they do it.

For example, NGOs have not been consulted nearly enough about the humanitarian imperative. They have not been part of the decision-making process over how priorities are set in the field. They have too few opportunities to meet with major multilateral agencies, and to help in devising ways to pool efforts and share operational authority.

That is why, in 2001, when UNICEF holds its next great event for children, we intend to make it an occasion in which NGOs will be welcomed as full members, along with other representatives of civil society, the private sector, governments and UN agencies.

This event, the first major meeting of what we are calling the Leadership Initiative for Children, will mark the start of a collaborative effort to draw up new global agenda for child survival, development and protection in the 21st Century.

It will also stand as the culmination of the process that began in 1990 with the World Summit for Children, where a handful of NGOs were granted token representative status by governments - to the Earth Summit, where NGOs were directly involved for the first time in preparatory talks as well as the Summit, and on through to the Social Development Summit in Copenhagen, the Beijing Women's Conference, and the Habitat Conference in Nairobi - all of them events where NGOs moved closer and closer to full partnership.

Now let me turn, in conclusion, to the central issue of sharing responsibility: the matter of partnerships with the public sector - namely, the governments.

There has been considerable discussion in recent years of the potential for ending the crisis of development assistance through the natural workings of the global market economy. The chief evidence cited is the fact that private-sector funding and investment in developing countries has been rising dramatically.

This is certainly true. Even as development overall aid has dropped, private capital flows have increased five-fold, and now represent close to 80 per cent of the total resources that go to developing countries each year - nearly twice what it was in 1990.

But private capital seldom gravitates to the very neediest countries - in 1995, for example, all but 20 per cent of total private flows went to just 12 developing countries, while the 49 countries in sub-Saharan Africa received only 5 per cent.

Moreover, in those countries that it does reach, private capital often does little for the poor. It is true that in some places, transnational corporations do provide income opportunities for many people, including some of the literate poor. But for the most part, private capital is used to finance hard infrastructure, like roads, bridges and communications. Only rarely do we find it supporting the development of such essential social services as primary health care, or basic education.

More to the point, private capital will not find its way to countries that lack an adequate social and economic infrastructure - which is precisely what multilateral aid is aimed at helping poor countries to build.

Investors are well aware that there will be no return on their investment unless a society has the capacity to put its resources to effective use.

This is why it is so important to help countries to improve health care services; to be able to offer basic quality education for all, especially girls; to have clean water and adequate sanitation; to practice good governance - and to use communication and information technology to promote knowledge and greater understanding among peoples and cultures.

All of this is not only smart social policy - it is smart business.

Multilateralism has always sought to address basic human needs. And it is now particularly consumed by questions of poverty eradication - the result of the mandates from the continuum of United Nations conferences on various aspects of development in the first half of this decade.

The pledges made by governments at these conferences were reaffirmations of their fundamental commitment to provide an agreed-upon minimum level of development assistance to poor countries. The centrepiece was the 1969 pledge by the industrialised countries to earmark at least 0.7 per cent of their Gross National Product (GNP) for Official Development Assistance (ODA).

Yet at a time when even modest increases in aid to the world's poorest countries could save the lives of millions of children and women, Official Development Assistance is in a state of virtual free-fall.

The collective ODA of the 29-nation donor group known as the OECD - which includes the United States - has fallen to a record low of 0.22 per cent of GNP - less than one-third of the 0.7 per cent target. And since 1992, the G-7 nations' contribution to the general ODA fund has plummeted about $15 billion - a reduction of almost 30 per cent in real terms.

Ladies and gentlemen, let us call this situation by its proper name: it is a scandal. The developed world, which is benefiting so vastly from globalisation, cannot be allowed to be deficient in its obligations to the developing world - which are not merely compassionate and generous but also a recognition that only by building an adequate human and developmental infrastructure in the developing world can you have a world economy that is one day stable and vibrant.

For all the importance of NGOs and other representatives of civil society, for all the potential value of development partnerships with business and the private sector, we must never lose sight of the fact that it is governments that remain the primary actors in this fundamental relationship for development.

It is the governments that have thought long and hard about the development imperatives; it is they who have set the targets and made the commitments. It is governments that sit on the executive boards of multilateral agencies. It is governments that think about development as a matter of social policy, who have development ministries and foreign ministries that fashion the world's humanitarian and political agendas.

For practical, legal, and moral reasons, governments must be held to their commitments. No one should pretend that simply getting more money from the private sector will compensate for the failures of the public sector.

The phenomenon of globalisation has opened the possibility of untold riches. But it has also shown its power to trigger the progressive impoverishment of large societies, such as Indonesia, where tens of thousands of families have fallen into abject poverty in the last two years.

There is a belief among many people that globalisation is an ineluctable process, as irresistible and beyond human control as the tides.

In fact, it is the product of deliberate, day-to-day policy choices. And that is why, ladies and gentlemen, we must not let governments off the hook.

Thank you.

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