Theme 1: The Role of Business in Advancing Peace Through Commerce

[Peace Through Commerce]

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A discussion moderated by Cindy Schipani, Professor of Business Law, Ross School of Business Visit Biographies for more about presenters

How can business contribute to sutainable peace?
In this session leaders from business and NGO institutions provide their understanding of the ways that commerce and peace link together. The presentations focus actual experiences of institutional leaders and empirical testing done of the relation of business and peace. The speakers range from groceries to tourism to technology to international development.

Presentations:
What do leading business and NGO leaders see as the contribution business can make to sustainable peace?
Watch the four videos and join the discussion with presenters below.

	Steve Killelea, Australian Entrepreneur and Philanthropist, Founder of Global Peace Index "The Compelling Case for Business to Embrace Peace"(6:41)			Walter Robb, President & Chief Operating Officer, Whole Foods Market "How We Do Business Matters: the Case for Conscious Capitalism"(5:34) Presentation slides Full Presentation Video

	Roger Dow President & CEO Travel Industry Association of America "Peace From The Perspective of the Tourism Industiry"(9:28)			John Sullivan Executive Director Center for International Private Enterprise "The Center For International Private Enterprse's Public-Private Partnerships and Peace"(8:37)

Resources

• Global Peace Index 2008 and GPI Country Rankings 2008
• CIPE Overseas Report CIPE Executive Director John Sullivan speaks with CNBC Pakistan about the importance of strong corporate citizenship within the modern business model.
  
• Walter Robb's presentation slides from "How We Do Business Matters: the Case for Conscious Capitalism," including Whole Foods stakeholder map (page 4).

Discussion: How can business contribute to sutainable peace?

1. Is asking business to contribute to peace an extension of corporate social responsiblity or is it something different?

2. Each speaker provides a concrete, positive example or set of examples where businesses have made a contribution to social harmony. Do you think the kinds of businesses and NGOs they represent in these industries can replicate what these organizations have done? Are there other busineses that you think could also play a leading role in promoting peace?

3. What impact, if any, do you think the recent global economic downturn will have on these efforts?

[Tim Fort]

Hello everyone and welcome to the WBI-ICR eConference: Peace Through Commerce! Today we begin our nine week discussion on these novel ways of thinking about the role business can play in making the world a safer place. Sometimes some (or all) of us may miss some (or all) of the mark, but my hope and expectation is that we will end up making good progress and advance as well as refine the ideas of how business can foster peace.

Our first moderator has a special place in the history of this effort. Ten years ago, there were very, very few people talking at all about what business could do to foster peace. Trade and peace? Yes. But business behavior and peace? That was different. When I became serious about wanting to pursue this, the first colleague I talked to was Cindy Schipani. She is now (and I was then) a professor at the University of Michigan Business School and her willingness to explore this topic with me made a huge difference to the effort intellectually and equally important, her credibility at Michigan gave the idea itself the credentials that allowed us to move forward. So it seems fitting that the first moderator for our eConference would be Cindy Schipani.

[Cindy Schipani]

It is my pleasure to welcome you to the first discussion of this conference on how business can contribute to sustainable peace. I hope you will join this discussion by adding your thoughts and experiences on how business may have a positive impact in promoting more peaceful societies.

[isaac]

This is very exciting. Is awesome to be part of this unique eConference. I think asking business to contribute to peace is an extension of corporate social responsibility and a call to future long term profitability in the economy.

Governments, Civil Society, Media, local and foreign businesses should engage in promoting peace by implementing social, economic and environmental consciousness.

In order to create political stability in countries, measures should be put in place by businesses to focus on responsible CSR behavior.

[Sean Callaghan]

I guess the question for me is one of chicken or egg - which comes 1st - peace or business / economic growth? In presenting his research, Steve Killelea seems to suggest that economic growth is a driver of peace (or at least an indicator) - but I would have to argue that without peace there is very little hope of economic growth - research by saferworld and others shows that the average conflict costs a country 15% of its GDP over the period of the conflict and that it takes many years for a country to claw its way back to where it was before.

Equally so poverty does not equal conflict prone - that is far too simple an analysis - and in fact prosperity does not equate to peacefulness - his own index shows that to be false. Neither does his analysis on years in education hold - again from his own world index.

What does seem to hold is that without post conflict economic growth the chances of returning to conflict is higher. And what also holds is that it is much cheaper (in financial terms) to prevent conflict compared to the cost of resolving it and reconstructing the economy after the fact. However, I see very little political will (or business will) to act decisively before the fact - because that is "meddling" and is risky.

I have spent the past year looking at the CSR aspects of this and it is almost impossible to find a company that has a specific CSR focus on peace and stability. They will invest in HIV, education, orphans, water etc - but very few in conflict prevention, mediation, conflict resolution etc.

There are some good examples of business acting to prevent or deter conflict - the Kimberly Process being the most notable - but again there is very little appetite to extend that kind of process to other commodities. Furthermore the Kimberly process is at best self imposed sanctions and is not an expansive business growth strategy.

I would value other perspectives on this.

Sean

[Sean Callaghan]

Hi Steve

Let me give an example of what I mean when I say that your analysis seems to contradict itself - take two countries on your Global Peace Index - Mozambique and USA

According to your 2008 Index Mozambique has a high state of peace while the USA has a low state of peace. Now according to your assertion that should indicate that Mozambique has a much higher per capita income than the USA and that kids in Mozambique spend much more time in school than their USA counterparts. Both of these assertions would obvious be false in this specific case. Equally so the Ease of Doing Business Index and Business Competitive Index for these two countries would suggest that they do not fit the model.

