“Investing in Development” is the title of an important new study released recently by the United Nations.  The study contends that international aid flows need to be reformed if the Millennium Development Goals (MDGs) are to be reached by 2015. The 18 MDG goals, adopted at a summit of heads of state, include cutting extreme poverty in half, achieving universal primary education, reducing the under-five child mortality rate by two-thirds and stabilizing the HIV/AIDS infection rate. 

To achieve these goals, the UN report calls for a significant increase in development assistance. It says that donors should provide up to 0.5 percent of their gross national product, then increase that to 0.7 percent by 2015.

For OECD donors, this would imply an immediate doubling of official development assistance.  For the United States, it would require a larger increase, even though in 2002 President Bush pledged to double the aid budget from 0.1 percent to 0.15 of GNP through the creation of the Millennium Challenge Account. To achieve the MDGs, the United States and other industrialized countries will have to increase aid budgets significantly.

What is too frequently overlooked in the debate over how to accelerate economic development is the role that the private sector should and can play.  For example, a recent study by the Center for Strategic and International Studies (“Promoting Transparency in the African Oil sector”) indicates that the oil-producing countries of the Gulf of Guinea in West Africa have received $30-40 billion in new investments over the last several years, and this trend will continue, if not increase, in the future. Under the best circumstances, the governments in the region will be very challenged to develop the capacity to maximize the use of this investment, and the subsequent wealth it will generate, to the nations’ benefit no matter how well intended national and local officials. 

It is in this context that Corporate Social Responsibility (CSR), and the companies that embrace CSR, can make a significant contribution to economic development in the United States and throughout the developing world, especially in Africa.  CSR can also help governments to meet the MDGS.  In fact as the Economist recently argued in a survey on CSR (January 22-25, 2005, Page 14):

“Untamed profit-seeking…puts strain on the environment and exploits workers.  At the same time the goal of sustainable development points to a more concrete agenda for CSR; while pursuing profit, enlightened companies should take care to protect the environment and uphold the rights of workers (and others) as well. Hence the ‘triple bottom line’ which thought-leaders on CSR (including the United Nations and the European Commission) want companies to monitor and report: don’t just aim to make money, but protect the environment and fight for social justice as well.”

The message is that governments alone, no matter how generous and well meaning, cannot end poverty and rectify the inequalities of economic development in Africa.  While governments must be at the forefront in making resources and expertise widely available, others, especially in the private sector, must play an active role. This is being recognized increasingly and explains why interest in corporate social responsibility has captured the attention of executives everywhere, especially the managers of international corporations in Europe and the United States.

To be sure, many companies take CSR seriously.  I remember vividly in 1990 in South Africa the managing director of a leading American company describing how nervous he became when the apartheid police entered his company’s premises to investigate reports that he had integrated his eating and changing area as a result of his senior management’s decision to implement faithfully the Sullivan Principles.  More recently, other companies have distinguished themselves in their efforts to be responsible citizens in the communities where they are present. The Ford Motor Company’s programs on HIV/AIDS in South Africa are exemplary as are efforts by ChervonTexaco to partner with USAID and the United Nations Development Program in Angola. 

The challenges are enormous, nevertheless.  It is for that reason that the Global Sullivan Principles seek to help companies achieve these goals. Reverend Sullivan’s vision was that of business working hand-in-hand with governments internationally and locally to advance social responsibility and a culture of peace. There is also an emphasis among the Global Sullivan Principles on improving the skills and capabilities of employees in order to increase their opportunities, inside the company and in the communities and nations where they live.

By companies and governments working together, and endorsing principles such as those devised by Reverend Sullivan, a firm foundation for broad ranging and sustainable economic development will be put in place.  Moreover, it is a reality that the volume of private capital flowing into the developing world, even though insufficient, is exponentially larger than the volume of official development assistance. Therefore more will be expected of multinational companies in terms of employee development, community investment and corporate social responsibility.

Becoming an endorser of the GSP can help companies respond to these expectations. We urge your company to take a close look at the Global Sullivan Principles and to become an endorser. 

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