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Center for Business as an Agent of World Benefit Rethinking the WORLD ECONOMY The Business of Peace: Economics, Innovation, and the Common Good Dr. Nadya Zhexembayeva Center for Business as an Agent of World Benefit Weatherhead School of Management Case Western Reserve University

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the business of peace economics innovation and the common good

The Business of Peace: Economics, Innovation, and the Common Good

Dr. Nadya Zhexembayeva

Center for Business as an Agent of World Benefit

Weatherhead School of Management

Case Western Reserve University

2006 noble peace laureate
2006 Noble Peace Laureate?

Muhammad Yunus & Grameen Bank,

Bangladesh

Center for Business as an Agent of World Benefit

2006 noble peace laureate4
2006 Noble Peace Laureate?

“Lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty. Micro-credit is one such means. Development from below also serves to advance democracy and human rights.”

Norwegian Nobel Committee, 2006

Center for Business as an Agent of World Benefit

the new reality
The New Reality

Center for Business as an Agent of World Benefit

business and society
Business and Society
  • Corporate Social Responsibility
  • Business Ethics
  • Philanthropy
  • Sustainability
  • Corporate Citizenship
  • Compliance

Center for Business as an Agent of World Benefit

a revolution in business strategy

Sustainability

Corporate Social Responsibility

Philanthropy

Business Ethics

Compliance and Disclosure

A Revolution in Business Strategy

Business Benefit

Societal Benefit

Center for Business as an Agent of World Benefit

the business of peace
The Business of Peace?
  • “Sustainability - meeting the needs of the present without compromising theability of future generations to meet their own needs”

Brundtland Commission, 1987

  • [Conflict] threatens our whole commercial presence in a country since, for such a presence to be sustainable, we need prosperous, peaceful and content societies. Stability built on repression or violence is fundamentally flawed, and contains the seeds of its own destruction.

The British Petroleum Company plc, Statement to International Development Committee, UK, 1998

  • War and armed conflict impose huge economic and environmental costs. These include: the destruction of physical infrastructure (transport and irrigation systems and power supplies) and social infrastructure (schools and hospitals); the loss of trade, investment and commercial links; damage to the environment; and the contamination of agricultural land, particularly by antipersonnel landmines. The extent of war-induced economic collapse is enormous in many countries.

SaferWorld, Submission to International Development Committee Enquiry, UK, 1998

Center for Business as an Agent of World Benefit

the cost of war
The Cost of War

MOZAMBIQUE

During Mozambique’s 16 year civil war from 1975 to 1992 over 40% of schools and health centers were destroyed or forced to close; economic losses totaled US$15 billion, equal to four times the country’s 1988 GDP; and industries were so damaged that post-war production equaled only 20-40% of pre-war capacity.

Center for Business as an Agent of World Benefit

the cost of war10
The Cost of War

BOSNIA

The estimated economic damage of the war to Bosnia was US$60 billion. By the end of 1995, 45% of all industrial plants and 75% of oil refineries had been destroyed. Electric generating capacity was 20% of its prewar level. Some 30% of all health facilities and 50% of all schools had been destroyed. The Muslim areas operated at only 5% of their prewar production capacity and Croat areas at 15% of prewar levels. Exports were 10% of their prewar level by 1995, although imports remained relatively high at 41% of prewar levels. By 1997, the annual income per capita had dropped to US$500 and the rate of unemployment stood at nearly 70%. The report estimated that the Bosnian conflict cost the international community at least US$53.68 billion between 1992 and 1998.

Center for Business as an Agent of World Benefit

the cost of war11
The Cost of War

SRI LANKA

Ethnic tensions erupted into large scale violent conflict in Sri Lanka in 1983. Military spending increased from 1.4% of total government spending in 1982 to 15.8% in 1998. The costs of the war to the Sri Lankan business community have been high, an estimated $2.2 billion, or 22% of Sri Lanka’s GDP in 1995. These have included: increased taxes (a national security levy of 5.5% has been placed on goods and services); destruction of physical assets (damage to physical infrastructure is estimated at over US$1 billion); closure of major industrial enterprises, such as cement and chemical factories, in the North and East; reduced productivity and output from agriculture and many other industries; personnel costs (such as frequent disruptions in normal working hours, low morale and brain drain); loss of tourism revenues (estimated at over $1.5 billion); restrictions on transport of goods and services around the country; and lost investment opportunities from both local and foreign investors.

