Businesses — Making the World Safe?

Iraq and Afghanistan are only two countries where the global community faces tough reconstruction tasks. Can global companies help to rebuild failed states? Heinrich von Pierer, CEO of the German company Siemens, presents his perspective in this Globalist Document.

All countries and all situations are, of course, unique, and there is no golden solution for all post-conflict scenarios. One must analyze each situation and tailor the response.

In general, I would say there are five basic factors that are critically important: security, infrastructure, financing, post-conflict planning and visible progress.

The first and foremost factor, security, is obvious. That has been a chronic problem in many regions, but since September 11, we also know that violence can strike anywhere, at any time.

There are no more safe havens in the world and we have to live with that fact. But now it is clear that — in order for business to operate — there must be a reasonable level of security and enough government control to provide basic law and basic order.

The risk factors must be reduced to a manageable level — not to zero, perhaps, but to a manageable level.

In critical regions, business follows some basic rules — for example, a strong reliance on local employees who best know their country, their culture and the local circumstances.

Also important are a few expatriates to push the process. Our principle in such cases is to send employees only on a voluntary basis.

These people are carefully chosen, after considering religious, ethnic and cultural factors — and they do not necessarily come from Germany.

Close cooperation with local authorities is a must for taking all proper measures. Above all, one needs good common sense, caution, prudence and, also, courage. But unfortunately, these rules may not always be enough.

If the risks are too high, we sometimes have to pull back only as long as necessary, I must add — because our basic philosophy is: "We are here to stay."

To summarize my first message, local government or provisional authorities must provide the necessary minimum of security — and business should draw on the experience of people who best know the country.

The second factor is infrastructure. Nothing can function without water, electricity, food supplies, transport and communication systems, particularly in cities.

One of the top priorities must therefore be to reconstruct and to secure these services in order to restore functional authorities, to meet the basic needs of the population — and to provide the foundation for rebuilding the economy and the society.

So my second message is to begin as soon as possible with the process of repairing and renewing the basic infrastructure.

The third factor is financing. The success of any reconstruction program depends on getting funds.

The private sector must have partners — international organizations such as the World Bank, bilateral partners, development agencies, governments and local authorities.

Business cannot bear the financial burden, nor it can bear it only to a limited extent. As we all know, the process of securing financing can be complex and time-consuming — and sometimes frustrating as well.

But in post-conflict situations, speedy financing is critical for restoring a viable society. Therefore, my third message is that financing instruments, including guarantees and public/private partnerships, must be made available as quickly as possible.

Nothing is more dangerous to the peace-building process than a lack of action.

The fourth factor is post-conflict planning, above all, timely planning. If at all possible, post-conflict plans need to be developed at the same time as military or conflict-resolution strategies. There must be a seamless and fast transition.

We have to be realistic. This means we cannot always expect all procedures to run in the standard forms that we know and are familiar with.

For example, there is the bidding process. Extraordinary situations often demand extraordinary solutions, as well as fast and uncomplicated decisions.

One must accept that this is sometimes more effective than following the usual game rules, because time is of the essence.

So my fourth message is to plan as much as possible in advance, but not to waste critical time in unique situations by relying on overly complex, overly bureaucratic and time-consuming solutions.

None of the four factors I have mentioned are effective without the fifth — visible progress.

People must personally see that progress is being made, that their own lives are improving, that they can begin to support their families again — not with extralegal activities, but as part of a new civil order.

That is essential for regaining trust and long-term social stability. My fifth message, therefore, is that we have to give people a future, a future that must be quickly tangible.

What can be done over the long term to secure stability? One central source of conflict is hopelessness, or the feeling or being excluded from growing prosperity and from the benefits of globalization — and of being overwhelmed by a process that one cannot influence.

Those fears, those desperate outlooks, lead to desolation and anarchy. People who have nothing to lose become unpredictable and capable of any deed.

We have to counteract those trends by giving people hope and a way out of their situation — not only for a brief moment, but on a sustainable basis.

I would like to give you three examples of what can and should be done. The first example is education. We must build schools, educate children and provide vocational training for youth.

If we educate the children, we open the future to them — a future in growing prosperity and a future without violence and aggression.

As the President of the World Bank said, people want hope for their children. That is expressed in the Asian proverb, "One generation is planting the trees. The next generation is enjoying the shade." Education for prosperity and peace could be a broad program for a public/private partnership.

The next example is health care. Basic public health services are a must, even in countries with isolated communities.

There are solutions like telemedicine to provide better health consultations. It is a tangible and effective way to bring part of the first world to the third.

The third example is the transfer of knowledge and technology. This is a key step to integrate local economies with the world and to train people to help themselves.

This could be accomplished in coordination with the local investment of global players. This is the way to build up networks of local business partners and suppliers — and to create jobs.

We took such an approach years ago under the guidance of Shimon Peres. We set up a joint venture software company for Palestinian and Israeli developers in Ramallah, in the West Bank.

These examples show that development aid and programs must do and can do, much more than fight poverty.

They must also focus on solutions for ensuring long-term benefits and stability — and they can be provided by public/private partnerships. Again, most important in my mind is education, education, education.

Business alone cannot change the world. But together with public partners, business can make decisive contributions in the struggle against violence, against anarchy and against terrorism — and on behalf of civilization, freedom and prosperity.

This Globalist Document is based on Mr. von Pierer’s speech at the meeting of the UN Security Council on “The Role of Business in Conflict Prevention, Peacekeeping and Post-Conflict Peace-Building,” held in New York on April 15, 2004. For the entire text (PDF), click here.