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Thursday, December 26, 2019
LONDON, Nov 27 2003 (IPS) - The Commonwealth will set up a new global index to measure socially responsible investment at a business forum in Abuja next week.
The forum is being held to promote business with an eye on sustainable development ahead of the heads of government meeting (CHOGM) Dec. 5-8, in Abuja; Nigeria.
The move to link business with goals of sustainable development and social responsibility – for long the domain of civil society and do-gooders – has got several governments interested. As many as eight heads of government are turning up ahead of CHOGM to attend the business forum Dec. 2-4.
"We have studies that show that many giant companies and pension funds prefer to invest in businesses committed to socially responsible development," chief executive officer of the Commonwealth Business Council (CBC) Mohan Kaul told IPS. "But 97 percent of that investment goes into the developed world."
The new index will link factors such as the gross national income (GNI) of a country, its purchasing power parity (PPP) index and the investment it is drawing. The index will show up what is being done or not and also suggest what is possible by way of investment in developing countries among the Commonwealth.
"We are talking to a major fund manager," Kaul said. "There already is an index like FTSE 4Good but we will create our own index." The CBC index will have a greater focus on good that comes to the developing countries among the Commonwealth – and that means 50 of its 54 members other than Britain, Canada, Australia and New Zealand.
The Commonwealth is a grouping of countries that were once a part of the British Empire.
"But while a lot of the investment is not going into developing countries, it is also true that many developing countries have not created a business environment that would encourage companies to compete in the international arena," Kaul said. "At Abuja we are working for a manifesto for business and government together to remove obstacles to wealth creation."
The moves are led by a new push into business partnerships that involve private companies, the government and civil society.
"Earlier models of privatisation have now worked," Kaul said. "A grouping is possible between civil society, the private sector and government." The CBC is promoting several models of business where a government owns the project, the private sector manages it and civil society speaks up for the people involved and affected.
These must include measures such as reduction of regulations, reducing time to set up new companies, and straightening out customs procedures, Kaul said. "In some places it takes nine months just to set up a company," he said.
The Commonwealth will also set up a certification system for companies that can be players in the international arena. This together with the new index would also give potential investors and companies in the developed world pointers to companies they can do business with.
The moves by the CBC are more than just more Commonwealth talk. Forums organised by the CBC led to business worth more than 3 billion dollars in 1999 and 2.3 billion dollars last year, Kaul said. "The largest component of this was business between developed and developing countries," he said.
Much of the business has come up in infrastructure, mining and power projects, telecom services and financial services. The CBC has been holding regional forums to promote business among firms from Commonwealth countries within regions. Africa investment forums have been held in South Africa and also in Abuja.
The CBC has found unique ways to make these business marriages work. Businessmen are persuaded to attend business forums. Everyone who comes along gets a password and a homepage on the forum website and access to everyone else who has registered. So you have everyone’s business interests on the dedicated website, and an idea what they are looking for.
The CBC then assembles a diary and puts together everyone who ought at least to talk. It then asks what happened once they met, and offers to make things happen if nothing did.
The CBC played a role in getting MTN of South Africa to make a massive investment in the mobile telephone market in Nigeria. MTN executives were invited to meetings at the ministry of telecom in Nigeria. MTN is now the leading mobile phone company in Nigeria.
The South African power giant Eskom Enterprises was put together with the National Electricity Production Agency (NEPA) in Nigeria. It now plans to take over several of the divisions into which NEPA has been divided.
The South African firm Shivacom made a deal to sell pre-paid telephone cards in Mozambique following business to business meetings set up by the CBC.
The Sumaria Group in the food and cooking oil business in Tanzania has set up a vegetable oil refinery in Mozambique. The group has expanded business across East Africa and in Britain.
Zandu Pharmaceuticals, a herbal medicine company based in Mumbai in India is being supported in exploring joint ventures and franchise arrangements in several countries in Africa.
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