This leads me to ask:

Is the USA / Mozambique example simply an exception to the rule?

Really trying to understand.

Sean

[Sean Callaghan]

Let me give you another example:

I have lived in South Africa most of my life and travel to Rwanda for work on a regular basis. According to the 2008 Global Peace Index Rwanda (76) is more peaceful than South Africa (116) - I would agree.

But according to the CIA World factbook the 2008 GDP per capita for Rwanda was $900 while in South Africa it was $10 400. And the average time in school for a Rwandan kid was 8 years and for a South African it was 13.

I remain concerned that the Global Peace Index modeling may be too simplistic or at least that the averaging of statistics dramatically skews the findings.

[Steve]

When analysing correlations with 140 countries there will always be outliers. South Africa, along with a handful of other countries are outliers on the GDP per capita correlations. Having a set of outliers does not mean the analysis is wrong. The interesting question is what causes these descrepancies, ie lots of natural resources, and whether the correlations will merge over time. Other factors that correlate with the GPI are well functioning governement, corruption and respect for human rights. Although I have traveled to South Africa many times I would not call myself an expert on the country but I would look at the direction of these indicators to see whether the country may become more peaceful or per capita income may drop.

[Steve]

My view on this is that peace and wealth is somewhat a vertuous cycle. Certainly my own experiences in Africa, East Timor and Cambodia have shown me that business can't start until war has ceased yet violence increases when economic growth faulters. The importance of our work is that peace is much more than just the absence of war. When peace is viewed as the absense of violence then no country today has reached it's potential and increasing levels of peacefulness therefore result in improved business conditions.

I am not sure of the contradictions that you are posing about the GPI. Mean years of schooling correlate at 0.58 which is a moderately high correlation, however % of GDP spent on education has a low correlation. Per capita income has a correlation of 0.57, again a moderately high correlation which most independent commentators would say shows a relationship between peace and wealth. Two other indexes that correlate with the GPI are Ease of Doing Business Index and Business competitive Index. There is more but think that this is enough to demonstrate the point.

[Donald Scott Wilde]

Hi Sean -

I think for business to be successful, you cannot be trying to operate in a war zone. It isn't peace or business like black or white. It's hard to collect payments when bullets are flying.

That does not mean that business cannot be a factor in maintaining and expanding peace. Pick a country where we have some form of (reasonably) stable diplomatic relationship that has a resource you value.

In my case, in 1999, I picked Ukraine. I had visited the country two years before, so when I received an inquiry from a young programmer, I started talking with him and after six months of casual conversation to build trust, I told him I could put him and his brother to work. I knew that Ukraine had and has a ton of well-trained programmers who are very hungry to improve their quality of life. My partner and I paid them six times the going rate over there (which was still five times less than American programming wages for young programmers) and they gave us years and years of excellent work. We finally got them into America after six years, and they still support my partner's business.

The price has gone up, but I know the dynamic is still there: these guys are quality programmers and they are ready to work. The money they took home to Ukraine helped their local economy tremendously and led to enormous good will towards Americans.

The difficulty now with doing this is the shortsighted whiners in the U.S. who complain that I should have paid Americans and that I "stole" jobs. That's the wrong way to look at it. Not only did I help a potentially very friendly ally grow in a peaceful and positive way, I created two jobs (my own and my partner's) out of nothing, and our web systems helped many American businesses grow and be more effective.

Ukraine is a country that is struggling to get out from under the shadow of the old Soviet empire and the new arrogance of the current Russian power structure. Our U.S. government deliberately left them hanging out to dry twice in the last two years when the simplest statements of support would have meant worlds to these people. They are trying to stabilize their free democratic republic, but it is up to us entrepreneurs to help them build the economic momentum necessary to maintain peace and grow beyond dependence on the old Soviet trade networks (such as the natural gas supply).

Do I believe in this? I am headed to Ukraine in two weeks. :D

[KREUTZER]

Hi everybody ,
I am a malagasy in Madagascar ,perhaps you can have a real case study by considering Madagascar just in time now .
It is important to acte after the conflict ,because as you say the country can go again to conflict because of its weakness .
Please support Madagascar to go in this way ,and the President of Madagascar is now discussing in SADEC meeting to introduce good business to fignt against poverty .
Thank you and may God bless you all .

[Dolly Bhasin]

I fully agree with you on this count.
I have also been trying to get to the root cause of major unrests/conficts to find a solution. Apparently, the most important reasons of all conflicts are rooted in three areas -
1. Unsatisfied Youth
2. Unequal wealth distribution
3. Cornering of resources (natural, capital and energy) to have more power

The only way to bring peace thus lies in
1. Education that connects to livelihood
2. Capacity building at all levels of the stakeholders in a community
3. Efficient and judicious use of resources

One of the ways to achieve this is the use of eBusiness to connect minds/transact business and manage resources.

Women are the key to making this happen as they are born with an art of combining development, harmony and education in a seamless bundle.

[Nancy Woodruff]

I agree with your three reasons for conflict, Dolly Bhasin. And would like to suggest one more: poor human health which I believe ultimately plays an important underlying role in the first three.

I suggest that women are also, in addition to possessing the art of seamless bundling (which may come from eons of multi-tasking in the home), most able to affirm the health issue.

I believe women could play an especially important role in questioning the impact that business products and practices can have on health... and on the creation of unequal wealth distribution and the misuse of resources. Is a product or business practice that damages human health a wise use of resources? While it may produce large profits for some, it weakens the fabric of our common existence, and someone.... often the poor and ultimately governments and their economies .... must pay for this.

I wonder if the women in this group might take the lead in promoting health as important for long-term solutions to conflict and unrest?