19 November 2004
Business Leaders Outline Private Sector Role in Forum Dialogue
Leaders' report to G8, Mideast and North African foreign ministers
Business leaders from the Group of Eight (G8) nations and the broader Middle East and North Africa met in New York September 24 to discuss the role of business in the Forum for the Future dialogue. The G8 countries are Canada, France, Germany, Italy, Japan, the United Kingdom, the United States and Russia.
The inaugural meeting of the forum is scheduled for December 10-11 in Rabat, Morocco.
Following is the statement that the business leaders submitted to their foreign ministers:
(begin text)
Business Dialogue Statement to Ministers
Secretary Powell
Minister Ben Eissa
Ministers
Ladies & Gentlemen
I have been selected by colleagues from the Middle East business community to address you this morning about issues of great importance to us in the region.
INTRODUCTION:
The Middle East region is faced with multi-dimensional challenges.
On the economic/ business front, the region is facing low productivity, low investment levels, low growth rates -- all contributing to a major time bomb of high unemployment.
Average unemployment in the region is 15% and higher amongst youth reaching 30%.
To maintain present levels of unemployment -- the region needs to create 100 million jobs between today and 2017. That is only 13 years away.
To create 100 million jobs over that period requires job growth of 4% per annum, a rate that has not been achieved in any nation during the 20th century.
This time bomb of unemployment is a reality that calls for the region's political, business, economic and community leaders to work together nationally, regionally and globally to overcome it.
Given the region's potential, combined with creative and innovative initiatives and supported by the economic super powers, we can overcome our challenges.
WHY A BUSINESS DIALOGUE:
Let me address the question: why a business dialogue?
Allow me to highlight 4 reasons why Business must be a partner in enhancing and reinforcing reform, competitiveness, and development.
1. Business is an engine and an indispensable ingredient for sustainable economic growth. Middle East business leaders and NGO's focused on economic issues have been strong voices for economic reform. I will refer to only two examples: The Arab Business Council's Blueprint for Economic Reform, which focuses on Corporate Governance, Human Resource Development and Economic Liberalization and the Alexandria Declaration.
2. Engaging business is critical to enhance national and regional competitiveness, the key to successful economic integration globally.
We support all efforts, especially the creation of National Competitiveness Councils in the region to evaluate, benchmark and recommend policies for enhanced competitiveness.
3. Business has been and in certain countries remains an impediment to free trade, and competition. Monopolistic and protectionist policies have no place in the region.
4. Finally successful business dialogue has been a recipe for success in Asia, Europe -the Trans- Atlantic dialogue and in major trading blocs such as NAFTA , Mercusor and EU.
AGENDA FOR DEVELOPMENT:
Allow me now to turn to our core message and a suggested Agenda for Development.
The Middle East has failed to reach its economic and business potential. All indicators show the gap between the status quo and the potential.
The vision is there and the strategies are on the table. The crux today is execution.
Execution and implementation will only come from clarity and transparency.
Some facts to bear in mind before we move to our Agenda For Development:
1. No one size fits all in terms of the region reform.
2. The Middle East region is not homogenous. Some countries are far advanced in certain sectors - however all can gain from leveraging best practices.
3. In each country in the region there are reform movements and supporters of competitiveness, but maturity and absorption capacity differ widely. It is therefore critical not to impose reform, but rather for the G-8 to work with the region's Governments, NGO's and business to create in a best practices paradigm. Such a policy will give positive multipliers rather than cause negative resistance.
4. To achieve the region's potential and face up to the challenges, we must acknowledge the symptoms and take comprehensive initiatives. Half measures are not enough, as they will not produce the momentum, nor create the critical mass, nor achieve the results we all desire for our children and ourselves.
These initiatives need to be home grown, built on tradition and culture that witnessed the region's greatness and its leadership. No other route has a better opportunity for success.
Such initiatives from our perspective must focus on:
- Governance.
- HR Development
- Education
- Economic Liberalization
- Competitiveness.
- Capital Markets (integration)
- Technology
- Connectivity
- Arabization
- Local content
- Trade and Investment
BODY:
Let me now share with you the 10 points the business dialogue would like to put on the table as an Agenda for Development.
1. The business leaders of the region wish to re-affirm their commitment to 2 covenants on:
- Corporate Governance
- Elimination of Corrupt Business practices
Plus 2 declarations on :
- Accounting and Audit Standards
- Corporate Social Responsibility
and are putting programs in place to promote all 4.
2. The Business community stands ready to engage in dialogue with Governments of both region and the G-8 to developing towards the region's potential.
3. We ask the G-8 to provide us access to your markets and to remove both domestic and export subsidies especially on agricultural products.
4. We ask both the G-8 and our region to accept outsourcing as a beneficial market allocation of resources, both in terms of services and human resources labor mobility.
5. We ask the G-8 for access to their technologies and support in developing home grown tech industry to service the next billion customers which will come from India, China, Brazil and the developing World.
6. We ask our ME Governments to change their policy on research and development to encourage local and foreign entrants in this crucial sector Hungary allows foreign companies to deduct up to 200% of R& D expenses from taxable income. Ireland's experience is also a clear-cut success.
7. Demographics in Europe and the Middle East are reversed. The skilled labor needs in Europe are increasing and youth in the Middle East can be trained in advance on required skills.
Instead of illegal immigration of labor, the alternative is providing skilled human resources to employers under contractual agreements.
Free trade must ultimately be coupled with free labor mobility
8. Economic reform in the region needs to be sustainable and to arrive at levels that have a clear and positive impact on the livelihood of the people of the region. Reform cannot be piece meal nor personalized. Reform and competitiveness must be institutionalized and have a clear-cut constituency of support. Media and education are critical components.
Business wishes to establish a regional Policy Institute as a forum for decision makers focused on action plans and execution of policy.
9. Business is also committed to play its role in education to develop competitive human resource capabilities both regionally and globally. Technical assistance is needed for such an ambitious objective.
10. Finally business calls upon you all to arrive at just and sustainable solutions to our region's conflicts that include but are not limited to the Arab Israeli conflict, Iraq, Afghanistan and Kashmir.
Future generations will look back at wonder and us why we were not much more pro-active and result oriented. The reality of our situation and its global implications cannot continue without us surrendering our humanity.
In conclusion I wish to reaffirm that the business community of the Middle East stands ready to work constructively in addressing these challenges.
Some of our initiatives that are underway are summarized in a set of slides, which we are sharing with you today.
The success of our Agenda For Development is critical for the future of our region.
[New York, September 24, 2004]
(end text)
(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)