Center for Business as an Agent of World Benefit

poverty peace business
Poverty, Peace & Business

Center for Business as an Agent of World Benefit

business as a force for peace peaceworks
Business as a Force for Peace: PeaceWorks

PeaceWorks

“PeaceWorks is a not-only-for-profit company. We have proven that we can build and sustain a profitable company AND do a little good in the world.

Together with people striving to co-exist, we create and deliver unique and exciting specialty foods- only the freshest ingredients, always all-natural, always delicious.

PeaceWorks currently does business with Israelis, Palestinians, Egyptians, South Africans, Turks, Indonesians and Sri Lankans.”

Center for Business as an Agent of World Benefit

business as a force for peace peaceworks14
Business as a Force for Peace: PeaceWorks

Commercial CooperationBusinesses profiting from joint ventures gain a vested interest in maintaining and cementing these valuable relations.

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Regional ParticipationPeoples and countries prospering under these cooperative activities gain a stake in the system, furthering stability.

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Human Interaction People working together under conditions of equality learn to shatter cultural stereotypes and humanize their formerly evil enemy

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Job Creation and Export Led GrowthWe connect local producers and manufacturers, creating profit opportunities for the region as a whole. The rising volume of exports and the subsequent job creation stimulates local economies and contributes to a rise in the standard of living.

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Employment & Technology Increasing output through exports generates economies of scale and reduces costs, making ventures in conflict regions more competitive. Export initiatives with overseas partners also benefit from transfer of better systems, enhanced professionalism, technology transfers and technical know-how.

+

Peace Building As groups learn to work together, cultural stereotypes are shattered and the enemy is demystified and humanized.

Center for Business as an Agent of World Benefit

business as a force for peace peaceworks15
Business as a Force for Peace: PeaceWorks

Center for Business as an Agent of World Benefit

business as a force for peace sager foundation
Business as a Force for Peace: Sager Foundation

Rwanda

The Hutu genocide of Tutsis in 1994 left nearly one million people dead in 100 days, killing approximately 50 percent of the Tutsi population, with the majority of the remainder fleeing the country.

The micro-enterprise program created by Sager Foundation partners the wives of men who were murdered in the tragedy into business partnerships with the wives of the 150,000 people imprisoned on accusations that they participated in the genocide.

Center for Business as an Agent of World Benefit

business as a force for peace sager foundation17
Business as a Force for Peace: Sager Foundation

Center for Business as an Agent of World Benefit

the business of peace18
The Business of Peace?
  • ...I believe that it is part of building good sustainable businesses to help establish safe, secure, stable and peaceful societies. Business thrives where society thrives.

Peter Sutherland, Chairman BP and Goldman Sachs

  • In the past, companies claimed they were fulfilling their social obligations by providing housing, education and health care for their workers and their workers’ families; they said their presence was automatically good for the local people because it provided jobs. But increasingly businesses in war zones find that they are paying taxes and bribes to and seeking protection from governments which are causing the war. Others find they have to pay protection money to or do business with rebel movements. Now, many companies are coming to accept a broader context for their operations and making a commitment to the people of the country they are working in, not just its government and laws.

War, Money and Survival, International Committee of the Red Cross, 2000

Center for Business as an Agent of World Benefit

the business of peace19
The Business of Peace!

Business cannot succeed in the world that fails.

Bertrand Collomb, Chairman of Lafarge

Across the world, huge companies that once shrugged off the United Nations as a worthy, if often ineffectually bureaucratic, do-good agency are now viewing it as a valuable partner. And the United Nations, for a change, is not only welcoming their help but seeking it out.

New York Times, December 10th 1999

New social partnerships are not a panacea. Nor are they easy. Even when they have the potential to solve a particular societal problem they often fail. Establishing and sustaining a mutually beneficial partnership is rarely simple, especially with non-traditional allies.

Partnership Alchemy, The Copenhagen Centre, 2000

Center for Business as an Agent of World Benefit

thank you
Thank you!

Questions?

Comments?

Thoughts?

Center for Business as an Agent of World Benefit